DNA-testing service 23andMe is making substantial efforts to nurse its feeble genetic core again to well being. The corporate will lay off 40% of its workforce, over 200 staff, and cull its remedy packages that embody cancer-treatment analysis, a part of a large restructuring plan introduced Monday.
“We’re taking these tough however crucial actions as we restructure 23andMe and concentrate on the long-term success of our core shopper enterprise and analysis partnerships,” CEO Anne Wojcicki stated in an announcement.
The announcement comes lower than two months after 23andMe’s board resigned en masse, exacerbating the corporate’s freefall standing. Its earlier board members, together with Sequoia Capital’s Roelof Botha and YouTube CEO Neal Mohan, wrote of their resignation letter in September they disagreed with Wojcicki’s strategic path for the corporate, together with her plans to take the corporate personal after its $6 billion valuation in 2021—its peak—plummeted to a market cap of simply $150 million round their departure.
The corporate, which grew to become wildly in style in 2017 on account of a growth in direct-to-consumer genetic-testing instruments, finally wasn’t capable of capitalize on its 2021 merger with a particular goal acquisition firm (SPAC) created by billionaire Richard Branson. SPACs had been a well-liked pandemic-era technique that originally juiced corporations trying to go public even when they lacked sound long-term financials. The tactic was largely a failure, and 21 SPAC merger targets went bankrupt in 2023. Since23andMe’s 2021 IPO, it has by no means been worthwhile.
The agency has additionally been battered by a altering market and safety disasters. Hit by a slowing demand for its flagship DNA-testing package, 23andMe additionally contended with a huge knowledge breach that uncovered the knowledge of 6.9 million customers. Earlier this 12 months, 23andMe tried to use a Band-Help by way of its telehealth subsidiary Lemonaid Well being, providing prescriptions for GLP-1 agonists like Ozempic and Wegovy.
A Tuesday SEC submitting stated “there may be substantial doubt concerning the firm’s capacity to proceed.” A spokesperson for 23andMe didn’t reply to Fortune’s request for remark.
Indicators of life
Regardless of 23andMe’s bleak prognosis, Wojcicki, who has helmed the corporate since its 2006 founding, has not given up.
“I feel we are able to navigate and land this airplane,” she instructed Fortune final month. “However it’s completely difficult.”
The corporate expects its restructuring plan, which additionally consists of exploring licensing agreements and asset gross sales of its therapeutics packages and winding down its scientific trials, to reserve it $35 million yearly. As a substitute, it is going to redouble its efforts on its core product of direct-to-consumer genetic testing, in addition to the sale of knowledge from the assessments to pharmaceutical builders.
“Changing into extra sustainable has been a high precedence,” Wojcicki instructed shareholders on Tuesday.
23andMe has additionally labored to rebuild its board, which, after the September mass resignation, included solely Wojcicki, who owns 49.75% of the corporate. On the finish of October, the agency tapped former WeWork CFO Andre Fernandez, former Redleaf Group CFO Mark Jensen, and former Cloudera, Inc. and Yodlee, Inc. CFO Jim Frankola, to affix its board.
On the middle of the corporate stays Wojcicki, who, regardless of being the goal of grievances from her earlier board, has been steadfast on her management expertise and function within the firm.
“I’ve at all times stated ever for the reason that very starting, I don’t should be in cost,” she stated. “There’s no ego for me. I care concerning the imaginative and prescient and the mission.”
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