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 applications that embrace cancer-treatment analysis, a part of a large restructuring plan introduced Monday.
“We are taking these difficult but necessary actions as we restructure 23andMe and focus on the long-term success of our core consumer business and research partnerships,” CEO Anne Wojcicki mentioned 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 route for the corporate, together with her plans to take the corporate non-public after its $6 billion valuation in 2021—its peak—plummeted to a market cap of simply $150 million round their departure.
The corporate, which turned wildly widespread in 2017 resulting from a increase in direct-to-consumer genetic-testing instruments, finally wasn’t in a position to capitalize on its 2021 merger with a particular objective acquisition firm (SPAC) created by billionaire Richard Branson. SPACs have been a well-liked pandemic-era technique that originally juiced firms seeking 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 equipment, 23andMe additionally contended with a huge knowledge breach that uncovered the data of 6.9 million customers. Earlier this yr, 23andMe tried to use a Band-Support by means of its telehealth subsidiary Lemonaid Well being, providing prescriptions for GLP-1 agonists like Ozempic and Wegovy.
A Tuesday SEC submitting mentioned “there is substantial doubt about the company’s ability to continue.” 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 think we can navigate and land this plane,” she instructed Fortune final month. “But it is absolutely complicated.”
The corporate expects its restructuring plan, which additionally consists of exploring licensing agreements and asset gross sales of its therapeutics applications and winding down its scientific trials, to reserve it $35 million yearly. As a substitute, it would redouble its efforts on its core product of direct-to-consumer genetic testing, in addition to the sale of knowledge from the exams to pharmaceutical builders.
“Becoming more sustainable has been a top priority,” 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 abilities and position within the firm.
“I’ve always said ever since the very beginning, I don’t need to be in charge,” she mentioned. “There’s no ego for me. I care about the vision and the mission.”
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