23andMe Explores Strategic Alternatives, Including Sale of Company or Assets
Embattled genetic testing company 23andMe announced on Tuesday that it is exploring strategic alternatives, which could include a sale of the company or its assets, a restructuring, or a business combination. The news coincided with the release of the company’s third-quarter results, which showed a significant decline in revenue.
The company’s consumer services business saw a 8% drop in revenue, falling to $39.6 million from $42.9 million in the same period last year. As a result, 23andMe will need additional liquidity to fund its operations, and the company is looking to raise capital. The management has determined that there is substantial doubt about the company’s ability to continue as a going concern.
23andMe has been struggling, with its stock losing 82% of its value last year. The company’s worth has decreased to less than $100 million, down from its peak of $6 billion. CEO Anne Wojcicki has been trying to keep the company afloat, but the company’s board of directors resigned in July after disagreeing with her over the company’s strategic direction.
The company has since appointed new independent directors and has proposed a restructuring plan, which includes cutting 40% of its workforce and shutting down its therapeutics business. A special committee has been formed to oversee the search for strategic alternatives, with Moelis & Company as its financial advisor and Goodwin Procter as its legal advisor. While there is no guarantee that a deal will take place, the company will explore all available options to ensure its future viability.
