23andMe faces bankruptcy and seeks buyer

The genetic testing company 23andMe filed for bankruptcy protection and is now for sale.

The company, which offers DNA testing services to determine the genetic ancestry of its customers and the presence of genetic risk factors for diseases, announced through an open letter to its customers that it has started a voluntary Chapter 11 restructuring and sale process. The announcement was accompanied by the resignation of the company's CEO and co-founder Anne Wojcicki, who is now trying to buy the company as a private bidder.

The company's director, Mark Jensen, explained: 'After a thorough evaluation of strategic alternatives, we have determined that a court-supervised sale process is the best path forward to maximise the value of the business.'

The company was co-founded in 2006 by Wojcicki, and saw a steep increase in business up to 2021, when its value on the market reached $5.8 billion. However, the company's reputation dropped after a 2023 data breach in which the information of 6.9 million customers was stolen and sold online. The disclosure involved mainly people of Jewish Ashkenazi and Chinese descent (see BioNews 1211). The incident caused a fall of the business value and was followed by a lawsuit that reached a settlement of $30 million.

The bankruptcy announcement sparked alarm in the company's customers, many of whom are now trying to delete their accounts and remove their genetic information. This has resulted in an increase of traffic on the 23andMe's website that prevented some people from accessing their accounts.

One of the users, Danielle Landriscina from Maryland, who initially used the genetic service to find relatives, said that it was difficult to delete her account and she had to wait some time. She told the BBC: 'If 23andMe is going to be sold, then my data can be sold, from what I hear. If I had to do it all over again, I would not have done this... the benefit does not outweigh what I think now is the harm of having my DNA out there having it possibly sold. It's very concerning.'

Another 23andMe customer, Michele Lewis from Georgia, did not experience the same difficulties in removing her data. She told the BBC: 'It was deleted almost immediately. I have never really been too worried about privacy issues or hacking or anything, but this isn't the first time 23andMe has had issues.'

Despite customers' concerns, the company reassured the public that they are seeking a buyer committed to respecting data privacy, and any buyer will have to comply with relevant data protection laws. Moreover, the company will continue to operate and sell products as usual.

Jensen added that 'we are committed to continuing to safeguard customer data and being transparent about the management of user data going forward, and data privacy will be an important consideration in any potential transaction.'