Genetic Testing Giant 23andMe Faces Uncertain Future
Revenue Plummets, Workforce Slashed
On Tuesday, 23andMe reported a dismal fiscal second quarter, with revenue plummeting to $44.1 million, a significant drop from $50 million in the same period last year. The company’s net loss narrowed to $59.1 million, or $2.32 per share, but the outlook remains bleak.
Massive Layoffs and Therapeutics Shutdown
In a bid to restructure, 23andMe announced it will cut 40% of its workforce, eliminating over 200 jobs, and discontinue its therapeutics business. The company will wind down ongoing clinical trials as quickly as possible and explore strategic options such as asset sales and licensing agreements to maximize the value of its therapeutic programs.
CEO Wojcicki’s Vision for the Future
“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,” said CEO Anne Wojcicki. “We are fully committed to supporting the employees impacted by this transition.”
Raising Capital and Regaining Compliance
The company is looking to potentially raise additional capital and has fulfilled its obligations as a public company by reconstituting its board and executing a reverse stock split. Wojcicki has reiterated her intention to take 23andMe private, but details remain scarce.
A Turbulent Year
Shares of 23andMe have slumped 75% this year, pushing the company’s market cap toward $100 million. The company faced the risk of being delisted from the Nasdaq before announcing a 1-for-20 reverse stock split in October. In September, all seven of the company’s independent directors abruptly resigned from the board, citing disagreements with Wojcicki about the company’s strategic direction.
What’s Next for 23andMe?
As the company navigates this uncertain period, one thing is clear: 23andMe must adapt to survive. With its core consumer business and research partnerships at the forefront, the genetic testing giant must find a way to regain its footing in a rapidly changing market.
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