23andMe’s slim list of prospective buyers–who must uphold privacy policies, according to the FTC. But what about that survey information? *Updated*

April 3, 2025 | by

Barely a week later, but only a few buyers are lining up for 23andMe’s parts. The future of the bits and pieces of 23andMe and their 15 million customers apparently are in the Magic 8 Ball’s response class: “reply hazy, try again” and “cannot predict now”. Not entirely surprising is the lack of vigorous and financially competitive interest in them. Fortune counted the interested parties at only three, plus unsurprisingly, their controlling shareholder Anne Wojcicki.

Here’s their rundown:

Nucleus Genomics. This isn’t a surprise as their founder, Kian Sadeghi, had posted an article about their pass at 23andMe on Substack last September. [TTA 12 March, Editor’s comments] Sadeghi has often likened Nucleus to Netflix versus 23andMe’s Blockbuster, where the second generation survives while the first generation dies off. Nucleus’ consumer offering are $400 tests that it claims can identify health risks for more than 900 conditions. Like 23andMe, Nucleus got in trouble with an early offering, a genetic test for IQ. Supposedly, Mr. Sadeghi is not all that interested in the genetic database, but in Lemonaid, the telehealth remedy site that 23andMe bought for $400 million ($100 million cash, $300 million in now worthless stock). The objective is to integrate telehealth and remedies with Nucleus’ tests, broadening the ‘one and done’ nature of most genetic testing–the original reason why 23andMe bought it. Nucleus has some cash on hand and resources to call in, having closed a $14 million Series A in January and backed by Reddit founder Alexis Ohanian and Peter Thiel’s Founders Fund.

The Sei Foundation. A blockchain developer and advocate for decentralized science (DeSci), it’s proposed a unique use case for the 23andMe database. Their X posting states that they can plug 23andMe genomics information into their blockchain, return data ownership to users through encrypted, confidential transfers, and then allow users to choose how their data is monetized and share in the revenue. They maintain that this would be compliant with existing healthcare and data privacy laws. Gerald Gallagher, general counsel for the foundation, said that “The legal issues involved are not specific to whether or not the data is stored on chain, and the current policy requires notice and new approvals from customers in the event of a sale of assets or change in control.”

Pinnacle Reliability. CEO/founder Ryan Sitton of this complex systems data analytics company for industrial reliability expressed interest in 23andMe before the Chapter 11 via this LinkedIn posting that offered $100 million four weeks ago. The social post did not lead to a real and properly financed offer to the board. According to Fortune, he has renewed his interest.

Anne Wojcicki stated her intent to buy the company when the Chapter 11 was announced and she stepped down from the CEO position. Neither she nor her spokesperson has had any further comment. 

23andMe and buyers better keep the data privacy promises. Federal Trade Commission (FTC) chairman Andrew Ferguson has already notified representatives of the US Trustee Program, a Justice Department division that oversees administration of bankruptcy proceedings, that 23andMe currently, as well as any future owners, must retain the data privacy policies put into place by 23andMe, such as they are. “The FTC believes that, consistent with Section 363(b)(1) of the Bankruptcy Code, these types of promises to consumers must be kept. This means that any bankruptcy-related sale or transfer involving 23andMe users’ personal information and biological samples will be subject to the representations the Company has made to users about both privacy and data security, and which users relied upon in providing their sensitive data to the Company,” he wrote. “Moreover, as promised by 23andMe, any purchaser should expressly agree to be bound by and adhere to the terms of 23andMe’s privacy policies and applicable law, including as to any changes it subsequently makes to those policies.” This seems to be a straight-up reading of current law, even if the current administration’s policy is to bring FTC and other agencies under closer control by the executive branch, a tangent which occupies the last two paragraphs of the Ars Technica article.

Guess what other information 23andMe has on its 15 million users? Survey data! 85% of 15 million users consented to have their individual data used for research. As part of that research, 23andMe requested that users complete an optional survey which added to their profiles. These extensive questions were not available for prior review, but the FAQs made it clear that once you consented to answering them, every time you visited the research page, you’d get questions to answer until they were all answered. In other words, endless continuing research. The rationale presented to users was to “help drive scientific and medical discoveries”. So, when you request to delete your data, will the survey data associated with the user profile be withdrawn as well? The lengthy article in The Conversation seems to conclude, no.

If it remains identifiable, this trove of data could be matched up with other data for law enforcement or to discriminate against someone at high risk for developing a genetic disorder. That type of discrimination is banned for employment and health insurance, but not life insurance or long-term care. Or it could be used to compile a more personal profile for marketing purposes. This needs to be cleared up. Despite this, every person with a 23andMe account should request that their personal data and anything else associated with it be deleted, immediately, before this information finds its way to a new buyer.

Weekend reading: 23andMe updates, a view at variance from the former co-founder, and a deeper historical analysis

March 28, 2025 | by

23andMe passes the ‘First Day Motions’ test in Federal bankruptcy court. On Wednesday, 23andMe received permission from the court to, during their Chapter 11:

  • Pay employee wages and benefits
  • Compensate certain vendors and suppliers in the ordinary course of business for goods and services
  • Enter into the term sheet of the $35 million debtor-in-possession financing agreement (DIP Facility) with JMB Capital Partners
  • Begin the process of selling substantially all of its assets* through a Chapter 11 plan or pursuant to Section 363 of the US Bankruptcy Code.

The court also approved the bidding procedures that take place over the 45-day clock that started with the bankruptcy petition on 23 March. Bidding is conducted by the company and Moelis, their independent investment banker.

  • Qualified bids must agree to comply with 23andMe’s consumer privacy policy and laws regarding treatment of customer data.
  • Any sale transaction involving the transfer of customer data requires court oversight and regulatory approvals.

Additional first day orders on the Kroll (claims agent) website are the retention of two law firms, Goodwin Procter LLP and Lewis Rice LLP by the Special Committee of the board of directors, and the continued use of cash management systems, intercompany transactions, honoring certain prepetition obligations, and priority on administrative expense to postpetition intercompany claims against debtors.

The next step is the ‘Second Day’ hearing that follows up on financing, with the entry of an order approving the DIP Facility and ‘additional requested relief’ that isn’t specified in the 23andMe release. 

*Given that thousands, perhaps tens or hundreds of thousands of a reported 14 million users, are deleting as much data as they can from the 23andMe database, what will the value of that genetic database be? Regarding that database, will there be a third-party ‘guard’ on that database appointed by the Court?

The TTA summary of the bankruptcy 24-26 March  This Editor likened the 23andMe implosion to that of Theranos–a watershed event that forces a rethinking of how we treat the privacy of customer medical data not covered by HIPAA, such as genetic data, as we approach (or try to approach) the mountain called ‘personalized medicine’.

23andMe’s co-founder, Linda Avey, essayed in LinkedIn yesterday that 23andMe was a missed opportunity to create a grand genomic dataset that would combine blood work, deeper gene sequencing, and wearable date culminating into actionable insights. The data is now fragmented among many holders.  In her conclusion, she was polite but unsparing: “Without continued consumer-focused product development, and without proper governance, 23andMe lost its way, and society missed a key opportunity in furthering the idea of personalized health. The 14+ million people who bought into the concept deserve to see their data moved to a secure platform with new leadership and vision. Consumers, however, should be careful sharing their data if they don’t trust its secure and ethical use”.Ms. Avey, a scientist and venture investor, was forced out of the company in 2009.

23andMe’s failure is more significant than Theranos as an example of reality versus the hype. Theranos was a near-straight up fraud with blood labs that didn’t work. 23andMe had a technology that worked and could with accuracy your ancestry and genetic risk factors, though the latter got them into trouble with the FDA with a cease-and-desist in 2013 [TTA 2 April 2014] that they didn’t emerge from till late 2015. But ancestry and genetic risk are ‘one and done’ readings. It’s not an ongoing business model. How do you get members to return and pay for more tests, even if they lose money? How do you get investors? Pivot to research and ‘therapeutic development’. The reality, as Anne Wojcicki herself admitted, is that there’s no money in diagnosis and prevention. “No one makes money in healthcare by keeping you healthy” and  “There’s no profit motive for people to get this information. A doctor does not make money if they give a diagnostic”–and this was said by her in 2019.

So how did the company become valued at $6 billion by 2021? Work the story, work the hype around preventative healthcare to get more venture rounds and then a SPAC facilitated IPO. “Personalized healthcare”.  A “research platform powered by engaged customers”.  While the real money was in selling the data to Pfizer, Genentech, and GSK–and that started back in 2015. All couched in ‘personalized healthcare’ and research.

Far, far more on this is over at AI Health Uncut, Sergei Polevikov’s Substack site. Grab your cuppa and/or lunch. It has more financial facts, particularly around 23andMe’s early years, and the botched opportunity of the Lemonaid acquisition. Everyone is a loser when it comes to 23andMe, except the Lemonaid founders who walked away with $100 million in cash (but lost $300 million in stock). It comes to the sad and numerically relentless conclusion that 23andMe was actually bankrupt since 2018. It was chasing ‘an impossible dream’ and was dishonest about its business model. The end result was that public trust in health tech erodes again–and that investors and founders trust each other a lot less. (And Mr. Polevikov also dubbed 23andMe another Theranos.)

Editor’s note: AI Health Uncut may be paywalled. I encourage our Readers to support Sergei’s work on Substack–for a modest annual subscription amount, you gain full access to his work, past and present, charts, videos, and articles.

Breaking: 23andMe files for Chapter 11 bankruptcy–whither customer data and security? An impact similar to Theranos?

March 24, 2025 | by

The exploding plastic inevitable comes to its inevitable end. 23andMe’s board filed for a Chapter 11 bankruptcy with the Eastern District of Missouri (!) Federal bankruptcy court on Sunday night (Case 25-40976). Anne Wojcicki, CEO, 49% controlling shareholder, and board member, stepped down from the CEO position, but remains on the board. Interim CEO is Joseph Selsavage, 23andMe’s chief financial and accounting officer,  according to their SEC Form 8-K filing.

In their announcement, 23andMe will, with court approval, actively solicit asset sales over a 45 day period.

Anne Wojcicki’s final non-binding proposals on 10 and 11 March were rejected by the Special Committee of the board of directors evaluating asset sales and now the bankruptcy.

Anne Wojcicki’s statement on X early on Monday morning was of a piece with her statements as 23andMe entered its death spiral starting in 2023. “We have had many successes but I equally take accountability for the challenges we have today. There is no doubt that the challenges faced by 23andMe through an evolving business model have been real, but my belief in the company and its future is unwavering.” In her post, she also said that she would bid for assets sold by the company. 23andMe has not issued any further statement or response to their former CEO’s comments.

The Chapter 11 versus 7 filing means that 23andMe will continue to operate as it sells assets and eventually shuts. It will be up to the board–including Ms. Wojcicki–and the bankruptcy judge regarding the disposition of the company’s assets, which include teleprescriber Lemonade and the large 23andMe genetic database. Those assets and liabilities essentially cancel each other out: $100-500 million in assets and the same in liabilities, according to the filing.

And about that large genetic database–the California attorney general Rob Bonta has already advised California 23andMe registered users to delete their data and request their samples to be destroyed. However, as previous articles have discussed, your data remains–de-identified, which the AG’s statement doesn’t go into in its “reminder” (more like a press opportunity for a 2026 reelection bid?). Mercury News  See today’s update for how-tos–and experiences in deletion.

23andMe has stated that it will not change the way that consumer data is stored or safeguarded, and will continue to operate as usual through the Chapter 11 process. They published an ‘open letter’ blog for customers that positions them as finding “a partner (Editor’s emphasis) who shares our commitment to customer data privacy and allows our mission of helping people access, understand and benefit from the human genome to live on.” which is frankly, misleading.

Perhaps the Chapter 11 is saving Ms. Wojcicki from a tremendous financial mistake in buying out the rest of the common shareholders, though the filing wipes out her investment in the company. It will be interesting to see the court’s comments on the ownership of what at its peak was a $6 billion-valued public company. CNBC  

This story is developing, but has developed ‘legs’ like Theranos in terms of mainstream impact. When YouTube tarot card readers are covering it….   

Updates 25-26 March   

MedCityNews yesterday recapped the various Wojcicki-led efforts to take the company private as Readers have been following, with the interesting addition that by 10 March, at least one minority shareholder, Zentree Investments, felt slighted. Zentree then bought more Class A stock to boost its ownership stake to 13%. (I wonder how they woke up on Monday.) Unfortunately, there were no further insights on why New Mountain Capital retreated from its short-lived offer to buy 23andMe with Ms. Wojcicki that went sideways by 28 February.  (Perhaps someone found something that led to the mutual conclusion of ‘Are we crazy?’)

The first hearing before the bankruptcy court, the Debtors’ First Day Motions, will be tomorrow, Wednesday 26 March, in St. Louis before the Honorable Brian C. Walsh. 

There is no hint of a pre-packaged bankruptcy leading to a reorganization of the business in any of the materials linked below.

From the Form 8-K and the Kroll case summary (Kroll is the claims agent for the company):

  • 23andMe has agreed with a lender, JMB Capital Partners Lending, LLC, to obtain up to $35 million in a senior secured term loan credit facility (DIP Facility). The debtor-in-possession financing from JMB is to pay for the Chapter 11 administrative costs and for working capital. This is subject to the bankruptcy court’s approval.
  • Subsidiaries of 23andMe (such as Lemonaid) will continue to operate. Lemonaid Health and two pharmacy operations are listed as  debtors in the filing.
  • On 21 March, Joseph Selsalvage was paid a retention cash bonus of $500,000 for his services through 31 December this year or 23andMe’s emergence from bankruptcy, whichever is earliest. If he leaves before the end of the retention period or is terminated for cause, the entire amount will be clawed back. The only exceptions are death, disability, or departure for ‘good reason’ as defined in the retention agreement.
  • The board was increased to five members, adding Thomas B. Walper as a non-employee member of the board and the Special Committee (formed for buyers) through the 2027 shareholders meeting. He will be paid $35,000 per month. Mr. Walper is a partner at Los Angeles’ Munger, Tolles & Olson LLP and specializes in bankruptcy law.
  • Any transaction will be subject to customary regulatory approvals, including, as applicable, the Hart-Scott-Rodino Act and the Committee on Foreign Investment in the United States.

From the 23andMe release:

  • The Special Committee rejected Anne Wojcicki’s final bids in the amended Schedule 13D made on 10 and 11 March.  
  • The company in the Chapter 11 will sell substantially all of its assets in a Section 363 sale.
  • Matt Kvarda, a managing director at Alvarez & Marsal, was appointed as chief restructuring officer.
  • First day motions (tomorrow) include requesting from the court authority to pay employees and certain vendors, reducing operating expenses such as real estate leases, and resolving all outstanding legal liabilities stemming from their October 2023 cyber incident.

Since 23andMe’s database includes personally identifiable information and Lemonaid stores medical information as a prescriber of various remedies, it is possible, but to be confirmed, whether Federal entities such as HHS will be involved in approvals of asset sales that have patient information. Those who submitted their tests for genetic analysis are not covered by HIPAA and in fact signed away many of their privacy rights in their submission. 

Information on deleting your user records if you used 23andMe, or you know someone who needs to know how:

Contrary to what many would like to have or to believe, 23andMe retains parts of user information after user deletion, such as: genetic information, date of birth, and gender “as required for compliance”; deletion request information “including but not limited to, your email address, account deletion request identifier, communications related to inquiries or complaints and legal agreements.”

Despite this, deleting your account is the wisest move, according to every expert this Editor has read.

Basically, you are deleting your account, revoking any research consent, and destroying any samples they may have retained. Simple, eh? Not quite! Step-by-step how-to guides are available on ZDNet (simplest) and TechCrunch (scroll to the end). This Editor cannot test as she never used 23andMe. Arundhati Parmar of MedCityNews‘ experience in attempting this process is chronicled in a LinkedIn video and on TikTok.  Expect website crashes, slow responses at best, and more than a few hitches.

New  FierceHealthcare’s Dave Muoio riffs on the data privacy issues which can be summarized as a “data stewardship crisis”. The few protections that members/users have are based on consumer protection laws. 23andMe’s privacy policy, as noted above, was explicit about the minimal protection they offered and that they had the right to access, disclose to others, and sell your genetic information:  “your Personal Information may be accessed, sold or transferred as part of that transaction and this Privacy Statement will apply to your Personal Information as transferred to the new entity. We may also disclose Personal Information about you to our corporate affiliates to help operate our services and our affiliates’ services.” Mr. Muoio reached out to experts at SOCRadar, QuantHealth, the Future of Privacy Forum, the Holland & Knight law firm, Pixel Privacy, and others. The consensus is that state and Federal safeguards are wholly inadequate.

Editor’s opinion:

23andMe’s cavalier attitude during their 2023 data breach, caused by their sloppy security (well documented by others and analyzed in our article here with previous articles linked within it) but blamed by their management on members reusing passwords, was symptomatic of a certain arrogance and attitude. By 2023, the company was already in trouble. Why would anyone believe that they’d be any less cavalier about personal genetic information?

Will this be another ‘watershed’ event like Theranos? The level of mainstream consumer media coverage the 23andMe bankruptcy has received reminds this Editor of the demise of Theranos. But here, there is no glamorous young founder in a black turtleneck jetting about and working in a Silicon Valley high-tech lab perpetrating a fraud. Here, the founder and key shareholder is a mature wealthy woman who kept a fairly low profile, the technology worked, the consumer business broke fresh consumer ground and, for its time, getting your genetic information and ancestry was a popular concept. GSK’s five year deal was completed–not renewed, but no lawsuits ensued. What was way off was its $6 billion valuation in 2021 after its SPAC and IPO.

Its faltering wasn’t news like Theranos or (for that matter) Walgreens either. The concatenation of failures along the way, save for the 2023-24 data breach/hacking which was news and drove away customers by the carload, was hardly noted at all. Yet suddenly. every one who ever dealt with 23andMe is anxious about their DNA being sold, with rumors of nefarious buyers like Bill Gates and from China popping up with notorious frequency.

We’ll see if this leads to change in genetic privacy laws and policies.

Update: Wojcicki increases 23andMe per share offer to $2.94 from $0.41–but there’s three contingency ‘catches’, and more

March 12, 2025 | by | 1 Comment

Will the 23andMe board go for this offer? Can this bulb be relit? There are two additional SEC Schedule D amended filings (#11 and #12) made on 10 and 11 March that sweeten the $0.41 per share all-cash deal just rejected by the 23andMe board [TTA 4 Mar]. The total value is now increased to a total of $2.94–but the additional $2.53 per share is made up of ‘catches’ called ‘contingent value rights’ or CVRs. These payments to shareholders are not immediate, but dependent on future performance and revenue milestones. In addition, and going unmentioned, are $50 million in operational financings, both pre and post-closing.

On 6 March, Ms. Wojcicki updated her offer as follows (see Item Number 4, ‘Purpose of Transaction’, on page 5 of both filings):

  • The original $0.41 cash for current outstanding shares not owned by Ms. Wojcicki (or not rolled over by current shareholders)
  • Plus three contingent value rights (CVRs) representing the potential (Editor’s emphasis) to receive an additional $2.53 per share total, based on specified revenue milestones for fiscal years 2026, 2027, and 2028.

The CVRs and milestones are contained in Exhibit 4, an email dated 6 March on pages 8-9, attached to Amendment #11. The CVRs would be payable in cash upon the achievement of the following milestones out to calendar 2028:

  • One CVR for $0.67 per share, payable if the Company’s revenue in the fiscal year ending March 31, 2026 exceeds $224 million;
  • One CVR for $0.84 per share, payable if the Company’s revenue in the fiscal year ending March 31, 2027 exceeds $295 million; and
  • One CVR for $1.01 per share, payable if the Company’s revenue in the fiscal year ending March 31, 2028 exceeds $367 million.

There’s more. Also in Amendment #11’s Exhibit 4, Ms. Wojcicki would provide an additional $30 million in unsecured financing for operations through the closing of the transaction, at a 7% interest rate and a maturity date after the closing. This was apparently part of the earlier offer but not viewable in the Schedule 13D, Amendment #10. This will be capitalized by $117 million in equity, new capital, the CVRs, and loans detailed in Appendix A, page 11.  

This is further sweetened in Amendment #12, pages 8-9. In an email marked Exhibit 5 responding to board requests, reiterating the cash offer, the CVRs, and the $30 million in pre-closing financing, Ms. Wojcicki adds that the $30 million loan “will not require immediate payments by the Company”. She then adds an additional $20 million to fund 23andMe operations, with the caveat that it will “be offset dollar-for-dollar by any future financing I am able to raise” which this Editor interprets as that she’ll be paid back by future raises. One last flourish: she commits to $15 million of “annual operating expense reductions to focus on the core business and increase the likelihood of returning future value to shareholders.” There is also an increase in capitalization to $137 million detailed in Appendix A, page 11, deleting $75 million in CVRs, substituting the same amount from ‘cash from operations’, and adding $20 million in additional equity commitments.

Will this be enough for the three-person board? Or will this be rejected, again? Stay tuned!   SeekingAlpha, Yahoo Finance/GuruFocus

Is this a smart deal for a smart woman? It seems to this Editor, who is not even remotely a sophisticated VC nor plays one on TV or YouTube, that Ms. Wojcicki is doing backflips to save a company that even she admits (in Exhibit 5) is near to bankruptcy.  Because she is the controlling shareholder, it’s likely that the strategy of letting the company go into Chapter 7 and buying up the desired assets (a lá Pear and its CEO/founder Corey McCann) is unattractive, possibly impermissible by the bankruptcy court–and humiliating. It also may not be workable, as the company’s major asset is a database of personal genomic information that users cannot claw back or provably deidentify [TTA 8 Nov 2024] but would be attractive to other buyers–even if litigated. As to 23andMe’s future, the whole area of genomics now has multiple competitors including Big Pharma. There were reasons why GSK walked away from their foundational deal with the company. AI can work with current data, there’s no consumer hook to capture additional data, and the whole shebang is incredibly capital intensive. Are these revenue projections even feasible? 

23andMe may have used up all its future–and Anne Wojcicki could be throwing away what remains of her fortune.

Breaking: 23andMe sale bids slide from $2.53 per share to $0.41 to none in 11 days, as board rejects CEO’s offer

March 4, 2025 | by

23andMe’s future growing dimmer by the day. Last week before Friday, 23andMe seemed to have a fighting chance. The 20 February Schedule 13D filing proposed a take-private offer for $2.53 per share, or $74.7 million, a small premium above their Nasdaq CM trading price, with CEO and controlling shareholder Anne Wojcicki joined by investor New Mountain Capital (NMC) [TTA 27 Feb]. Evidently that offer went sideways before the board of directors’ Special Committee could even consider it. By Friday 28 February, a week later, New Mountain withdrew from the acquisition bid for unspecified reasons. On Sunday 2 March, Ms. Wojcicki offered instead to the board her non-binding all cash bid of $0.41, or about $12 million. This would acquire the current outstanding shares not owned by Ms. Wojcicki (or not rolled over by current shareholders).  Amended Schedule 13D 

It took about “24 little hours” for the 23andMe board and their advisers to unanimously reject that offer, stating that at $0.41, it represented an 84% decrease to the prior $2.53 offer made with New Mountain Capital. Release.  It is one cent above Anne Wojcicki’s offer made back on 31 July 2024, which matched the price of the shares at that time. No one involved had any comments. (Share price today: $1.37)

So the genetic data/testing/telemedicine company returns to Square Zero. One can only speculate why NMC withdrew so quickly, on what they saw after a bid that made them run, not walk, to the exit. One wonders how Anne Wojcicki would offer not only a misfire of a bid, but also counter with a ridiculously low bid that she had to know would be rejected. Then again, one wonders what the board’s options really are, given the parlous state of their cash reserves. Will this be the second board that throws up their six hands and resigns? CNBC, Business Insider

23andMe gets a $74.7M offer from Wojcicki and New Mountain Capital–this time for real?

February 27, 2025 | by | 2 Comments

If at first you don’t succeed, make another take-private offer, as the company is sinking. Anne Wojcicki, CEO of the terminally beleaguered 23andMe, has with little fanfare placed on the table a take-private offer for $2.53 per share, or $74.7 million, a small premium above their Friday close on Nasdaq CM at $2.42. (Wednesday’s close was $2.23.) With a market cap today of $65 million, it is a far cry from their post-SPAC days in 2021 where their valuation hit a peak of $4.8 billion by October. The news was revealed in their filing of a Schedule 13D with the Securities and Exchange Commission.

Ms. Wojcicki, or more exactly the Anne Wojcicki Revocable Trust, is backed in this take-private transaction by New Mountain Capital, with her legal advice from heavyweight law firm Skadden Arps Slate Meagher & Flom LLP. New Mountain Capital is being advised by Ropes & Gray LLP. Dechert LLP is reportedly on the company’s side although in January Goodwin Procter LLP was listed.

This is a far cry from her seemingly off-the-cuff offer of $0.40 on 31 July to the previous board’s Special Committee, which this Editor estimates at a $11-12 million offer. The 23andMe seven-person board rejected it a few days later, then departed in frustration on 17 September 2024. They were replaced by a three-person board–plus Ms. Wojcicki, the controlling shareholder. After their 28 January Q3 report that simply confirmed their sinking liquidity and revenue despite shedding/closing lines of business, the new Special Committee, consisting of the three outside directors, opened up 23andMe to ‘strategic alternatives’ on 31 January. 

The consumer/research genetics company’s cash on hand is an anemic $79.4 million as of 31 December–barely above, and likely currently below the $74.7 million Wojcicki/NMC offer. There is nothing left to sell other than Lemonaid [TTA 22 Jan]–but why no one is stepping up to buy a company with a foothold in telehealth remedies including GLP-1 drugs, even with FDA’s change away from compounded drugs, is a mystery

Assume this is a best offer? Whether this non-binding proposal will be countered by others is not known, but a safe assumption is that this will be the only one on the table. Ms. Wojcicki has effective majority control, confirmed in the Schedule 13D filing as 20% of Class A common stock and 69.4% of Class B common stock. Reportedly this gives her 49.99% of the voting power. Both Ms. Wojcicki and New Mountain are offering secured debt financing to fund 23andMe’s operations through the transaction’s closing, As a result, other offers are not likely in this Editor’s estimation.

No timing is reported or comment available from 23andMe.   CNBC, Lawyer Monthly

23andMe running low on cash, considers sale, “strategic alternatives” by Special Committee

January 31, 2025 | by

Cash-poor 23andMe considers other strategic alternatives, including a sale. The latest unsurprising development in 23andMe’s story is the admission, by their new board of directors, that 23andMe now does not have enough cash to continue for the next 12 months. They are now considering the following strategic alternatives: a possible sale of the company, business combination, sale of all or part of the Company’s assets, licensing of assets, restructuring, or other strategic action. Leading the search will be a Special Committee composed of three independent directors. Release

This announcement was paired with their 28 January report of Q3 financials that revealed their incredible shrinking liquidity: $79.4 million as of 31 December versus $126.6 million on 30 September (Q2), and $216.5 million on 31 March (Q1). This is after staff layoffs of 40% or more, closing of operations such as drug discovery and therapeutics, offloading real estate, and attempting to find outside funding. The dismal conclusion: “Accordingly, management has determined that there is substantial doubt about the Company’s ability to continue as a going concern.”

Q3 consumer services revenue was only $39.6 million versus prior year’s $42.9 million. There was a last payment from GSK under their now terminated research agreement of $19.3 million. Q3 net loss was $26.8 million.  While carrying no debt, their accumulated deficit is $2.4 billion. Release

The new Special Committee is composed of their three independent directors, Mark Jensen, Andre Fernandez, and Jim Frankola. They are also the only board members other than CEO Anne Wojcicki. Meetings should be uncomplicated. Moelis & Company LLC is the financial advisor and Goodwin Procter LLP is the legal advisor. If “Special Committee” and “alternatives” sound familiar, the previous board also formed a Special Committee to investigate alternatives last summer. Wojcicki’s $0.40/share buyout offer (before the reverse stock split) was roundly rejected on 2 August 2024. By September, the seven independent directors resigned rather than continuing with the ” protracted and distracting difference of view with you (Wojcicki) as to the direction of the Company.”

The bottom line: Anne Wojcicki is the decider–no one else. She holds 22.5% of the company’s outstanding Class A common stock and 59.2% of outstanding Class B common stock (according to analyst TD Cowen), reportedly giving her 49.99% of the voting power. Other than Lemonaid, there’s nothing to throw out the hatch to lighten the load [TTA 22 Jan]–and why no one is stepping up to buy a company with a foothold in telehealth remedies including GLP-1 is a mystery. Research partnerships such as Discover23 with Lifebit are slow and limited revenue generators. Their October 2023 data breach lawsuits in the US and Canada are still pending, though in December there was a preliminary conditional approval by the US District Court for Northern California for a $30 million settlement.

This Editor, recalling Wojcicki’s December interview with Gayle King with statements about 23andMe that seemed to emit from an Alternate Universe, and the fact that not only the board but also the operations of the company have shrunk to near-nothing, has concluded that she will close 23andMe’s doors before conceding control–and buy the genetic database out of the bankruptcy.

Also MedTechDive and Medical Device Network

Straws in the wind? 23andMe considering Lemonaid telehealth sale, announces Discover23 research offering with Lifebit

January 22, 2025 | by

The long jump to Who Knows %&()#$!@ Where continues. 23andMe’s Incredible Shrinking Act continues with reports that their Lemonaid telehealth/teleprescribing unit is reportedly being shopped. The reports originated with sources talking to Business Insider with pickup in other industry publications like PYMNTS. How far the fishing line has been thrown is unclear. 23andMe has not returned calls from either BI or PYMNTS.

23andMe hasn’t much else to throw out the hatch. In lightening their expense load after their disastrous, poorly handled 2023 consumer data breach and subsequent class action lawsuits, the company last year shuttered its therapeutics discovery unit [TTA 14 August 2024]. By the fall, it scrubbed out 200+ employees or 40% of its remaining workforce, and fully closed its therapeutics development unit though it was still running two clinical trials that would have to be wound down. It was touted as saving $35 million annually but when executed cost $12 million in one-time severance and termination-related costs [TTA 14 Nov 2024]. Somehow it survived a mass resignation of the board [TTA 17 Sept]. 23andMe still merchandises its ancestry, health analysis, and the Total Health annual package on a scale from $99 to $999 annually.

Lemonaid entered the hot GLP-1 prescribing and support business in 2024, adding to its quick-diagnosis/quick-prescribing suite of psychiatric, birth control, erectile dysfunction, diabetes, and cholesterol meds. 23andMe bought it during their 2021 steak-and-trimmings days for $400 million in cash and stock, when 23andMe rolled in cash after their IPO at $300/share and was worth $3.5 billion. At the time, CEO Anne Wojcicki touted the integration of Lemonaid with their genetics as “healthcare that is based on the combination of your genes, your environment, and your lifestyle”. Lemonaid lifted them to a $4.8 billion valuation. Today, 23andMe’s stock, after a reverse stock split, closed today at $3.58 for a market cap of $86 million. Ancestry and health genomics proved to be a ‘one and done’ unsustainable consumer business, with the capture of consumer genetic information proving to be controversial. While featuring its 23andMe ownership, Lemonaid continues in its established business model without a breath of genetics.

The value of Lemonaid as a standalone is unknown. But given the competitive teleprescribing sector it’s in with GLP-1 weight loss drugs peaking, it’s likely at or near maximum value to be cashed in.

Anne Wojcicki for the past year has made no secret of her desire to personally buy the company and take it private. From her recent statements about “transforming healthcare” in five years [TTA 4 Dec 2024] and the company’s latest moves, Lemonaid may be, in her eyes, an off-strategy ‘lemon’. Their 8 January announcement of Discover23 was strictly about merchandising their research database cohort and genomic studies for biomedical research and governments (!) through a Trusted Research Environment (TRE) developed by Lifebit, an outside technology company based in London.

The picture to this Editor is of a company deliberately shrinking, moving away from the consumer market as much as possible, and selling its apparently huge genomic database for research purposes as its real and main business. A clever and timely cashout of Lemonaid will satisfy shareholders–and make the company, now worth less, easier for Wojcicki, who holds the controlling shares, to buy. And from there, who knows?

Two follow ups: Steward Health CEO resigns–and sues the Senate HELP committee, Wojcicki will take 23andMe private

October 1, 2024 | by

Ralph de la Torre MD hasn’t sailed the $40 million boat south yet–but he doesn’t have to go into his office anymore, only the lawyers’. Yesterday (30 September), Dr. de la Torre stepped down from his CEO and board positions of the bankrupt Steward Health. He had submitted his resignation on 19 September, the day that the Senate Health, Education, Labor and Pensions (HELP) Committee voted to hold him in criminal and civil contempt due to his failure to appear before the committee on 12 September. The full Senate voted to refer the contempt charges to the Department of Justice (DOJ) on 25 September. [TTA 26 Sept]

de la Torre filed his own lawsuit on 30 September in the District of Columbia US District Court against each member of the HELP Committee, charging them with violating his Constitutional rights, specifically the Fifth Amendment on self-incrimination, in seeking to subpoena him for a hearing which “was simply a device…to attack Dr. de la Torre and publicly humiliate and condemn him” as part of a “coordinated campaign to villainize and scapegoat him.” The lawsuit seeks to have the subpoena and the contempt referral invalidated and declared unenforceable as a result, seeking declaratory and injunctive relief. He had previously asserted his Fifth Amendment rights before the Committee in view of the company’s Chapter 11 proceedings. Given the threatening and extreme language of several of the committee Members and the actions that de la Torre’s filing singles out, the DC District Court hopefully will give this a fair hearing.

It is unknown if anyone will replace de la Torre as CEO even on an interim basis, as the company is selling its assets via the US Bankruptcy Court for the Southern District of Texas.

“While Dr. de la Torre has amicably separated from Steward on mutually agreeable terms, he will continue to be a tireless advocate for the improvement of reimbursement rates for the underprivileged patient population,” a Steward spokesperson said to Becker’s in a 28 September statement. “Dr. de la Torre urges continued focus on this mission and believes Steward’s financial challenges put a much-needed spotlight on Massachusetts’ ongoing failure to fix its healthcare structure and the inequities in its state system.” (Our Readers will not be blamed for being slightly amazed at this last statement, as most of Steward’s troubled hospitals, including two hospitals that no one would buy, were in that state–and Steward’s interests ranged all the way to London and Malta.) FierceHealthcare, Healthcare Dive 

She’ll do it herself, because nearly 50% of voting shares says she can–No Third-Parties Need Apply. Per an SEC regulatory filing yesterday (30 September), beleaguered 23andMe CEO Anne Wojcicki declared that she is no longer seeking proposals from third parties and is moving forward to acquire the company. “It has become even clearer to me that the best path forward for the (company) is for me to take the company private.” Since the board of directors is vacant–except for her–and she holds effective voting control, it is hard to contradict her. While the company is public via a SPAC that cracked hard, with shares hovering around $0.37, her $0.40 bid per share was rejected by the board in no uncertain terms. However, Wojcicki is the only one who counts here, as she has sole voting power over 9.7 million shares and shared voting power over 101.1 million shares of the company equaling 24.8% of the company’s shares. Replacements have not been made for the seven departed independent directors–and this Editor doesn’t expect any until (and if) Wojcicki buys the company [TTA 17 Sept].

In the SEC filing, Wojcicki said “Importantly, I remain committed to our customers’ privacy and pledge to maintain the (company’s) current privacy policy in effect for the foreseeable future, including following completion of the acquisition I am currently pursuing.” This Editor ironically notes that had that position on site and database security prevailed a year or so ago, none of this would have happened.

Wojcicki may be buying a near-empty shell of a company that preferred to blame users versus clean up its security act, but it will be All Hers. There you go. Reuters, The Business Journals, Yahoo News

23andMe drops drug discovery group, expands Lemonaid into GLP-1 weight loss medications, loses $69M in Q1–and board rejects CEO’s buyout offer

August 14, 2024 | by

Troubled 23andMe disbands drug discovery group, moves into weight loss meds, loses $69 million in FY25 Q1–and soundly rejects CEO buyout offer. The next shoes have dropped in the 23andMe drama.

The latest from both the Q1 earning announcement and their SEC filing, both 8 August:

  • 23andMe has abandoned its drug discovery dreams and closed the unit, terminating 30 employees in the Therapeutics Discovery unit including Bill Richards, the head of Therapeutics Discovery (package details in the 8-K), effective 9 August.  SEC Form 8-K 
  • 23andMe will retain their Therapeutics Development unit for the two drugs currently in early-stage clinical trials. They are also collaborating with Nightingale Health to pilot a metabolomics blood biomarker panel with a cohort of 23andMe+ members.
  • The Lemonaid telehealth unit is moving into prescribing GLP-1 semaglutide weight loss drugs through a membership program and receive either brand-name or compounded medications. (Editor’s note: why anyone would be a member of 23andMe after their epic user and member data breach last year–that they blamed on users’ passwords–is beyond me.)
  • This is coupled with what the company terms in its Q1 press release “a large-scale genetic research study to help identify the genetic mechanisms that may drive the efficacy and potential side effects of GLP-1 medications”

Their Q1 FY 2025 was singularly depressing, with revenue sinking 34% to $40 million, well below the $52 million projected by Street analysts. The drop was attributed to the loss of the GSK genetics collaboration in mid-2023.  The only bright spot was that losses also shrank 34% to $69 million from $105 million in the prior year. 

Stock delisting pending. ME closed on Tuesday at $0.35. The company received an extension from Nasdaq to 4 November and is seeking shareholder approval for a reverse stock split to raise the price above $1.00 as required. Endpoints, MedWatch, FierceHealthcare

CEO’s buyout rejected. On 2 August, the $0.40 per common share non-binding offer from CEO and controlling shareholder Anne Wojcicki offered on 29 July [TTA 1 Aug] was soundly, roundly rejected by the impressively named Special Committee of the Board of Directors of 23andMe. From the letter:

“We are disappointed with the proposal for multiple reasons, including because it provides no premium to the closing price per share on Wednesday, July 31st, it lacks committed financing, and it is conditional in nature. Accordingly, we view your proposal as insufficient and not in the best interest of the non-affiliated shareholders. Therefore, we are not prepared to move forward under the terms provided. Importantly, we request that you immediately withdraw your stated intent to oppose any alternative transaction so that we can fully assess whether there is interest from third parties in a transaction that would maximize value for all shareholders.” (Editor’s emphasis)

It closes with a demand:

“In the absence of a revised offer at a more appropriate price per share that meets the other requirements set forth above, we will pursue other alternatives in striving to maximize value for all shareholders. In that regard, given both the lack of certainty regarding a path forward with you and your potential investors and the current liquidity position of the Company, in parallel with your work to submit a revised bid, we intend to immediately begin the process of engaging a consultant to advise the Special Committee on a revised business plan that would provide the Company with a path to a more sustainable financial profile and achieving profitability. In your capacity as CEO, we expect your full support in these efforts.“

Given that she reportedly holds 22.5% of the company’s outstanding Class A common stock and 59.2% of outstanding Class B common stock (according to analyst TD Cowen)–other reports state that she has in total 49.99% of the voting power–that is quite a defiant statement. Based on her supervoting privileges–a trick picked up from her Silicon Valley tech friends back when–Wojcicki could kill any buy not in her interest. Or any interest, period. Developing.  

Weekend reading: 23andMe’s exploding plastic inevitable fate–and what might have been

April 20, 2024 | by

23andMe may go private, break up, or go bankrupt. Not many other options. A major end-of-week news item in healthcare was that 23andMe, the beleaguered genetic testing company, may be taken private by its CEO and founder Anne Wojcicki per an SEC 8-K filing on 18 April and a press release issued the same day. Currently, she is a major shareholder controlling more than 20% of the total outstanding shares with ‘supervoting’ rights that entitle her to approximately 49% voting power. She filed a Schedule 13D the prior day indicating her intent to buy all outstanding shares. No offer value nor timing was specified. Bloomberg, LinkedIn

23andMe shares closed Friday at $0.48 on the Nasdaq Global Select Market. On Wednesday, they closed at an all-time low of $0.36. It has not had a close above $1.00 since 29 September 2023. In November, Nasdaq notified them that the company had 180 days to bring the share price above $1.00 or face delisting–and there is little time remaining on the clock. CNBC

In February, after a disastrous fiscal Q3 with net loss tripling and revenue down 32%, Wojcicki floated the idea of separating the consumer genomics/virtual care and the commercial genomic database/drug discovery businesses but has turned now to taking the company private and fully under her control. Its market cap is now about $200 million with $200 million cash on hand, creating a zero-sum situation. The release states that on 28 March, the board of directors formed a special committee to evaluate alternatives to maximizing shareholder value. But when ‘shareholder value’ has to be approved by one shareholder with 49% of the votes, the BOD’s options may be constrained.  

What a difference in three years. In February 2021 after much anticipation, 23andMe went public in a SPAC founded by Richard Branson and soared to a $3.5 billion valuation. It achieved a $4.8 billion market capitalization after buying in October 2021 Lemonaid, a quick-diagnosis/quick-prescription telehealth company for minor but troublesome conditions that was touted, but never became, a nexus of, to quote the announcement, “healthcare that is based on the combination of your genes, your environment, and your lifestyle.”  At the time, its future seemed unlimited between consumer genetic testing (genotyping, not diagnostic) for health and ancestry, building up Lemonaid into a full-featured virtual diagnostics and health service, while taking the deidentified data and marketing it for commercial research to Big Pharma, initially via a five-year exclusive deal with GSK.

That commercial use proved to be a sticky wicket with consumers concerned about how their data was being protected, with opting out made (deliberately?) opaque and difficult. Other than Lemonaid, 23andMe failed to successfully diversify beyond the core ‘one and done’ genotype testing until very late last year. Last February, after their disastrous 6.9 million record data breach turned the spotlights on, the Wall Street Journal revealed that a pricey subscription program for lifestyle counseling that included clinical exome sequencing plus Lemonaid called Total Health failed to gain traction after its late 2023 debut and their in-house drug discovery moved only two out of 50 into early-stage human trials. The GSK deal expired and was not renewed. 23andMe was also torching through cash. [TTA 2 Feb]. The thick and sticky icing on the cake was 23andMe’s antagonistic response to the breached customers, blaming them for recycling passwords and using multiple features they offered [TTA 19 Jan]. This was rightfully blasted in the industry and the subject of multiple consumer class-action lawsuits.

In this Editor’s opinion, 23andMe’s ship must pass between the Scylla and Charybdis of financial choices. Splitting up a near-worthless company into three money-losing parts, like Gaul, is rearranging deck chairs on the sinking ship (to really scramble our metaphors). In either a Chapter 7 (closure) or Chapter 11 (reorganization) option, Wojcicki would lose control and her spot as CEO, wiping out the shareholders, but she might retain some value in Chapter 11 in the IP, depending on how it is structured. Then finally, there is Wojcicki’s buying out the other shareholders. That is dependent on her having or being able to access the cash from investors. None of this solves the failure of the business model, which was for most customers ‘one and done’ testing, not subscribing to additional services, and unsubscribing from any further data use. They saw nothing attractive or useful in the other services. Then as a member to be hacked and blamed for it? That is a run, do not walk, to the exit.

Chapter 7s are usually forced situations where there is little value left in the company other than intellectual property (as in Pear) and equipment (if applicable), zero confidence in management and product delivery (Olive AI), withdrawal of key client business, collapsing in a heap of litigation (Theranos), and any of the above coupled with overwhelming debt that lenders will no longer carry (Babylon Health).

A Must Read for your weekend is Arundhati Parmar’s gem of an essay on 23andMe in MedCityNews–the company’s current dilemma contrasted with what if co-founder Linda Avey had not been ousted in 2009. She expertly sets off interviews with Avey and Wojcicki into an illuminating virtual debate that should be part of an MBA candidate’s case study. Parmar sets them off with analyst views, the experience of a referred 23andMe customer who illuminates the life-changing nature of genetic testing as well as 23andMe’s service drawbacks, and a sparkling view from an empty 23andMe cocktail reception at this past January’s JPM.

2014: a few quotes

January 2, 2015 | by

As a coda to yesterday’s review of our predictions for 2014, here are a few quotes that particularly struck this editor as of interest in 2014, sometimes because of what was said and sometimes because of who was saying it – it’s left to the reader to decide which.

Arthur L. Caplan, Director of Medical Ethics at the New York University Langone Medical Center at the end of an interesting piece in the New York Times on the finer points of genetic testing said:

If you want to spend wisely to protect your health and you have a few hundred dollars to spare, buy a scale, stand on it, and act accordingly.

Three months later, Anne Wojcicki, the founder of 23andme – one of the genetic testing organisations mentioned in the last clip – was quoted in this Medcity News piece as saying: (more…)

23andme and FDA: making nice?

July 2, 2014 | by

In a reversal from the ‘¡No pasarán!’ (‘They shall not pass!’) position 23andme and its QS fans famously took back in the winter and spring [TTA 2 Apr, with prior links] vis-a-vis FDA on interpretation of genetic tests, this report from VentureBeat indicates that 23andme is holding out an olive branch. It’s not your usual cutting. It’s an application for Bloom’s Syndrome, a rare inherited genetic disorder, which FDA just accepted. Adding to it is that CEO Anne Wojcicki is a carrier of this disorder. VentureBeat’s speculation is that if successful, the Bloom’s Syndrome application would be the template for future test applications. The tone on both sides has grown conciliatory. For example: sitting on the same Congressional panel on healthcare last Tuesday was an FDA physician directly involved in the approval situation and Ms Wojcicki. There was a well-timed, quite emollient interview with Ms Wojcicki in the Wall Street Journal this past weekend. Certainly a factor is that 23andme is still growing, but less quickly–up 150,000 from its pre-FDA contretemps level of 550,000. And its funders, even though closely related to Ms Wojcicki, hate to wait on numbers which are certainly below projections.