• by Tanya Gazdik , September 23, 2024

Genetics testing company 23andMe is experiencing upheaval, with all of its independent directors resigning last week. 

"The resignations follow drawn-out negotiations with 23andMe CEO and co-founder Anne Wojcicki, who wants to take the company private,” according to CBS News. "The directors said they would be resigning effective immediately — arguing that, while they still believed in 23andMe's mission, their departures were for the best due to Wojcicki's concentrated voting power and a ‘clear’  difference of opinion on the company's future.”

In a memo to employees published in a securities filing, Wojcicki said she was "surprised and disappointed" by the directors' decision. She said taking 23andMe private "outside of the short term pressures of the public markets" would be best for the company long term.

“23andMe went public in 2021, jumping on the SPAC trend of the era, when a bunch of companies went public via ‘special purpose acquisition companies’ — essentially shell-company mergers that let firms go public in a hurry when investor appetite is strong,” according to CNN Business. “The stock shot up, briefly valuing the company at $6 billion. Wojcicki, who owns 49% of the company, became a billionaire.”

Wojcicki’s profile rose with the company, with Mattel modeling a doll on her as part of its “Barbie Role Models” line.

“23andMe has amassed a vast trove of DNA from its popular test kits and pioneered using genetic information to determine risks for an array of diseases,” according to The Washington Post. “It became the first firm, in 2017, to win clearance from the U.S. Food and Drug Administration to market such tests directly to consumers. After filing to go public in 2021, 23andMe’s stock briefly reached a nearly $6 billion value.”

But since then, 23andMe has struggled to find a sustainable business model. The company has also struggled with lawsuits against it.

The company last week agreed to pay $30 million settlement to end multidistrict litigation revolving around a 2023 data breach. 

“The settlement, which is pending a judge's approval, comes after the company confirmed in October that ‘threat actors’ used about 14,000 accounts, approximately 0.1% of the company's user base, to access the ancestry data of 6.9 million connected profiles,” according to USA Today. “Leaked data included users' account information, location, ancestry reports, DNA matches, family names, profile pictures, birthdates and more.”

While 23andMe confirmed the existence of the breach in October, it did not reveal the full extent of the issue until December. A class-action suit was filed in San Francisco the following month, accusing 23andMe of failure to amply protect users' personal information