23andMe CEO Anne Wojcicki Plans to Take Company Private
The DNA-testing company’s enterprise value is less than zero as its shares close at a new low
Anne Wojcicki is seeking to take her DNA-testing company 23andMe ME 43.04%increase; green up pointing triangle private after three years in public markets that saw the once-hot company’s valuation collapse from a high of $6 billion.
Her intentions were revealed in a public filing late Wednesday, which stated that she is working with advisers to help craft a potential deal and intends to speak with potential partners and financing sources. The filing said she would oppose any other buyer taking over the company. She holds 49.99% voting power in the company, which would make it all but impossible for anyone else to buy it.
News of Wojcicki’s plan drove 23andMe stock up 40% to $0.50 per share in early trading Thursday. They had closed Wednesday at $0.36, a record low that translated to a market capitalization of about $200 million. 23andMe had more than that amount of cash in the bank at the end of its last reported quarter. At the lower share price the company’s enterprise value was negative.
Wojcicki declined to comment.
The cratering of its stock reflects the many challenges facing its business. Its DNA tests aren’t as popular as they once were and lose money. 23andMe has tried to create a recurring revenue stream from its tests by offering a subscription product, but that has fallen far short of the company’s sales goals since customers only need to take its test once.
Wojcicki pivoted the company into prescription drug development, hoping to use its massive DNA database to discover new pharmaceuticals. But drug discovery is a cash-hungry business in which prospects can take a decade to pay off. The company has enough cash to last until 2025 at its current rate of spending. It has potential drug candidates in the pipeline, and taking the company private while securing additional financing could give it more leeway to get them to market.
An effort to offer medical care has also sputtered as the company has yet to fully integrate the telehealth company it acquired that was meant to anchor that service.
Wojcicki co-founded the company in 2006. She took over as sole chief executive in 2009 after pushing out her co-founder and has seen the company through other challenges, including a run-in with the Food and Drug Administration in 2013. The agency halted sales of its health test, citing a risk of false reports but later cleared them after the company spent millions validating its health reports.
Nasdaq last year threatened to delist the company’s shares.