DNA testing kit firm 23andMe files for bankruptcy in the US

DNA testing company 23andMe has filed for bankruptcy protection in the US while it searches for a buyer, after struggling with heavy losses and facing the aftermath of a data hack.

The genetics company also announced the immediate resignation of its chief executive and co-founder Anne Wojcicki.

Founded in 2006, California-based 23andMe analyses its customers’ DNA through home saliva collection kits to produce personalised genetic reports on health and ancestry.

23andMe said it had kickstarted voluntary Chapter 11 proceedings in the US – meaning it intends to reorganise its debts and assets to have a fresh start, while remaining in business.

It will also see the company put itself up for sale.

The resignation of Ms Wojcicki is “effective immediately”, by mutual agreement, according to the group.

In a post to social media platform X, formerly Twitter, Ms Wojcicki said she was “disappointed” by the bankruptcy plan but that she had resigned as chief executive so she could “be in the best position to pursue the company as an independent bidder”.

Chairman Mark Jensen said: “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.”

He said the process would help the firm address “operational and financial challenges” including through further cost-cutting and resolving legal liabilities.

“In addition, 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,” he stressed.

23andMe came under an investigation by the UK and Canadian data protection regulations over a 2023 data breach and concerns that genetic information may have been been compromised.

The Information Commissioner’s Office (ICO) said on Sunday night it was “monitoring the situation closely” and the company remained under an obligation to protect the personal information of its customers.

Stephen Bonner, ICO deputy commissioner, said: “Genetic information is among the most sensitive personal data that a person can entrust to a company and organisations handling such data are required to uphold a very high standard of security and governance in accordance with the UK GDPR (General Data Protection Regulation).

“The ICO and the Office of the Privacy Commissioner of Canada have been jointly investigating the data breach that 23andMe first reported to us in October 2023. Earlier this month, we issued 23andMe with our provisional findings, a notice of intent to fine £4.59 million and a preliminary enforcement notice.

“We would stress these findings are provisional and, as with all preliminary findings, are subject to representations from 23andMe including in relation to affordability considerations. The ICO will carefully consider any representations made before taking a final decision.”

23andMe also settled a legal case in the US alleging that the company failed to protect the privacy of its customers.

The firm reported a loss before income tax of more than 128 million dollars (£98.8 million) in its latest financial results, covering April to December 2024.

It said lower kit sales and a decline in average selling prices were partly behind a drop in revenues.