23andMe, once a pioneer in consumer genetic testing, has filed for Chapter 11 bankruptcy while desperately searching for a buyer as millions of Americans wonder what will happen to their sensitive DNA data.
Key Takeaways
- 23andMe has filed for Chapter 11 bankruptcy protection while seeking a buyer for its business valued at $50 million.
- Co-founder Anne Wojcicki has resigned as CEO but plans to pursue acquiring the company as an independent bidder.
- California Attorney General Rob Bonta has issued an urgent consumer alert advising customers to consider deleting their genetic data.
- The company recently settled a $30 million lawsuit related to a data breach affecting 6.9 million customers.
- 23andMe maintains that customer genetic data remains protected, with no changes to how it’s stored or managed during bankruptcy proceedings.
Bankruptcy Filing and Business Operations
23andMe initiated voluntary Chapter 11 proceedings in the US Bankruptcy Court for the Eastern District of Missouri. The genetic testing company has secured $35 million in debtor-in-possession financing to maintain operations during the bankruptcy process. The company listed assets and liabilities between $100 million and $500 million in bankruptcy documents. Despite these financial challenges, 23andMe has confirmed it will continue operating while it seeks a buyer.
The bankruptcy comes after several difficult years for the company, including a 40% reduction in workforce announced last November. Additionally, 23andMe recently settled a lawsuit for $30 million related to a significant data breach that affected 6.9 million customers. These incidents have contributed to the company’s financial distress, forcing it to explore options for potential sale while maintaining customer services.
Leadership Changes
Co-founder Anne Wojcicki has resigned as CEO of 23andMe in a surprising leadership shakeup. According to Wojcicki, she stepped down so she “can be in the best position to pursue the company as an independent bidder.” This suggests Wojcicki intends to potentially buy back the company she helped create. In the interim, CFO Joe Selsavage has taken the reins as CEO to guide the company through the bankruptcy and sale process.
The transition in leadership comes at a critical juncture for the company, which pioneered direct-to-consumer genetic testing since its founding in 2006. Wojcicki, who helped build the company into a household name with more than 14 million customers worldwide, now finds herself in the unusual position of potentially bidding to acquire the company she helped create.
Privacy Concerns and Consumer Data
California Attorney General Rob Bonta has issued an urgent consumer alert regarding the “trove of sensitive consumer data 23andMe has amassed.” Bonta is advising customers to consider deleting their genetic information from the company’s databases due to concerns about how this highly personal data might be handled during bankruptcy proceedings. The alert has raised alarm among millions of customers who previously submitted DNA samples to the service.
For its part, 23andMe has responded by emphasizing that there are “no changes to how customer data is stored, managed, or protected” during the bankruptcy process. The company maintains its commitment to safeguarding customer data and transparency in data management. Customers concerned about their genetic information can access account settings to download their data, revoke research consent, or completely delete their accounts and request the destruction of their biological samples.
Customer Options for Data Protection
Under California’s Genetic Information Privacy Act and Consumer Protection Act, consumers have specific rights regarding their genetic data. Customers can delete their 23andMe accounts and personal information by logging into their accounts, accessing settings, downloading data if desired, and confirming deletion requests via email. The company is required to honor these requests regardless of its financial situation.
Consumers who previously consented to having their genetic information used for research purposes can revoke that consent through account settings. Additionally, those who provided physical samples can request that their stored saliva samples and DNA be destroyed by changing preferences in their account settings. These options provide important protections for consumers concerned about the security of their highly sensitive genetic information during the company’s financial restructuring.
Sources:
- 23andMe files for bankruptcy as California AG urges customers to delete data
- 23andMe users told to consider deleting their data by California attorney general as the company files for bankruptcy
- Attorney General Bonta Urgently Issues Consumer Alert for 23andMe Customers
- 23andMe Bankruptcy Stock Price Falls Penny Territory Data Warning
