Biotech
Thursday, April 18th, 2024 5:09 pm EDT
Key Points
- Anne Wojcicki, CEO of 23andMe, is considering taking the genetic testing company private due to a significant decline in its stock price, plummeting over 95% from its 2021 highs.
- In a recent SEC filing, Wojcicki expressed her intention to maintain control of the company and stated her reluctance to support any alternative transaction. She is working with advisors to explore financing sources and potential partners for this proposal.
- Despite 23andMe’s initial success with at-home DNA testing kits, which propelled it into the mainstream, the company has struggled to generate consistent recurring revenue. Trading at around 45 cents per share, it received a deficiency letter from the Nasdaq Listing Qualifications Department, prompting its board to form a “Special Committee” to explore strategic options, including Wojcicki’s interest in acquiring all outstanding shares. The committee, committed to acting in the best interests of shareholders, will review Wojcicki’s proposal alongside other strategic alternatives. Wells Fargo has been engaged as the financial advisor, with no guarantee that Wojcicki’s offer will lead to the desired outcome.
Anne Wojcicki, CEO of 23andMe, is contemplating the prospect of privatizing the genetic testing company following a significant plunge in its stock price, which has dropped by over 95% from its peak in 2021. According to a recent filing with the Securities and Exchange Commission, Wojcicki is collaborating with advisors and intends to engage with potential financing sources and partners. Expressing her desire to retain control of the company, Wojcicki stated that she would not support any alternative transaction. Co-founded in 2006, 23andMe gained widespread recognition for its at-home DNA testing kits, offering customers insights into their family ancestry and genetic makeup. The company went public in 2021 through a merger with a special purpose acquisition company, valuing it at approximately $3.5 billion. However, 23andMe has faced challenges in generating consistent recurring revenue, as customers typically require only one DNA test to obtain their results. Currently trading at around 45 cents per share, the company received a deficiency notice from the Nasdaq Listing Qualifications Department in November, requiring it to raise its share price above $1 within 180 days. In response, the company’s board established a “Special Committee” in March to explore strategies to boost the stock’s performance. A recent press release revealed Wojcicki’s interest in acquiring all outstanding shares of 23andMe, given that she owns shares representing over 20% of those outstanding, translating to approximately 49% of voting power. The Special Committee, in charge of evaluating strategic options, including the possibility of privatization, emphasized its commitment to acting in the best interests of 23andMe and its shareholders. Wells Fargo has been enlisted as the financial advisor to the committee, which cautioned that Wojcicki’s proposal may not necessarily lead to the desired outcome. 23andMe refrained from further commentary beyond the press release.
For the full original article on CNBC., please click here: https://www.cnbc.com/2024/04/18/23andme-ceo-anne-wojcicki-considers-taking-company-private.html
