Shares of DNA testing firm 23andMe Holding surged after CEO Anne Wojcicki revealed plans to potentially take the struggling company private.
Following Wojcicki’s disclosure of the potential go-private transaction to the board, 23andMe’s stock experienced a remarkable surge, climbing as much as 33% on Thursday, marking its most significant jump since August 2022.
The move comes amidst a challenging period for the company, which has seen its stock plummet to below $1 a share in recent months. Initially valued at $3.5 billion when it went public in 2021 through a merger with a special purpose acquisition company, 23andMe has faced substantial hurdles as its revolutionary DNA testing business failed to gain widespread traction.
In the SEC filing, Wojcicki emphasized her intention to retain control of the company and pursue the go-private transaction, expressing reluctance towards alternative strategies. She outlined plans to engage with potential partners and financing sources in the coming weeks, a move aimed at bolstering the company’s prospects.
Facing declining sales of its DNA testing kits, 23andMe has shifted its focus towards subscription-based products, such as the recently launched Total Health program. Priced at $1,188, the program offers a comprehensive health-care package, including DNA testing, blood tests, and regular consultations with company healthcare providers. Despite these efforts, the subscription model has yet to deliver the desired results, while the company’s drug development arm continues to incur losses.
As Wojcicki explores avenues to revive the company’s flagging stock price, including the potential separation of its drug development and consumer businesses, the future of 23andMe remains uncertain. With the company’s transition towards healthcare delivery and preventive care, Wojcicki aims to position 23andMe as a vital player in the evolving healthcare landscape.
Amidst ongoing challenges, the prospect of going private represents a significant strategic shift for 23andMe, signaling the determination of its CEO to chart a new course for the company in pursuit of long-term sustainability and success.
