By Rolfe Winkler and Sabela Ojea
DNA-testing company 23andMe said on Monday that it was firing roughly 40% of its workforce, more than 200 people, as Chief Executive Anne Wojcicki seeks to stabilize her money-losing business.
As part of the restructuring, the company said it was closing its drug development arm, which had been conducting human trials for two of the company's advanced drug candidates. The company said it would wind down those trials and try to sell those two prospects.
Wojcicki for years touted drug development as central to the company's strategy to profit from the trove of data that consumers send in to learn about their ancestry. In August, 23andMe said it would close its sister drug discovery unit, which had been tasked with identifying new drug candidates.
23andMe still hopes that pharmaceutical companies will license its genetics data to help develop their own drugs. It has been seeking additional partners since it announced that a prior deal with pharma giant GSK would no longer be exclusive. A year later it hasn't announced any others.
23andMe reported financial results for its September quarter early Tuesday. Revenue declined 12% from the prior year quarter to $44 million, and net loss was $59 million.
The company ended the quarter with $127 million of cash, down from $170 million three months prior.
The company has undergone five rounds of layoffs since the beginning of 2023. Back then it had more than 800 employees. After this round of cuts, that number falls to about 300. It said Monday's restructuring would save $35 million annually.
23andMe's stock has continued to fall to new lows, some days pushing its market capitalization below the amount of cash on its balance sheet.
"We are taking these difficult but necessary actions as we restructure 23andMe and focus on the long-term success of our core consumer business and research partnerships," Wojcicki said in a statement.
Its core consumer business is unprofitable and people who take its DNA test only need to do so once, limiting growth potential. The company is pivoting to subscription sales, but that too has been a struggle. The number of subscribers, which the company only discloses once a year in March, fell earlier this year compared with the prior year.
Wojcicki, who controls nearly half of 23andMe's voting power, has sought to take the company private. But her efforts to do so had disappointed 23andMe's independent directors, all seven of whom resigned in September. They expressed disappointment that Wojcicki had not put forth a fully-financed deal to buy the company. That left Wojcicki as the sole director on the board.
The company announced two weeks ago that it had added three new directors to the board.
Write to Rolfe Winkler at Rolfe.Winkler@wsj.com and Sabela Ojea at sabela.ojea@wsj.com
(END) Dow Jones Newswires
November 12, 2024 09:52 ET (14:52 GMT)
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