23andMe's stock turns lower after company posts its latest quarterly loss

MW 23andMe's stock turns lower after company posts its latest quarterly loss

By Ciara Linnane and Mike Murphy

Stock had gained late Monday on news it would cut 40% of its workforce as part of a restructuring

23andMe Holding Co.'s stock turned down early Tuesday, after the DNA-testing company reported its latest quarterly loss, shedding gains made late Monday after it announced it would cut 40% of its workforce as part of a restructuring.

Sunnyvale, Calif.-based 23andMe $(ME)$ said its net loss came to $59 million in its fiscal second quarter to Sept. 30, narrower than the loss of $75 million posted in the year-earlier period. Revenue came to $44 million, down from $50 million a year ago.

FactSet analysts no longer offer estimates for the company, which has seen its value plunge 98% from its 2021 peak to about $116 million as of Monday.

Once a booming consumer-health company, 23andMe has struggled as its ambitions to become a leading healthcare company by building out the company's core product of tracking individual genetic histories into telehealth and drug development have been stymied.

Consumer demand for its DNA-testing kits has dropped sharply over time and it has become evident that consumers, once they have received their test results, have no further use for the product or company. That has made it difficult to create an aftermarket and grow sales.

In September, 23andMe's independent board members resigned en masse over a dispute with co-founder and Chief Executive Anne Wojcicki's plans to take the company private. Last month, it made moves to rebuild its board and underwent a 1-for-20 stock split for its Class A and B shares.

The job cuts will impact about 200 employees.

The company said it would also explore "strategic alternatives" for its clinical and preclinical assets. The restructuring is expected to save the company about $35 million in annualized costs.

"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.

The company had cash and equivalents of $127 million at the end of the quarter, down from $216 million at the end of March.

23andMe's stock jumped more than 5% in after-hours trading following the announcement. Still, shares are down about 75% year to date, while the S&P 500 has gained 25.8%.

-Ciara Linnane -Mike Murphy

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November 12, 2024 08:05 ET (13:05 GMT)

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