CEO Anne Wojcicki’s offer to take her genetic testing company 23andMe private for 40 cents a share has been met with resistance from her own board.
In a letter sent Friday, a special committee of board members rejected Wojcicki’s plan and asked her to make several changes. The board also requested Wojcicki “immediately withdraw [her] stated intent to oppose any alternative transaction,” while saying it expected her support to have consultants develop a “revised business plan” that can put the company on a more stable path.
Wojcicki’s take-private proposal comes months after first disclosing her ambitions. It would value the company at about $230 million, or about 6% of the $3.5 billion valuation of the company when it went public in 2021.
“We are disappointed with the proposal for multiple reasons, including because it provides no premium to the closing price per share on Wednesday, July 31st, it lacks committed financing, and it is conditional in nature,” the board committee said in the letter.
But the committee left the door open for a deal. “We further understand that these financing sources may be in a position in two weeks to present the opportunity to their respective investment committees,” the board group said. “With that in mind, the Special Committee is prepared to provide you and your potential investors with a limited amount of additional time to submit a revised proposal in line with our expectation.”
The South San Francisco-based biotech has been a consumer genetics pioneer since it was founded by Wojcicki in 2006. It has sold its direct-to-consumer DNA genotyping kits to millions of people, creating a trove of genetic data that it is now attempting to use to develop drugs.
But that dual business model, playing in both consumer health and biotech, has contributed to a terrible run in the public markets. Its stock price closed on Thursday at $0.38.
“Tech investors don’t like the therapeutics burn. The therapeutics people don’t understand consumer,” Wojcicki told Endpoints News in an interview this January. “You’re straddling a fence and no one is there. In a bull market, people are more open to that, and in a market like now, people want vanilla ice cream. If you’re not vanilla, if you’ve got toppings in there, you’re out.”
As the board’s letter makes clear, people also want profits. 23andMe has racked up a $2.2 billion deficit over its tenure, including a $667 million net loss for its 2024 fiscal year. The business had about $217 million in cash and equivalents on the books at the end of March.
Wojcicki beneficially owns nearly 110 million shares of 23andMe’s stock, with most being super-voting shares. All told, her combined voting power is 49.75%, according to a July 16 proxy filing.
23andMe declined to comment further on the matter. Wojcicki did not immediately respond to a request for comment.