The Silicon Valley and Wall Street golden kid 23andMe was the DNA testing firm just three years ago. The company is currently in risk of being delisted from the Nasdaq.
However, CEO of 23andMe Anne Wojcicki tells CNN that Wall Street shouldn't write her off just yet.
The erstwhile digital unicorn's worth has plummeted by 96% from its top share price of $17.65 in February 2021, despite the company's first surge in popularity.
Currently trading at roughly $0.70 per share, 23andMe was notified in November that it was not complying to Nasdaq regulations, which mandate that a business keep its stock price above $1. In other words, it has roughly three months to raise the price or take a chance.
“We’re very aware of this,” Wojcicki stated. “We’re making the necessary changes to make the business sustainable, and then it’s going to be about growing it again.”
Deep connections in Silicon Valley
When 23andMe debuted in 2006, it broke down barriers. The cost of sequencing a human genome was estimated by experts at the time to be around $14 million.
Silicon Valley runs in Wojcicki's family tree.
Her father was a physics professor on the Stanford campus, where she grew up. Since she published How to Raise Successful People, which was inspired by her own daughters, and taught Palo Alto High School students who were the children of tech titans for decades, her mother has earned the title of "Godmother of Silicon Valley." Anne's sister Susan Wojcicki was previously YouTube's CEO. Google was co-founded by her ex-husband, Sergey Brin.
When Wojcicki recognised an opportunity to transform the genetics industry, she took it. Wojcicki and her co-founders bet that they could offer consumers with health and ancestry data for less than $1000 by sequencing only a portion of their DNA.
They won their bet. Time Magazine termed the company's retail DNA test "Invention of the Year" in 2008, and by 2011, its DNA database had grown to more than 100,000 clients. They went public in 2021 and their market value quickly climbed to $6 billion.
Dramatic downfall
The company recently faced criticism for security breaches impacting 6.9 million users, and it has failed to find a method to keep people engaged with its services after they have used the one-time DNA kit. Wojcicki says she and 23andMe are now primarily focused on medication research, which is a costly and risky endeavour that may take decades to pay off.
More pressing concerns: the company has yet to produce a profit, and 23andMe may run out of money as early as next year. According to Wojcicki, the problem stems from a slowdown in the biotech sector rather than internal issues.
“We did layoffs last year,” noted Wojcicki, referring to the three rounds of cuts and the sale of a subsidiary that reduced her staff by about a quarter. “But we’re not alone in this biotech downturn. And so what you have to do is you have to cut back and you have to prioritise the programs that you think are the most important.”
“We’ve been caught in the downturn along with the entire industry. We’re absolutely exploring what our options are to prioritise our best assets…we can’t do everything we’ve done. That’s what happens in this kind of market. 23andMe is on the right track," stated Wojcicki. "The vision and where we're going is solid, but the path to get there is more turbulent."
Wojcicki is confident that genetic sequencing will alter healthcare and drug discovery, and that 23andMe will be well-positioned to capitalise on this opportunity.
However, drug discovery is a lengthy process, with an average time of 10 to 15 years from target identification to FDA approval.
The question is, are investors willing to wait that long?