NEW YORK (AP) — All of 23andMe's independent directors resigned from its board this week, an unusual move that marks the latest challenge for the genetic testing company.
The resignations come after lengthy negotiations with 23andMe CEO and co-founder Anne Wojcicki, who wants to take the company private. In a statement Tuesday letter In a letter to Wojcicki, the seven directors said they had yet to receive a “fully funded, fully diligent and viable proposal that is in the best interest of unaffiliated shareholders” from the CEO after months of efforts.
The directors said they would step down effective immediately, arguing that while they still believed in 23andMe's mission, their departures were for the best because of Wojcicki's concentrated voting power and a “clear” difference of opinion about the company's future.
Wojcicki later responded to the resignations in a memo to employees published in a securities journal. presentationand said she was “surprised and disappointed” by the directors’ decision. Still, she maintained that taking 23andMe private and “away from the short-term pressures of the public markets” would be best for the company in the long run.
Wojcicki added that 23andMe would immediately identify independent directors to join the board. Wojcicki, who holds 49 percent of the voting power in 23andMe, was the only remaining board member listed on the company’s website as of Thursday. A spokesperson had no further updates to share when contacted by The Associated Press.
23andMe, which went public in 2021, has struggled to find a profitable business model since then. The company reported a net loss of $667 million in its latest fiscal year, more than double the $312 million loss from the year before.
23andMe's stock also plunged: The company's shares closed at 33 cents on Thursday, down more than 97% since its stock market debut in 2021, according to FactSet.
In April, Wojcicki announced her intention to take 23andMe private by acquiring all outstanding shares she does not own. Wojcicki also said she wanted to retain control of the company and was not willing to support alternative transactions from other bidders. She submitted a proposal in late July, but it was deemed insufficient by the board’s review committee.
Aside from the resignations, 23andMe has been in the news for a number of other reasons in recent months, particularly in relation to privacy concerns. Last week, 23andMe agreed to pay $30 million in cash to settle a class-action lawsuit accusing the company of failing to protect customers whose personal information was exposed in a 2023 data breach.
23andMe has given preliminary support to the settlement, which will be approved by a judge next month. In a statement, a spokesman said the company looked forward to finalizing the agreement, which it believes is “in the best interest of 23andMe’s customers.” The $30 million payment would resolve all claims in the United States, the spokesman added, with $25 million of that expected to be covered by insurance coverage.
