NEW YORK (AP) — All of 23andMe’s independent directors resigned from its board this week, a rare move that marks the latest challenge for the genetic testing company.
The resignations follow lengthy negotiations with 23andMe CEO and co-founder Anne Wojcicki, who wants to take the company private. In a letter to Wojcicki on Tuesday, the seven directors said they had yet to receive from the CEO “a fully funded, fully vetted and actionable proposal that is in the best interests of the unaffiliated shareholders” after months of efforts.
The directors said they would resign effective immediately, arguing that while they still believed in 23andMe’s mission, their departure was 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, posted in a securities filing, saying she was “surprised and disappointed” by the directors’ decision. She maintained, however, that taking 23andMe private and removing it “from the short-term pressures of the public markets” would be the best choice for the company in the long run.
Wojcicki added that 23andMe would immediately identify independent directors to join the board. Wojcicki, who holds 49% of 23andMe’s voting power, 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 since struggled to find a profitable business model. The company reported a net loss of $667 million for its most recent fiscal year, more than double the $312 million loss the year before.
Shares of 23andMe also fell, with the company’s stock closing at 33 cents on Thursday, down more than 97% since its 2021 public debut, according to FactSet.
In April, Wojcicki announced plans to take 23andMe private by acquiring all of the outstanding shares she doesn’t own. Wojcicki has also said she wants to retain control of the company and isn’t willing to support other deals from other bidders. She submitted a proposal in late July, but the board’s review committee deemed it insufficient.
Beyond the resignations, 23andMe has been in the news in recent months, particularly over 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 is expected to be reviewed by a judge for approval next month. In a statement, a spokesperson said the company looks forward to finalizing the deal, which it believes is “in the best interest of 23andMe’s customers.” The $30 million payment would settle all U.S. claims, the spokesperson added, and $25 million is expected to be covered by insurance coverage.
