Genetic testing company 23andMe declares bankruptcy

On Sunday, the genetic testing and heritage company 23andMe announced that it had entered Chapter 11 bankruptcy and was asking a court to arrange its sale. The company has been losing money for years, and a conflict between its board and CEO about future directions led to the entire board resigning back in September. Said CEO, Anne Wojcicki, has now resigned and will be pursuing an attempt to purchase the company and take it private.

At stake is the fate of genetic data from the company’s 15 million customers. The company has secured enough funding to continue operations while a buyer is found, and even though US law limits how genetic data can be used, the pending sale has raised significant privacy concerns.

Risky business

The company launched around the time that “gene chips” first allowed people to broadly scan the human genome for sites where variations were common. A few of these variants are associated with diseases, and 23andMe received approval to test for a number of these. But its big selling point for many people was the opportunity to explore their heritage. This relied on looking broadly at the patterns of variation and comparing those to the patterns typically found in different geographic regions. It’s an imperfect analysis, but it can often provide a decent big-picture resolution of a person’s ancestry.

23andMe faced a number of challenges, though. For starters, the gene chips quickly became commodities, allowing a large range of competitors to enter the field, some of which had stronger backgrounds in things like linking genealogies to public records. This commodification also meant that many potential 23andMe partners in the pharmaceutical industry, who might be interested in gene/disease linkages, could affordably build their own databases or simply rely on some of the public resources that have since been developed, like the UK’s Biobank.