California Attorney General urges Californians to direct 23andMe to delete their genetic data and samples.
By Wolf Richter for WOLF STREET.
Genetic testing and data collection company 23andMe, which had gone public via merger with a SPAC in 2021, finally filed for bankruptcy today. Shortly after the announcement of the company’s merger with Richard Branson’s SPAC in February 2021, the SPAC’s market cap reached $6 billion. Now, the outfit is valued at $19 million.
Branson’s SPAC went public via IPO at $10 a share in late 2020. It then acquired 23andMe at the company’s peak in revenues. The 1-for-20 reverse stock split last October turned each 20 shares [ME] into one share, and thereby turned the SPAC’s IPO price of $10 into $200. And today’s price of $0.73 would be $0.037 on a pre-reverse-split basis.
After the total collapse since late 2021, today’s additional drop of 59% doesn’t even show up on the chart. 23andMe failed because its business model failed, and that was already clear before going public, but it didn’t matter because it was the time of free money and consensual hallucination about SPACs and other assorted creatures (data via YCharts).
From 2020 through the first three quarters of the current fiscal year, the company had net losses of $1.79 billion. Annual revenues fell by 28% from the peak in 2020 through the last fiscal year.
In advance of the bankruptcy filing, the company secured a $35 million debtor-in-possession (DIP) loan commitment from JMB Capital Partners Lending. The DIP loan puts JMB in a senior position on liens ahead of prior lenders.
In the bankruptcy filing, the company has petitioned the court to allow it to pay employees, vendors, and suppliers, and requested approval to exit various contracts, including office leases in Sunnyvale and South San Francisco.
Co-founder Anne Wojcicki tendered her resignation as CEO by “mutual agreement” between her and the special committee, effective March 23 evening, but remains on the Board as a Class III director. CFO Joe Selsavage, was appointed interim CEO.
Wojcicki, who until 2015 was married to Google co-founder Sergey Brin, has been offering to buy out the company at a price lower even than today’s closing price – most recently in March at 41 cents a share, or at $11 million. Those efforts were rejected by the board.
In September, the company’s independent board members quit en masse over these take-private efforts. By then, the end was already palpable.
The company implemented serial layoffs, including last November when it cut 40% of its remaining staff and scuttled Wojcicki’s efforts to diversify the business model by using the genetic data it had collected from its 15-million users to develop therapies and offer personalized medical care.
DNA data is the most personal and unique data there is, and users paid to give it away, and now that data resides with 23andMe and will get auctioned off in bankruptcy court. Some of the data has also been sold to drug development companies over the years in supposedly anonymized form. Hackers obtained some of the data in 2023. Police also obtained DNA data from some specific customers.
For customers, this is more than just one of the countless heroes in our pantheon of Imploded Stocks.
California Attorney General Rob Bonta “urgently” issued a “Consumer Alert for 23andMe Customers,” telling Californians that under the state’s “robust privacy laws,” they “have the right to direct the company to delete their genetic data.”
“I remind Californians to consider invoking their rights and directing 23andMe to delete their data and destroy any samples of genetic material held by the company,” said the alert, which gave 9-step instructions on how to do that.
That would obviously be a good idea. But deleting data on a computer isn’t that clear-cut. Unless data are actually overwritten, the data is still there but just doesn’t show up in the directory anymore. There is no way to check if the data was actually overwritten.
The company said in its bankruptcy press release: “Any buyer will be required to comply with applicable law with respect to the treatment of customer data and any transaction will be subject to customary regulatory approvals, including, as applicable, approvals under the Hart-Scott-Rodino Act and the Committee on Foreign Investment in the United States.”
Which is, like, very reassuring? So maybe a Chinese company wouldn’t be allowed to buy the data?
The company was hacked in October 2023, and genetic data of what now has grown to nearly 7 million customers was exposed. The hacker was offering some of the genetic data on the dark net. The company subsequently agreed to settle a lawsuit related to the hack for $30-million.
In a bankruptcy auction, the buyer of the assets – primarily the genetic data – would shed any claims stemming from the hack.
In 2018, big pharma company, GlaxoSmithKline [GSK] invested $300 million in 23andMe and signed an “agreement to leverage genetic insights [the genetic data] for the development of novel medicines.” At the time, 23andMe had “over 5 million customers,” the press release went on to say, adding that “23andMe customers can also choose to participate in research and contribute their information to a unique and dynamic database, which is now the world’s largest genetic and phenotypic resource.”
On the other hand, people can still pay to hand their DNA to the company. It is now running a special for its “Premium” annual subscription for $199 for the first-year, with a $68 renewal, including the genetic test.
Here’s a screenshot of part of that page, for posterity:
The big problem that 23andMe has always had is its business model. DNA tests are a once-in-a-lifetime thing. One test is all people need to see their ancestry data. And not everyone wants to surrender their genetic data. Maybe it was a cool thing at first, and then people started thinking about the implications? So demand from consumers has dropped.
The company tried to come up with subscription models, veering into healthcare and offering more than just genetic tests, but it just didn’t lead to a big revenue stream, and revenues continued to decline. Its genetic drug discovery adventure never led anywhere, but burned up a huge amount of cash. And licensing the genetic data from its customers to pharmaceutical companies for drug development also failed to produce that big revenue stream.
Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the mug to find out how:
If there is nothing unusual about my genetic information (and no bad behavior like a serial killer history), why would it be urgent to delete my data?
Yes, obviously, for you it’s a good thing they have your genetic data? That’s why people give away their genetic data. They don’t see a problem with it. And for those people, it’s just fine that this data is out there in the wild, getting handed around and used in various ways, it’s just their genetic data, I mean, come on, what’s the big deal? After all the data a smartphone collects on everything, why worry about the genetic data?
Their own genes prevent a realistic comprehension of the implications in terms of their “privacy”.
Perhaps in the future, your genetic information is discovered to have some trait that is considered a pre-existing condition or some other definition as yet to be determined, such as aggressive behavior or high risk of cancer…and so you are considered a liability to society, and are thus treated as such, locked up, dropped from insurance, eradicated…
duh…how about insurance companies getting their hands on your genetic information and proceed to deny you coverage based on genetic risk factor? This line of question reminds me of people that scream at the top of their lungs if I didn’t do anything wrong and I have nothing to hide then we don’t need privacy. To that kind of logic, I would like to invite these people to openly share their financial data for the world to see. Anyone at anytime should be able to know how much you have in your bank account, because afterall you didn’t do anything wrong to earn that money right? Why have any privacy to guard against people looking at your bank statement?
Nothing uniquely identifies you more than your genetic data. SSN, passport number, fingerprints, facial ID – your genetic data is all that wrapped together and more.
I would hope there would be HIPAA requirements protecting this data. Like if a large medical practice went bankrupt, and it was left to the tender mercies of Wall Street and vulture capitalists, one would hope there would be some protections for the health data.
now you can be framed with DNA evidence at the scene of a gruesome crime. But if you didn’t do anything wrong, you don’t have any worries that your DNA was found on or in that corpse, right?
I think having someone’s genetic code is light years away from being able to replicate someone’s genetic code.
How do you think they sequence it? The DNA is duplicated into strands of 500,00 base pair length and then reassembled. You can easily copy an entire genome for a 1000 dollars.
It’s not just your genetic data. Once you give them your DNA you’ve essentially given them everyone in your families DNA. The DNA from bothers, sisters, kids etc…is, probability wise, virtually identical. As someone who values their privacy, I was more than a little upset when my sister gave them her genetic information to find her “ancestry”.
They should have pivoted to a genetic testing market similar to Ambry Genetics in Aliso Viejo. Even then, business is still tough, heard they are also not doing so hot especially after Konica purchased them a while back and now an AI company just acquire them from Konica. Either case, it’s a tough business but at least they are not floundering as bad as 23andMe.
Alive humans constantly question why I do not have a Facebook, Twitter (X), Amazon, or any social media account.
They need to pay me for the data.
I do allow Google to track me as I have nothing to hide.
A recent theft quickly solved by the police stunned me with the incredible efficiency of the ALPR (Automated License Plate Reader) system which captures a database of vehicular movement. This is not a good time to be a criminal. They will get you.
Unreal. Genetic data makes up your existential fingerprint. How the **** is this not covered under HIPAA laws? And why is it even auctionable?
Perhaps HIPAA should be modified to include it, but HIPAA is somewhat limited in the entities that are covered.
Consensual hallucination at its finest ! Doh!! 😣
Yeah. Lower end of the gene pool. So to speak…
Dove in head first.
BleachBit anyone?
😁😁😁
It is also possible that your DNA is incredibly valuable. Henrietta Lacks had special cells with unique DNA. They are still used today and are called the HeLa cell line.
The total worth is over 1 billion $ from then to now of which her family has received nothing. She was not asked if her cells could be used in research when they were taken from her when she was ill. She herself passed from cancer decades ago, but her cancer caused her cells to become immortal and worth a fortune.
Ancestry will scoop up these “assets”…
…for the right price.
I want the genetic data of the idiots that invested in this “special” spac. This is so I can give it to my grandchildren so they can avoid hooking up with any of them.
I knew this genome mapping to find out if you’re royalty nonsense would blow up at some point. Total mistake giving up that kind of information.
Not the long lost King? The treasure chests should just be emptied out to buy booze? So then it really was all just about “steal from the rich and give to the pour”! Maybe that’s what they meant by “trickle down” after all?
So far, I haven’t heard any realistic reason to get worked up about someone having my genetic information. I think the issue is much ado about nothing.
I’m glad there is an endless supply of people who think like you or else companies like 23andMe would go out of business. Wait… OOPS
Why do we allow the media to surprise us with constant fake revelations of specific hacks? Tech-savvy folks know that privacy and encryption are myths. Any info in a public place is public. Everything is hacked all the time. You’re only protected from the RESULTS of a hack if your data is insignificant and trivial, not worth the time and money to run an extortion with it.
Ah, we all feel oh so special; and interesting. We’re not, we are members of the masses. Nobody has any interest in us at all.
In the latest James Bond 007 film, “No Time to Die,” there was a new deadly tech developed by the bad guys.
“Project Heracles, a bio-weapon containing nanobots that infect like a virus upon touch and are coded to an individual’s DNA, rendering it lethal to the target and their relatives but harmless to others.” (imdb.com) Essentially an untraceable method to kill specific people, or groups with certain ancestry, or any target you wanted. So maybe not something you’d want the Chinese to have?
If you were in the service, your DNA was collected and if you were ever arrested it too was collected. Who knows where else it’s been collected?
These genetic tests don’t go back very far. 200-300 years – not very interesting. If they could go back 60,000 years – I’d pay for that (see: world map early human migration). What I’d like to know is if I’m related to the creator of stadel cave lion man (bbc – living with the gods – beginnings of belief).
Actually they go further back than that. I was recently corresponding with a very distant cousin in England. We share an ancestor who was born in 1540.
Just change their name to 23andAI … problem solved!
/S
I think maybe someday I will run into a clone of myself.
I’m wondering how I would handle that?
I recall reading Terms & Conditions for an innocuous little device to alert your smart phone about the tire pressures on your vehicle. In those terms they were given permission to access literally anything contained on your smart phone. Further, that data became the property of the “company”. And that should the company be sold, that data was their asset and could be sold with the company.
Wonder what 23&Me’s T&C say?
All your base are belong to us
(those around in the 90s will understand)
A buddy had his done and it came back with a tad of Neanderthal.
I told him we can’t be friends anymore.
Even Bog Irish has to draw a line somewhere.
I just can’t believe being mad at yr sister cuz she got hers done.
As an elderly ordinary commoner, I don’t see what all the hub bub is about.
I have read that anyone with $25 can buy your social security number. If you are worried about identity theft, go and freeze your credit rating (it is free). Then there is no need to worry about identity theft, unless maybe you are a chronic debtor—then everyone wants your number (if they don’t already have it).
To freeze your credit, which is also known as a security freeze, you need to contact each of the three major credit bureaus (Equifax, Experian, and TransUnion) directly, either online, by phone, or by mail, to request a freeze on your credit report.
If I remember right Wolf was making a big thing about this years ago after the Experian hack. I’ve had all my credit frozen since then. It’s pretty easy to do online but you have to make 3 more accounts. If you need to apply for anything you log into all 3 and set a time-limited unfreeze. Pretty easy and I rarely get unsolicited credit card offers now.
23andme already sold all the DNA files to the FBI years ago. So if you participated in this, your DNA is now on file alongside every convict in America who has been to a state Dept of Corrections facility. Being a person who may have never even been arrested but your DNA is in the federal databases gotta suck when your only goal was to find out what percentage of Irish or Bulgarian blood is flowing through you veins