In line with the restructuring initiative, 23andMe is looking for strategic opportunities for its pipeline assets, including licensing deals or outright sales.
Genetic testing company 23andMe announced on Monday that it will discontinue its development of new therapies, instead focusing on its genetic testing services and products.
This strategic shift is part of a sweeping business restructuring effort to streamline its operations and cut costs. The company is also laying off more than 200 employees, corresponding to around 40% of its workforce, which will cost it up to $12 million in severance, transition and termination-related costs. In return, 23andMe expects to generate over $35 million in annualized savings.
As it winds down its drug discovery and development operations, 23andMe said it is “actively exploring” strategic opportunities for its therapeutic pipelines. These could include licensing agreements, asset sales or other transactions. In the meantime, the company is working to discontinue its clinical trials “as quickly as practical.”
In the company’s statement, CEO Anne Wojcicki called Monday’s restructuring “difficult but necessary actions” that will enable the “long-term success of our core consumer business and research partnerships.” As for its abandoned assets, Wojcicki said that “we continue to believe in the promise shown by our clinical and preclinical state pipeline and will continue to pursue strategic opportunities to continue their development.”
23andMe has two clinical-stage assets that it is looking to offload. The more mature of the two, 23ME-00610, is an anti-CD200R1 antibody that binds to the receptor and prevents its interaction with its corresponding ligand. This mechanism disrupts a key signaling cascade involved in the risk of cancer and immune diseases.
23ME-00610 is in Phase I/IIa development and has been shown in early studies to have therapeutic potential against neuroendocrine tumors and clear-cell renal-cell carcinomas.
The direct-to-consumer gene testing company was also working on the Phase I 23ME-01473, which targets the ULBP6 protein and restores the body’s antitumor activity through natural killer and T cells. ULBP6 is a stress-induced ligand found on cancer cells that binds to the NKG2D receptor found on immune cells. This interaction helps cancer cells evade the immune system, and 23ME-01473’s mode of action could potentially restore immune recognition.
Monday’s restructuring comes as 23andMe weathers months of difficulties. Since its initial public offering in 2021, the company’s stock has plummeted nearly 98%, from a peak of nearly $259 to $4.6 at the most recent close.
In September 2024, all independent directors of the company’s board resigned, citing dissatisfaction with Wojcicki’s leadership. “After months of work, we have yet to receive from you a fully financed, fully diligenced, actionable proposal that is in the best interests of the non-affiliated shareholders,” the directors wrote in their resignation letter to Wojcicki.
The exodus from 23andMe’s board put it at risk of being delisted from Nasdaq, but the company in late October 2024 announced that it had narrowly missed this outcome and regained compliance with listing requirements.
