DNA-Testing Site 23andMe Fights for Survival
Three years after reaching unprecedented heights with a market valuation surpassing Apple’s, DNA-testing firm 23andMe now finds itself in a struggle to survive. Once celebrated for its innovation in consumer genetic testing and its high-profile clientele, 23andMe has seen its stock price plummet to just under $5, a mere fraction of its peak at $321. This week, it narrowly avoided delisting from the stock market, sparking concerns about the future of its valuable database of genetic information.
Despite these challenges, the company remains publicly optimistic. In a statement, 23andMe reiterated its commitment to data privacy and protecting its customers’ genetic information, even as questions arise about what might happen to this sensitive database should the company be sold or shuttered. CEO and co-founder Anne Wojcicki has reportedly resisted external acquisition proposals, opting instead to consider taking the company private.
23andMe’s rapid rise to fame was marked by groundbreaking consumer insights and influential users like Oprah Winfrey, Warren Buffet, and Snoop Dogg. Millions of users gained insights into family connections and health predispositions, generating significant excitement and driving up the company’s valuation. However, the initial surge in popularity has proven difficult to sustain. According to Professor Dimitris Andriosopoulos of Strathclyde University, 23andMe’s business model lacked continuity, with few reasons for customers to return after their initial report. Additionally, a strategy to leverage anonymised genetic data for pharmaceutical research faced delays due to the lengthy drug development process.
In recent months, internal disruptions have mirrored the company’s struggles. The board resigned earlier this year, leaving Wojcicki as the sole remaining founding leader. Although the company denies speculation of an impending sale, the possibility has drawn attention, including calls from competitor Ancestry for regulatory oversight in case of a sale.
With a database that includes not only the DNA of consenting customers but also potentially sensitive genetic information of their relatives, 23andMe’s situation raises concerns around data privacy. Carissa Veliz, author of Privacy is Power, underscores that genetic data is especially sensitive, affecting not only individuals but also family members who did not consent to share their information.
Data security remains a pressing issue, especially after a cyberattack hit 23andMe just one year ago. While the company insists that data protections are firmly in place, experts like David Stillwell, professor of computational social science at Cambridge, warn that genetic data carries lasting implications. Hackers gaining access to DNA information could lead to far-reaching consequences, given the predictive power of genetic data.
As regulatory discussions on genetic data privacy evolve, Veliz advocates for stricter laws on personal data use, cautioning that current privacy policies allow companies substantial control over consumer data. For 23andMe, safeguarding customer trust and addressing privacy concerns could be vital to any potential recovery—if the company can secure its footing in an increasingly competitive market.
