Three years ago, 23andMe was hailed as a groundbreaking DNA-testing firm, enjoying a share price that surpassed even Apple’s. However, the company now finds itself in a precarious position, grappling with a dramatic decline in its stock value and looming threats to its survival. The firm narrowly avoided being delisted from the stock market this week, raising alarms about the future of its sensitive customer data.
The firm, once celebrated for its innovative DNA reports revealing users’ ancestry and health predispositions, has seen its share price plummet from a peak of $321 to just under $5—reducing its market value to a mere 2% of what it was during its heyday. Industry experts point to a lack of a sustainable business model as a critical factor in the decline. Once customers received their DNA results, there were few avenues for continued engagement or revenue generation, leading to dwindling interest.
Professor Dimitris Andriosopoulos from Strathclyde University highlighted another issue: delays in monetizing the company’s anonymized DNA database for drug research, which typically takes years to yield profit. He expressed skepticism about the firm’s future, stating, “If I had a crystal ball, I’d say they will maybe last for a bit longer… but as it currently is, in my view, 23andMe is highly unlikely to survive.”
The turmoil within 23andMe’s leadership has compounded its challenges. Following the resignation of the board in the summer, only CEO and co-founder Anne Wojcicki remains from the original lineup. Speculation regarding the company’s potential sale or closure persists, although Wojcicki has publicly rejected any takeover offers, insisting that she intends to take the company private.
The sensitive nature of the data held by 23andMe raises significant privacy concerns. Carissa Veliz, author of Privacy is Power, warned that users’ genetic information not only affects them but also impacts family members who did not consent to share their data. David Stillwell, a professor at Cambridge Judge Business School, added that unlike traditional data breaches, compromised DNA data poses unique risks, as genetic ties can lead to predictive insights about individuals based on the data of relatives.
In response to these concerns, 23andMe emphasized its commitment to customer privacy, stating that any potential changes in ownership would adhere to existing data protection laws and that customers would be informed before any modifications to terms of service. Nonetheless, the specter of a data breach, as experienced by the company a year ago, lingers ominously.
Experts argue that robust regulatory frameworks are essential to safeguard personal information, especially in the face of potential corporate upheaval. Veliz asserts that without stricter regulations on the handling of personal data, consumers remain vulnerable. She advocates for a ban on the trade of personal data to enhance protection measures.
As 23andMe navigates this tumultuous landscape, the future of the company and the integrity of its vast genetic database remain uncertain, raising crucial questions about data privacy and corporate responsibility in the evolving tech landscape.
