23andMe Considers Selling Telehealth Business Amid Financial Struggles
Genetic testing company 23andMe is reportedly exploring the sale of its telehealth business, Lemonaid Health, as it grapples with financial challenges and the aftermath of a significant data breach. The company acquired Lemonaid Health in 2021 for $400 million as part of a strategic move to expand into personalized telemedicine services.
The potential sale comes as 23andMe faces a steep decline in its stock value following a 2023 data breach that affected millions of customer accounts. The company’s shares, which debuted at $11.13 in June 2021, have plummeted, forcing a reverse stock split to maintain its Nasdaq listing.
The data breach, which exposed ancestry information of nearly 7 million users, resulted in a $30 million class action settlement in 2024. This incident has not only strained the company financially but also significantly damaged its reputation in the market.
CEO Anne Wojcicki has been exploring various options to address the company’s challenges. Initially considering taking the company private, Wojcicki later expressed openness to a third-party takeover, leading to the resignation of the entire board. However, she has since retracted the third-party buyout consideration while maintaining interest in privatization.
23andMe’s market valuation has drastically fallen from $3.5 billion in 2021 to approximately $91 million. The company now faces the daunting task of regaining investor confidence and stabilizing its position in the competitive genetic testing and healthcare services market.
As 23andMe navigates these turbulent waters, the potential sale of Lemonaid Health represents a significant shift from its earlier strategy of integrating genetic testing with personalized healthcare services. The outcome of this decision could have far-reaching implications for the company’s future direction and its role in the evolving landscape of personalized medicine.
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