What happened to 23andMe? FDA ban, mass resignations and more explored as biotech firm files for bankruptcy

American biotech firm 23andMe has recently filed for bankruptcy protection, as per reports by BBC. The outlet further revealed the resignation of the company co-founder and CEO, Anne Wojcicki. In a press release dated March 23, the company revealed that they would continue operation during the sale process.

In the press release, they further claimed that there "are no changes to the way the company stores, manages, or protects customer data." Meanwhile, on Friday, March 21, California Attorney-General Rob Bonta issued a consumer alert which advised consumers to get their information removed from the company's official website.

The company also witnessed resignation from seven of its independent directors last week on Tuesday. As per BBC reports dated March 20, they were frustrated with the CEO's "strategic direction." They also weren't on the same page with Wojcicki's decision to take the firm private.

According to The Wall Street Journal, the company had been struggling to be profitable for quite some time now. The company which reportedly was once worth $6 billion, has lost its value by about 98% and also might get delisted from the Nasdaq, as per CNBC.

For the unversed, the company, founded back in April 2006, was known for its direct-to-consumer genetic testing service.

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Back in 2013, the US Food and Drug Administration imposed a ban on some personal genetic tests offered by 23andMe

While 23andMe had recently filed for bankruptcy protection, this was not the first time that they found themselves in trouble. Back in 2013, they faced a ban on selling its saliva-collection tests by the FDA. A November 2013 report by BBC claimed that the company then failed to provide transparent information to corroborate their marketing claims about the tests.

The outlet added that the purpose of the tests was to indicate that personal genetic codes could affect the future health of an individual. In a public letter, that the FDA then sent to 23andMe, Alberto Gutierrez, the director of their centre for devices and radiological health wrote:

"FDA is concerned about the public health consequences of inaccurate results from the PGS device - the main purpose of compliance with FDA's regulatory requirements is to ensure that the tests work."

The agency also claimed that despite multiple emails, the company had not provided the necessary information surrounding the tests. Meanwhile, the biotech firm then added that they had acknowledged the concerns and would communicate the same.

For those unaware, 23andMe was offering a detailed assessment on more than 200 ailments to its users at a mere price of $99, based on the users' saliva sample. Just a few days after the FDA sent the letter to the company, a class action lawsuit was filed against them in the Southern District Court of California.

As per reports by Vox, many claimed in the suit that despite lack of sufficient approval, the company continued promoting its health promises. The complaint further added that this could lead users to make harmful choices concerning their health.

Over the years, the company even received several celebrity endorsements including ones from Oprah Winfrey, Eva Longoria, and Snoop Dogg. After the recent resignation of Anne Wojcicki, 23andMe is trying to sell itself under the court's supervision.