DNA testing site 23andMe fights for survival

Three years ago, DNA testing company 23andMe was a huge success, with a stock price higher than Apple’s.

However, from the days when millions of people flocked to submit saliva samples in exchange for detailed reports about their ancestors, family relationships and genetic makeup, it is now a fight for survival.

Its stock price has plummeted this week almost delisted from the stock market.

And of course this is the company that holds the most sensitive data imaginable on its customers, raising troubling questions about what might happen to the massive personal DNA database – and their extremely valuable.

When contacted by the BBC, 23andMe was optimistic about its prospects – and insisted it remains “committed to protecting customer data and remains focused on maintaining customer privacy”.

But how is one of the most talked about tech companies supposed to answer questions about its existence?

Not long ago, 23andMe was in the public eye for all the right reasons.

Its famous customers include Snoop Dogg, Oprah Winfrey, Eva Longoria and Warren Buffet – and millions of users have received unexpected and life-changing results.

Some people discover that their parents are not who they thought they were or that they are genetically predisposed to serious diseases. Its stock price skyrocketed to $321.

Fast forward three years, that price has dropped to just under $5 – and the company is now worth 2% of what it was.

What happened?

According to Professor Dimitris Andriosopoulos, founder of the Responsible Business Unit at the University of Strathclyde, the problem for 23andMe is twofold.

Firstly, it doesn’t really have an ongoing business model – once you’ve paid for your DNA report, you have very little money to pay back.

Second, the plan to use anonymized versions of collected DNA databases for drug research would take too long to be profitable because drug development takes so many years.

That led him to a blunt conclusion: “If I had a crystal ball, I would say they could last a little longer,” he told the BBC.

“But in my opinion, with the current situation, 23andMe is unlikely to survive.”

The problems at 23andMe are reflected in the turmoil within its leadership.

the the board resigned over the summer and only CEO and co-founder Anne Wojcicki – sister of the late YouTube president Susan Wojcicki and ex-wife of Google co-founder Sergei Brin – remains on the original lineup.

There are rumors that the company will soon close or be sold – claims they deny.

“23andMe co-founder and CEO Anne Wojcicki has publicly shared that she intends to take the company private and is not willing to consider third-party takeover proposals,” the company said. said in a statement.

But that hasn’t stopped the speculation, with rival firm Ancestry calling on US competition regulators to step in if 23andMe is put up for sale.

Companies rising and falling are nothing new – especially in the technology sector. But 23andMe is different.

“It’s worrying because of the sensitivity of the data,” said Carissa Veliz, author of the book Privacy is Power.

And that’s not just for individuals who have used the company.

She told the BBC: “If you give your data to 23andMe, you also give away the genetic data of your parents, siblings, children and even distant relatives who don’t consent.” with that”.

David Stillwell, professor of computational social science at Cambridge Judge Business School, agrees that the stakes are high.

“DNA data is different. If your bank account details are hacked, it will be disrupted but you can get a new bank account,” he explained.

“If your (non-identical) sibling has used it, they share 50% of your DNA, so their data can still be used to make health predictions about you.”

The company firmly asserts that these concerns are unfounded.

“Any company that processes consumer information, including the type of data we collect, has applicable data protection measures set out in law that must be complied with as part of any future ownership changes,” they said in their statement.

“23andMe’s terms of service and privacy statements will remain in place unless and until customers are provided with and agree to the new terms and statements.”

There are also legal protections in place in the UK under its version of data protection law, GDPR, whether a company goes bankrupt or changes hands.

Even so, all companies can be hacked – like 23andMe 12 months ago.

And Carissa Veliz remains uneasy – and says that ultimately a much more robust approach is needed if we want to keep our most personal information safe.

She says: “The terms and conditions of these companies are often very extensive; When you give them your personal data, you give them permission to do almost anything they want with it.”

“Until we ban the trade of personal data, we are not protected well enough.”

Additional reporting by Tom Gerken