DNA testing firm 23andMe has filed for Chapter 11 bankruptcy protection.

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The once high-flying San Francisco company—which provides DNA analysis to offer insights into ancestry, health traits, and genetic risks—is aiming to sell itself after facing significant challenges, including rejected acquisition offers and declining market value in the wake of a 2023 data breach that impacted millions of users.

In addition, CEO Anne Wojcicki has stepped down, and CFO Joe Selsavage will serve as interim CEO during the restructuring process, 23andMe said on Sunday. The company plans to continue operating as it seeks a buyer.

The bankruptcy filing punctuates a stunning downfall for what was once one of Silicon Valley’s buzziest companies. It follows a long series of setbacks for 23andMe, including mass layoffs and restructuring efforts.

Last year, 23andMe reduced its workforce by nearly 40%, a move that was part of an effort to cut operating costs and pivot the company’s focus. 23andMe has also faced mounting financial losses, with its valuation dropping dramatically since its 2021 IPO.

Shares of 23andMe (NASDAQ: ME) were down 43% in premarket trading on Monday following the bankruptcy news, bringing them down to penny stock territory.

The company’s financial turmoil is compounded by an industry-wide decline in demand for at-home DNA testing, as well as ongoing concerns about privacy and data security, all of which were made worse by the 2023 breach.

An urgent warning for customers

On Friday, California Attorney General Rob Bonta urged customers to consider requesting that 23andMe delete their data and destroy any biological samples, and issued a consumer alert regarding 23andMe’s financial distress and the potential risks to customer data.

“California has robust privacy laws that allow consumers to take control and request that a company delete their genetic data,” said Bonta. “Given 23andMe’s reported financial distress, I remind Californians to consider invoking their rights and directing 23andMe to delete their data and destroy any samples of genetic material held by the company.”

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Reached for comment about Bonta’s statement, 23andMe referred Fast Company to its open letter to customers, in which it insists customer data is safe. The company says the bankruptcy process will have no impact on how it stores, manages, or protects data.

“[We] are committed to continuing to safeguard customer data and being transparent about the management of user data going forward, and data privacy will be an important consideration in any potential transaction,” said Mark Jensen, chair of the board of directors, in statement.

This post originally appeared at fastcompany.com
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