- [Narrator] In 2006, Anne
Wojcicki co-founded 23andMe and me on the idea that you could revolutionize healthcare with spit. - Spit. Spitting. - It's a whole lot of spit. - We had this big spit party. - [Narrator] Wojcicki has promised that 23andMe's accessible
and affordable home DNA test would show people their genetic lineage, help them take control of their health, and one day take drugs developed from the
company's genetic research. And for a moment, that promise paid off, gaining 23andMe a $6
billion valuation in 2021 and making Wojcicki a
self-made billionaire. But now the one-time
invention of the year company has become a penny stock, and could lose its spot on the NASDAQ. So what went wrong? - We felt that fundamentally
we're not making progress fast enough in the research world. - Anne's mission is she wants
to use genetic information to change the way we deliver
healthcare in America. In the process, she
would also love to build a great big business that solidifies her as one of the great
founders in Silicon Valley. - [Narrator] When Wojcicki founded 23andMe with genetics expert Linda Avey, she was dating Google
co-founder Sergey Brin, who provided some of the initial funding. Wojcicki continued to build
up high-profile backers, hosting spit parties for
celebrities and investors. Between 2006 and 2012,
23andMe raised enough money to drop the price of its
kit from $999 to $99. And by 2015 it gained FDA approval to provide health information to customers based on their DNA. Sales boomed. In the years following its FDA approval, the number of customers
that had been tested grew to almost 8 million. - Americans love learning
about their ancestry. - [Speaker] You always wonder, you know, who does make you who you are? - It just kind of went viral,
and it became a great gift. Oh, this is a fun thing to
give mom and dad on Christmas. - [Narrator] And 23andMe started investing in one of Wojcicki's long-term goals, using the test results to develop drugs. - We actually are looking
at all the data that we have that we've essentially crowdsourced, and can we actually make medications? - [Narrator] 23andMe's popularity grew, with celebrity endorsements... - I believe my DNA plays a big role in my musical style and influence. - [Narrator] Big ad campaigns, and even a guest stint for
Wojcicki on "Shark Tank." - I don't think it's
world-changing for me, so for that reason, I'm out. - [Narrator] But at the same time, she was pushing back on a
constant concern from consumers, data privacy. - What we really wanna do
is allow you to have choice about how your data is being used. - [Narrator] The Golden State
Killer was caught in 2018 using DNA information from a database. And by 2019, 23andMe sales had slowed. - My hypothesis is that you
have some of the effect from, you know, Facebook, people
concerned about privacy. You had Golden State Killer, and so people, you know, people pause. - [Narrator] But there was
also a bigger issue at play with 23andMe's business model. - When you're running a business, you typically wanna have a product that consumers have to
buy again and again. But with 23andMe, the key
problem with their business is that you only really need
to take the test one time. - [Narrator] Wojcicki's
solution was to launch 23andMe+, a subscription platform
that offers health advice based on DNA results. Then in 2021, the company
went public through SPAC, partnering with Richard
Branson's Virgin Group, briefly hitting that $6 billion valuation. - We're really at a point in time where I'm ready to, you know, explode. Like there's huge
opportunities on therapeutics and huge opportunities
for our consumer business. - [Narrator] Using funding from that deal, 23andMe dialed up investments with its pharmaceutical partner, GSK, and acquired telehealth
company Lemonaid Health, moves that increased
23andMe's operating costs, - Developing drugs, getting
things to clinical trials, and then running clinical trials, I mean, this is the kind of thing that costs a lot, a lot of money. - [Narrator] With that and falling sales, the company posted a loss of 312 million by the end of its 2023 fiscal year. At the same time, interest
rates had been rising and funding was drying up. - That took a lot of the
air out of 23andMe sales. That's left them struggling for where are they gonna find
that next slug of cash that's gonna help them
deliver on this real desire to develop drugs with that
database that they have. - [Narrator] Wojcicki cut
half of the development team by mid-2023. - [Anne] A smaller, more focused
therapeutics organization allows us to reduce our cash burn and provides the overall business
with a longer cash runway. - [Narrator] As 23andMe's
stock price was sliding, privacy concerns were also catching up. - Hackers claiming to be
selling millions of stolen data from the genetics website 23andMe. - We've always said there's, you know, there's a theoretical
possibility of risks, but we do everything we can to make sure that we're ensuring the privacy and the
protection of people's data. - [Narrator] The company's share price pushed below a dollar. In November, NASDAQ gave the
company roughly five months to get its stock back up or risk being delisted from the exchange. In 23andMe's Q3 earnings call,
sales continued to slide, and the company said it's
considering splitting off its consumer and drug
development businesses. - One additional piece of news that's gonna come later this year is data on whether one of the drugs that they're developing is effective. And if you can get on that pathway, well, then you can start to
raise money against that. So there's a potential
that maybe they can regain some of the momentum they've lost. (soft meditative music)
