By Connor Hart

23andMe is in need of cash and weighing a sale of the company.

The DNA-testing company said Tuesday that it is exploring strategic alternatives, including a business combination and the sale of all or some of its assets. The company, which narrowed its loss and posted higher revenue in its fiscal third quarter, has struggled to find a profitable business model, underscoring its fall in valuation to nearly $0 from $6 billion.

Shares fell 19%, to $2.77, in after-hours trading. The stock ended the regular session 1.6% higher, at $3.40, having lost more than three-quarters of its value in the past year.

23andMe said it needs cash to fund its operations. The company, which is attempting to raise capital, will implement cost-cutting measures such as reducing operating expenses, negotiating terminations of its long-term leases and attempting to reach a settlement covering all U.S. customers affected by a recent cyber incident.

At the end of the recent quarter, 23andMe had $79.4 million in cash and cash equivalents, down from $126.6 million as of Sept. 30, and $216.5 million as of March 31.

It reported a net loss of $45.5 million, or $1.73 a share, for its three months ended Dec. 31, compared with a loss of $278 million, or $10.80 a share, a year earlier. Total revenue increased to $60.3 million from $44.7 million.

The company said it could be forced to modify or cease operations if it fails to raise capital or enter a transaction.

Currently, there can be no assurance that its consideration of alternatives will result in any agreements or transactions. It doesn't expect to provide any updates to its review until it enters a business agreement or is required to by law.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

January 28, 2025 18:02 ET (23:02 GMT)

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