Dive Brief:
- Anne Wojcicki, co-founder and former CEO of 23andMe, will buy back “substantially all” of the genetic testing firm’s assets, 23andMe announced Friday. A bankruptcy court must still approve the sale.
- The nonprofit TTAM Research Institute — an acronym for 23andMe — outbid Regeneron with a purchase price of $305 million. Biotechnology firm Regeneron had offered $256 million, and the company was selected as the backup bidder, according to the announcement. The Wall Street Journal first reported TTAM’s winning bid.
- Wojcicki previously tried to take 23andMe private, but two offers were rejected by the company’s board. Wojcicki resigned as CEO when the genetic testing firm filed for bankruptcy in March, raising privacy questions about what would happen to consumers’ genetic data in a sale.
Dive Insight:
TTAM plans to buy most of 23andMe’s assets, including the company’s genetic testing business, research services and the Lemonaid Health telehealth business. The deal is still subject to approval by the bankruptcy court and closing conditions, with a hearing scheduled for June 17.
The planned sale has raised questions about what 23andMe will do with the company’s troves of DNA testing data. California Attorney General Rob Bonta filed an objection to the sale on Monday, saying 23andMe is trying to sell the data without first getting consumer consent, as required under the state’s Genetic Information Privacy Act. A coalition of 28 states filed a lawsuit last week against 23andMe, objecting to the sale of genetic data.
TTAM said it would comply with 23andMe’s existing privacy policies, and included a term sheet of voluntary privacy safeguards in its purchase agreement.
Despite being a nonprofit, TTAM said it would comply with all applicable state privacy laws as if it were a for-profit entity, according to court records. A court-appointed privacy ombudsman had raised concerns in a report last week that some data-protection laws might not apply to TTAM because of its nonprofit status, according to The Wall Street Journal.
TTAM also said it would not sell or transfer customers’ genetic data in the case of a merger, acquisition or bankruptcy unless the entity is another domestic nonprofit research institution and agrees to adopt TTAM’s privacy statements. The nonprofit also said it will establish a consumer privacy advocacy board within 90 days.
“We are pleased that the competitive bidding process has resulted in significantly more value to our stakeholders while enhancing critical protections around customer privacy, choice and consent with respect to their genetic data,” 23andMe board chair Mark Jensen said in a statement.
The offer follows several attempts by Wojcicki to buy 23andMe. The former 23andMe CEO proposed to take the company private in August for 40 cents per share. The board rejected that offer, saying it was “insufficient,” and the seven independent directors later resigned. In March, a special committee of the board rejected another offer by Wojcicki to pay 41 cents per share. The company filed for Chapter 11 bankruptcy protection later that month.
