Another unexpected transformation has taken place around the once-heroic DNA testing company 23andme. Last month, biotech company Regeneron bought the company's assets, including its genetic database of about 15 million users, for $256 million in bankruptcy auctions, and appears to have completed the deal. But a larger bid by 23andMe co-founder and former CEO Anne Wojcicki prompted a second auction.
At a court hearing in St. Louis, Missouri yesterday (June 4), 23AndMe's attorney accidentally revealed that Worgicky's proposal after the auction has reached $305 million. Wojcicki resigned as CEO of 23AndMe in March and questioned the results of the initial auction, where he teamed up with her nonprofit TTAM Institute to make a bid.
After the revelation, representatives from 23AndMe, TTAM and Regeneron reached an agreement to reopen the sales process. The second auction, scheduled to take place later this month, will start with a new offer from TTAM, almost $50 million higher than Regeneron’s original winning bid.
After the news, today 23AndMe's stock surged more than 24% today.
What's wrong with 23andme?
The move marks a turning point in the turbulent decline of 23andme. The company was originally founded by Wojcicki in 2006 and initially gained appeal with its ancestral suite located in saliva and was released in 2021. By the end of that year, its valuation reached a peak of US$6 billion.
However, its financial situation deteriorated rapidly. 23AndMe strives to generate consistent revenue outside its DNA testing suite, and customers usually only purchase once. In 2023, the company faces a major data breach that leaked information from approximately 7 million users, leading to a class action lawsuit. Earlier this year, it filed for Chapter 11 bankruptcy.
In the downfall of 23AndMe, involving the fate of its massive user DNA database, state prosecutors generally urge users to delete their genetic data from the platform. When Regeneron announced the acquisition of the company's assets last month, it pledged to comply with privacy laws and consumer policies regarding genetic databases, which TTAM also intends to commemorate the upcoming auction.
Regeneron, who has developed treatments for a variety of diseases, notes that it plans to use data to accelerate medical research. The company also agreed to allow court-appointed ombudsmen and other stakeholders to review their privacy practices.
Another sale on the card
For the upcoming auction of 23AndMe, TTAM will start the process with a bid of $305 million. Regeneron will then be asked to make a higher bid, starting at $315 million, after which TTAM will have two hours to make the final proposal before the final bid goes to Regeneron. Attorneys from both sides agreed that the failed bidder would receive a $10 million “breakup fee”.
TTAM's new bid increased significantly from the $146 million offered during the auction last month, which far surpassed the initial $40 million bid proposed by 23andMe before the bankruptcy filed in March Wojcicki. U.S. bankruptcy judge Brian Walsh described the negotiation terms of the new auction as “very positive development” for equity holders at a hearing yesterday.
