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The founder of 23andMe has asked a federal bankruptcy court judge to reopen an auction for the genetic testing company, saying she has the fresh financial backing of a Fortune 500 company.
Anne Wojcicki said in court filings on Saturday that she has secured the support of a “Fortune 500 company with a current market capitalisation of more than $400bn and $17bn in cash”.
Last month, 23andMe announced that the upstate New York-based biotech company Regeneron had won the bidding for the company with a $256mn all-cash deal. In her court papers, Wojcicki alleged that the debtor and its advisers had unfairly tilted the auction to Regeneron, a claim the company denied in its own court filings.
23andMe, however, said in its filings that it would seek court approval to allow both Wojcicki and Regeneron to put in additional bids by June 12. Procedures could include the right for Regeneron to receive a “last look” to top any offer from Wojcicki as well as a $10mn termination fee should she prevail in the bidding. Regeneron has a market capitalisation of more than $50bn.
The flurry of filings posted over the weekend offered details of the competing bids made for 23andMe during an auction conducted between May 14 and May 16. Wojcicki has been pursuing the acquisition through TTAM Research Institute, which she founded and which described itself as a “California non-profit public benefit corporation”.
23andMe lawyers had cast doubt during the auction on the value and liquidity of the stock portfolio of TTAM, whose securities underpin some of its bid. TTAM said it has since sold shares for cash.
In the auction, TTAM had formally bid around $150mn but said that the financial and legal advisers to 23andMe had improperly limited its highest bid to $250mn, over misplaced concerns about its “financial wherewithal” and had abruptly ended the auction before it could make a bid TTAM said would have exceeded $280mn.
23andMe filed for bankruptcy protection in March after the company rejected a $40mn go-private buyout from Wojcicki, who was once married to Google co-founder Sergey Brin. Wojcicki started 23andMe in her sister’s Menlo Park garage in 1998. Brin introduced Wojcicki to scientist Linda Avey, who was developing plans for a direct-to-consumer genetics business, and they launched the business together.
The company was plagued by years of falling revenue as it was unable to grow beyond its genetic testing business, in which customers would send back saliva samples to be analysed for medical conditions and family genealogy. A buyer of the company’s assets in bankruptcy would not be responsible for assuming any liabilities from ongoing litigation from a 2023 data breach.
An independent consumer data privacy “ombudsman” is to submit a report to the bankruptcy court on any buyer’s plans to protect customer data.
23andMe went public in 2021 in a merger with a blank cheque vehicle sponsored by Richard Branson. The company once reached a market capitalisation of nearly $6bn. The company’s shares have jumped from around 55 cents prior to announcement of the Regeneron sale to now more than $3, implying a current market capitalisation of $83mn.
Lawyers for 23andMe and Wojcicki did not immediately respond to requests for comment.
