Judge Approves Sale of 23andMe to Nonprofit After Controversial Bid

ST. LOUIS, Missouri – A bankruptcy judge has approved the sale of 23andMe, a company renowned for its genetic testing services, to a nonprofit led by co-founder Anne Wojcicki. The ruling comes after concerns were raised about the potential sale of sensitive DNA data to a pharmaceutical firm.

The sale was initiated when Regeneron Pharmaceuticals won an auction to acquire 23andMe for $256 million, leading to a backlash from multiple states concerned about the handling of genetic data. The states argued that genetic information differs significantly from other types of property, warranting special protection during the bankruptcy process.

To alleviate these concerns, the bidding was reopened. The nonprofit TTAM Research Institute, formed by Wojcicki, ultimately acquired the company for $305 million. This institute aims to use the genetic data for medical research while pledging to uphold stringent privacy measures, including the option for customers to delete their data at any time.

“It’s going to be under the same privacy policies, the same cybersecurity protections, same management as it was before,” said Justin Leonard, a lawyer representing Oregon in the states’ lawsuit. However, not all states are satisfied; California, Kentucky, Tennessee, Texas, and Utah remain opposed to the sale.

Judge Brian Walsh noted that the structure of the sale allows for customer data transfer only in a technical sense. He acknowledged the “scary proposition” of selling genetic information but pointed out that lawmakers have not outright banned such transactions.

The legal discourse surrounding 23andMe’s sale underscores a looming question: how should DNA data be perceived as legal property? Laura Coordes, a bankruptcy expert at Arizona State University, emphasized the need for stronger data privacy laws. “I hope this case will spur meaningful thought about data privacy protections,” she said.

Amid the unfolding situation, customers like Kyle have expressed their apprehensions regarding their genetic data’s safety. After hearing about the potential sale to Regeneron, he chose to remove his family’s data from the platform. “If that information gets into the wrong hands, it’s very dangerous,” Kyle emphasized.

As the controversy continues, the sale’s finalization hinges on whether the opposing states can file an appeal before the deadline on July 7.