More than two months after filing for Chapter 11, 23andMe has found a buyer in Regeneron Pharmaceuticals, which has agreed to acquire substantially all the bankrupt direct-to-consumer genetic testing pioneer’s assets for approximately $256 million after winning a competitive auction on Friday.
Regeneron emphasized in announcing the deal that it had committed to complying with 23andMe’s privacy policies, protecting its genetic data contributed by customers under applicable law, and maintaining security controls in place designed to protect such data. 23andMe has collected data from some 15 million customers.
Yet the sale remains subject to approval by the U.S. Bankruptcy Court for the Eastern District of Missouri, which has appointed an independent Consumer Privacy Ombudsman to examine the deal, assess its impact on consumers’ privacy, and report back to the court by June 10.
The bankruptcy court is set to consider approving Regeneron’s acquisition of 23andMe on June 17, with the deal expected to close during the third quarter of this year. The transaction remains subject to approval by the bankruptcy court, approval under the Hart-Scott-Rodino Act, and customary closing conditions.
“Through our Regeneron Genetics Center, we have a proven track record of safeguarding personal genetic data, and we assure 23andMe customers that we will apply our high standards for safety and integrity to their data and ongoing consumer genetic services,” George D. Yancopoulos, MD, PhD, Regeneron’s co-founder, board co-chair, president and chief scientific officer, said in a statement. “We believe we can help 23andMe deliver and build upon its mission to help people learn about their own DNA and how to improve their personal health, while furthering Regeneron’s efforts to improve the health and wellness of many.”
Regeneron said it will acquire substantially all of 23andMe’s assets, including its Personal Genome Service (PGS), Total Health, and Research Services business lines. Its $256 million agreement does not include the purchase of 23andMe’s Lemonaid Health subsidiary, which 23andMe said it plans to “wind down in an orderly manner” in accordance with the purchase agreement.
Regeneron has offered employment to all employees of the acquired 23andMe business units, “which will allow us to continue our mission of helping people access, understand and gain health benefits through greater understanding of the human genome,” Mark Jensen, Chair and member of the special committee of 23andMe’s board, said in the statement.
23andMe filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code on March 23, with the aim of finding a buyer for the business through a bankruptcy court auction. As part of the court-supervised sale process, 23andMe required all bidders to guarantee that they will comply with its privacy policies and applicable law.
“After a thorough evaluation of strategic alternatives, we have determined that a court-supervised sale process is the best path forward to maximize the value of the business,” Jensen said in a statement at the time. “We expect the court-supervised process will advance our efforts to address the operational and financial challenges we face, including further cost reductions and the resolution of legal and leasehold liabilities.”
Jensen was appointed board chair, while Joe Selsavage, 23andMe’s chief financial and accounting officer, took on the additional role of interim chief executive officer, and Matt Kvarda, a managing director at management consulting firm Alvarez & Marsal, has been appointed chief restructuring officer.
To support its operations, 23andMe secured a commitment for up to $35 million in debtor-in-possession (DIP) financing from JMB Capital Partners. The DIP financing plus cash generated from the company’s ongoing operations is expected to support the business during the bankruptcy period. 23andMe said the outcome of the auction satisfied conditions to access the second tranche of the financing, providing additional liquidity to support the business pending completion of the sale.
Among potential bidders who expressed interest in acquiring 23andMe were Anne Wojcicki, who co-founded 23andMe in 2006 and served as its CEO until she resigned shortly before the Chapter 11 filing. Wojcicki, who has remained on 23andMe’s board, offered in March to take 23andMe out of public ownership by offering to buy the company for $42 million—consisting of a $30 million bridge loan, $10 million in new capital, and $2 million of her own rollover equity.
“We are pleased to have reached a transaction that maximizes the value of the business and enables the mission of 23andMe to live on, while maintaining critical protections around customer privacy, choice and consent with respect to their genetic data,” Jensen said today.
The post Regeneron to Acquire 23andMe with Winning $256M Bid appeared first on GEN - Genetic Engineering and Biotechnology News.
Regeneron emphasized in announcing the deal that it had committed to complying with 23andMe’s privacy policies, protecting its genetic data contributed by customers under applicable law, and maintaining security controls in place designed to protect such data. 23andMe has collected data from some 15 million customers.
Yet the sale remains subject to approval by the U.S. Bankruptcy Court for the Eastern District of Missouri, which has appointed an independent Consumer Privacy Ombudsman to examine the deal, assess its impact on consumers’ privacy, and report back to the court by June 10.
The bankruptcy court is set to consider approving Regeneron’s acquisition of 23andMe on June 17, with the deal expected to close during the third quarter of this year. The transaction remains subject to approval by the bankruptcy court, approval under the Hart-Scott-Rodino Act, and customary closing conditions.
“Through our Regeneron Genetics Center, we have a proven track record of safeguarding personal genetic data, and we assure 23andMe customers that we will apply our high standards for safety and integrity to their data and ongoing consumer genetic services,” George D. Yancopoulos, MD, PhD, Regeneron’s co-founder, board co-chair, president and chief scientific officer, said in a statement. “We believe we can help 23andMe deliver and build upon its mission to help people learn about their own DNA and how to improve their personal health, while furthering Regeneron’s efforts to improve the health and wellness of many.”
Regeneron said it will acquire substantially all of 23andMe’s assets, including its Personal Genome Service (PGS), Total Health, and Research Services business lines. Its $256 million agreement does not include the purchase of 23andMe’s Lemonaid Health subsidiary, which 23andMe said it plans to “wind down in an orderly manner” in accordance with the purchase agreement.
Employment offered to all employees
Regeneron has offered employment to all employees of the acquired 23andMe business units, “which will allow us to continue our mission of helping people access, understand and gain health benefits through greater understanding of the human genome,” Mark Jensen, Chair and member of the special committee of 23andMe’s board, said in the statement.
23andMe filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code on March 23, with the aim of finding a buyer for the business through a bankruptcy court auction. As part of the court-supervised sale process, 23andMe required all bidders to guarantee that they will comply with its privacy policies and applicable law.
“After a thorough evaluation of strategic alternatives, we have determined that a court-supervised sale process is the best path forward to maximize the value of the business,” Jensen said in a statement at the time. “We expect the court-supervised process will advance our efforts to address the operational and financial challenges we face, including further cost reductions and the resolution of legal and leasehold liabilities.”
Jensen was appointed board chair, while Joe Selsavage, 23andMe’s chief financial and accounting officer, took on the additional role of interim chief executive officer, and Matt Kvarda, a managing director at management consulting firm Alvarez & Marsal, has been appointed chief restructuring officer.
To support its operations, 23andMe secured a commitment for up to $35 million in debtor-in-possession (DIP) financing from JMB Capital Partners. The DIP financing plus cash generated from the company’s ongoing operations is expected to support the business during the bankruptcy period. 23andMe said the outcome of the auction satisfied conditions to access the second tranche of the financing, providing additional liquidity to support the business pending completion of the sale.
Among potential bidders who expressed interest in acquiring 23andMe were Anne Wojcicki, who co-founded 23andMe in 2006 and served as its CEO until she resigned shortly before the Chapter 11 filing. Wojcicki, who has remained on 23andMe’s board, offered in March to take 23andMe out of public ownership by offering to buy the company for $42 million—consisting of a $30 million bridge loan, $10 million in new capital, and $2 million of her own rollover equity.
“We are pleased to have reached a transaction that maximizes the value of the business and enables the mission of 23andMe to live on, while maintaining critical protections around customer privacy, choice and consent with respect to their genetic data,” Jensen said today.
The post Regeneron to Acquire 23andMe with Winning $256M Bid appeared first on GEN - Genetic Engineering and Biotechnology News.