23andMe founder aims to restart auction with major corporate backing

23andMe founder Anne Wojcicki is seeking to reopen the auction for the bankrupt genetic testing company, claiming unfair bias towards Regeneron's (REGN) $256 million bid and alleging that her higher bid was improperly capped; Wojcicki states she now has the backing of a Fortune 500 company with a market capitalization exceeding $400 billion. 23andMe is seeking court approval for final proposals from Wojcicki and Regeneron by June 12, and a $10 million breakup fee for Regeneron if Wojcicki prevails.

Analysis

The bankruptcy auction for genetic testing firm 23andMe faces a significant challenge, as founder Anne Wojcicki seeks to reopen the process, contesting Regeneron Pharmaceuticals' (REGN) accepted $256 million bid. Wojcicki alleges that the sale process was unfairly biased towards Regeneron and that her bidding entity, TTAM Research Institute, was improperly prevented from submitting a superior bid, potentially exceeding $280 million, after their initial $146 million offer. A key development is Wojcicki's assertion of support from an unnamed Fortune 500 company with a market capitalization over $400 billion, potentially bolstering her financial capacity. This dispute arises from 23andMe's April bankruptcy filing, attributed to declining consumer interest and a significant 2023 data breach. The court is now considering a motion to allow both Wojcicki and Regeneron to submit final proposals by June 12. Should Wojcicki's bid ultimately succeed, Regeneron would be entitled to a $10 million breakup fee, highlighting the ongoing uncertainty and contention surrounding the acquisition of 23andMe's assets.

Key Decisions for Investors

• Investors in Regeneron (REGN) should closely monitor the court's decision regarding the reopening of the 23andMe auction and the June 12 proposal deadline, as a successful challenge by Wojcicki would negate Regeneron's acquisition, albeit with a $10 million breakup fee.
• The disclosed backing of Wojcicki's bid by a substantial Fortune 500 entity suggests continued strategic interest in the genetic testing and data sector, a point to consider for those assessing long-term industry viability despite 23andMe's specific challenges.
• Given the ongoing legal contest and the potential for revised bids, the final outcome for 23andMe's assets remains highly uncertain, warranting caution for any investment decisions directly contingent on the completion of this specific acquisition by either party.