Judge OKs sale of 23andMe to a nonprofit led by its founder : NPR

A sign is displayed in front of the 23andme seat on February 01, 2024 in Sunnyvale, California.

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Justin Sullivan / Getty Images from North America

A bankruptcy judge approved the sale of the insolvent genetic company 23andm to a non-profit organization led by one of the company’s co-founders. The agreement effectively avoids controversial transfer of DNA data to a third party.

The prospect of the delicate of 23 and genetic information on millions of people passing to the most offender triggered the Tell when it was announced in May that Regeneron Pharmaceuticals, based in New York, had won an auction to acquire the company for $ 256 million.

23andme customers use saliva -based DNA test kits to find out more about their ancestry and their potential risks for genes based on genes. The company stores data – and spits samples – and sends users an analysis of their genetic information.

Despite Regeneron’s promises to honor 23andme’s privacy policies, more than two dozen states have continued to stop the agreement, arguing that genetic information is a single type of property and fundamentally different from that which could normally change hands in a bankruptcy sale. (Think of real estate or office furniture.)

The call for tenders has been reopened and the non -profit TTAM research institute won with an offer of $ 305 million.

The TTAM Research Institute was created in May by Anne Wojcicki, co -founder and former CEO of 23andme, to acquire the assets of the company and use DNA data for medical research. Some 80% of the 23andme Over 15 million Customers have agreed to allow their data to be used for research, depending on the company.

The acronym TTAM is a nod to “twenty-three years and me”. The Institute is also committed to improving confidentiality policies and allowing customers to delete their data at will, as already 23andm.

Friday, in a file, judge Brian Walsh of the United States Court of bankruptcy in the Missouri Oriental District, in Saint-Louis, wrote that the current structure of the agreement “implies a customer data sale only in the technical sense”.

The pursuit of states had sought to ensure that consumers have total control over genetic information, which is very personal and immutable.

Justin Leonard, a lawyer who represented Oregon in the States trial, said that this result would satisfy the concerns of the States: “It will be under the same confidentiality policies, the same cybersecurity protections, the same management as before.”

But not all states agree. The judge’s decision noted that a handful of states – California, Kentucky, Tennessee, Texas and Utah – “are actively opposed to sale”. Leonard says that people opposed to sale have until midnight on July 7 to obtain suspension to call.

23Andme and TTAM did not immediately respond to a request for comments on the decision.

The legal battle focused on the risks and unknowns of the sale of DNA data from consumers to a third party after bankruptcy. And for customers like Kyle, this feeling of risk was reinforced after 2023, when Accessible pirates Genetic information from millions of 23andm customers.

Kyle said he had started to still worry about genetic data from his family after a 2024 alleged that 23 and 23 and had not informed Chinese and ashkenazi Jewish customers that their data had been targeted and were sold online in organized lists – a potential security risk. Kyle’s family had learned, through a 23andme test, that one side was Ashkenazi Jews.

“It was definitely asserted,” said Kyle, who asked NPR to use her first name only his family that his family could be targeted. “And I would say that we especially forgot it after that.”

In a word, that was the problem with the 23andme business model: it was a unique product. Once people have learned their risk of genealogy and genetic health, many have forgotten 23andm, and the company has struggled to attract regular customers.

When it was announced that 23 and 23 are sold to Regeneron, Kyle decided to completely delete the data from his family.

“I think that historically, there is a concern among the Jewish community for people who know who we are, where we live and our genealogy. And if this information is put in bad hands, it is very dangerous,” he said.

He said he was not convinced that the data is guaranteed to be secure, even under the TTAM research institute.

In his decision, Judge Walsh wrote that the sale of genetic data “is a frightening proposal”. But he added that legislators had not prohibited it, and in this case, an “absolute ban” could lead to missed opportunities, although he did not explain what these opportunities might be.

Last year, 23 and agreed with a regulation in the combination of data violation Without admitting reprehensible acts. Walsh has written that the funds of the sale at the TTAM Research Institute “may be sufficient to compensate for all the creditors of the company, including customers who were injured by a data violation”.

The case highlights the lack of laws to safeguard genetic confidentiality and questions about how DNA data should be considered a legal property, explains Laura Coordinations, bankrupt expert at the law of the State University of Arizona.

“I hope that the problems that this case raises and the attention that they have obtained in turn stimulating a significant reflection on the protections of data confidentiality, and these protections in a bankruptcy,” she said.

“I think of a certain level that there are legislative movements which must be taken and that I would like to see,” she said. “This is how you make sure that you do not have all these upheavals and all these reactions from the state and the federal government, and the public … You work to strengthen the long -term basic protections.”