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Court Approves Genapsys Sale to Sequencing Health

NEW YORK – The judge overseeing Genapsys' bankruptcy proceedings has authorized the sale of the firm's assets to Sequencing Health.

In an order filed Monday in the US Bankruptcy Court for the District of Delaware, Judge Brendan Shannon wrote that the sequencing instrument developer had "demonstrated compelling circumstances and a good, sufficient, and sound business purpose and justification for the immediate approval and consummation of the sale."

According to the asset purchase agreement, Sequencing Health would offer up to $10 million in cash and assume debt of approximately $32 million owed by Genapsys to Oxford Finance.

Sequencing Health, a recently formed company with ties to Farallon Capital Management and Soleus Capital — both investors in Genapsys' $70 million Series D financing round — provided the only qualified bid by the extended deadline of Sept. 2. 

Genapsys filed for Chapter 11 bankruptcy protection in mid-July, seeking a quick sale within two months. Sequencing Health had acted as the so-called "stalking horse bidder," effectively a minimum bid in the sale process. Founded in 2010, Genapsys had been developing a silicon chip-based benchtop sequencing instrument.

The order followed a Sept. 8 hearing on the sale. At the hearing, Ryan Breslow, executive chairman of Love Health, a health tech startup, said his firm was interested in making a bid and asked for five to seven more days to finalize an offer. However, Genapsys, Sequencing Health, and Oxford Finance all opposed any further extension of the process, and Shannon denied the request.

The cash received from Sequencing Health will help cover Genapsys' obligations of approximately $5.2 million, as well as other expenses.

Attorneys for Genapsys said at the hearing that the deal could be closed as early as Wednesday. The deadline outlined in the purchase agreement is Sept. 16.