July 8 (Reuters) - A U.S. district judge put on hold the

bankruptcy sale of genetic testing company 23andMe late on

Monday, giving California three days to make its case that the

sale should remain blocked during an appeal related to the

state's genetic privacy law.

California failed to convince a bankruptcy judge to stop the

sale earlier on Monday, but U.S. District Judge Matthew Schelp

in St. Louis ordered a brief pause following California's appeal

of that ruling. Schelp scheduled a Thursday court hearing to

determine if a longer pause is warranted in the case.

23andMe, which filed for bankruptcy in March, is selling its

assets to TTAM Research, a new nonprofit founded by 23andMe

co-founder Anne Wojcicki, for $305 million.

23andMe, TTAM and California did not immediately respond to

a request for comment.

California argues the sale violates the state's Genetic

Information Privacy Act, which prohibits the transfer and

disclosure of genetic data or biological samples to third

parties, including TTAM Research, without express permission for

each transfer. California consumers represent about 1.8 million

of the approximately 10 million genetic profiles in 23andMe's

inventory, according to California's court filings.

U.S. Bankruptcy Judge Brian Walsh had overruled California's

objection, and similar objections from other states opposed to

the sale on June 27. He said Monday that California customers

would not be harmed because they retained the right to delete

their genetic data even after the sale is complete.

TTAM has said it would continue to protect customers'

genetic data and maintain 23andMe's privacy policies, including

customers' right to delete their data. Wojcicki was 23andMe's

CEO before its bankruptcy filing, and her new nonprofit's name

is an acronym formed from the first letters of the words

"twenty-three and me."

23andMe filed for bankruptcy after a drop-off in consumer

demand and a 2023 data breach that exposed millions of

customers' genetic data.

The case is California v. 23andMe Holding Co. ( MEHCQ ), U.S. District

Court for the Eastern District of Missouri, No. 25-cv-0099

For California: Bernard Eskandari and Daniel Nadal of the

Office of the Attorney General of California

For 23andMe: Christopher Hopkins and Paul Basta of Paul

Weiss, among others

Read more

California fails to stop 23andMe founder from re-acquiring

company

23andMe's founder Anne Wojcicki wins bid for bankrupt DNA

testing firm

DNA testing firm 23andMe files for bankruptcy as demand

dries up

(Reporting by Dietrich Knauth in New York)