Biotechnology giant Regeneron Pharmaceuticals has agreed to acquire the core assets of DNA testing and ancestry company 23andMe for US$256 million, which will be a relief to the 14 million customers who had yielded their genetic data to the flailing company.
23andMe’s recently filed a Chapter 11 bankruptcy, which led to fears that millions of client’ DNA information could fall into the wrong hands.
Safe and secure medical advances
“We have deep experience with large-scale data management, having worked with collaborators around the world to link de-identified DNA sequences from nearly three million consented participants to electronic health records, safely and securely enabling future medical advances,” said Regeneron co-founder, board co-chair, president and chief scientific officer George Yancopoulos.
“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.”
The deal, announced on Monday, includes 23andMe’s personal genome service as well as its health and research business lines – 23andMe will continue to conduct consumer genome services as a wholly owned subsidiary of Regeneron.
The deal excludes Lemonaid Health, the company’s telehealth subsidiary, which is expected to be wound down.
The acquisition remains subject to approval by the United States Bankruptcy Court for the Eastern District of Missouri, with a hearing scheduled for June 17.
If approved, the transaction is anticipated to close in the third quarter of this year.
The purchase comes two months after 23andMe announced it would seek to sell “substantially all of its assets” through a court-supervised reorganisation.
Chief executive officer and co-founder Anne Wojcicki resigned from her executive role at that time but retained her seat on the company’s board.
Challenges to sustainable model
Once a trailblazer in consumer genetic testing, 23andMe has faced persistent challenges since listing in 2021.
These include financial losses, difficulties establishing a sustainable business model, and the aforementioned public concern over data privacy – particularly in the wake of a 2023 data breach.
As part of the deal, Regeneron has committed to maintaining 23andMe’s existing privacy protocols.
The company will process personal data according to existing consents, privacy policies, and legal requirements.
A court-appointed consumer privacy ombudsman will also evaluate the transaction’s impact and report findings by June 10.
Mark Jensen, chair of 23andMe’s board special committee, said the agreement “maximises the value of the business and enables the mission of 23andMe to live on,” while safeguarding user data.
He confirmed that all current employees will be retained under the new ownership.
“We believe we can help 23andMe deliver and build upon its mission to help those interested in learning about their own DNA and how to improve their personal health, while furthering Regeneron’s efforts to use large-scale genetics research to improve the way society treats and prevents illness overall,” Yancopoulos added.
Regeneron shares fell slightly in pre-market trading following the announcement.