Regeneron Agrees to Purchase Most Assets of 23andMe for $256 million
All of 23andMe’s employees in the acquired business units will retain their jobs
One of the most consequential acquisitions in the clinical laboratory genetic testing industry is about to take place.
On May 19, Regeneron Pharmaceuticals, Inc. announced it had entered into a purchasing agreement to acquire most of the assets of 23andMe for $256 million. The acquisition, which is contingent on bankruptcy court and regulatory approvals, is expected to close during the third quarter of this year.
Once viewed as a flourishing company in the home genetics testing arena, 23andMe filed for bankruptcy in March in the Eastern District of Missouri. The latest transaction will allow Regeneron to acquire 23andMe’s Personal Genetic Service (PGS), Total Health Service and Research Service business lines, as well as its Biobank and associated assets.
The purchase will not include 23andMe’s Lemonaid Health telehealth business, which will cease operations.
“Regeneron was one of the first biotech companies to bet its future on the power of DNA, fueling our drug discovery efforts so as to deliver some of the world’s leading and most innovative medicines,” said George Yancopoulos, MD, PhD, Regeneron’s co-founder, president, and chief scientific officer in a news release.
“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,” said George Yancopoulos, MD, PhD, co-founder, president and chief scientific officer of Regeneron in a news release. (Photo copyright: New York Medical College.)
Weakening Demand, Data Breach Led to Bankruptcy
Since its founding in 2006, 23andMe has collected genetic data from more than 15 million consumers via its home DNA testing kits. It was the first company to offer autosomal DNA testing to obtain ancestry data.
Its direct-to-consumer, saliva-based genetics testing business soon gained much popularity. In 2008, Time Magazine named its Personal Genome Service “Invention of the Year.”
At its peak, the company was valued at approximately $6 billion. In its bankruptcy filing, 23andMe contended it had $277.42 million in assets and $214.7 million in outstanding debts.
Lately, 23andMe has been struggling due to a weakening demand for its ancestry testing kits. In addition, a data breach that occurred in 2023 exposed genetic data of nearly seven million customers to the offending hackers, contributing to concerns related to privacy issues.
Regeneron to Continue 23andMe’s Genomic Services
Based in Tarrytown, NY, Regeneron intends to continue uninterrupted service of 23andMe’s consumer genome services as a subsidiary business. The company asserted in its new release that it “intends to ensure compliance with 23andMe’s consumer privacy policies and applicable laws with respect to the treatment of customer data.”
The current issue of The Dark Report notes that the fate of patient DNA samples is a significant concern for 23andMe’s customers as the bankruptcy proceeds. “At least two state attorneys general, for California and Pennsylvania, have urged consumers to think critically about whether to allow their data to remain with 23andMe,” The Dark Report observed.
Regeneron has sought to reassure consumers who have used 23andMe’s services.
“Regeneron Genetics Center is committed to and has a proven track record of safeguarding the genetic data of people across the globe, and, with their consent, using this data to pursue discoveries that benefit science and society, said Aris Baras, MD, senior vice president and head of the Regeneron Genetics Center, in the news release. “We assure 23andMe customers that we are committed to protecting the 23andMe dataset with our high standards of data privacy, security and ethical oversight, and will advance its full potential to improve human health.”
Court to Review Protection of Customer Data
As part of the deal, Regeneron agreed to detail the intended use of 23andMe’s customer data, privacy programs, and security controls for review by a court-appointed, independent customer privacy ombudsman (CPO) and other interested parties.
The US Trustee Office handling the case appointed Neil Richards, JD, a law professor at Washington University School of Law as the CPO for the case. Richards will present a report to the court on June 10 outlining any potential impact on the security of 23andMe’s customer data. The acquisition is scheduled for review and potential approval on June 17.
“We are pleased to have reached a transaction that maximizes the value of the business and enables the mission of 23andMe to live on, while maintaining critical protections around customer privacy, choice and consent with respect to their genetic data,” said Mark Jensen, 23andMe’s board chair in a statement.
Regeneron will provide further details regarding its plans for customer data use as the court hearings proceed.
—JP Schlingman
