Regeneron announces deal to acquire DNA testing 23andMe for $256 million
Regeneron will acquire DNA testing company 23andMe out of bankruptcy for $256 million, securing nearly all its assets and promising to continue consumer genome services uninterrupted.
Regeneron announced that it will acquire DNA testing company 23andMe for $256 million as part of the latter's bankruptcy case. The deal covers most of 23andMe's main assets but excludes its telehealth platform, pharmacy services, and lab ordering business. The purchase is a significant move for Regeneron as it continues to take a greater role in genetic research and personalized medicine.
23andMe, founded in 2006 and led along with Anne Wojcicki, had struggled with profitability despite popularity among consumers. The company had wanted to combine its vast DNA data with drug discovery, but transactions to this end did not gain much traction. Given Regeneron's experience working with large-scale genetic data, the transaction is poised to help unlock new medical discoveries while customers' genetic privacy continues to be protected.
DNA testing 23andMe set to be acquired by Regeneron
The DNA testing company 23andMe (MEHCQ) is set to be acquired out of bankruptcy by major pharmaceutical company Regeneron (REGN) for $256 million.
The transaction includes nearly all of 23andMe's assets except its telehealth platform, pharmacy fulfillment business, and lab and test ordering services pertaining to Lemonaid Health, according to a U.S. Bankruptcy Court for the Eastern District of Missouri court filing.
The deal is scheduled to close July 1. The news sent 23andMe's stock up more than 26% in premarket trading. Regeneron's stock was up just over 1%
This deep cut in the formerly highly sought genetic testing company address concerns about the security of sensitive genetic data of tens of millions of clients and address a strategic direction 23andMe had been highly searching for.
23andMe bankruptcy sparked concerns in their consumers. Photo: CNA
Regeneron announced it will acquire 23andMe's Personal Genome Service (PGS), Total Health, Research Services, and its Biobank and related assets for $256 million, ensuring that 23andMe's consumer genome services continue without interruption. The deal is subject to bankruptcy court and regulatory approvals, with a goal of closing in the third quarter of 2025.
Founded in 2006 by Anne Wojcicki, who is also known as the ex-wife of Google co-founder Sergey Brin, 23andMe had attempted for years to build a strong business model combining its DNA data repository with drug discovery, aiming to streamline the development of personalized and targeted therapies.
However, the limited partnerships it managed to form yielded minimal results. Regeneron already works in genetic data-driven drug discovery, as explained by co-founder and board chair George Yancopoulos, highlighting their experience managing large-scale genetic data securely and ethically.
"We have deep experience with large-scale data management, having worked with collaborators around the world to link deidentified DNA sequences from nearly three million consented participants to electronic health records, safely and securely enabling future medical advances," he said in a statement Monday.
The critical situation of 23andMe
23andMe had begun to close its clinical trials last November and went bust in March. Though popular with customers, the company was having difficulty making a profit after its 2021 public listing via a SPAC backed by Virgin Group-owned Richard Branson's Virgin Group, which valued it at $3.5 billion and raised $592 million in gross proceeds.
"Consumer-facing testing startups are still raising, and young consumers show the most interest of any generation in at-home testing across fertility, microbiome, and hormone health," according to venture funding firm Rock Health in an email to clients in March.
The FDA's recent approval of a home test for cervical cancer screening is a testament to that trend.
Regeneron assured clients it will apply the highest regard for data privacy and security, drawing on its significant experience with the handling of genetic data through clinical trials.
"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,” said Aris Baras, senior vice president and head of the Regeneron Genetics Center, in a statement.
"Since 2013, the Regeneron Genetics Center has sequenced the genetic information of nearly three million people in research studies, using this deidentified data to make meaningful discoveries at speed and scale," Baras said.
