Drugmaker Regeneron to acquire 23andMe out of bankruptcy

Regeneron Pharmaceuticals said Monday it will acquire 23andMe’s DNA testing business and most of its assets out of bankruptcy and pledged to continue offering the popular consumer service and adopt its privacy practices to safeguard customer data.

The deal would put the DNA data of millions of customers in the hands of a pharmaceutical company, which hopes to supercharge its efforts to mine genetic data for insights in crafting novel medicines. Regeneron stressed in a statement that it is experienced in handling such sensitive data, citing its work with anonymized DNA sequences from nearly three million people who consented to share it, while pledging to comply with 23andMe’s privacy practices and laws that govern customer data.

Regeneron said it was prepared to explain how it will use and protect the data to an independent, court-appointed customer privacy ombudsman.

“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,” George Yancopoulos, Regeneron’s co-founder and president, said in a statement.

Mark Jensen, chair of 23andMe’s special committee of the Board of Directors, said in a statement that the acquisition “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.”

Regeneron will pay $256 million in cash to acquire “substantially all” of 23andMe’s assets, excluding its telehealth business. At its peak in the fall of 2021, 23andMe had a stock-market value of about $6 billion.

San Francisco-based 23andMe filed for bankruptcy in March after spending heavily to expand its business beyond its saliva-collecting kits. The testing business, which emerged as a cultural force by revealing customers’ ancestry and sometimes family secrets, always faced a challenge: people generally only needed to order the test once.

Led by co-founder Anne Wojcicki, 23andMe embarked on an ambitious plan to deploy its trove of genetic information as an engine for delivering both health insights and discovering new medicine. But the biotechnology business is risky and expensive, and it proved to be a drain on 23andMe after its partnership with pharmaceutical giant GlaxoSmithKline ended.

23andMe also expanded into health care, acquiring telemedicine firm Lemonaid Health for $400 million in 2021. But that venture fizzled, with the company concluding last year it was worth about $200 million less than what it had paid, according to a securities filing, contributing to an annual loss of $666.7 million. As a publicly traded company, 23andMe never turned a profit.

Compounding the company’s financial problems, it was hit by a massive hack in October 2023.

Its bankruptcy filing raised an immediate question for its more than 15 million customers: What would happen to the sensitive genetic data that 23andMe had amassed?

California’s attorney general issued an unusual consumer alert, urging customers to consider directing 23andMe to delete their data. The company said at the time that it wasn’t changing how it stores, manages or protects customer data and that a buyer would have to comply with privacy laws.

Regeneron on Monday tried to reassure customers that it would be a responsible custodian of their data.

“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,” Aris Baras, a senior vice president at Regeneron, said in the company’s statement.

The New York-based drugmaker operates the Regeneron Genetics Center, where it uses its own DNA database to power its drug-discovery efforts. The company’s deal to acquire 23andMe’s DNA trove is a kind of validation for bankrupt firm’s biotech dreams.

In 23andMe’s last call with financial analysts in November, Wojcicki still held out hope that the pharmaceutical industry would see the value of its DNA data for discovering new medicine.

In a securities filing, 23andMe said that Regeneron was selected as the winning bidder for its assets among seven qualified suitors. A bankruptcy court hearing to consider approval of the sale is currently set for June 17. Regeneron said it expects to close the deal in the third quarter of 2025.