Regeneron Pharmaceuticals announced Monday that it will purchase “virtually everything” of 23andme’s assets for $256 million. The deal comes weeks after a former buzzy DNA testing startup, once worth nearly $6 billion, filed for Chapter 11 bankruptcy.
According to Regeneron, the acquisitions include 23andMe’s personal genomic services, Total Health, and Research Services Business Line. Pharma Giant secured the deal after taking part in the bankruptcy auction.
“We believe 23andMe can fulfill and build a mission to help people learn how to improve their DNA and their personal health. Meanwhile, we will promote Regeneron’s efforts to improve the health and wellbeing of many.”
According to the new release, the deal does not include Lemonaid Health, the 23andme telehealth unit that was acquired in 2021 for around $400 million. The business is closed, but Regeneron said it plans to provide jobs to all employees tied to the business unit it acquires.
The acquisition requires approval from the US Bankruptcy Court for the Eastern District of Missouri. In the case of Greenlit, it is expected to close in the third quarter of this year.
23Andme made early splashes with a Mail-In DNA kit that helps customers track their ancestors and identify genetic traits. It was made public through SPAC transactions in 2021 and was temporarily worth billions. However, the momentum did not last.
After it was published, the company struggled to build a stable income and expand it to research and treatments. Things got worse when the 2023 data breaches released information from nearly 7 million customers. The fallout caused serious privacy concerns, particularly as some of the affected accounts reportedly belong to wealthy individuals in the US and Europe.
As part of the bankruptcy process, 23andMe had to stick to the privacy rules for bidders. The court-appointed consumer privacy ombudsman will consider the transaction and will file a report by June 10th. Regulators, including the Federal Trade Commission, have raised concerns about the fate of customer data for sale.
“Several lawmakers and officials, including the Federal Trade Commission, have expressed concerns about the safety of consumer genetic data through the 23andMe sales process,” CNBC reported.
“We are pleased to reach transactions that maximize the value of our business, achieve our 23andMe mission, and maintain important protections regarding customer privacy, choices and consent regarding genetic data.”
23 Andme: Fast fall from grace
Bankruptcy did not come out of nowhere. Last year we reported on the dramatic collapse from 23andme’s Silicon Valley Darling to Pennystock. Its value fell 96% when traded at nearly $18 per share. As of Monday, the company’s market capitalization had shrunk to about $25 million.
The 2023 data breaches also sparked fresh criticism. 23AndMe initially claimed that only 14,000 customers were directly affected, but further disclosure revealed that the stolen data included nearly 7 million users, reportedly including well-known individuals.
Founded in 2006 by Linda Avey, Paul Cusenza and Anne Wojcicki, 23andme was a pioneer in the individual DNA testing market, providing genetic insights into consumer ancestry and health. Despite initial success, the company is struggling with profitability. The business model, which relied on customers to undergo one-time testing, continued to sought new revenue streams from 23andMe, including failings in subscription services and drug development ventures.
What began as a pioneering consumer health technology company has now entered the hands of Big Pharma, along with millions of genetic profiles. Now, the problem is: What happens next?
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