Regeneron Pharmaceuticals has officially acquired DNA testing company 23andMe in a $256 million deal. This takeover follows 23andMe’s recent bankruptcy filing in the United States, marking a new chapter for the once-popular genetics firm.
Regeneron has assured customers it will maintain 23andMe’s privacy standards and uphold strong security measures to protect sensitive user data. The acquisition agreement specifically highlights data protection as a key priority.
Last month, under pressure from multiple state attorneys general, 23andMe agreed to appoint an independent ombudsman. This role will oversee the protection of consumer genetic information, addressing concerns about potential misuse by future owners.
What the Acquisition Means for 23andMe and Its Users
Regeneron will acquire nearly all of 23andMe’s assets. However, Lemonaid Health, a subsidiary offering telehealth services, will close as part of the deal. The core DNA testing and data business will continue, operating as a fully owned subsidiary under Regeneron’s management.
Unlike 23andMe’s original focus on consumer genetics and ancestry, Regeneron plans to use the genetic data primarily for drug discovery and pharmaceutical research.
Mark Jensen, chairman of 23andMe’s board, expressed confidence in the acquisition. He emphasized that user privacy, autonomy, and informed consent would remain central to the company’s mission.
Shift in Strategy: From Consumer Service to Pharmaceutical Research
Dr. Jennifer King, an expert in privacy and data policy from Stanford University, commented on the shift in 23andMe’s purpose. She noted that while the company marketed itself as a nonprofit-style effort “helping humanity,” it always operated with profit motives.
With Regeneron now in control, Dr. King said customers should understand that their genetic information will support drug development rather than just providing personal health insights.
23andMe’s Rise and Challenges
Founded in 2006 by Anne Wojcicki, 23andMe quickly gained popularity. Celebrity endorsements from figures like Oprah Winfrey and Snoop Dogg helped build its brand. The company went public in 2021 and reached a valuation of over $6 billion but never turned a profit.
Interest in DNA testing kits waned, and a subscription model failed to attract enough users. Attempts to pivot into drug research stalled, leading to financial difficulties.
In 2023, a major data breach compromised personal and genetic details of millions of customers. Hackers exploited reused passwords, exposing family trees and location data. Though the company said no DNA sequences were leaked, it settled a lawsuit related to the breach.
Following this, 23andMe laid off about 200 employees, nearly 40% of its workforce, and briefly considered going private to avoid acquisitions.
Consumer Warnings and Privacy Concerns
After filing for bankruptcy in March, several state attorneys general advised users to delete their data from 23andMe’s databases. While the company reaffirmed its commitment to privacy, its policies allowed for personal data transfers in events like mergers or bankruptcies.
To address these concerns, 23andMe agreed to an independent overseer to monitor data handling and protect user information during the sale process.
The acquisition by Regeneron signals a significant shift in 23andMe’s future. While the company once empowered users with genetic insights, its data will now play a role in pharmaceutical research under Regeneron’s guidance.