Biotechnology company Regeneron will acquire 23andMe out of bankruptcy for $256 million, with a plan to keep the DNA-testing company running without interruption and uphold its privacy protection promises.
Regeneron aims to use the large trove of genetic data to further its own work using genetics to develop medical advances—something 23andMe tried and failed to do.
23andMe said it was “pleased” with the sale to Regeneron and “grateful” that 23andMe employees will stay employed.
If the sale is approved, a court-appointed, independent consumer privacy ombudsman will ensure that data privacy protections are honored.
Sold for $256 million, 23andMe has fallen far from its heyday.
The biotechnology firm Regeneron will pay $256 million to buy 23andMe out of bankruptcy, with the intention of maintaining uninterrupted operations and honoring its pledges to protect privacy.
When Regeneron announced the acquisition, it gave 23andMe’s 15 million customers the assurance that their data, including genealogy, health and genetic information, and other sensitive personal data, would be secure and in capable hands. As 23andMe attempted and failed to do, Regeneron hopes to use the vast amount of genetic data to advance its own work using genetics to develop medical advancements.
According to a statement from Aris Baras, senior vice president and head of the Regeneron Genetics Center, “As a world leader in human genetics, 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.”. We promise 23andMe customers that we will uphold the highest standards of data privacy, security, and ethical oversight in order to safeguard the 23andMe dataset and to fully realize its potential for enhancing human health. “.
“The Genetic Center at Regeneron already has its own genetic dataset from almost 3 million people,” Baras said.
During the company’s demise, consumers, legislators, and regulators have expressed serious concerns about the security of 23andMe’s dataset. In March, for example, California Attorney General Rob Bonta took the unprecedented step of urging Californians to remove their genetic information in the midst of 23andMe’s financial troubles. In a March letter, Federal Trade Commission Chairman Andrew Ferguson also voiced his opinion, emphasizing that “any purchaser should expressly agree to be bound by and adhere to the terms of 23andMe’s privacy policies and applicable law.”. “..”.
“Pleased” with the sale to Regeneron, 23andMe expressed gratitude that its employees would continue to work for the company. In a separate announcement, Mark Jensen, chair and member of the 23andMe board of directors’ special committee, stated that the acquisition “enables the mission of 23andMe to live on, while maintaining critical protections around customer privacy, choice, and consent with respect to their genetic data.”.
By the end of the third quarter, the sale—which will be conducted through a bankruptcy auction—should be finished, subject to approval by the US Bankruptcy Court for the Eastern District of Missouri. A court-appointed, impartial consumer privacy ombudsman will make sure that data privacy safeguards are upheld if the sale is authorized. Securities filings show that Regeneron was one of seven bidders for 23andMe.
23andMe, which was sold for $256 million, is far from its peak. The tenacious Silicon Valley startup, which was established in 2006 and is well-known for selling genetic tests directly to consumers, reached a peak valuation of $6 billion in the fall of 2021 following its IPO. However, 23andMe’s “one-and-done” product business model caused it to struggle. Despite being publicly traded, the company has never made a profit, and its attempts to diversify into the biotech and health care sectors have failed. The seven independent directors of 23andMe resigned in September over differences of opinion with CEO Anne Wojcicki regarding the “strategic direction” of the business. Wojcicki left the company in March, and it declared bankruptcy.
