Struggling DNA testing firm 23andMe to be bought for $256m

23andMe DNA testing firm will be bought by Regeneron Pharmaceuticals for $256 million after the company went through financial problems and bankruptcy proceedings. The auction during bankruptcy proceedings resulted in Regeneron acquiring nearly all 23andMe assets while the company functions as a fully-owned subsidiary dedicated to drug development through its genetic database.

Regeneron maintains it will uphold 23andMe's strict privacy rules while establishing strong data protection systems to protect user information. 23andMe reached an agreement in April to establish an ombudsman position for data protection oversight following U.S. state attorneys general concerns about genetic information misuse in a potential sale.

The board chairman Mark Jensen stated that the company will achieve maximum value through its existing mission which includes preserving customer consent and privacy standards and ethical genetic data use.

23andMe suffered a significant decrease in its business performance after the acquisition announcement. Anne Wojcicki co-founded 23andMe in 2006 and the company rose to fame in Silicon Valley thanks to the support of Oprah Winfrey and Snoop Dogg. The company launched its initial public offering in 2021 with an evaluation exceeding $6 billion. The company encountered financial losses while consumer DNA kit sales experienced a gradual decline. The company tried to transition to subscription-based services together with pharmaceutical development but the new strategies failed to create a lasting profitable business model.

The data breach occurred in 2023 when it exposed millions of user information that included family ties and location data. 23andMe assured its customers that no DNA data was extracted during the breach but the incident triggered costly legal actions. A major data breach combined with financial instability led the company to lay off approximately 40% of its workforce during the first part of 2024. Wojcicki made attempts to remove the company from public ownership but she avoided outside acquisitions until this point.

The acquisition has brought back attention to the genetic information security practices of the organization. Users must accept that 23andMe can move their data to different parties through bankruptcy and merger processes as specified in their privacy policy. When 23andMe filed for bankruptcy in March state attorneys general recommended users erase their data because of potential risks to valuable personal information reuse.

The acquisition of Lemonaid Health will terminate operations but Regeneron will use the large dataset to develop its pharmaceutical products. Multiple people continue to doubt whether commercial drug development combined with personal genetic information can be operated within ethical boundaries.

The acquisition ends the legacy of this consumer genetics brand yet starts its new mission under transformed operational guidelines.