Regeneron to Acquire Bankrupt DNA Testing Firm 23andMe for $256 Million

Drugmaker Regeneron Pharmaceuticals has announced plans to acquire 23andMe Holding for $256 million through a bankruptcy auction. The purchase, set to conclude in the third quarter of the year, comes as 23andMe struggles with declining demand for its genetic testing kits and the fallout from a significant 2023 data breach that compromised genetic data for millions of customers.

Regeneron has stated its commitment to adhering to 23andMe’s existing privacy policies and ensuring compliance with applicable data protection laws. A court-appointed overseer will monitor the handling of customer data and security policies throughout the transition. The acquisition will include all units of 23andMe, except its telehealth service Lemonaid Health, which is being wound down as part of the bankruptcy proceedings.

Aris Baras, senior vice-president of Regeneron Genetics Centre, emphasised the company’s focus on protecting the acquired data. Highlighting its proven standards for data privacy and ethical oversight, Baras noted that the genetic dataset will be utilised to further health-related advancements with the consent of participating customers.

Despite promises of stringent data safeguards, concerns remain over the lack of comprehensive federal privacy regulations in the United States. Current legislation offers limited protection against changes to privacy policies, leaving over 15 million customers vulnerable to potential misuse of their sensitive data. Lawmakers and privacy advocates have expressed concerns about these risks, particularly as the market for genetic data continues to grow.

One competing bidder in the bankruptcy auction, the Global BioData Trust, suggested a consumer-focused approach to managing 23andMe’s genetic database. They proposed returning control of the genetic data directly to customers, allowing them to choose freely how their DNA information would be utilised. However, even this solution carried potential privacy risks under the current regulatory environment.

Regeneron plans to integrate 23andMe as a direct or indirect wholly owned subsidiary. While the acquisition represents opportunities for growth in the field of genetic research and personalised medicine, it has sparked questions around privacy and the ethical management of sensitive customer information in the absence of strict controls.