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US drugmaker Regeneron has agreed to buy 23andMe out of bankruptcy for $256mn, ending the genetics testing start-up’s messy run as a public company.
The takeover comes less than two months after 23andMe filed for bankruptcy protection in a last-ditch attempt to sell itself. The sale to a pharmaceutical company could raise privacy concerns among the 15mn users who entrusted their genetic data to the start-up, which allows users to trace their family lineage.
After peaking at a market value of $5.8bn in 2021 following its public listing via blank cheque vehicle, 23andMe’s share price collapsed as investors began to doubt its business model, which never turned a profit, and persistent questions over privacy and control of its vast database of genetic information.
Co-founder and chief executive Anne Wojcicki agreed to relinquish control of the company as part of the bankruptcy, following multiple failed take-private bids.
Founded in 2006, 23andMe raised cash from leading Silicon Valley investors such as Sequoia Capital, and later $300mn from GSK in 2018. That investment ignited concerns about how a giant pharmaceutical company could use 23andMe’s genetic data.
Shares of 23andMe, which was delisted from Nasdaq in March and now trade over the counter, more than doubled on Monday after the deal was announced. Investors bet that the sale will mean shareholders get a sizeable recovery from the bankruptcy.
Regeneron, which is behind blockbuster drugs including immunology drug Dupixent and the Covid-19 antibody cocktail used to treat US President Donald Trump in 2020, said it would continue to offer 23andMe’s consumer-facing genetic testing service.
The Tarrytown, New York-based company said it would comply with 23andMe’s privacy policies about the processing of personal data, which was a key condition of any bankruptcy sale being reached.
Wojcicki long aspired to turn 23andMe into a drug development company in its own right.
Regeneron said it would “detail the intended use of customer data” for review by a court-appointed customer privacy ombudsman.
After 23andMe filed for bankruptcy, many users deleted their profiles over fears that their data would be sold. And congressional Republicans in April opened an investigation into the company to probe for potential national security and data privacy concerns. In 2023, the company was also hit by a massive data breach affecting nearly 7mn customer accounts.
Wojcicki, who was once married to Google co-founder Sergey Brin, started 23andMe in her sister’s Menlo Park garage in 1998.
Brin introduced Wojcicki to scientist Linda Avey, who was developing plans for a direct-to-consumer genetics business, and they launched the business together.
Named for the number of chromosome pairs in human DNA, 23andMe offered a “spit kit” that allowed people to explore their genealogy.
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