DNA testing company 23andMe (MEHCQ) is being purchased out of bankruptcy by large-cap drugmaker Regeneron (REGN) for $256 million.
The deal includes “substantially all assets” but excludes the telehealth platform, pharmacy fulfillment business, and lab and test ordering services under Lemonaid Health, according to the agreement filed in the US Bankruptcy Court in the Eastern District of Missouri. The deal is scheduled to close July 1.
The news sent 23andMe’s stock up more than 26% in premarket trading. Regeneron’s stock was up just over 1%.
The steep discount on the once highly valued testing firm puts an end to concerns about the fate of sensitive genetic data of millions of customers. It also aligns with a strategy that 23andMe had been pursuing for years.
“Regeneron intends to acquire 23andMe’s Personal Genome Service (PGS), Total Health and Research Services business lines, together with its Biobank and associated assets, for $256 million and for 23andMe to continue all consumer genome services uninterrupted,” Regeneron said in a statement Monday. “Subject to bankruptcy court and regulatory approvals and other customary closing conditions, the transaction is expected to close in the third quarter of 2025.”
23andMe, which launched in 2006, was famously led and co-founded by Anne Wojcicki — ex-wife of Google co-founder Sergey Brin. The company had tried for 10 years to create a robust business segment pairing its DNA data bank with drug discovery, hoping to make it a more efficient process as the industry turned to more personalized and targeted treatments. But the few partnerships it succeeded in securing over the years produced little.
Read more about 23andMe’s stock moves and today’s market action.
Regeneron is already in the business of linking de-identified genetic data to drug discovery, according to co-founder and board chair George Yancopoulos.
“We have deep experience with large-scale data management, having worked with collaborators around the world to link deidentified DNA sequences from nearly three million consented participants to electronic health records, safely and securely enabling future medical advances,” he said in a statement Monday. “We believe we can help 23andMe deliver and build upon its mission to help those interested in learning about their own DNA and how to improve their personal health, while furthering Regeneron’s efforts to use large-scale genetics research to improve the way society treats and prevents illness overall.”
The data bank
23andMe began shutting down clinical trials in November of last year and filed for bankruptcy in March.
Despite having a popular consumer test, 23andMe struggled to turn a profit since going public. It went public via a SPAC, via Richard Branson’s Virgin Group, in 2021, and raised $592 million in gross proceeds. The company was valued then at $3.5 billion.
But industry watchers believe the consumer testing model still holds value.
“Consumer-facing testing startups are stillraising, and young consumers show the most interest of any generation in at-home testing across fertility, microbiome, and hormone health,” according to venture funding firm Rock Health in an email to clients in March.
That has been evidenced by the recent FDA approval of an at-home cervical cancer screening kit.
Regeneron said in a statement Monday that it intends to ensure the data is kept secure and that individuals’ privacy is paramount. The pharma company isn’t new to genetic testing and data banks, as it has been doing so through clinical trials for years.
“We assure 23andMe customers that we are committed to protecting the 23andMe dataset with our high standards of data privacy, security and ethical oversight and will advance its full potential to improve human health,” said Aris Baras, senior vice president and head of the Regeneron Genetics Center, in a statement.
“Since 2013, the Regeneron Genetics Center has sequenced the genetic information of nearly three million people in research studies, using this deidentified data to make meaningful discoveries at speed and scale,” Baras said.
Yahoo Finance senior legal reporter Alexis Keenan contributed to this article.
Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee as AnjKhem on social media platforms X, LinkedIn, and Bluesky @AnjKhem.
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