DNA testing company 23andMe (MeHCQ) was purchased from bankruptcy by major drugmaker Regeneron (REGN) for $256 million.
The transaction includes “basically all assets” but does not include telehealth platforms, pharmacy performance operations, and laboratory and test ordering services, according to an agreement filed by the U.S. bankruptcy court in the eastern region of Missouri. The deal is scheduled to end on July 1.
The news has allowed 23AndMe's stock to grow by more than 26% in previous market transactions. Regeneron shares rose more than 1%.
The huge discounts for once overvalued testing companies have brought attention to the fate of sensitive genetic data from millions of customers. It is also aligned with 23AndMe’s strategy to work hard throughout the year.
“Regeneron intends to acquire 23AndMe’s Personal Genome Services (PGS), the Whole Health and Research Services business line, as well as its biobank and related assets, to continue uninterrupted at 23AndMe for $256 million.
23AndMe was launched in 2006 and was led and co-founded by Anne Wojcicki, the ex-wife of Google co-founder Sergey Brin. The company has tried to create a strong business unit for 10 years, pairing its DNA database with drug discovery – hoping to make it more effective as the industry moves to more personalized and targeted treatments. However, over the years, few partnerships it successfully gained have been produced.
According to co-founder and chairman of the board, George Yancopoulos, Reyn has been engaged in the business of linking de-identified genetic data to drug discovery.
“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. 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 further Regeneron's efforts to use large-scale genetics research to improve the way society, he said in a statement on Monday. ”
23AndMe began closing clinical trials in November last year and filed for bankruptcy in March.
Despite being tested by popular consumer, 23AndMe is still struggling to make money since its launch. It opened in 2021 through a SPAC through Richard Branson's Virgin Group and raised $592 million in total revenue. The company is worth $3.5 billion.
But industry observers believe that consumer testing models are still valuable.
“Consumer-facing testing startups are still increasing, with younger consumers showing the best interests in fertility, microbiome and hormone health in a March email to customers.”
The FDA recently approved a home cervical cancer screening kit, which has proven it.
Regeneron said in a statement Monday that it intends to ensure data is secure and that personal privacy is crucial. The pharmaceutical company is not new to genetic testing and databases, as this has been done through clinical trials for years.
“We assure 23AndMe customers that we are committed to protecting 23AndMe datasets with high standards of data privacy, security and ethical supervision and will promote 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, Regeneron Genetics Center has sequenced the genetic information of nearly 3 million people in its research and used the more identified data to make meaningful discoveries at speed and scale," said Barras.
Yahoo Finance senior legal journalist Alexis Keenan contributed to this article.
Anjalee Kachmli is a senior health journalist at Yahoo Finance, covering all medicines, insurance, nursing services, digital health, PBMS, and health policy and politics. Of course, this includes GLP-1. Follow Anjalee on social media platforms as Anjkhem X, LinkedIn and Bluesky @anjkhem.
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