The drugmaker Regeneron Pharmaceuticals has agreed to buy the genetic testing firm 23andMe Holding for $256m through a bankruptcy auction, the companies announced on Monday.
Regeneron said it will comply with 23andMe’s privacy policies and applicable laws with respect to the use of customer data and that it is ready to detail its intended use of the data to a court-appointed overseer. The companies expect to close the deal in the third quarter.
“Regeneron Genetics Center is committed to and has a proven track record of safeguarding the genetic data of people across the globe, and, with their consent, using this data to pursue discoveries that benefit science and society,” said Aris Baras, the senior vice-president and head of the Regeneron Genetics Center. “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.”
The bankruptcy proceedings, filed in March, had drawn scrutiny from lawmakers who warned that millions of customers’ genetic data could be sold to unscrupulous buyers. At least one group, called the Global BioData Trust, placed a formal bid to acquire 23andMe and pitched itself as a means to return control of the data to consumers who could choose to store their DNA information in the trust or share it with an affiliated public benefit corporation.
Even that bid came with risks to customers’ privacy, though. The US does not currently have comprehensive privacy regulation that would establish enforceable guardrails around how Regeneron will store, use and share the genetic data it is acquiring from 23andMe. Companies, thus, are free to change their privacy policies on a whim – at times with little notice to users. Without a federal privacy regulation, there are few ways to hold entities, including non-profits, accountable to their promises on how they will manage consumer data.
23andMe last month agreed to allow a court-appointed overseer for the company’s handling of customers’ genetic information and its security policies during the bankruptcy.
As part of the agreement, Regeneron will acquire all units of 23andMe, except the telehealth service Lemonaid Health, which the genetic testing firm plans to wind down. After the transaction completes, 23andMe will continue to operate as a wholly owned direct or indirect unit of Regeneron, the companies said.
The company has collected genetic data from 15 million customers who ordered its DNA testing kits online and provided saliva samples. It had been struggling with weak demand for its ancestry testing kits and the fallout from a data breach in 2023 that exposed millions of customers’ genetic data.
