Bankrupt DNA testing company 23andMe to be acquired by Regeneron for $256 million

Regeneron Pharmaceuticals

has announced it will acquire 23andMe, the once high-flying consumer

DNA testing company

, for $256 million through a bankruptcy auction. The deal comes after 23andMe filed for Chapter 11 bankruptcy protection in March amid plummeting demand for its ancestry kits and fallout from a 2023 data breach. Regeneron, a major player in biotech and pharmaceuticals, said it will honor 23andMe’s privacy commitments and adhere to legal safeguards around customer genetic data. The acquisition raises questions about how the vast trove of personal health information from 15 million users will now be handled.

Why 23andMe went bankrupt

Once a pioneer in the consumer DNA testing market, 23andMe faced a steady decline in demand as public interest in ancestry testing waned. The situation worsened after a 2023 data breach compromised the genetic data of millions of customers, damaging the company’s credibility and triggering lawsuits. At the same time, the firm struggled to pivot to new business models, including health insights and telemedicine, which failed to generate sufficient revenue. Mounting losses and limited investor confidence ultimately pushed the company to seek bankruptcy protection.

Privacy concerns draw scrutiny

Regeneron said it will comply with 23andMe’s privacy policies and relevant laws when handling customer data. A court-appointed overseer will monitor the company’s data use, a safeguard agreed upon in April amid fears that sensitive genetic profiles could fall into the wrong hands. Lawmakers and privacy advocates had raised alarms when 23andMe first entered bankruptcy, warning that consumer data must be protected even in the course of a sale.

Data breach and business decline

The sale marks a significant turn for 23andMe, which was once among the leading personal genomics companies. However, demand for at-home DNA testing declined sharply in recent years, and the company’s reputation took a hit after a major 2023 data breach exposed the personal data of millions. The incident led to lawsuits and further eroded public trust, contributing to its financial troubles.

Exclusion of Lemonaid Health

As part of the acquisition deal, Regeneron will take control of all 23andMe units except for Lemonaid Health, its telehealth subsidiary. 23andMe plans to shut down Lemonaid Health as part of its restructuring. The core genetic testing business, however, will continue operating as a wholly owned unit under Regeneron.

What happens next

The companies expect to close the transaction by the third quarter of 2025. Once completed, 23andMe will function as either a direct or indirect subsidiary of Regeneron. While Regeneron’s specific plans for the data and technology are not yet clear, the company says it is committed to transparency and legal compliance, especially as it navigates public and regulatory scrutiny over the future of

consumer genetic information

.