DNA for Sale - Inside Regeneron's $256 Million Gamble on 23andMe's Genetic Treasure Trove

DNA for Sale: Regeneron's $256 Million Gamble on 23andMe's Genetic Treasure Trove

The gleaming headquarters of 23andMe once symbolized Silicon Valley's promise to revolutionize healthcare through consumer genetics. That era officially ended Monday as Regeneron Pharmaceuticals announced its acquisition of the fallen genetic testing giant's core assets for $256 million—a fraction of the company's $6 billion peak valuation.

"This represents a remarkable reversal of fortune for a company that once epitomized the direct-to-consumer genetic testing movement," said a biotech analyst who has tracked the company since its 2021 public listing. "23andMe essentially created a category, dominated it, and then watched it crumble beneath them."

The acquisition comes after 23andMe filed for Chapter 11 bankruptcy protection in March, following years of declining sales, mounting losses, and the devastating fallout from a 2023 data breach that compromised the genetic information of nearly 7 million customers.

Inside the Deal: What Regeneron Gets and What It Doesn't

Regeneron's winning bid in the court-supervised auction includes 23andMe's Personal Genome Service, its Total Health and Research Services businesses, and crucially, the company's biobank containing genetic data from approximately 15 million customers.

What's not included is equally telling: Lemonaid Health, the telehealth service 23andMe acquired for $400 million in 2021 in a failed attempt to establish recurring revenue streams, will be shuttered. The exclusion underscores the real value proposition for Regeneron—unprecedented access to genetic data that could fuel drug discovery for decades.

At roughly 4.3 cents per historical genetic profile acquired, compared to an estimated $150 customer-acquisition cost for similar data today, Regeneron appears to have secured a bargain. The transaction requires approval from the U.S. Bankruptcy Court for the Eastern District of Missouri, with a hearing scheduled for June 17.

The Privacy Quandary: What Happens to Your DNA?

For the millions who swabbed their cheeks and sent their samples to 23andMe over the past decade, the acquisition raises profound questions about genetic privacy and consent.

"Your DNA and your family health history should not be a corporate asset," said J.B. Branch, a Big Tech accountability advocate for the consumer rights group Public Citizen. "Of course, Regeneron will promise to 'respect consent' and 'uphold privacy policies.' Those are bare minimal legal requirements. But time and again these companies fail consumers."

Recognizing these concerns, the bankruptcy court has appointed a Consumer Privacy Ombudsman to evaluate potential impacts on customer privacy. The ombudsman's report is due June 10, a week before the final approval hearing.

Regeneron has pledged to honor existing privacy policies and process customer data only in accordance with previously granted consents. "We have a proven track record of safeguarding personal genetic data, and we assure 23andMe customers that we will apply our high standards for safety and integrity to their data," the company stated in its press release.

However, privacy experts question whether the original consent forms ever contemplated a bankruptcy scenario where DNA data would be transferred to a pharmaceutical company.

Data as Drug Discovery Currency

For Regeneron, the acquisition represents a strategic play to accelerate drug development through access to one of the world's largest repositories of genetic information. The company already manages approximately 3 million genetic profiles through its Genetics Center, and adding 23andMe's dataset creates unparalleled scale.

"This is fundamentally about lead-time advantage in the race to discover new therapeutic targets," explained a pharmaceutical analyst who requested anonymity to discuss the competitive implications. "Unlike AI models that can be trained quickly once data is available, human genetic datasets take years to accumulate and validate. Regeneron just bought themselves a multi-year head start."

Renowned for developing treatments for conditions including blindness, allergies, cancer, and COVID-19, Regeneron first gained mainstream attention in 2020 when its experimental COVID-19 treatment REGN-COV2 was used to treat then-President Donald Trump.

Dr. Aris Baras, a Regeneron vice president, emphasized the company's commitment to responsible data stewardship: "We guarantee 23andMe users that we are dedicated to safeguarding the 23andMe dataset with our stringent standards for data privacy, security, and ethical oversight."

Regulatory Scrutiny Intensifies

The acquisition has drawn sharp attention from regulators across multiple jurisdictions. The UK Information Commissioner's Office and Canada's Office of the Privacy Commissioner issued a joint statement calling for robust protection of customer genetic information. Meanwhile, several U.S. state attorneys general, including those from California and Texas, have intervened in the bankruptcy proceedings.

California Attorney General Rob Bonta has advised state residents to request deletion of their genetic information and destruction of samples held by 23andMe before the acquisition closes.

In Washington, the transaction has breathed new life into legislative efforts to regulate genetic data. The Genomic Data Protection Act , currently in committee, could establish new federal standards for genetic data privacy, though pharmaceutical industry lobbying is expected to push for broad research exemptions.

The Autopsy of a Biotech Darling

23andMe's demise reflects broader challenges in the consumer genetic testing industry. After peaking in 2018-19, global demand for direct-to-consumer ancestry kits has fallen more than 40% as market saturation and price sensitivity took hold.

The company's finances deteriorated rapidly in recent years. Revenue fell 27% year-over-year to $220 million in fiscal 2024, while losses ballooned to $174 million. By the time of the bankruptcy filing, 23andMe's valuation had plummeted to under $50 million, forcing co-founder Anne Wojcicki to step down.

Industry analysts point to several factors in the company's downfall:

• Failure to establish recurring revenue streams despite multiple product pivots
• The costly and ultimately unsuccessful $400 million acquisition of Lemonaid Health
• Reputation damage from the 2023 data breach that compromised millions of customer profiles
• Rising customer acquisition costs as market penetration plateaued

Precedent-Setting Transaction

The acquisition may serve as a template for how genetic data is valued and transferred in future business transactions. For an industry that has struggled to establish sustainable business models, the deal suggests pharmaceutical partnerships may represent the ultimate exit strategy.

"This transaction could represent a watershed moment in how we think about genetic data commercialization," said a bioethicist who studies the intersection of genetics and commerce. "We're seeing the culmination of a business model where consumers pay to give companies their most intimate biological information, which is then monetized through pharmaceutical partnerships."

For Regeneron, the investment appears modest compared to potential returns. The company's annual research and development budget exceeds $18 billion, making the $256 million acquisition price roughly 1.4% of yearly R&D spending. If the genetic data accelerates even one blockbuster drug discovery, the return on investment could be massive.

What Comes Next

The immediate future brings several key milestones. The Consumer Privacy Ombudsman's report due June 10 will likely influence final court approval scheduled for June 17. If approved, the transaction is expected to close in the third quarter of 2025.

For current and former 23andMe customers, particularly those affected by the 2023 data breach, the July 14 deadline to file Cyber Security Incident Claims represents a crucial opportunity to seek redress before the acquisition concludes.

The longer-term implications reach far beyond a single corporate transaction. As genetic data increasingly serves as the foundation for medical research and drug development, questions of ownership, consent, and commercialization will only grow more complex and consequential.

"We're entering uncharted territory," concluded the bioethicist. "When a person's genetic blueprint becomes a tradable asset in bankruptcy proceedings, we need to fundamentally rethink our privacy frameworks and consent models. The DNA genie is truly out of the bottle now."