Regeneron has agreed to pay USD 256 million to acquire at-home DNA test maker 23andMe after the troubled firm declared bankruptcy. Through the buyout, Regeneron will acquire the data of 23andMe’s customers, obtaining the valuable genetic profiles of millions to potentially develop new and lucrative therapies. With ambiguous legal guidelines surrounding genetic information, the acquisition calls into question the use and privacy of such sensitive data.
From Success to Bankruptcy
US drugmaker Regeneron has acquired 23andMe after the genetic testing firm filed for bankruptcy in March. Through the USD 256 million deal, Regeneron will take over 23andMe’s Personal Genome Service, Total Health and Research Services divisions while its Lemonaid Health business will be shut down. Still awaiting approval by the US Bankruptcy Court and expected to close in the third quarter of this year, the deal is the final chapter in 23andMe’s turbulent recent history.
Founded in 2006, the company became widely known for its DIY DNA testing kits that let consumers easily learn about their family lineage. Worth some USD 6 billion at its peak, 23andMe went public in 2021 through a merger with a special purpose acquisition company. But with its one-time tests, the San Franciso-based firm struggled to generate enough ongoing revenue to turn a profit and share prices soon dropped as investors questioned its business model.
To make matters worse, serious concerns about data privacy arose when the information of almost seven million 23andMe’s users was hacked in 2023. The attacks exposed customer names, birth dates, ancestry details as well as genetic health information, and above all highlighted the vulnerability of such sensitive personal data.
Under-Regulation
Concerns about privacy and data security continued when 23andMe began its bankruptcy proceedings and US lawmakers raised the issue of potential data exposure. The Federal Trade Commission (FTC) called for stringent oversight to ensure that consumer privacy rights be upheld and chairman Andrew Ferguson expressed the FTC’s concerns about the potential sale or transfer of millions of American’s personal information. “Any purchaser should expressly agree to be bound by and adhere to the terms of 23andMe’s privacy policies and applicable law,” said Ferguson.
Upon confirming its acquisition of the test maker, Regeneron pledged to comply with 23andMe’s existing privacy policies and adhere to applicable laws. “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,” Regeneron co-founder George D. Yancopoulos, assured.
Yet seeing as there are no comprehensive privacy regulations in the US that govern the rapidly evolving genetic data space, legally binding guidelines for the use, storage, and sharing of the data from 23andMe are virtually non-existent. And without these regulations, consumers may have limited recourse if their data is misused. “With only a handful of states enacting privacy laws, there is still a Wild West component at play,” wrote legal expert Sterling Miller about the use of biometric data, including DNA. “How is the data being gathered and used? What are the limits? Can it be sold? Because of the nature of biometrics, it is literally the most “personal” personal data available and it is not at all clear that the laws have kept pace with the rapid development in this area.”
Capitalising on Genetic Data
For drugmakers like Regeneron genetic data offers invaluable insights into areas such as disease risk and susceptibility that they can potentially take advantage of to develop new therapies. The purchase of 23andMe will put the genetic data of some 15 million people in the hands of a pharma company who will use it to search of new drugs and potentially make a profit out of it. While 23andMe’s customers offered their DNA samples willingly in exhange for a fee, and an estimated 83 percent opted-in for its use in research, they probably had no idea what a priceless asset it would become.
Regeneron, a biotech created in the 1980s that has developed breakthrough therapies like Dupixent, has extensively leveraged genetic data. Its Regeneron Genetics Center (RGC) along with the efforts to sequence 100,000 people have led to the identification of several novel therapeutic targets. According to the Tarrytown, NY-based firm, through the analysis of genetic data, it has discovered over 50 new protective genetic variants associated with diseases such as obesity, chronic obstructive pulmonary disease (COPD), cancer, and blinding eye diseases. These discoveries have brought some 30 new drug targets into Regeneron’s development pipeline, significantly accelerating the drug discovery process.
Regeneron has also expanded its genomic database through collaborations, including one with the Truveta Genome Project, which aims to sequence up to 10 million additional patient genomes linked to electronic health records. Additionally, the company is involved in genetic medicine platforms. Utilizing CRISPR technologies, Regeneron has developed a targeted gene insertion platform and in collaboration with Intellia, Regeneron was the first to successfully use CRISPR for transthyretin amyloidosis in a single-dose clinical trial.
