The DNA testing firm 23andMe says it has entered into an agreement to be acquired by Regeneron Pharmaceuticals for $256m (£192m). It comes two months after the company filed for bankruptcy protection in the US. 23andMe said Regeneron had committed to comply with its privacy policies as part of the deal, and that Regeneron has security controls in place to protect user data. Last month, the firm agreed to have an ombudsman oversee the protection of user data in response to demands by several state attorneys general in the US. The officials expressed concern over the potential for unscrupulous buyers to wield the data against consumers. Regeneron will acquire nearly all of 23andMe's assets,the company said in a statement. Its subsidiary Lemonaid Health will be wound down under the agreement. 23andMe will continue to operate as a wholly-owned unit unit of Regeneron, which said it would use the firm's data for drug development. "We are pleased to have reached a transaction that maximizes the value of the business and enables the mission of 23andMe to live on, while maintaining critical protections around customer privacy, choice and consent with respect to their genetic data," said 23andMe's board chairman Mark Jensen. The deal was made through auction last week as part of the company's bankruptcy proceedings. The company declined to comment further when approached by the BBC. 23andMe was co-founded in 2006 by Anne Wojcicki who served as CEO until stepping down in March. Over the years, the company received high-profile endorsements from celebrities including Oprah Winfrey, Eva Longoria and Snoop Dogg. 23andMe went public in 2021, which saw its value top $6bn - but it never turned a profit. The once-celebrated company has struggled amid weak demand for its testing kits and never managed to redefine its business model. A subscription service failed to gain traction with customers and efforts to use its massive trove of data to move into drug development also faltered. Then in 2023 the company experienced a data breach that exposed the genetic data of millions of users. The firm ultimately settled a lawsuit alleging it failed to protect the privacy of nearly seven million customers whose personal information was exposed. Hackers gained access to family trees, birth years and geographic locations, by using customers' old passwords, but the company maintains the data stolen did not include DNA records. Two months after the settlement, it slashed 200 jobs - about 40% of its workforce. Ms Wojcicki tried to take the company private but was not open to a third-party takeover. When 23andMe filed for bankruptcy protection in March, attorneys general from multiple US states advised its customers to purge their information from the firm's database. At the time, the company said it would continue to protect customer data as laid out in its privacy policy, and any buyer of the company would have to abide by laws that apply to how customer data is treated. But its privacy policy also included language which allowed for personal information to be accessed, sold, or transferred if it was "involved in a bankruptcy, merger, acquisition, reorganization, or sale of assets". 23andMe agreed to a court-appointed overseer of customer genetic data after several states alleged the company was failing to take data security seriously enough. Sign up for our Tech Decoded newsletterto follow the world's top tech stories and trends.Outside the UK? Sign up here.
Struggling DNA testing firm 23andMe to be bought for $256m
TruthLens AI Suggested Headline:
"Regeneron Pharmaceuticals to Acquire 23andMe for $256 Million Following Bankruptcy"
Bbc News
8.0
TruthLens AI Summary
23andMe, the DNA testing company that has faced significant challenges in recent years, has announced its acquisition by Regeneron Pharmaceuticals for $256 million. This deal comes just two months after 23andMe filed for bankruptcy protection in the United States, highlighting the financial difficulties the firm has encountered. As part of the agreement, Regeneron has committed to adhering to 23andMe's privacy policies, which have become increasingly important following a data breach that exposed sensitive information of millions of users. The acquisition includes nearly all of 23andMe's assets, although the subsidiary Lemonaid Health will be dissolved. The acquisition is expected to allow 23andMe to continue operating as a wholly-owned unit of Regeneron, which plans to utilize the company's data for drug development purposes. Mark Jensen, chairman of 23andMe's board, expressed satisfaction with the transaction, emphasizing the importance of protecting customer privacy and maintaining user choice regarding genetic data.
Founded in 2006 by Anne Wojcicki, 23andMe enjoyed initial success, buoyed by endorsements from celebrities and a peak valuation of over $6 billion after going public in 2021. However, the company struggled to turn a profit and failed to adapt its business model in the face of declining demand for its testing kits. Attempts to launch a subscription service and leverage its extensive data for pharmaceutical development did not yield the anticipated results. The situation worsened in 2023 when a significant data breach led to a lawsuit concerning the company’s failure to adequately protect user privacy, resulting in a settlement. In response to ongoing concerns about data security, 23andMe appointed an ombudsman to oversee customer data protection, a move prompted by pressure from state attorneys general. As the company transitions under Regeneron's ownership, it faces the challenge of regaining consumer trust while navigating the complexities of genetic data privacy and security in an evolving market.
TruthLens AI Analysis
The acquisition of 23andMe by Regeneron Pharmaceuticals for $256 million comes after the DNA testing firm faced significant challenges, including filing for bankruptcy just two months prior. This development not only highlights the struggles of 23andMe but also raises questions about the future of genetic data privacy and the direction of the biotech industry.
Business Implications and Market Perception
The announcement of this acquisition signifies a strategic move by Regeneron to leverage 23andMe’s extensive genetic data for drug development. This could enhance Regeneron's capabilities in personalized medicine, aligning with current trends in the pharmaceutical industry that prioritize data-driven approaches to treatment. The deal's timing, amid 23andMe's financial troubles, suggests a potential undervaluation of the company's assets, which could attract interest from investors looking for bargains in the biotech sector.
Public Sentiment and Privacy Concerns
The article emphasizes Regeneron's commitment to adhering to 23andMe’s privacy policies, which is crucial given the heightened sensitivity surrounding genetic data. The mention of an ombudsman overseeing data protection indicates a response to public concern about genetic data misuse. This narrative could foster a sense of trust among consumers, but it also serves to mitigate backlash from regulatory authorities and consumer advocates who worry about data exploitation.
Potential Manipulation and Hidden Agendas
While the acquisition may appear straightforward, there could be underlying motivations that the article does not fully disclose. For instance, the focus on privacy protections may overshadow the reality of how genetic data could be utilized for profit, especially if Regeneron uses this data in ways that consumers do not fully understand or consent to. This aspect raises questions about transparency and the ethical considerations of using consumer data in medical research.
Connections to Broader Trends
This news story could be linked to broader discussions in the biotech and healthcare sectors, particularly as companies increasingly rely on big data for innovation. The struggles of 23andMe mirror challenges faced by similar firms, such as the difficulty in monetizing genetic testing services. The failure of its subscription model indicates a shift in consumer interest, which other companies may also encounter.
Impact on Economies and Sectors
The acquisition could influence investor confidence in the biotech market, particularly for companies involved in genetic testing and data analytics. As Regeneron integrates 23andMe’s assets, it may also set a precedent for future acquisitions in a sector that is rapidly evolving. Stock prices of related companies may fluctuate depending on how the market perceives this acquisition as a model for future investments in genetic data.
Community Reception and Target Audience
This news may resonate more with health-conscious consumers and those interested in genetic testing, as the acquisition highlights the potential for advancements in personalized medicine. Additionally, it may appeal to investors looking for growth opportunities in biotech.
In summary, while the article presents an acquisition that appears beneficial for both companies, it also opens up discussions about ethical practices in genetic data usage and the potential risks involved. The overall reliability of the news seems high, given the presence of factual details such as financial figures and statements from company representatives. However, it is essential to remain cautious about the implications of how genetic data will be managed moving forward.