Regeneron Plans $256M Acquisition to Aid 23andMe

Regeneron has announced its acquisition of 23andMe, a genetic testing company, for $256 million. The deal was finalized during a bankruptcy auction and is pending approval from a bankruptcy court, along with other regulatory clearances. Once completed, Regeneron plans to ensure that 23andMe’s consumer genome services continue uninterrupted. The genetic testing company will operate as a subsidiary under Regeneron’s umbrella.

In addition to acquiring 23andMe's DNA testing services, Regeneron will gain the Total Health platform, which provides comprehensive testing such as exome sequencing and blood biomarker analysis. This platform is focused on assessing longevity. Regeneron will also take over 23andMe’s research operations, which include studies on the genetics of conditions like bipolar disorder and dyslexia, development of antibodies for solid tumor indications, and genome-wide association studies related to myasthenia gravis. Furthermore, Regeneron will control 23andMe's biobank, with a commitment to prioritize the privacy, security, and ethical use of customer data.

Notably, Lemonaid Health, which is 23andMe’s telehealth platform specializing in women’s, men’s, and mental health services, is not included in the acquisition by Regeneron.

23andMe had filed for Chapter 11 bankruptcy in March, requesting the Missouri court’s permission to sell nearly all its assets. The court approved the bankruptcy bid, stipulating that interested buyers must adhere to 23andMe’s privacy policy and relevant laws. The company subsequently sought bids for its assets. Anne Wojcicki, 23andMe's former CEO, who once held a significant portion of shares and voting rights, made several attempts to privatize the company but faced rejection by a special committee of independent directors.

The company has faced financial challenges for several years. It went public in 2021 with a valuation of $3.5 billion but reported a net loss of $312 million for its fiscal year 2023. In November 2024, to stabilize its finances, the company reduced its workforce by 40%, equating to around 200 employees.

For Regeneron, the acquisition of 23andMe represents an opportunity to strengthen its business, especially after experiencing a challenging first quarter. Analysts from BMO Capital Markets anticipate a turbulent period for Regeneron as it attempts to regain momentum. The company's Eylea franchise saw a 26% decline in sales year-on-year, generating $1.04 billion in the U.S.

The acquisition is also seen as a strategic move to enhance Regeneron’s gene therapy pipeline. Earlier, in February, Regeneron disclosed that its AAV-based gene therapy, DB-OTO, partially restored hearing in 10 out of 12 children born with profound genetic hearing loss, without any adverse events. DB-OTO, acquired from Decibel Therapeutics for $109 million in 2023, works by delivering a functional copy of the otoferlin gene, a primary cause of congenital deafness. Regeneron is also advancing another therapy targeting GJB2-related hearing loss.