23andMe, the beleaguered genetic testing company co-founded by Anne Wojcicki in 2006, has reportedly lined up a buyer. Regeneron Pharmaceuticals has agreed to buy the company for $256 million. These are treacherous waters for any company. They recently filed Chapter 11 bankruptcy protection in the United States and experienced a massive data breach that compromised the personal information of over 150 million users.
This agreement—won in an auction as part of 23andMe’s bankruptcy proceedings—comes after a wave of scandals. In 2023, the company again landed in scalding water, this time over a lawsuit. It violated customers’ privacy, the complaint says, and it placed the personal information of almost seven million customers at risk. In the aftermath of the incident, the firm responded by hiring its first ombudsman. This decision followed pressure from a number of state attorneys general, aimed at stronger protection of user data.
As much as 23andMe enjoyed high-profile endorsements—including celebrity endorsements from Oprah Winfrey and Snoop Dog—the company has never been profitable. Though it went public in 2021 with a valuation of over $6 billion, the company failed to find its financial legs. Just two months later, after agreeing to settle the privacy lawsuit, the company announced layoffs, cutting about 200 employees. This cut represented roughly 40% of its staff.
Anne Wojcicki was CEO until she announced her own resignation in March 2023. During her tenure she tried to take 23andMe private but was not open to third party buy out offers. MARK JENSEN, chairman of board, sounded a positive note for the company’s future just days after the acquisition.
“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,” – Mark Jensen, 23andMe’s board chairman.
Even at the height of the bankruptcy proceedings, attorneys general from five states encouraged customers to remove their data from 23andMe’s database. They warned that hackers can remotely change data and could alter results. It’s been a good week for Regeneron Pharmaceuticals. This latest action comes as a new lifeline for the beleaguered company that has faced growing pressure from regulators and overwhelming market headwinds.