The recent development in the world of genetic testing signifies a pivotal moment for both 23andMe and its founders. After the company faced significant financial difficulties, leading to a Chapter 11 bankruptcy filing in March 2024, it has been acquired by TTAM Research Institute, a nonprofit organization spearheaded by Anne Wojcicki, who is well-known as the co-founder and former CEO of 23andMe. The acquisition deal, valued at an impressive $305 million, was announced on a Friday, marking a substantial change in the genetic testing sector and the future of the company.
The bidding process that culminated in this acquisition was far from straightforward. Prior to TTAM’s victory, Regeneron Pharmaceuticals, a New York-based biotech firm, had made headlines by planning to acquire the majority of 23andMe’s assets for $256 million, as reported on May 19. However, Regeneron’s decision not to raise their bid was based on their evaluation of 23andMe’s remaining value. The competition between TTAM and Regeneron reflects the complexities surrounding the financial landscape of startups within the biotech realm, particularly those venturing into the uncharted waters of consumer DNA testing.
As the situation unfolded, both 23andMe and Regeneron refrained from commenting on the acquisition or the bidding war when approached by CNN. It is important to note that in the wake of the bankruptcy filing, Wojcicki resigned from her position at 23andMe on March 24. The company faced tremendous challenges throughout 2024, notably when all seven of its independent directors resigned collectively over the dissatisfaction with Wojcicki’s “strategic direction” that aimed to take the company private. The company had already trimmed its workforce by approximately 40%—around 200 employees—and halted the development of certain therapies as part of a broader restructuring initiative.
At its peak, 23andMe had a market valuation of around $6 billion and had amassed genetic data from roughly 15 million consumers through its popular at-home DNA testing kits. These kits provided customers with insights into their genetic makeup, potentially flagging health risks. However, the transition from one-time purchasers to ongoing subscribers proved to be a significant challenge for the company.
The bankruptcy situation raised alarms regarding data privacy. Many customers were apprehensive that their sensitive genetic information might be sold to third parties. In response to these concerns, 27 states and the District of Columbia took the legal step of filing a lawsuit to prevent any sale of genetic data without explicit customer consent. This legal action highlights the ongoing concerns about privacy in the genetic testing industry, particularly when such data might be used to tailor products or marketing strategies aligned with individual genetic traits.
Further complicating this matter is the limited legislative framework surrounding genetic discrimination, which allows for the potential misuse of genetic information in various domains, despite protections provided by the Genetic Information Nondiscrimination Act, which prohibits using genetic data in health insurance and employment decisions.
TTAM, committed to ethical practices, announced plans to adhere to 23andMe’s established privacy policies and ensure customer rights regarding data management remain intact, including options to delete accounts and withdraw from research studies. Wojcicki expressed her enthusiasm about TTAM’s ability to advance the mission of 23andMe, emphasizing the importance of individual autonomy regarding genetic data and how such knowledge can empower consumers in managing their health and ancestry.
The acquisition is not only a continuation of 23andMe’s services but also includes “substantially all” of its assets, such as its personal genome service, research operations, and the telehealth initiative, Lemonaid Health, acquired in 2021. However, before the transition can be finalized, the deal awaits approval from the US Bankruptcy Court for the Eastern District of Missouri, with a hearing already scheduled for June 17. This critical approval will determine the next steps for TTAM and 23andMe as they embark on a new chapter together, potentially redefining the landscape of direct-to-consumer genetic testing services.