There’s a famous Warren Buffett saying: “Buying a bad business for cheap is still buying a bad business.” And that logic checks out. Most of the time (just ask “Mama Cathie” who ironically buys bad business at crazy prices most of the time). But every so often, someone digs through the rubble of a corporate disaster and finds something valuable buried underneath. That’s exactly what Regeneron Pharmaceuticals seems to think it did this week when it scooped up nearly all of 23andMe’s assets for $256 million… a company that not long ago was worth over $6 billion. To put that in perspective, 23andMe lost 95.7% of its value in four years.

Let’s back up. In 2021, 23andMe was the new all star of consumer biotech. It had just gone public via a SPAC deal led by Sir Richard Branson and raised nearly $600 million. The pitch was cool: by collecting genetic data from millions of users through those now-ubiquitous saliva kits, the company would not only help consumers learn about their ancestry and health risks, but also power a new era of personalized drug discovery.

But the glow didn’t last. While people liked spitting in tubes to find out they were 2% Scandinavian, that novelty wore off. Demand for kits dried up, profits never materialized, and a 2023 data breach that exposed sensitive genetic data from millions of users only made things worse. Despite a decade-long attempt to shift toward biotech partnerships and drug development, the company couldn’t make it work. By March of 2025, 23andMe was out of money, shutting down trials, and filing for Chapter 11 bankruptcy.

That’s when Regeneron, a $100 billion drugmaker with a very different playbook, stepped in and said: we’ll take it. Today, they won the bankruptcy auction, securing 23andMe’s Personal Genome Service, its Total Health and Research business, and (most crucially) its biobank of roughly 15 million genetic profiles. Notably, Regeneron left behind the telehealth business Lemonaid Health, which is being shut down. The acquisition is expected to close by the third quarter of 2025, pending court and regulatory approvals. In the meantime, 23andMe will keep operating as a Regeneron subsidiary, with consumer-facing services continuing without disruption.

So why would a pharma giant buy the wreckage of a failed consumer DNA company? Well it actually might be a smart play because of the data. Unlike 23andMe, which always struggled to do much with its massive genetic database beyond ancestry reports and vague health insights, Regeneron knows how to turn that data into actual drugs. They’ve already sequenced the DNA of nearly 3 million participants through their own research programs, linking it to electronic health records to fuel drug discovery. And with 15 million more records now in their hands, they’ve got way more firepower to work with.

As Regeneron co-founder George Yancopoulos put it, they believe they can build on 23andMe’s mission while advancing Regeneron’s own push to revolutionize how we prevent and treat illness through genetics. It’s a smart wager and one that could turn a fire sale into a billion-dollar pipeline. Of course, there are concerns. Lawmakers raised alarms about what would happen to customers’ data after the bankruptcy, which is why a court-appointed overseer is monitoring how Regeneron handles it. The company, for its part, is saying all the right things… assuring the public that privacy, ethical oversight, and regulatory compliance are top priorities.

Still, the fact remains: Regeneron just bought 15 million DNA profiles for $256 million… basically $17 a genome. That’s cheaper than a Netflix subscription, and way less than what Meta pays to guess your shoe size based on Instagram likes. It could be a genius move or one members of the board point to as a reason to fire the CEO after one bad earnings report.

Stock.News has positions in Netflix and Meta.