Consumer Genetic Testing Industry Prepares for Slowing Demand

Dozens of companies currently offer direct-to-consumer genetic tests for a variety of purposes. The most popular tests use genetic variations to make predictions about health, provide information about common traits, and offer clues about a person’s ancestry.

The number of companies providing direct-to-consumer genetic testing is growing, along with the range of health conditions and traits covered by these tests. Because there is currently little regulation of direct-to-consumer genetic testing services, it is important to assess the quality of available services before pursuing any testing.

Other names for direct-to-consumer genetic testing include DTC genetic testing, direct-access genetic testing, at-home genetic testing, and home DNA testing. Ancestry testing (also called genealogy testing) is also considered a form of direct-to-consumer genetic testing.

Entering 2020, there had been a number of signs that the market began to slow down:

• Illumina, the manufacturer of the DNA decoding system that serves as the basis for many genetic testing companies, lowered its full-year expectations in 2019.
• Veritas Genetics, a company that provided whole-genome sequencing for $600, suspended its U.S. operations, citing issues raising additional funding. 
• Helix was looking to partner with health care providers after planning to sell tests directly to consumers.
• 23andMe laid off about 14% of its staff, as the company looked to scale back on work that isn’t core to the consumer testing and therapeutics businesses that 23andMe operates.

Recently, activities by the two largest companies in the industry confirm that continued success in the industry is becoming more difficult.

Blackstone reached a definitive agreement to acquire Ancestry® from Silver Lake, GIC, Spectrum Equity, Permira, and other equity holders for a total enterprise value of $4.7 billion.

Ancestry is the global leader in digital family history services, operating in more than 30 countries with more than 3 million paying subscribers across its Ancestry online properties and more than $1 billion in annual revenue.

23andMe recently launched a new subscription service that costs members $10 per month or $79 per year for access to exclusive health reports based on the latest research.

Each is a bet that the solution to lagging demand for DNA tests is offering more and deeper information to consumers. And each could come to nothing if the yesteryear boom in consumer genetics proves to have been a fad.

Takeaway: Consumer genetics testing companies are  rethinking strategies due to slowing demand for DNA tests