October 6, 2013

Is direct to consumer genetic testing profitable?

Direct to consumer DNA testing is attracting a lot of attention. Is it ethical, how should it be regulated, does it make medical sense? These are all interesting questions, but the one I'll try to answer in this post is whether genome testing makes business sense.


The most well-known company in this space is 23andMe. That's no coincidence: It is working hard at increasing its profile and even has its own commercials.

As of September this year, 23andMe has genotyped 400,000 customers. That's 220,000 more than a year earlier, meaning that at a current price of $99 per test 23andMe made around $22m in the last 12 months. Contrasting this with the $161m in investment the company has attracted since it was founded in 2007, that's not great.

Competing companies are not doing much better. As the list below shows, 23andMe is currently to my knowledge the only company still active selling direct-to-consumer genetic testing services. The others have either declared bankruptcy or have otherwise stopped offering direct-to-consumer services.
It's obvious that genetic testing by genotyping is a niche market. Since it's unlikely that the value of these tests to consumers is going to increase dramatically, it's not clear to me how this could change in the near future.

5 comments:

  1. Hey Art, thank you for the post.
    As interpretation of genomic data will be developing, to understand genotyping and other genomic findings might become easier to consumers too. What do you think of it?
    I think it is possible that genetic testing by genotyping then will be through counsellers, doctors or other third parties who could provide you useful advice according to your genetic data.

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    1. Hi Hajnalka, thank you for commenting. The reason why I was writing that I don't see how the value of genotyping to consumers could increase dramatically is that better interpretation is likely to increase the utility of tests marginally, but not more. That's at least according to my limited understanding of genotyping.

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  2. in genealogy, there is also http://www.familytreedna.com/

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    1. Thanks! I left ancestry testing services out of this intentionally, as they probably serve a market that is slightly to the more health-centered information that companies like 23andMe produce. Also, ancestry testing in theory requires genotyping of only a few dozen variants rather than tens of thousands like 23andMe does.

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  3. I personally don't think consumer driven genotyping will ever catch on. Why? Because quite simply I think it is absolutely pointless. At most it tells you what diseases you are at risk for. In this case, simply knowing your family health history is a more pragmatic indicator of risk. The only time I think genotyping is relevant is when it comes to genetic counseling for those trying to conceive who know they are at risk of certain diseases. In which case, a direct consumer genotype probably isn't very appropriate, you need a counselor to go with it.

    Also I think another factor is the stigma behind genetic testing. Have you seen Gattaca? I know a lot of people who don't like the idea of the "wrong" people getting a hold of the their DNA. Which is kind of silly since your DNA is easily accessible (you shed it all day long) and while yes it is unique, it doesn't really tell any great secrets about you. At least not yet with our current technology.

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