- 23andMe in June started trading after going public in a deal that valued the company at $3.5 billion.
- Despite 23andMe’s success, the consumer genomics market has largely bottomed out, an analyst said.
- Others hoping to cash in on genetic health assessments have pivoted or shuttered efforts altogether.
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As 23andMe starts trading as a public company, the personal genetics market isn’t what it once was.
“We’ve kind of hit the bottom and we’re stable right now,” Evercore analyst Vijay Kumar told Insider in March.
But that hasn’t stopped competitors from building out niches in other areas.
Kumar is skeptical of consumer genomics’ potential as a long-term, sustained market opportunity, citing the regulatory red tape and lack of scientific evidence showing that low-cost DNA sequencing can translate into better medical care.
Based on the widespread availability of genetic testing for health risks, the public might presume scientists and healthcare professionals might have figured everything out about the genome, but they haven’t, Kumar said.
Direct-to-consumer genetic testing has largely raced ahead of consensus among academic scientists and clinicians on what genomic sequencing can do. A study published in February in the British Medical Journal found that the type of genetic screening tools typically used by companies like 23andMe and Ancestry was less accurate in correctly predicting genetic risks for rare variants.
Dr. Robert Nussbaum, the chief medical officer of competitor Invitae, told Insider in March that applying this test type to more common genetic variants could mean thousands of people erroneously believing, for example, they carry the BRCA1/2 breast cancer mutation.
Restating concerns over FDA approval, Kumar added that “data without context is meaningless.”
Though the market for consumer genetic tests may have stabilized after bottoming out, sequencing as a whole is still poised to grow in the next few years, whether overseas or in the US. And 23andMe’s Anne Wojcicki told Insider in February the company saw an uptick in interest during the pandemic.
In its latest presentation to investors in February, 23andMe highlighted both the role of consumer products and drug discoveries in its business, pointing out subscriptions for new health screenings as the next phase of direct-to-consumer growth.
Not all companies, however, have amassed 10.7 million genotyped customers like 23andMe has. Spurred by the pandemic, diminishing consumer interest, and concerns over data privacy, companies that started out in the direct-to-consumer DNA testing space have largely taken different approaches to growing their businesses.
Here’s how companies like 23andMe and its competitors have fanned out into other less buzzy areas of healthcare or even exited the game altogether.
This article was initially published in March and has been updated with financial details from 23andMe as it went public, updates on Helix, and a new investment in Invitae by SoftBank.