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Federal Regulators Issue Notice to DTC Test Company Orig3n That Its Purchase of Interleukin Genetics Could Involve CLIA Compliance Issues

CMS sends letter to Orig3n notifying the genetic test company that it may not have the required certifications to market its genetic tests

Orig3n’s recent ill-fated “DNA Day” promotion to offer free genetic tests during an NFL football game this past fall pushed Orig3n into the media spotlight. The Massachusetts-based biotech company—which sells 18 different DNA tests on its website—suspended the promotion due to questions from the Centers for Medicare and Medicaid Services (CMS) and the Maryland Department of Health (MDH) regarding the legality of the testing under the Clinical Laboratory Improvement Amendments of 1988 (CLIA).

Since then, however, new details from BuzzFeed and GenomeWeb indicate that Orig3n may not have the required certifications to market their genetic tests after all. On October 30, 2017, CMS served Orig3n with an out-of-compliance notice. According to BuzzFeed, the letter came from Karen Dyer, MT (ASCP) DLM, Director, Division of Laboratory Services and the CLIA program at CMS.

In a letter to Kate Blanchard, Chief Operating Officer at Orig3n, Dyer wrote, “To apply for CLIA certification, Orig3n must contact both the Massachusetts and California state agencies immediately for guidance. Orig3n’s various tests analyze 18 genes related to health, from ‘muscle power’ to ‘sugar sensitivity’ to ‘age-related metabolism’. It offers genetic testing that provides information for the assessment of health.” The letter gave Orig3n a November 13 deadline to update CMS on issues regarding their CLIA certification.

Robin Smith, CEO, Orig3n, told GenomeWeb the notice “was the first time that any clear guidance was given regarding specific genes and requirements for CLIA/non-CLIA.” He also noted efforts Orig3n undertook over the prior year to fully certify their laboratory.

The test shown above is one of 18 genetic tests Orig3n offers direct to consumers. According to Vice, Orig3n claims their tests do not require FDA-approval “because the tests are not diagnostic [and] they don’t require it.” The Baltimore Sun reported that “Orig3n is confident it can receive the proper approvals and plans to have a fan giveaway later this season at one of our games.” (Photo copyright: Orig3n.)

A Quick Resolution for Orig3n’s CLIA Woes?

Fortunately for Orig3n, meeting compliance and obtaining certification for their existing lab is no longer a requirement to resolve the issue. In a November press release, Orig3n announced the purchase of Interleukin Genetics. Orig3n plans to absorb Interleukin’s existing assets, including a CLIA-certified genetics laboratory in Waltham, Mass., capable of analyzing more than one million samples annually.

“Once we met with Interleukin Genetics, we saw a natural alignment between the two organizations regarding our shared commitment to a future of personalized health,” Smith noted. “With our trajectory of accelerated growth, we couldn’t imagine a better fit for acquisition. We are very pleased to be welcoming Interleukin Genetics to Orig3n.”

GenomeWeb asked Blanchard how the acquisition would impact Orig3n’s commercialization of the 18 tests in question by CMS, now that Orig3n owns a CLIA-certified lab, and through it, meets the requirements of CMS’ out-of-compliance notice. Blanchard declined to comment.

New Concerns Surrounding Interleukin Assets

Yet, in solving one set of problems, some experts believe Orig3n might have inherited a new set. In July 2016, GenomeWeb reported that Interleukin Genetics would be laying off 63% of its staff. Unable to secure a clinical services agreement, the company could not extend debt payment deferrals with its senior lenders. At the time of writing, debts totaled $5.6 million.

Further complicating matters, a 2015 peer-reviewed analysis published in the Journal of the American Dental Association (JADA) questioned the clinical validity of an inflammation management program called “Ilustra” that Interleukin claimed, “identifies individuals with an increased risk for severe and progressive periodontitis, due to a life-long genetic predisposition to over-produce Interleukin-1 (IL-1), a key mediator of inflammation.”

Another GenomeWeb article reported on the turbulent road the Ilustra program followed until Orig3n eventually pulled it from the market. GenomeWeb noted critics’ concerns about the marketing of precision medicine, genetic testing, and regulatory issues facing medical laboratories as these technologies mature.

Clinical Laboratories Continue to Field Concerns Over DTC Testing

“This [genetic] test would have been laughed out of the room if it had been presented to oncologists, or to professionals in medical genetics,” declared Scott Diehl, PhD, co-author of the JAMA analysis, a genetics researcher at Rutgers School of Dental Medicine, and Professor and Principal Investigator at Rutgers Biomedical Health Sciences.

GenomeWeb notes in their latest coverage that with Orig3n’s purchase of Interleukin Genetics, Diehl is once again concerned that the genetic tests in question might find their way back to the market.

When GenomeWeb questioned Orig3n about the concerns surrounding Interleukin’s Ilustra product, a spokesperson stated, “that was simply before Orig3n’s time with the company and they do not have a part in it.” Blanchard added, “[We are] looking at the entire Interleukin portfolio and implementing the tests if and when we decide it is appropriate.”

Regardless of the decisions made by Orig3n on future genetic tests and genetic service offerings, coverage of this event highlights a myriad of concerns—from regulatory scrutiny to the pitfalls of acquiring existing diagnostic tests or laboratory assets—facing clinical laboratories, anatomic pathologists, and other medical professionals working in the ever-shifting landscape of the modern healthcare system.

—Jon Stone

Related Information:

This DNA Testing Company Is Violating Federal Lab Testing Rule

Orig3n Acquires Interleukin Genetics, a Genetics-based Personalized Health Company, to Advance the Future of Health Faster

Orig3n’s Purchase of Interleukin’s CLIA Lab May Appease CMS, But Some Question Plans for Test Assets

Biotech Company Offers Fitness and Beauty-Focused Genetic Tests

Interleukin Genetics Slashes 63 Percent of Workforce, Shuts down Program and Mulls Sale

‘DNA Day’ Planned for Ravens Game Undergoes Federal and State Scrutiny

Interleukin Shutting Down Genetic Testing Program, Lays Off Staff

Divergent Findings on Interleukin Gum Disease Risk Test Raise Questions about Clinical Use

Interleukin 1 Genetic Tests Provide No Support for Reduction of Preventive Dental Care

Controversial Gum Disease Risk Test Highlights Precision Medicine Marketing, Regulatory Issues

State and Federal Agencies Throw Yellow Flag Delaying Free Genetic Tests at NFL Games in Baltimore—Are Clinical Laboratories on Notice about Free Testing?



Two International Surveys Show Doctors and Consumers See Increasing Value in Genetic Testing

As demand for genetic tests increases, so does the call for clinical laboratories to process and analyze the data, and work with ordering physicians to explain test results to patients

According to a 23andMe press release announcing the results of two national surveys, “most people and doctors agree that genetic testing offers promise for more personalized healthcare.” This is positive for clinical laboratories that provide genetic testing. These two surveys indicate a growing understanding among physicians and healthcare consumers of genetic testing’s value to effective precision medicine.

The surveys were conducted by Medscape, an online resource of medical information owned by WebMD, and Material, an international firm that partners with companies to provide strategy, insights, design, and technology, according to its website. Direct-to-consumer (DTC) genetic testing company 23andMe commissioned the surveys.

The researchers found that 75% of patients in the US said, “they’d be more likely to follow a doctor’s advice if they knew their genetic profile was used to personalize their care.”

The survey also revealed that:

  • 92% of doctors in the US say genetics is an important part of a patient’s complete health picture.
  • 66% of doctors say genetic testing could help lead to better outcomes for patients.

“I am excited about a future where genetic information becomes the foundation of personalized health,” said Anne Wojcicki, 23andMe co-founder and CEO, in a press release. “And that future may help alleviate some issues already affecting the population.” Recent surveys commissioned by 23andMe that indicate both physicians and patients are becoming more accepting of genetic tests are good news for clinical laboratories that perform genetic testing. (Photo copyright: TechCrunch/Wikimedia Commons.)

Filling a Need for Personalized Healthcare

Elective genetic testing is not only becoming more popular with doctors and patients, it may also fill a key precision medicine need in the population. According to the researchers, “more than half of people surveyed (55%) said they don’t feel healthy today, and 63% said they don’t feel in control of their health. And while most people surveyed (62%) said they wanted advice from their doctors that was tailored to them personally, few, only about 36%, said that’s what they were getting,” the press release noted.

Clearly, demand for a pathway to more personalized healthcare exists in the market. Thus, companies that offer elective genetic testing are looking to fill that need.

Genetic testing kits from companies such as 23andMe and Ancestry have become increasingly popular over the past few years. People often turn to these DTC companies to learn about their heritage, but they also allow healthcare consumers to take part in elective genetic testing without needing a referral from a doctor.

Before the popularity of these DTC tests, most genetic testing only took place when ordered by a healthcare provider. But that may be changing. According to a study conducted by Global Markets Insights (GMI), the size of the DTC genetic testing market “surpassed USD $3 billion in 2022 and is predicted to expand at over 11.5% CAGR [compound annual growth rate] from 2023-2032.”

GMI also predicted that “rising prevalence of genetic disorders will accelerate [genetic testing] industry growth.”

Problems and Opportunities in Genetic Testing

As consumer demand for elective genetic testing has increased, certain issues and opportunities have arisen as well.

In an article she penned for STAT titled, “Why the Rise of DNA Testing Is Creating Challenges—and An Opportunity,” physician/scientist Noura Abul-Husn MD, PhD, Vice President of Genomic Health at 23andMe, wrote, “This rapid growth has created what some might see as a big problem and others might see as an opportunity.” Abul-Husn is also Associate Professor of Medicine and Genetics, and Clinical Director of the Institute for Genomic Health, at the Icahn School of Medicine at Mount Sinai.

“The problem? There hasn’t been a corresponding increase in genetics education and training healthcare providers about it, meaning that many people are reaching out to healthcare providers who are ill-prepared to incorporate genetic test results into clinical practice,” she wrote.

“The opportunity? Results from genetic testing can help healthcare providers engage with their patients on a deeper level about personal health risks, promoting health, and preventing disease,” she added.

Growing Need for Processing and Analyzing Genomic Tests

A YouGov survey of 1,000 adults between February 9 and February 12, 2022, showed that two of every 10 Americans have taken a DTC genetic test. But it seems healthcare professionals currently lack the training to incorporate genetic test results into their patients’ care. This may present an opportunity for the genetic testing industry to meet the demand of its consumers.

The growing popularity of elective genetic testing will also increase demand for clinical laboratories to process and analyze these types of tests. And that will drive increased revenue and job opportunities in those labs.

Another factor that is positive about the increased acceptance and interest in genetic testing by doctors and consumers is that this creates a demand by employees for their company health plan to cover genetic tests. Each year, going forward, employers will recognize that their employees want genetic tests and so will take steps to make such tests a covered benefit within the health plan. That is also a positive market factor for those medical laboratories offering genetic testing.  

It seems clear that elective genetic testing offers individuals the opportunity to work with their physicians to design personalized treatments based on their unique conditions. And it gives the healthcare industry—including clinical laboratories—the opportunity to expand services and branch out. The future of precision medicine may lie within our genes.  

—Ashley Croce

Related Information:

New 23andMe Surveys Find Most People and Doctors Agree That Genetic Testing Offers Promise for More Personalized Healthcare

Genetics: The Bridge to More Personalized Healthcare

Why the Rise of DNA Testing Is Creating Challenges—And An Opportunity

Genetic Testing Coverage and Reimbursement

FDA Authorizes 23andMe to Report Results of Direct-to-Consumer Pharmacogenetics Test to Customers without a Prescription, Bypassing Doctors and Clinical Laboratories

International Team of Scientists Use Genetic Testing to Solve Centuries-Old Mystery of Black Death’s Origin

Direct-to-Consumer Health Testing Company LetsGetChecked Acquires Veritas Genetics, Veritas Intercontinental, and BioIQ

As demand for DTC at-home genetic testing increases among consumers and healthcare professionals, clinical laboratories that offer similar assays may want to offer their own DTC testing program

Things are happening in the direct-to-consumer (DTC) medical laboratory testing market. Prior to the pandemic, the number of consumers interested in ordering their own diagnostic tests grew at a rapid rate. The SARS-CoV-2 outbreak, however, and the need for consumers to access COVID-19 tests, caused DTC test sales to skyrocket.

One company benefiting from the DTC trend is New York City-based LetsGetChecked. In March, it announced its acquisition of Veritas Genetics which included that company’s Veritas Intercontinental business division. No purchase price was disclosed.

LetsGetChecked describes itself as a “virtual care company that allows customers to manage their health from home, providing direct access to telehealth services, pharmacy, and [clinical] laboratory tests with at-home sample collection kits for a wide range of health conditions,” according to the company’s LinkedIn page.

The acquisition of Veritas brings whole genome sequencing capabilities to LetsGetChecked, according to MobiHealthNews.

“Through these acquisitions, LetsGetChecked will leverage the power of whole genome sequencing to launch a full lifecycle of personalized healthcare, delivering the most comprehensive health testing and care solution on the market,” said Peter Foley, Founder and CEO of LetsGetChecked in a press release.

“By integrating Veritas Genetics’ and Veritas Intercontinental’s capabilities with LetsGetChecked’s scalable diagnostic and virtual care infrastructure, we are able to turn comprehensive genetic insights into practical recommendations and lifestyle changes, guided by clinical experts,” he added.

George Church, PhD
“Our mission to deliver the benefits of whole genome sequencing to millions of individuals continues as part of the LetsGetChecked family. I am particularly excited about the opportunity to combine genetic testing with the broad spectrum of virtual and at-home care models offered by LetsGetChecked. I expect these acquisitions will change the future of personalized healthcare as we know it,” said geneticist George Church, PhD, co-founder of Veritas Genetics, and Professor of Health Sciences and Technology at Harvard and MIT, in a press release. (Photo copyright: Wyss Institute at Harvard University.)

Leveraging the Power of Whole Genome Sequencing

To date, LetsGetChecked claims it has delivered nearly three million at-home direct-to-consumer tests and served more than 300 corporate customers with testing services and biometric screening solutions since its founding in 2015.

The company focuses on manufacturing, logistics, and lab analysis in its CAP-accredited, CLIA-certified laboratory in Monrovia, Calif., as well as physician support, and prescription fulfillment. The DTC company’s products include at-home tests for women’s health, men’s health, basic wellness, sexual health, and SARS-CoV-2 testing.

Veritas Genetics also was a DTC testing company co-founded by internationally-known geneticist George Church, PhD. In 2016, the company announced it would deliver a whole human genome sequence (WGS) for just $999—breaking the $1,000 cost barrier for whole genome sequencing.

In “Veritas Genetics Drops Its Price for Clinical-Grade Whole-Genome Sequencing to $599, as Gene Sequencing Costs Continue to Fall,” Dark Daily covered how just three years later, in 2019, the company announced it would do a WGS for only $599.

“There is no more comprehensive genetic test than your whole genome,” Rodrigo Martinez, former Veritas Chief Marketing and Design Officer, told CNBC. “So, this is a clear signal that the whole genome is basically going to replace all other genetic tests. And this [price drop] gets it closer and closer and closer.”

That market strategy did not succeed. By the end of 2019, the company announced it would cease operations in the United States but continue operations in Europe and Latin America. It has sought a buyer for the company since that time. Now, almost three years later, LetsGetChecked will become the new owner of Veritas Genetics.

Veritas’ primary product, myGenome was launched in 2018 as a whole genome sequencing and interpretation service to help consumers improve their health and increase longevity. The myGenome test screens for and provides insight on many hereditary diseases such as cancer, cardiovascular disease, and neurological disorders. It also provides observations on more than 50 personal traits and ancestry information.

In addition to bringing whole genome sequencing abilities to its test offerings for consumers, LetsGetChecked hopes the acquisitions will create new testing capabilities such as pharmacogenomics, cancer and viral screenings, and maternal fetal screenings.

“By integrating Veritas Genetics’ and Veritas Intercontinental’s genetics offering with our scalable virtual care infrastructure, we are able to leverage the power of whole genome sequencing to launch a full lifecycle of personalized healthcare, which has always been our goal,” Foley told MobiHealthNews.

Veritas Genetics and Veritas Intercontinental will continue to operate under the LetsGetChecked family of companies.

BioIQ also Acquired by LetsGetChecked

In early May, LetsGetChecked also acquired diagnostic testing and health improvement technology company BioIQ, which will continue to operate as a wholly-owned subsidiary.

BioIQ offers at-home tests, health screenings, and vaccinations to consumers. The company’s products include:

  • Heart health panel,
  • Lipid panel,
  • Respiratory panel,
  • Prevention panel, and
  • Wellness panel.

Individual tests offered by BioIQ include:

  • A1C,
  • COVID-19,
  • Hepatitis C test and
  • Sexually transmitted diseases.

BioIQ also offer e-vouchers for health screenings and vaccinations at participating retail pharmacies, clinical laboratories, and physician’s offices.

“The future of healthcare is in providing high-quality at-home diagnostics and care that comprehensively serve an individual’s health needs throughout their whole life,” said Foley in a press release about the BioIQ acquisition. “With this acquisition, LetsGetChecked gains a trusted partner with an extensive knowledge base and a breadth of experience in serving health plans and employer markets to deliver healthcare solutions at scale.”

These acquisitions by LetsGetChecked demonstrate how genetic testing companies are pivoting to new strategies. Clinical laboratories that perform genetic testing will want to monitor how these partnerships unfold in the future as healthcare consumers and providers continue to embrace at-home genetic testing.

JP Schlingman

Related Information:

Genetic Sequencing Opens New Doors—and Concerns—for Home Health Testing

LetsGetChecked to Acquire Veritas Genetics and Veritas Intercontinental to Unlock the Future of Personalized At-Home Healthcare

LetsGetChecked Scoops Up Genomics Company Veritas Genetics

Veritas Genetics Drops Its Price for Clinical-Grade Whole-Genome Sequencing to $599, as Gene Sequencing Costs Continue to Fall

LetsGetChecked Completes Acquisition of BioIQ

Have Low-cost Direct-to-Consumer Genetic Tests Changed Census Results in America?

Citizens claiming racial diversity increased by 276% in the 2020 census, leading experts to wonder if racial diversity is increasing or if people are simply electing to identify as such and how this trend will affect healthcare

Once again, we see another unexpected consequence to expanded DNA testing done by consumers for their own interests and needs. As NPR recently reported in “The Census Has Revealed a More Multiracial US. One Reason? Cheaper DNA Tests,” the growing trend of ordering low-cost direct-to-consumer (DTC) genetic testing to identify cultural heritage (where a family came from) and genealogy (to connect with extant family members) has educated healthcare consumers more about their cultural roots.

Such knowledge, NPR speculates, is allowing people to complete their census survey with more accurate “heritage” classifications.

How does this affect clinical laboratories? As Dark Daily covered in “Popularity of Direct-to-Consumer Genetic Tests Still Growing, Regardless of Concerns from Provider and Privacy Organizations,” popularity of at-home testing—including DNA testing—coupled with demand for increasingly personalized medicine (PM) in healthcare, will likely change the types of test orders medical laboratories receive from physicians.

What Did the 2020 Census Show?

The last US census showed an interesting change compared to previous census surveys. More Americans identified themselves as racially diverse than in previous censuses. Scientists in multiple specialty areas—including demographics, sociology, genetics, and more—are asking why.

According to federal Census Bureau data, in the most recent census, people who identify as more than one race rose by 276%! Scientists are only just beginning to hypothesize the reasons for this increase, but three potential factors, NPR reported, have emerged:

  • More children are being born to parents who identify with racial groups that are different from one another.
  • In 2017, the federal government made minor changes to how the census asked questions about race and in how those answers were categorized.
  • People are reconsidering what they want the government to know about their identities, according to Duke University Press.

The increased incidence of DNA testing for cultural heritage may be an additional factor in the different ways people identified themselves during the census, driving its popularity, NPR noted. More people are purchasing at-home DNA tests to learn where their ancestors lived and came from, and their family’s genealogy.

“Exactly how big of an effect these tests had on census results is difficult to pin down,” NPR reported. “But many researchers agree that as the cost of at-home kits fell in recent years, they have helped shape an increasing share of the country’s ever-changing ideas about the social construct that is race.”

How the Census Alters Government Policy

Pew Research noted that, although only about 16% of Americans have taken an ancestry DNA test, the marketing efforts of “companies such as 23andMe and, which operates the AncestryDNA service, should not be underestimated,” NPR reported.  They have a wide reach, and those efforts could be impacting how people think about race and ethnic identity.

For most of human history, social experience and contemporary family history have been the drivers of how people identified themselves. However, low-cost DTC genetic testing may be changing that.

Jenifer Bratter, PhD

“The public has kind of taken in the notion that you can find out ‘who you are’ with a test that’s supposed to analyze your genes,” Jenifer Bratter, PhD (above), a Professor of Sociology at Rice University who studies multiracial identity, told NPR. “What that does for anyone who does work in racial identity and racial demography is cause us to think through how genetic ideas of race are in public circulation.” Desire by healthcare consumers to know their risk for chronic disease has already driven a marked increase in demand for low-cost DNA testing, which has also affected the types of test orders clinical laboratory are receiving from doctors. (Photo copyright: Rice University.)

One concern that sociologists and demographers have about this trend is that the US census is an important tool in policy, civil rights protections, and even how researchers measure things like healthcare access disparities.

“You’re going to have a lot more people who are not part of marginalized groups in terms of their social experiences claiming to be part of marginalized groups. When it comes to understanding discrimination or inequality, we’re going have very inaccurate estimates,” says Wendy Roth, PhD, Associate Professor of Sociology, University of Pennsylvania, told NPR.

Cherry-picking One’s Racial Identity

In “Genetic Options: The Impact of Genetic Ancestry Testing on Consumers’ Racial and Ethnic Identities,” published in the American Journal of Sociology, Roth and her fellow researchers theorized that DTC at-home DNA test-takers do not accept the results fully, but rather choose based on their identity aspirations and social appraisals.

They developed the “genetic options” theory, “to account for how genetic ancestry tests influence consumers’ ethnic and racial identities.” They wrote, “The rapid growth of genetic ancestry testing has brought concerns that these tests will transform consumers’ racial and ethnic identities, producing “geneticized” identities determined by genetic knowledge.”

However, a more healthcare-related motivation for taking a DTC DNA test is to learn about one’s potential risks for familial chronic health conditions, such as cancer, heart disease, and diabetes, etc.

In “With Consumer Demand for Ancestry and Genealogy Genetic Tests Waning, Leading Genomics Companies are Investigating Ways to Commercialize the Aggregated Genetics Data They Have Collected,” Dark Daily noted that, faced with lagging sales and employee layoffs, genomics companies in the genealogy DNA testing market are shifting their focus to the healthcare aspects of the consumer genomics data they have already compiled and aggregated.

According to Joe Grzymski, PhD, Chief Scientific Officer at Renown Health and Associate Research Professor of Computational Biology at Desert Research Institute, a research campus of the University of Nevada Reno, the consumer market is going to become more integrated into the healthcare experience.

“Whether that occurs through your primary care doctor, your large integrated health network, or your payor, I think there will be profound changes in society’s tolerance for using genetics for prevention,” he told GenomeWeb.

Regardless, as Dark Daily reported in 2020, sales of genetic tests from Ancestry and 23andMe show the market is cooling. Thus, with less than 20% of the population having taken DNA tests, and with sales slowing, genetics testing may not affect responses on the next US census, which is scheduled for April 1, 2030.

In the meantime, clinical laboratory managers should recognize how and why more consumers are interested in ordering their own medical laboratory tests and incorporate this trend into their lab’s strategic planning.

—Dava Stewart

Related Information:

The Census Has Revealed a More Multiracial US. One Reason? Cheaper DNA Tests

Percentage of Population and Percent Change by Race: 2010 and 2020

Revisions to the Standards for the Classification of Federal Data on Race and Ethnicity

America’s Churning Races: Race and Ethnicity Response Changes Between Census 2000 and the 2010 Census

About Half of Americans Are OK with DNA Testing Companies Sharing User Data with Law Enforcement

Genetic Options: The Impact of Genetic Ancestry Testing on Consumers’ Racial and Ethnic Identities

With Consumer Demand for Ancestry and Genealogy Genetic Tests Waning, Leading Genomics Companies Are Investigating Ways to Commercialize the Aggregated Genetics Data They Have Collected

Consumer Reports Identifies ‘Potential Pitfalls’ of Direct-to-Consumer Genetic Tests

Popularity of Direct-to-Consumer Genetic Tests Still Growing, Regardless of Concerns from Provider and Privacy Organizations

Genetic Test Company 23andMe Completes Merger with Richard Branson’s VG Acquisition Corp., Stock Now Trades on NASDAQ

23andMe executives say they plan to leverage their database of millions of customer genotypes ‘to help accelerate personalized healthcare at scale,’ a key goal of precision medicine

In what some financial analysts believe may be an indication that popularity of direct-to-consumer (DTC) genetic testing among customers who seek info on their ethnic background and genetic predisposition to disease is waning, personal genomics/biotechnology company 23andMe announced it has completed its merger with Richard Branson’s VG Acquisition Corp. (NYSE:VGAC) and is now publicly traded on NASDAQ.

According to a 23andMe news release, “The combined company is called 23andMe Holding Co. and will be traded on The Nasdaq Global Select Market (“NASDAQ”) beginning on June 17, 2021, under the new ticker symbol ‘ME’ for its Class A Common shares and ‘MEUSW’ for its public warrants.”

Now that it will file quarterly earnings reports, pathologists and clinical laboratory managers will have the opportunity to learn more about how 23andMe serves the consumer market for genetic types and how it is generating revenue from its huge database containing the genetic sequences from millions of people.

After raising $600 million and being valued at $3.5 billion, CNBC reported that 23andMe’s shares rose by 21% during its first day of trading.

Anne Wojcicki

“23andMe is more than just a genetics company. We are an activist brand that is approaching healthcare and drug discovery with the individual at the center, as our partner,” said Anne Wojcicki (above), 23andMe’s co-founder and Chief Executive Officer, during remarks she gave after ringing the opening bell on the company’s first day of public trading, a 23andMe blog post noted. “We are going to continue pioneering a consumer-centered personalized healthcare world. We are going to show that drug discovery can be more efficient when you start with a human genetic insight,” she continued. (Photo copyright: TechCrunch.)

Might the quick rise in its stock price be a sign that 23andMe—with its database of millions of human genotypes—has found a lucrative path forward in drug discovery?

23andMe says that 80% of its 10.7 million genotyped customers have consented to sharing their data for research, MedCity News reported, adding that, “The long-term focus for 23andMe still remains using all of its accumulated DNA data to strike partnerships with pharmaceutical companies.”

Time for a New Direction at 23andMe

While 23andMe’s merger is a recent development, it is not a surprising direction for the Sunnyvale, Calif.-based company, which launched in 2006, to go.

Even prior to the COVID-19 pandemic, both 23andMe and its direct competitor Ancestry had experienced a decline in direct-to-consumer testing sales of at-home DNA and genealogy test kit orders. This decline only accelerated during the pandemic.

In “With Consumer Demand for Ancestry and Genealogy Genetic Tests Waning, Leading Genomics Companies Are Investigating Ways to Commercialize the Aggregated Genetics Data They Have Collected,” Dark Daily reported how, “faced with lagging sales and employee layoffs, genomics companies in the genealogy DNA testing market are shifting their focus to the healthcare aspects of the consumer genomics data they have compiled and aggregated.”

Meanwhile, 23andMe Therapeutics, a division focused on research and drug development, has been on the rise, Bloomberg News reported. On its website, 23andMe said it has ongoing studies in oncology, respiratory, and cardiovascular diseases.

“It’s kind of an ideal time for us,” Wojcicki told Bloomberg News.

“There are huge growth opportunities ahead,” said Richard Branson, founder of the Virgin Group, which sponsors the special-purpose acquisition company (SPAC) VG Acquisition Corp., in the 23andMe news release.

In a VG Acquisition Corp. news release, Branson said, “Of the hundreds of companies we reviewed for our SPAC, 23andMe stands head and shoulders above the rest.”

“As an early investor, I have seen 23andMe develop into a company with enormous growth potential. Driven by Anne’s vision to empower consumers, and with our support, I’m excited to see 23andMe make a positive difference to many more people’s lives,” he added.

Report Bullish on Consumer Genetic Testing

Despite the apparent saturation of the direct-to-consumer (DTC) genetic testing market, and consumers’ concerns about privacy, Infiniti Research reported that worldwide sales of DTC tests “are poised to grow by $1.39 bn during 2021-2025, progressing at a CAGR [compound annual growth rate] of over 16% during the forecast period.”

“This study identifies the advances in next-generation genetic sequencing as one of the prime reasons driving the direct-to-consumer genetic testing market growth during the next few years. Also, reduction in the cost of services and growing adoption of online service platforms will lead to sizable demand in the market,” the report states.

Clinical laboratory leaders will want to stay abreast of 23andMe rise as a publicly-traded company. It will be interesting to see if Wojcicki’s vision about moving therapies into clinics in five years comes to fruition. 

—Donna Marie Pocius

Related Information

23andMe Successfully Closes its Business Combination with VG Acquisition Corp.

23andMe to Merge with Virgin Group’s VG Acquisition Corp. to Become Publicly-Traded Company Set to Revolutionize Personalized Healthcare and Therapeutic Development through Human Genetics

Ringing in 23andMe’s Next Chapter

Genetic Testing Company 23andMe Rises in First Trade After Richard Branson SPAC Merger

Four Takeaways From 23andMe’s SPAC Deal

23andMe DNA Testing Firm Goes Public Following Branson Deal

Global Direct-to-Consumer Genetic Testing Market

With Consumer Demand for Ancestry and Genealogy Genetic Tests Waning, Leading Genomics Companies Are Investigating Ways to Commercialize the Aggregated Genetic Data They Have Collected

Consumer Genetic Testing Company 23andMe to Merge with Sir Richard Branson’s VG Acquisition Corp and Go Public