Genomics experts say this is a sign that clinical laboratory genetics testing is maturing into a powerful tool for population health
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’ve compiled and aggregated.
Recent analysis of the sales of genetic tests from Ancestry and 23andMe show the market is definitely cooling, and the analysts speculate that—independent of the consequences of the COVID-19 pandemic on consumer behavior—the two clinical laboratory genetic testing companies may already have done testing for the majority of consumers who want to buy these tests.
“I think the consumer market is going to become more integrated into the healthcare experience,” Joe Grzymski, PhD, told GenomeWeb. “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.”
In February, Ancestry, the largest company in the home DNA testing space, announced it was laying off 6% of its workforce or approximately 100 people, across different departments due to a decline in sales, CNBC reported. Several weeks earlier, 23andMe, the second largest company in this market, also announced it was laying off about 100 people or 14% of its workforce due to declining sales.
“I wasn’t surprised by the news,” said Linda Avey, a 23andMe co-founder who is now co-founder and Chief Executive Officer at Precisely Inc., a genomics company headquartered in San Francisco. She was commenting to GenomeWeb on the recent restructuring at her former company. “The level of expensive advertising has been insane here in the US. Those [customer acquisition costs] are not a sustainable model.”
CNBC surmised that the lull in at-home genetic testing is due mainly to:
A drought of early adopters. Individuals who were interested in the testing for genealogical and health reasons, and who believed in the value of the tests, have already purchased the product.
Privacy concerns. Some potential customers may have reservations about having their DNA information collected and stored in a database due to concerns about how that data is safeguarded and its potential uses by outside companies, law enforcement, and governments.
COVID-19 May or May Not Be a Factor in Declining DNA Testing Sales
The COVID-19 pandemic may be playing a role in the decline in sales of at-home DNA testing kits. However, there are indications that the market was cooling before the virus occurred.
An article in MIT Technology Review reported that 26 million people had purchased at-home DNA testing kits by the beginning of 2019. The article also estimated that if the market continued at that pace, 100 million people were expected to purchase the tests by the end of 2020.
However, data released by research firm Second Measure, a company that analyzes credit and debit card purchases, may show a different story, reported Vox. The data showed a general decline in test kit sales in 2019. Ancestry’s sales were down 38% and 23andMe’s sales were down 54% in November 2019 compared to November 2018. The downward trend continued in December with Ancestry sales declining 15% and 23andMe sales declining 48% when compared to December 2018.
Second Measure, however, compiled data from the two companies’ websites only. They did not include testing kits that may have been purchased through other sources such as Amazon, or at brick and mortar locations.
Nevertheless, the measures being taken by genomics companies to shore up their market indicates the Second Measure data is accurate or very close.
Rise of Population-level Genomics
This decline in genealogical sales seems to be behind DNA-testing companies shifting focus to the healthcare aspects of consumer genomics. Companies like 23andMe and Ancestry are looking into developing health reports based on their customers’ data that can ascertain an individual’s risk for certain health conditions, or how they may react to prescription medications.
For some genomics companies like 23andMe, the at-home DNA testing market was never specifically about selling testing kits. Rather, these companies envisioned a market where consumers would pay to have their DNA analyzed to obtain data on their ancestry and health, and in turn the testing companies would sell the aggregated consumer data to other organizations, such as pharmaceutical companies.
“Remember that 23andMe was never in the consumer genomics business, they were in the data aggregation business,” Spencer Wells, PhD, founder and Executive Director of the Insitome Institute, a US-based 501(c)3 nonprofit think tank focused on key areas in the field of personal genomics, told GenomeWeb. “They created a database that should in principle allow them to do what they promised, which is to improve people’s health through genomic testing.”
Even with clinical laboratory testing currently focused on COVID-19 testing, there remains an opportunity to sequence large numbers of people through at-home DNA testing and then incorporate those findings into the practice of medicine. The hope is that sales will again accelerate once consumers feel there is a compelling need for the tests.
Pathologists and clinical laboratory managers will want to watch to see if the companies that grew big by selling ancestry and genealogy tests to consumers will start to send sales reps into physicians’ offices to offer genetic tests that would be useful in diagnosing and treating patients.
Medical laboratories are already using gene sequencing as part of a global effort to identify new variants of the coronavirus and their genetic ancestors
Thanks to advances in genetic sequencing technology that enable medical laboratories to sequence organisms faster, more accurately, and at lower cost than ever before, clinical pathology laboratories worldwide are using that capability to analyze the SARS-CoV-2 coronavirus and identify variants as they emerge in different parts of the world.
The US Centers for Disease Control and Prevention (CDC) now plans to harness the power of gene sequencing through a new consortium called SPHERES (SARS-CoV-2 Sequencing for Public Health Emergency Response, Epidemiology, and Surveillance) to “coordinate SARS-CoV-2 sequencing across the United States,” states a CDC news release. The consortium is led by the CDC’s Advanced Molecular Detection (AMD) program and “aims to generate information about the virus that will strengthen COVID-19 mitigation strategies.”
The consortium is comprised of 11 federal agencies, 20 academic institutions, state public health laboratories in 21 states, nine non-profit research organizations, and 14 lab and IVD companies, including:
Oxford Nanopore Technologies
Verily Life Sciences
‘Fundamentally Changing How Public Health Responds’
Gene sequencing and related technologies have “fundamentally changed how public health responds in terms of surveillance and outbreak response,” said Duncan MacCannell, PhD, Chief Science Officer for the CDC’s Office of Advanced Molecular Detection (OAMD), in an April 30 New York Times (NYT) article, which stated that the CDC SPHERES program “will help trace patterns of transmission, investigate outbreaks, and map how the virus is evolving, which can affect a cure.”
The CDC says that rapid DNA sequencing of SARS-CoV-2 will help monitor significant changes in the virus, support contact tracing efforts, provide information for developers of diagnostics and therapies, and “advance public health research in the areas of transmission dynamics, host response, and evolution of the virus.”
The sequencing laboratories in the consortium have agreed to “release their information into the public domain quickly and in a standard way,” the NYT reported, adding that the project includes standards for what types of information medical laboratories should submit, including, “where and when a sample was taken,” and other critical details.
Sharing Data Between Sequencing Laboratories and Biotech Companies
The CDC announced the SPHERES initiative on April 30, although it launched in early April, the NYT reported.
According to the CDC, SPHERES’ objectives include:
To bring together a network of sequencing laboratories, bioinformatics capacity and subject matter expertise under the umbrella of a massive and coordinated public health sequencing effort.
To identify and prioritize capabilities and resource needs across the network and to align sources of federal, non-governmental, and private sector funding and support with areas of greatest impact and need.
To improve coordination of genomic sequencing between institutions and jurisdictions and to enable more resilience across the network.
To champion concepts of openness, standards-based analysis, and rapid data sharing throughout the United States and worldwide during the COVID-19 pandemic response.
To provide a common forum for US public, private, and academic institutions to share protocols, methods, bioinformatics tools, standards, and best practices.
To establish consistent data and metadata standards, including streamlined repository submission processes, sample prioritization criteria, and a framework for shared, privacy-compliant unique case identifiers.
To align with other national sequencing and bioinformatics networks, and to support global efforts to advance the use of standards and open data in public health.
Implications for Developing a Vaccine
As the virus continues to mutate and evolve, one question is whether a vaccine developed for one variant will work on others. However, several experts told The Washington Post that the SARS-CoV-2 coronavirus is relatively stable compared to viruses that cause seasonal flu (influenza).
Nor, he said, is one variant likely to cause worse clinical outcomes than others. “So far, we don’t have any evidence linking a specific virus [strain] to any disease severity score. Right now, disease severity is much more likely to be driven by other factors.”
Fast improvements in gene sequencing technology have made it faster, more accurate, and cheaper to sequence. Thus, as the COVID-19 outbreak happened, there were many clinical laboratories around the world with the equipment, the staff, and the expertise to sequence the novel coronavirus and watch it mutate from generation to generation and from region to region around the globe. This capability has never been available in outbreaks prior to the current SARS-CoV-2 outbreak.
Direct-to-consumer medical laboratory testing company gets a major shot in the arm as developers find ready investors and increasing consumer demand
Clinical laboratory tests, usually performed without fanfare, were thrust into the limelight during a recent episode of Shark Tank, an American reality TV show on which aspiring entrepreneurs compete for the attention and partnership funds of various investors.
EverlyWell, a direct-to-consumer (DTC) company that offers at-home lab tests without lab visits or doctor referrals, obtained a $1-million line of credit from Lori Greiner, one of Shark Tank’s participating entrepreneurs, according to MobiHealthNews. EverlyWell has consumers collect their own specimens at home, which are then sent to a medical laboratory testing facility.
“It’s incredible for the industry that we were selected and aired on a show like Shark Tank. It really shows the intersection of what’s happening in consumer healthcare and the high cost in healthcare and that people are really responding to new solutions,” Cheek told MobiHealthNews.
“I think the product is brilliantly crafted,” Greiner stated during the episode’s taping, according to MobiHealthNews. “It’s really nice; it’s really easy. It’s super clear. I think the state of healthcare in our country now is so precarious. I think this gives people an empowered way … to know whether or not they have to go find a doctor,” she concluded.
Greiner offered the $1 million line of credit (with 8% interest) in exchange for a 5% equity stake in EverlyWell, explained Austin360. According to SiliconHillsNews, she did so after reviewing certain EverlyWell financial indicators, including:
$2.5 million in revenue in 2016;
$5 million expected revenue in 2017; and
20% monthly growth rate.
Julia Cheek, CEO and Founder of EverlyWell (above), in a news release following her success on reality show Shark Tank, said, “We’re leading a major shift in the consumer health marketplace by bringing the lab to consumers’ doorsteps, and we are moving quickly to expand our channels, launch innovative tests, and deliver a world-class customer experience.” (Photo copyright: Forbes/Whitney Martin.)
Physician Review Still Part of Home-testing Process
EverlyWell lists 22 home lab tests on its website and a market share that encompasses 46 states. Shoppers can search for specific tests based on symptoms or by test categories that include:
Energy and Weight; and
Genomic Test (through a partnership with Helix, a personal genomics company).
The most popular test panels include:
Vitamin D; and,
Prices range from $59 for a glycated hemoglobin (HbA1c) test (found under the general wellness category) to $399 for a women’s health testing kit. EverlyWell explains that it has no insurance contracts for these diagnostic tests, which do not require office or lab visits.
The testing process, according to EverlyWell’s website, proceeds as follows:
After ordering and paying online, kits arrive at the customer’s home;
The consumer self-collects a sample (such as blood spots, dried urine, or saliva) and returns it by prepaid mail to a medical laboratory that partners with EverlyWell. The company notes that it works with CLIA (Clinical Laboratory Improvement Amendment)-certified laboratories;
A board-certified doctor reviews the lab results; and,
A report is available online in a few days.
“Our goal is not to remove the importance of physician review. It’s to make the experience easier for the consumer,” Cheek told Texas CEO Magazine. “We designed a platform that is all about access and empowering consumers to have access to and monitor their own health information,” she continued.
Texas CEO Magazine explained that Cheek was inspired to create the company following “a bad personal experience with health and wellness testing that sent her to seven different specialists, cost $2,000 out of pocket, and left her with pages of unreadable results.”
Since then, the three-year old start-up company has garnered more than $5 million in venture capital, noted the news release.
Many Choices in Direct-to-Consumer Lab Company Market
EverlyWell is not the only player in the DTC clinical laboratory test space. According to MedCityNews, there are at least 20 other DTC lab test companies in the market including:
Laboratory Corporation of America (LabCorp);
Quest Diagnostics (Quest);
Sonora Quest Labs;
Theranos; and others.
The direct-to-consumer lab test market grew from $15 million to about $150 million in 2015 and includes both large and small clinical laboratory test developers, noted Kalorama Information.
Clearly, the DTC testing market is expanding and garnering the attention of major developers and investors alike. This growing demand for home-testing diagnostics could impact anatomic pathology groups and smaller clinical laboratories in the form of reduced order testing and decreased revenue.
As tests explore genetic markers related to excessive weight gain, and breast and ovarian cancer, companies as well as employees are seeing returns on investment and participation
In a development that is auspicious for medical laboratories, more genetic tests are making their way into more corporate health benefit plans. Big brands—from Aetna to Visa—are partnering with personalized health companies and clinical lab companies doing genetic testing as they support tests to help employees head-off health risks.
Employers’ sponsorship of genetic testing is a trend that could become more common, noted Fortune. But human resources and benefits experts say the offerings are still uncommon. There are also unresolved issues, such as when genetic test results are inconclusive or questionable.
For medical laboratories, the companies’ genetic testing benefits could prompt more test orders from healthcare consumers. Based on the results of their genetic tests, people might decide to make lifestyle changes, work toward prevention of chronic conditions, and take further tests to assess progress. (more…)