Do-it-yourself DNA tests have attracted their fair share of controversy over what they can or cannot tell about a person. But consumers don’t appear to be paying much attention to critics, judging from sales of at-home tests, which are driving a market expected to hit $350 million by the end of the decade, according to data from Kalorama Information.
The demand has been so strong that the popular consumer genetics company, AncestryDNA, had a database of two million samples as of mid June —double the number it had roughly one year ago.
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As result, the Lehi, Utah-based company is enlisting a second lab, Quest Diagnostics, to handle the volume of incoming DNA samples needing to be analyzed.
The 2 million milestone was an unexpected but welcome one, AncestryDNA spokesman Brandon Borrman said. “The demand surprised even us,” he said. “It surprised pretty much everyone.”
AncestryDNA’s parent company, Ancestry.com, reported revenues of $683 million in 2015, but Borrman said the company doesn’t report sales for the various divisions. So it’s hard to assign a dollar figure to the DNA side of the business. But as a descendant of the genealogy giant, they are veterans of dealing directly with consumers. Only now, customers tracing their personal history can pay $99 for an at-home kit that helps them peer into their genetic makeup.
Ancestry.com’s CEO Tim Sullivan attributed the popularity of DIY genetic tests to an “inherent” need among humans to learn more about who they are as individuals and how they connect to the rest of the world.
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“The stories and revelations contained within our DNA can have incredibly meaningful, life-altering effects that change how we think about ourselves and our world,” he said in a statement.
The parent company is also thinking about its own story a little differently.
Formerly known as a family history company, Borrman said the company is rebranding itself as an “identity company.” That may help explain the company’s foray into family health history with a new division, AncestryHealth, and longevity research through a partnership with Calico.
Borrman wouldn’t speculate about whether Ancestry.com would spin-off the DNA division or about rumors back in 2015 that Permira Advisers, the European buyout firm that owns much of Ancestry.com, planned to put the parent company up for sale. So far, Permira has stayed put although Ancestry.com brought in new investors in April 2016.
AncestryDNA already sends the DIY genetic kits to Illumina Inc., also headquartered in Utah. But the consumer genetics company needed to scale up to keep up.
“Adding a second diagnostic partner is a critical step forward as we work to continue to meet the consumer demand we’re seeing for our DNA tests in the United States and markets around the world,” Ken Chahine, the executive vice president and general manager of AncestryDNA, said in a statement.
The company chose Madison, New Jersey-based diagnostics corporation Quest, which has a corral of more than a dozen subsidiaries and a new 200,000 square-foot lab in Marlborough, Massachusetts. That gives AncestryDNA access to labs on both coasts, which they hope will cut down on the time it takes to turn around results for customers on the eastern side of the U.S.
Sharing our unique capabilities with Ancestry will help everyone learn more about themselves,” Steve Rusckowski, Quest Diagnostics CEO said in the news release.
Quest Diagnostics will analyze genetic samples of AncestryDNA customers to examine ethnicity and family history. Beyond that, Quest is clearly looking to use the relationship as a way to expand its presence in the direct-to-customer sphere.
It’s a relatively new market for Quest, whose base has been U.S. physicians and hospitals. Teaming up with AncestryDNA could open the doors for Quest to customer-direct sales and their foothold could grow if the two companies develop additional D2C tools and applications, which is something Quest says it is interested in exploring.
“At Quest, we saw this as an ideal opportunity to expand our footprint in the direct-to-consumer testing space by collaborating with one of the world’s leading services in family history,” Quest Spokesman Dennis Moynihan wrote in an emailed response to questions.
For now, though, AncestryDNA is taking things slow. They won’t start sending samples to Massachusetts until early 2017. Despite the added capacity, AncestryDNA won’t be doing direct disease testing, although Borrman said it’s no secret that they have been exploring proper paths into the DIY diagnostics territory with U.S. and European regulators.
AncestryDNA isn’t revealing how many DNA samples they expect to receive next year, or even if they’ve made those projections. Borrman said they didn’t expect the surge in the past year. “Even the best laid plans can go awry,” he said.
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