CNBC Disruptor 50

23andMe competitor Veritas Genetics slashes price of whole genome sequencing 40% to $600

Key Points
  • Veritas is lowering the cost of a full genome sequence from $999 to $599 and believes within two years it will be pricing in the $100–$200 range.
  • The personal genetics company co-founded by Harvard scientist George Church thinks the price cuts will lead millions of consumers to seek their full DNA profile.
  • Cheaper heritage and health tests from AncestryDNA and 23andMe from $99 to $199 have been purchased by millions, but a top Veritas executive said that is "like comparing a tricycle with a sports car."
Harvard geneticist George Church poses for a portrait inside his lab at Harvard Medical School.
Jessica Rinaldi | Reuters

Genome-sequencing company Veritas Genetics offered the first $1,000 whole genome sequence to consumers and physicians in 2016. Now the company is ready to again push competition in the growing personal genetics industry, cutting its test pricing by 40% and closing the gap on popular genetic-testing companies 23andMe and AncestryDNA.

The Veritas whole genome sequencing product "myGenome" will go down in price from $999 to $599, a new price point that the company, a 2019 CNBC Disruptor 50, thinks will lead millions of more consumers to access the company's services.

"We know that all genetic tests lead to the genome," Veritas chief marketing and design officer Rodrigo Martinez said. "There is no more comprehensive genetic test than your whole genome. 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."

Research into genomics, the branch of biology concerning genetics, has progressed rapidly over the past few decades. When the first whole genome was sequenced in 2003, the process required 15 years of work, 20 different labs and more than $3 billion, according to Martinez. Veritas is now using advances in AI and machine learning to automate more of this process, making it much more affordable.

'This is the inflection point'

Veritas already tested the influence of pricing on its whole genome sequencing product once, when the company dropped the price of the service from $999 to $199 briefly last November for the first 1,000 kits ordered. That experiment — which matched the pricing on the popular consumer genetics kits offered by 23andMe and Ancestry — sold out in less than six hours and cost the company only $458 in marketing spend, according to Martinez.

"This is the inflection point," Martinez said. "This is the point where the curve turns upward. You reach a critical mass when you are able to provide a product that gives value at a specific price point. This is the beginning of that. That's why it's seismic."

Forget Facebook privacy, these companies are after the most private data, biometric data
Forget Facebook privacy, these companies are after the most private data

Consumers have been slow to make the transition from ancestry-based genetic tests to whole genome sequences, which offer far more medical data and insight, and it is not clear the $599 price will be enough. While the MIT Technology Review reported that more than 26 million people have taken at-home ancestry tests, Veritas has only fully sequenced about 5,000 genomes so far, according to the company.

A major part of getting consumers to pay the premium is successfully explaining the difference between whole genome sequencing and genotyping, the service offered by companies like 23andMe. Whole genome sequencing looks at all 6.4 billion letters of the human genome; genotyping looks at less than half of 1% of that number, according to Martinez. This difference is the reason whole genome sequencing offers much more comprehensive health-care data, leading the Mayo Clinic to begin using Veritas' tests in their executive health programs.

"It's like comparing a tricycle with a sports car," Martinez said of the difference.

According to 23andMe, its genotyping technology includes 600,000 variants, looking at points in the human genome that it knows — based on published scientific research — to convey information about genetic predispositions. That more focused approach is distinct from the full human genome. The genetic variants it studies are based on FDA requirements for support to be found in the published scientific research, and the 23andMe genetic-testing kit (priced at $199) is the only one approved by the FDA to report health conditions directly to the consumer without a medical professional needing to be involved in the process. It offers 130 total reports based on specific genetic variants and has sold 10 million kits.

More from Disruptor 50:
A start-up trying to usurp Western Union and shake up the $689B money-transfer market
Why some of the world's top cybersecurity hackers are paid millions to use their powers for good

An AncestryDNA spokeswoman stressed that its consumer DNA testing service (priced at $99) is focused on helping people discover their family history. It predicts genetic ethnicity and helps people find new family connections, but it does not provide health reports. AncestryDNA says more than 15 million people have taken its test. 23andMe also offers a heritage test, at a price of $99.

The only way we're going to be able to truly extract the value of the genome for a healthier society is going to be analyzing millions of genomes that have been sequenced. And the only way we can get there is by reducing the price so that more consumers can sequence their genome.
Rodrigo Martinez
Veritas chief marketing and design officer

Proponents of genome sequencing are hopeful the technology will allow consumers to uncover medical conditions to which they have a genetic predisposition, leading the health-care industry to focus more on prevention rather than treatment. However, Robin Bennett, a genetic counselor at UW Medicine, is skeptical of how helpful insurance will be in covering these services.

"[Health care] may be moving in that direction, but the payment for testing and for services, it hasn't moved in the preventive direction," Bennett said. "So unless the health-care system changes, these tests may not be as useful because ... the health-care system hasn't caught up to say, 'Yes, we support payment for this.'"

To reach a point where genomics is woven into everyday life, a phase Veritas calls The Era of the Social Genome, the company is predicting the price of a whole genome will begin its decline to the $100–$200 price point and consumer adoption of 1 million in 2021.

A key difference between the Veritas business model and the personal genetic health tests offered by 23andMe and Ancestry and others is that Veritas requires a medical professional to evaluate the results for individuals.

Human insights remain critical

UW's Bennett is concerned the technology allowing for whole genome sequencing is moving faster than our ability to interpret the information, and pricing pressure spurred by cheaper technology could negatively influence the quality of genome interpretation.

"You still want to have very qualified people interpreting that information and that are going beyond the artificial intelligence route," Bennett said. "You still need that human knowledge of understanding these genes. So at some point, I think the human cost of interpretation still has to be considered."

This is also complicated by the fact that scientists are still not entirely sure if certain variations in genes are natural or disease causing.

Kathryn Phillips, a professor of health economics at UCSF, said the reason insurers have been slow to cover genetic tests is not the label "preventative care," but instead the uncertainty of whether or not genome sequencing can currently lead to actionable clinical results.

"Insurers are looking for things where, if you get the information, there's something you can do with it and that both the provider and the patient are willing and able to use that information to do things that improve their health," Phillips said. "Insurers are very interested in using genetic testing for prevention, but we need to ... demonstrate that the information will be used and that it's a good trade-off between the benefits and the costs."

Because of this, Phillips currently sees greater potential in more specialized genetics tests, citing noninvasive prenatal testing as an example.

"I think the growth is going to be in areas where there's a need and where we have good evidence that the information will be used, as opposed to just kind of blanket, everyone's going to just go out and pay to get themselves sequenced out of pocket," Phillips said.

Veritas is launching a subscription model for its genetic tests this fall, which will let consumers continually learn more about their genome as the research improves. The company believes the best way to keep improving this research is to sequence as many genomes as possible, and that is driving the company's sales goal. Martinez said Veritas is planning to sequence between 15,000 and 20,000 genomes next year at this new price point with hopes of sequencing more than 150,000 the following year.

"The only way we're going to be able to truly extract the value of the genome for a healthier society is going to be analyzing millions of genomes that have been sequenced," Veritas' Martinez said. "And the only way we can get there is by reducing the price so that more consumers can sequence their genome."