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Many lessons are still being learned, and the recent struggles of one of the pioneers in genomics consumerism, 23andMe1, has demonstrated the numerous challenges with cyber security, result interpretation, and the pitfalls of an incoherent strategy. However, companies that have a clear strategy, including an approach to create value in the market and invest in differentiating genomics capabilities are now reaping the rewards. Our report highlights the critical choices that genomics players need to make to prosper in the rise of genomics.
Chapter 1 Scientific breakthroughs and accessible testing
Since the human genome was first sequenced in 2003, emerging technologies in the collection, sequencing, and analysis of genomic data, have driven down the cost of DNA sequencing, from over $1 million to $600 per genome in the past 15 years. This reduction enabled by next-generation sequencing (NGS), has unlocked huge potential in scientific discovery and health outcomes2. With the use of genomics, we can now end the diagnostic odyssey that exists for many rare diseases, helping families avoid years of hospital visits and unnecessary tests3. NGS-based biomarker tests can now analyse hundreds of clinically actionable cancer biomarkers, simultaneously transforming the treatment options and outcomes for cancer patients.
Figure 1. Examples of genomic innovations
- Multi-cancer early detection (MCED) tests, a type of liquid biopsy, capable of catching early-stage cancer long before symptoms appear.
- Long-read sequencing techniques, such as nanopore technology, are providing additional diagnoses through more accurate genome assembly, where traditional short-read technology faced limitations.
- Gene editing technologies that can correct genetic disorders in vivo.
- Multi-omic technologies, such as proteomics, in combination with genomics are improving biomarker identification and tumour characterisation and treatment effectiveness.
The accessibility of genomic services has dramatically increased, enabling a multitude of commercially available genetic tests, and large-scale nationally driven genomic projects.
Figure 2: Market forecast for Next Generating Sequencing (NGS)
Figure 3: Increase in oncology biomarker discovery betweenWT 2005 and 2023
Figure 4: Increase in number of biomarker clinical trials between 2000 and 2019
Figure 5: Increase in number of personalised medicines approved between 2016 and 2020
Chapter 2 The emerging commercial opportunity
Globally, we have seen governments implement national genomic strategies, investing over $4B in the past 10 years. The UK is a leading example with multiple genomics programs such as the UK Biobank and the 100k Genomes Project, generating a 2021 market cap of £5B8.
In the Asia Pacific region, governments have been investing in genomic initiatives and improvements in healthcare infrastructure, leveraging their large and genetically diverse populations. Consequently, the APAC genomics market is now one of the fastest growing regional markets.
For example, Australia launched the Genomics Health Futures Mission (GHFM) in 2018 and is investing $500M over 10 years in genomics research under the Medical Research Future Fund (MRFF). Early successful programs funded through the GHFM include:
The Acute Care Genomics program, which provided whole-genome sequencing to 290 families with undiagnosed, critically-ill infants, and resulted in 136 new diagnoses of rare genetic diseases, 120 of which led to changes to critical care management plans10
Mackenzie’s Mission research study, which offered a reproductive genetic carrier screening to over 9,000 couples across Australia, identifying 1 in 50 couples has an increased risk of having a child with one of the 750 conditions screened11
In 2023 the Australian Government announced a $145mn investment to cover over 34 new, expanded or increased Medicare rebates for genetic testing with 112,000 people set to benefit from this expanded testing12. Inclusion of genetic testing on the Medicare Benefits Scheme is fundamental to equitable access to innovative diagnostic testing and creates a market for private sector genomics companies to offer competitive services in the sector.
Figure 7: 5-year growth in the number of government subsidised genetic tests in Australia
Figure 8: 5-year growth in the volume of subsidised genomic tests in Australia
We are now seeing an inflection point where there is growing demand across the value chain for players who can support sample collection and storage, sequencing, genomic analysis, and result interpretation. This is creating opportunities for large pathology players, niche genomics services companies and organisations with deep clinical knowledge.
Chapter 3 Hurdles to overcome
Despite the growth, excitement and opportunities offered by genomics, the market is still developing with many commercial, structural, and regulatory elements yet to be defined.
Industry, healthcare providers, academia and policy makers need to work together to establish the use of genomics into our health systems. However, with increasing capacity, ongoing development in the understanding of gene-disease interactions and provision of dynamic consent, patient experiences will continue to improve.
National “flagship" programs are expanding the clinical knowledge base beyond clinical geneticists to specialists in several fields, including primary care. Our own PwC research, “Improving the clinical adoption of health technologies”14 has provided recommendations on the blend of clinical validation, clinical engagement, resources and other approaches to improve clinical adoption of health technologies.
Chapter 4 Charting a path for success
There are several strategic paths to benefit from growth within the sector and the capabilities required to deliver value vary depending on the business model and value proposition. Pathology players are leveraging their broad network, clinical footprint and ability to deliver high volume services. Biotech companies are using their experience at clinical development to demonstrate clinical utility of new genomic tests within clinical practice. Technology players are using data and AI to associate new genomic variations with disease outcomes. All of these players can be successful if they deploy a coherent strategy connected to differentiating capabilities.
1. Have a clear understanding of the way to play
Successful companies have a clear understanding of the way they create value for customers. Within the genomics sector we have observed four primary ways to play:
Test and platform innovator: Create value by developing novel genomic tests or sequencing platforms. These companies are combining their familiarity with clinical development pathways alongside their deep expertise in genomics technologies. They generate and own the IP behind their innovations. Examples include Oxford Nanopore Technologies, who develop new long-read sequencing methods using nanopore technology and GRAIL who are pioneering multi-cancer early detection methods from a single blood draw.
Value optimizer: Create value through commercial and operational efficiency to serve markets within and across geographies in a cost-efficient manner. These companies can deploy technologies at scale leveraging their clinical networks and high throughput processing capabilities, while focusing on lower complexity panel-based testing to optimise internal operations and simplify reporting. Examples are large pathology companies who leverage their established footprint and clinical network.
Portfolio manager: Create value by offering an extensive suite of genomics services and capabilities. They are able to consolidate multiple genomic services and products in one place to cover the entire customer journey. One example is Invitae, who provide a suite of tests across multiple disease areas, genomic sequencing, and resources to support clinical practices.
Research partner: Create value by deepening our understanding of genomics and its correlation with diseases and human biology. These companies have established research and industry networks and advanced analytical capabilities to associate novel gene mutations with disease outcomes. For example, Genomics England, established to execute the 100,000 Genomes Project, have built a network of collaborations across industry and academia, with 700+ research projects
2. Align products and services to strategy
Many organisations limit their potential by defining their portfolios on short-term financial metrics, then fit a strategy around that. We see success when organisations align their products and services to their strategy. Determining the right blend and depth of products and services requires organisations to consider a collective set of choices:
3. Clearly articulate your differentiated capabilities
A successful strategy clearly articulates the mutually reinforcing capabilities that differentiates the organisation, putting it ahead of its competitors. Capabilities should not be generic activities but instead reflect the specific intersection of people, knowledge, IT, tools, and processes. We have highlighted some of the critical capabilities to be successful in genomics.
Successful organisations understand which are their differentiating capabilities, and which ones are table stakes This enables them to be intentional about how they realign costs to capabilities that matter most.
Chapter 5 Conclusion
Genomics has justifiably generated a large amount of anticipation and excitement in the scientific community and healthcare industry, and we are at the beginning of an era of immense discovery and learning. Industry has an important role in driving the growth of the sector and there are opportunities across the genomic value chain.
At PwC we are helping companies define a cohesive strategy building on a few differentiating capabilities. Genomics is no different, and with the right strategy and capabilities, underpinned by clinical governance and risk assurance frameworks, private sector genomic players will be at the forefront of sustained growth in the sector.
Time will tell whether 23andMe is at the end of their journey or experiencing a blip in their meteoric rise to fame as a genomics pioneer. Regardless, their strategy provides a useful case study in the perils of trying to be great at too many things. Having a coherent strategy connected to differentiated capabilities will play a large role in your organisation’s success.
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Contact us
Nick Meadows
Pharma, MedTech and Life Sciences Sector Leader, PwC Australia
Tel: +61 499 426 899
Senior Associate, Enterprise Strategy & Value (Health), PwC Australia
Tel: +61 403 146 141
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