Business on genes
Lose weight and prolong youth: why the demand for genetic tests has increased in Russia
Vladislav Skobelev, Anastasia Skrynnikova, Forbes, 01.02.2022
In Russia, more and more people want to find out who left a trace in their DNA, whether they have a predisposition to diabetes or stroke. In search of answers to these questions, Russians are buying genetic tests: their manufacturers have noted an increase in demand for their services in 2021. The domestic market of genetic tests will grow by an average of 15% per year and will reach 5 billion rubles by 2025. Why are genetic tests becoming more popular and is it worth believing them?
Hunting for Data
In 2021, the market for genetic testing in Russia will increase by 16%, to 2.9 billion rubles, compared with 2.5 billion rubles in 2020, according to the study "Analysis of the market for genetic testing in Russia and Europe" by Smart Consult for December 2021 (available from Forbes). In the next five years, the market will grow by an average of 15.3% per year and will reach 5 billion rubles by 2025.
The manufacturers of genetic tests interviewed by Forbes said that last year the demand for their services has grown significantly. In 2021, the number of genetic tests sold by the Russian company Genotek increased 2.5 times year-on-year. At MyGenetics, demand grew by 96% year-on-year, at Atlas by 30%, and at GenoAnalytics by 15-20%. The exact figures in the companies are not disclosed. Over the entire period of operation of genetic laboratories (since 2003), Russians have done less than 1 million tests, while tens of millions of such studies have already been conducted in the United States, says Artem Elmuratov, co-founder and development director of Genotek. At the same time, at least 10 companies currently operate in Russia that conduct genetic testing in various areas.
Now the task of Russian genetic companies is not to make a profit, but to build up the customer base, says a Forbes source close to one of the manufacturers of genetic tests. "So far, no one even abroad understands how this business will be monetized. For example, genetic companies could sell the accumulated data in an impersonal and processed form for analytics, but it's too early for Russian companies to think about it because of the small database," the Forbes interlocutor believes.
If earlier genetic tests were ordered by people with a high income level for entertainment purposes, then in 2021 in Russia it was mainly people with average incomes who used genetic diagnostics to manage their health and solve certain tasks, according to the Smart Consult study. For example, clients wanted to lose weight, get rid of digestive problems, improve athletic performance, reduce the risk of developing certain diseases, etc.
The demand for genetic tests is growing due to the popularization of a healthy lifestyle: many Russians became interested in sports and proper nutrition, and the next step for them was attention to their health, the study says. The main factor stimulating the growth of demand for genetic tests will be the development of the preventive medicine market: its main ideas are not to treat, but to prevent diseases and prolong the youth of the body for many years. Genetic tests, which allow to obtain information about predispositions to diseases, injuries, skin aging, are becoming the main tool for the implementation of these principles, according to Smart Consult.
Previously, genetic analyses were carried out mainly for entertainment, but now they are increasingly being used to monitor their health and personalize medicine, confirms Andrey Perfiliev, medical director of Atlas Holding. In Atlas, the demand for oncology research in 2021 has tripled year—on-year, and the demand for analysis of the bacterial environment of the intestine has increased by 25%, Perfiliev said.
Genotek is most often contacted by customers who want to establish their pedigree, but demand is also growing for medical testing, Elmuratov noted. According to the founder of Genotek, genetic tests have already ceased to be an exotic service, and many people have begun to understand their practical benefits.
Due to the growth of the customer base, the company managed to reduce the prices of its services: the average check in Genotek fell by about 20%, to 12,000 rubles, in 2021. "The more samples are in the company's database, the more family ties among them we can find for customers," Elmuratov said. According to him, this pattern leads to the effect of word of mouth and a further increase in orders.
In Russia, the cost of genetic testing falls annually due to the reduction in the cost of complete sequencing of the human genome, as well as the growth of competition from domestic and foreign players, according to Smart Consult. At the same time, the price of genetic research in Russia is 2-3 times higher than in the USA, according to the company's research.
The COVID-19 pandemic has forced people to pay attention to their health, and the interest in a healthy lifestyle and taking care of their body has led to an increase in demand for genetic tests, says Vladimir Volobuev, CEO of MyGenetics.
Transactions with large companies that are also entering a new market for themselves through partnerships have helped in popularizing genetic tests, says Arthur Isaev, founder and CEO of Genetico. The attracted funds of the laboratory were able to direct to marketing, which influenced the demand, he noted.
Big companies in the market
In 2016, Genotek raised $2 million, in particular, from the former head of the presidential administration of Russia and a member of the company's board of directors, Alexander Voloshin. At the end of 2020, Yandex, together with a pool of investors, invested $4 million in Genotek. The influence of Yandex on the interest in tests is recognized in Genotek itself. According to Elmuratov, the company started selling tests through Yandex.Market, besides, the very news that the IT company became a shareholder of a genetic company was "a good signal for the whole market" and showed interest in genetic research from large companies.
At the end of 2021, Sber entered the genetic research market: the Sber Eaptek service began selling DNA tests under its Health Solution brand, which are produced at the National Center for Genetic Research (MyGenetics brand). According to the company, these tests will help to identify diseases or hereditary predispositions. "I wouldn't be surprised if Sberbank's interest in this market may be due to the fact that their competitor [Yandex] has entered this niche," says Elmuratov.
The growing interest in genetic tests is also associated with "the state's interest in the development of genetic technologies in our country," Perfiliev from Atlas believes. In April 2019, after President Vladimir Putin signed Decree No. 97 on genetic certification and compiling a genetic profile of the population, the demand for genetic testing increased in Russia, the service began to be introduced not only in the premium segment of medical institutions, but also in the mass, according to Smart Consult.
In 2020, Putin instructed the government, with the participation of the Kurchatov Institute, to create a national database of genetic information of citizens. At a meeting on the development of genetic technologies, the President announced the beginning of the creation of three genomic centers, the main technological partner of which will be Rosneft. In 2021, the head of Rosneft, Igor Sechin, said Putin said that the company plans to create a database of 100,000 Russians and spend 22.5 billion rubles on it at the first stage of research.
Now some scientists criticize the reliability of data on predisposition to diseases based on test results, because these are statistics that do not explain cause-and-effect relationships, says Isaev from Genetico. According to him, laboratories can reveal that people with a certain mutation are twice as likely to have diabetes, but such correlations risk being accidental.
It is really possible to determine some genetic diseases with the help of a genetic test, says ITMO associate professor Dmitry Alekseev. According to him, there is a wide range of diseases called monogenic — when there is a breakdown in the gene and a person can be a carrier of the disease. Such diseases, for example, include cystic fibrosis. If both potential parents are carriers of such a gene, then the probability of a couple having a child with such a disease is 25%.
Genetic tests also reveal the risks of not a specific genetic disease, but, for example, coronary heart disease, the expert adds. "The algorithms work well, and thanks to a huge variety of genetic indicators, it is possible to find out whether a person can get sick with a certain disease earlier than the national average," says Alekseev.
According to him, with the help of a genetic test, it is also possible to determine the pedigree — thanks to qualitative research of individual nations. But this service is more relevant for Americans: "In this country there is literally a cauldron of different nations who emigrated in different centuries." Russians have the same level of incest "so ancient" that it cannot be compared with Americans, but it is possible to identify Jewish roots in their blood, for example, the ITMO associate professor added.
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