Genomic testing players like RIL's Strand eye tier-2, 3 markets as demand grows

Companies like Strand Life Sciences, a subsidiary of Reliance Industries Ltd, and MedGenome are increasing their footprint through organic and inorganic routes, with a focus on the smaller cities and towns.

“Genomics is an added tool to your medical diagnosis," Ramesh Hariharan, director and CEO of Strand Life Sciences, told Mint. Genomic testing involves analysing or sequencing a person’s DNA, to identify genetic changes that can help diagnose or screen for various cancers, rare diseases, genetic conditions and neurological disorders, among other things.

“If you take any hundred women, two to three would be born with a mutation in their genes that will place them at substantially high risk for breast and ovarian cancer. And no amount of x-rays, blood tests will tell you that you are at high risk. You have to sequence the DNA to get that understanding," Hariharan said.

Genomic testing has been increasing in healthcare diagnosis, predominantly among tertiary specialists in metros and tier 1 cities in India, especially in oncology, pediatrics, rare diseases, and prenatal and reproductive healthcare, according to industry executives.

Cancer burden

India's cancer burden is growing at an alarming rate. According to an EY-FICCI report from 2022, cancer incidence rates have increased at a CAGR of 6.8% from 2015 to 2020. In 2022, about 20 lakh cases were documented, although the real incidence is estimated to be 1.5 to three times higher. According to projections, the cancer burden in India could exceed 45 lakh new cases within the next 5-6 years. The report highlighted that awareness and screenings for major types of cancer were dismally low in the country.

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This has led to a massive increase in demand. “Volume-wise, we've been growing year-on-year anywhere between 40% and 45% on average [in the last five years]," said Dr. Vedam Ramprasad, CEO of MedGenome India. MedGenome expects to clock 350,000 genetic tests this year. The industry will continue to grow by at least 30-35% in terms of volumes and about 20% in revenues for the next 4-5 years, Ramprasad said.

“Considering our population and the burden of disease that we have, what we are doing is only minuscule," he said.

The Indian genomics market was valued at about $60 million in 2023, and projected to grow at an 18% annual rate for the next five years, according to a report by Nomura Research Institute Consulting and Solutions India.

Ramping up

Genomics players are scaling up their capabilities as well as expanding into new markets organically as well as through acquisitions.

MedGenome, which started operations in 2013, has raised $175 million in funding so far. The company has a strong presence in the country's top 10 cities, but wants to expand to tier 2 and tier 3 cities. “Whether it's a rare disease or oncology burden, we see that about 40-50% of the patients are from non-metros and non-tier 1 cities," Ramprasad told Mint.

The company is focusing on acquisitions for deeper penetration. Earlier this year, MedGenome acquired a stake in Odisha-based GenX Diagnostics, which has a robust regional presence. Ramprasad said that the company is actively looking at more acquisition and partnership opportunities with regional players to increase its footprint.

Through its inorganic play, MedGenome is also looking at entering further into integrated diagnostics – offering radiology and pathology tests in addition to genomics, to expand its presence.

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Last week, Strand opened in Bengaluru a new 33,000-sq ft facility with a cutting-edge genomics laboratory with the latest sequencing technologies. The facility will aid the company in scaling up the number of tests it processes as well as increase its test offerings. Strand also launched a blood-based test for early detection of multiple cancers called CancerSpot last week.

While the company declined to share specifics on its capacity expansion, it said that the new facility “can support all our growth plans and even more, and help cover patients from all parts of India and many international markets".

While Strand has a pan-India presence, it aims to increase its presence in tier 2 and tier 3 cities through partnerships with healthcare providers, as well as increase its international presence, Hariharan said. The company currently processes tests from eight countries including Nepal, Bangladesh, Middle East and Southeast Asian nations.

Making genomics affordable

One of the key factors driving demand for genomic testing is the fall in prices as technology improves. Ramprasad said that prices have fallen by 50% in the last five years.

Today, while some specialised tests can cost up to ₹1 lakh, there are several that cost in the range of ₹8,000-20,000.

Strand and MedGenome are focusing on increasing awareness among healthcare providers as well, to expand testing. MedGenome currently partners with 5,000-6,000 healthcare providers, which include hospitals, clinics, and diagnostics players, and is focusing on expanding its footprint.

Strand is in the process of partnering with hospital chains for their corporate offerings, which would include preventive screenings. The company has already partnered with chains like Max Healthcare, Aster, and Reliance Foundation Hospital to offer in-patient screenings for illnesses.

Some in-patient tests are being covered by insurance now, said Hariharan, adding that as more tests start getting covered, adoption of genomic testing will increase.

Diagnostics play

Leading diagnostics players have also started offering genome testing as demand increases. Suraksha Diagnostics Ltd, whose initial public offering (IPO) was launched last Friday, plans to offer genomic testing and molecular pathology as a B2B service for hospitals and nursing homes.

“The entire diagnostic [space] is eventually shifting to molecular pathology so the growth will definitely come in these areas," Ritu Mittal, managing director and CEO at Suraksha Diagnostics, told Mint. The company has a strong footprint in eastern India and plans to increase its penetration in the region and in the north-east. “We have a huge addressable market which is fairly underpenetrated in the east…we see huge headroom for growth," Mittal said.

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Metropolis Healthcare Ltd, one of the largest diagnostics chains in the country, offers personalised genomics assays and specialised tests, including next-generation sequencing for cancer biomarkers.

“We are actively collaborating with healthcare providers to ensure that these cutting-edge innovations are accessible to patients across the country, especially in tier 2 and tier 3 cities," Ameera Shah, promoter and executive chairperson at Metropolis Healthcare, told Mint. “While India's current share in this sector is relatively modest, the potential for growth is immense. We are investing in research and development, building skilled talent, and scaling genomic capabilities," she said.