Specialist
Former VP at Ancestry.com LLC
Agenda
- Key developments in consumer genomics relating to Ancestry.com
- Competitive dynamics, noting positioning against 23andMe and others
- Recent sale and expected strategy change
- Differences in consumer reach, cost share and marketing cost
- Coronavirus recovery following steep decline in sales and layoffs
- H2 2020 outlook including market saturation
Questions
1.
Could you share an overview of key developments or trends in the consumer genetic testing market?
2.
How would you characterise Ancestry’s competitive positioning in the industry vs consumer DNA testing peers such as 23andMe as well as non-pure-play businesses?
3.
How would you assess the competitiveness of Ancestry’s breadth of capabilities and offering in heritage and ancestry standpoint as well as health? Are there any potential weaknesses or strengths you would highlight in its positioning?
4.
Could you elaborate on the financial considerations for an assessment of Ancestry?
5.
You mentioned the potential saturation of the industry could cause a downturn, as well as the difficulties from the coronavirus pandemic and subsequent low testing volumes. How might you expect Ancestry’s growth numbers to shift in light of these issues?
6.
Are there any other key metrics worth monitoring for the business model of Ancestry or its competitors? Could you describe the competitive dynamics and who might be winning or losing market share?
7.
Would you expect 7x EBITDA multiples to be reasonable valuations for further M&A in the industry, beyond the Blackstone deal with Ancestry?
8.
How are customer acquisition costs trending for Ancestry and peers?
9.
What trends or developments might be affecting the core customer demographics?
10.
Ancestry’s annual revenue is estimated at around USD 1bn. Are there any revenue growth opportunities you would anticipate, given the layoffs earlier in 2020?
11.
How feasible do you think a subscription business model is, especially given the current economic situation in the US and abroad? What other developments in strategy would you expect from Ancestry?
12.
You mentioned that 23andMe and Ancestry have entirely different demographics for their core customer bases, and that 23andMe has leaned more towards pharmaceutical partnerships and internal drug compound development. How would you frame the potential for head-to-head competition between 23andMe and Ancestry?
13.
To what extent would you expect D2C companies to displace legacy players such as Invitae? How are the D2C businesses broadening and strengthening their relationships with physicians, and how would you characterise that as a growth avenue for the industry?
14.
Could you summarise your pricing outlook for the industry, especially in light of the further growth avenues, market saturation and need to differentiate in an increasingly commoditised industry?
15.
Could you expand on the pharmaceutical partnership strategy as a growth avenue? Which players other than 23andMe have been the most active in expanding those capabilities? What is the cost of the back-end software and data platform?
16.
What role are Ancestry and its peers playing through possible data use agreements during the pandemic to find genetic marks that might explain differences in immune response among COVID-19 patients? How might that diversify their offerings and enhance understanding of COVID-19 as a disease?
17.
How would you assess the recently more pronounced discussion around representation of people of colour, especially in the US, and overall ethnic diversity in genetic studies and databases for businesses such as Ancestry? What role do you feel these businesses can play in this movement, and what are the downstream implications for more diversity and representation?
18.
We indicated the increasing importance of diversified data for health analysis and pharmaceutical partnerships. How can Ancestry and its peers incentivise a more representative distribution in people that take their tests? What would you say are the implications of strategies such as paying for data from underrepresented minority ethnic groups, and how would you weigh the cost-benefit of such solutions?
19.
Are there any other key points you would like to highlight about Ancestry’s positioning and outlook in the overall consumer genomics industry?
20.
How would you expect the regulatory risks and the data privacy concerns to develop?
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