Diagnostics: Industry Trends for 2023

The diagnostics industry has been the subject of increased attention since the emergence of COVID-19, with the market currently estimated at USD 23.2 billion in 2022 and projected to grow 5.4% by 2027 to reach a value of USD 30.2 billion. Here, we discuss three trends that are believed to have an impact on the area in the year to come.

Predictive Genetics

Predictive genetics are continuing to gain a further foothold in the world of diagnostics. The focus of it is to identify the gene mutations that are linked to a variety of hereditary diseases such as certain types of cancers, cystic fibrosis and Huntington’s disease. There are multiple forms of predictive genetic testing available, including molecular testing, biochemical testing and chromosome studies.

The global market is predicted to reach a value of USD 3.4 billion by 2027 at a CAGR of 13.4% as R&D efforts are taking advantage of the potential to diagnose and treat any illnesses before their symptoms become apparent.

At-Home Diagnostics

Over the last few years, diagnostics has fallen directly into the hands of consumers – with COVID-19 making diagnostics become a part of everyday life for many people thanks to the explosion in antigen tests. This increasing consumerization of diagnostics also has a knock-on effect of reducing in-person visits to healthcare institutions thus reducing the cost of care.

At-home sample testing offers solutions outside of COVID-19, with tests becoming readily available to customers to diagnose a range of issues including fertility, thyroid levels, sexually transmitted diseases and more. Abbott Laboratories, BD and QuidelOrtho are amongst the organizations who have spoken of their intention to expand their foothold into the direct-to-consumer testing market.

Increased M&A and Financing Activity

Molecular diagnostics companies have been the subject of much M&A activity in recent years. 2022 was marked by deals including Bio-Rad’s acquisition of Curiosity Diagnostics for USD 170m and BD entering an agreement to acquire Spain-based Cytognos. This comes after a number of landmark deals in 2021 such as Roche’s purchase of GenMark Diagnostics for a total price of USD 1.8 billion. Investors are also retaining their sights on the molecular diagnostics market across all fundraising stages, with Synthego, TauRx Therapeutics and Scipher Medicine all examples of companies that have garnered significant investment in 2022.

Although similar to the entire life sciences sector, investment has contracted following a boom period during 2020 and much of 2021. As well, a trend has emerged where companies are now favoring private equity investment instead of following the route of IPOs and SPAC mergers. According to Biotechgate data, only one molecular diagnostics organization went public in 2022: Virax Biolabs, who held their IPO in July. Following this, their price on the Nasdaq has plummeted from a high of USD 10.94 in August to, at the time of writing, USD 0.74 – a decrease of 93%.