One Company Makes Almost All the Home DNA Test Spit Tubes
(Bloomberg Businessweek) -- If you’re looking for a bellwether in the $100 million consumer DNA-testing industry, OraSure Technologies Inc. would make a good choice. Before companies such as 23andMe Inc. can begin to assess just how Scandinavian you are, a vial carrying your saliva needs to make its way safely to the company’s lab. That vial was almost certainly designed by OraSure’s subsidiary, DNA Genotek. OraSure Chief Executive Officer Stephen Tang reported profits of about $20 million on $182 million in revenue last year, and these days his company’s biggest business is spit.
A plastic tube may not sound like a mind-blowing invention, but saliva samples are extremely sensitive to time, temperature, and other factors, and the genetic information encoded within can easily degrade if not properly stored. For companies offering cheap DNA analysis, safely transporting saliva is no small feat. Each half-teaspoon sample needs to survive delays in delivery and any hot or cold spikes it’s exposed to on its journey through the postal system, as well as on the customer’s end. “You’ve got to make it as easy as possible for a person to spit in the tube, close the tube, recap the tube, and send it to you without any variation,” Tang says.
OraSure’s T-shaped tubes contain a patented mix of fluid preservatives. After you spit inside, snapping the cap shut pierces a membrane containing the chemical mix. At room temperature, a sample can last in one of the tubes for more than two years, according to the company. Aside from helping the sample resist environmental factors, Tang says, the chemicals also minimize any nonhuman DNA that might be present. “That’s the secret,” he says. “Saliva is not pure. It’s got a lot of bacteria and other stuff swimming in it.”
OraSure’s tubes are the only ones the U.S. Food and Drug Administration has approved. Every major U.S. company in consumer DNA testing uses them except for Ancestry.com LLC, which in 2017 paid OraSure $12.5 million to settle a lawsuit alleging it had copied the company’s technology. (Ancestry agreed to pay OraSure a royalty on its own version of the tube and has said it was glad to put the matter behind it.) The millions of DNA-testing kits sold around the world in the past decade would hold more than a standard backyard swimming pool’s worth of saliva.
“The FDA approval gives customers confidence,” says Mark Massaro, an analyst at investment bank Canaccord Genuity Group Inc., who estimates OraSure’s market share at more than 90 percent. “That, and they can preserve saliva for a long time.”
The company may not have the market to itself forever. Exact Sciences Corp., a molecular diagnostics company, acquired a leading developer of sample-preservation technology last fall that, given significant further investment, could have a clear path to FDA approval for its own spit tubes. Tang says he’s focused on widening the uses for OraSure’s technology. Clinical and academic labs also use the company’s products, as do companies testing animal DNA. OraSure has also expanded into urine collection, to diagnose sexually transmitted diseases and other conditions, and feces collection, to compete in the emerging field of gut-bacteria analysis. “We are all about the integrity of the sample collection,” Tang says. “It’s a wide-open field.”
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