Advancing technologies and limited regulation have supported industry growth
Los Angeles, CA (PRWEB) May 22, 2012
DNA Test Kit Manufacturing is a relatively young industry with numerous opportunities for new applications. Recent developments have driven growth since 2007 and have helped defend against the economic downturn. Revenue surged in 2009 as DNA test kits started to be introduced in drugstores, but growth has slowed and is expected to moderate to in 2012 and beyond. Although the increase over the year will be strong, it is slightly lower than the expected five-year average annual rate of 18.1%. According to IBISWorld industry analyst Sophia Snyder, “New product development, a favorable regulatory environment and demographic trends have largely driven growth in industry revenue.” DNA technology has revolutionized the types and capabilities of test kits available, thereby reducing the price of these kits and expanding into additional markets.
While technology has been on the rise, regulation has not. The DNA Test Kit Manufacturing industry has faced relatively low regulatory opposition, which enabled kits to be sold online and in drugstores. “This freedom has created some consumer speculation, though,” says Snyder, “and has led to mounting criticism regarding the test kits' reliability.” The forensic DNA test kit product segment has also benefited from the regulatory environment. Many states now allow DNA testing prior to conviction, spurring demand for test kits at law-enforcement agencies. The favorable regulatory environment is not forecast to persist, with regulation of direct-to-consumer kits forecast to increase during the five years to 2017, causing costs to rise and profit margins to suffer. Furthermore, the constitutionality of forensic DNA testing prior to conviction will face further challenges in upcoming years.
Mergers and acquisition (M&A) activity has been increasing during the five years to 2012, pushing down the number of companies 1.7% annually on average to 34. As small companies integrate with larger operators, overall access to resources for research and development and marketing has grown. M&A activity is forecast to continue during the five years to 2017, while some companies will exit in response to mounting regulation. The strong revenue growth during the previous five-year period will entice new operators into the industry, balancing out the M&A activity and exits. Over the past five years, market share concentration has grown in large part because of heavy merger and acquisition activity among the industry's largest companies. IBISWorld expects this trend to continue over the next five years as large firms look to expand their DNA test kit segments in light of growing consumer interest for the product. Although about half of the industry is made up of small, specialized manufacturers, a few larger companies dominate the industry, including Life Technologies Corp., Agilent Technologies Inc., Qiagen and Bode Technology Group Inc. For more information, visit IBISWorld’s DNA Test Kit Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures equipment that is used to identify individuals on the basis of their respective DNA profiles. Kits can be used for various types of DNA testing, including paternity testing, forensic services, ancestry testing and maternity testing. The industry does not include the manufacture of pathological DNA test kits or molecular diagnostics.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
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