Economics of Sequencing: what drives the price?

How can Dante Labs offer Whole Genome Sequencing at $499 instead of $1,000 or $2,000? 

We get this question a lot. We thought it would be nice to show the cost structure of a typical sequencing lab, as well as our own.

The chart below shows the cost structure of a Genetic Lab with about $10M in annual revenue. The data comes from publicly available financial data of genetic labs that are listed in the stock exchanges, hence publishing their income statements.

The cost of the tests is only 17% of total costs.

Cost of Sequencing

A large share of costs is Research and Development (44%) – which serves to advance genetic testing in the future years.

Sales and Marketing is 23% - higher than the cost of the tests: these are investments in ads, marketing campaigns and cost of sales representatives and account managers. Finally, General and Administrative Costs represent 16% of the total costs: these are office rent and all the administrative costs.

At Dante Labs, we have a different cost structure. Specifically, we keep our marketing expenses below 10% (5% when we are good). We have negligible Sales expenses, since we sell our tests online and have no sales force visiting hospitals and doctors’ office.

What do we do with these saving?

We pass these savings to our users.

This is why we can offer Whole Genome Sequencing at $499 instead of thousands of dollars, including customized reports and personalized customer service.