On April 22nd, Genetic Analysis AS (“Genetic Analysis” or the “Company”) announced that the Company are launching a microbiome test for the Consumer Health (D2C) market in China in collaboration with Thalys Medical Technology Group Corporation (“Thalys”). The test is based on GA’s clinically validated microbiome test, the GA-map® Dysbiosis Test, but specifically adapted to suit the Chinese market, with additional tests expected to be launched by Thalys based on the Genetic Analysis platform in the future.
Analyst Group’s View of the Launch
In January 2022, Genetic Analysis announced the collaboration with Thalys to evaluate and develop innovative diagnostic solutions for the rapidly growing human microbiota market in China. The recently announced launch of a consumer test marks the first step of the collaboration between Genetic Analysis and Thalys, with additional tests expected to be launched by Thalys based on the Genetic Analysis platform in the future. As previously announced in the initial collaboration agreement from 2022, Thalys will distribute the tests via its new Independent Clinical Lab (ICL) in Shanghai, while Genetic Analysis will supply the partner with reagent kits.
The launch establishes the Company’s first commercial presence in the large and fast-growing Chinese market. Additionally, the business model of providing Thalys with reagent kits and proprietary software is assessed as low risk while providing potential for high margins. The reagent kits are expected to have a high gross margin, Analyst Group estimates the Company’s gross margin on reagent kits to fluctuate between 75–80 % in the coming years. As revenue will be generated based on the number of tests sold, while Genetic Analysis is not required to make any additional financial investments as part of the collaboration, the launch enables a low risk business model while having the potential to generate significant revenue, given a successful launch.
The Chinese D2C microbiome testing market is expanding rapidly and, depending on the source, the market is expected to grow from USD 50–80m in 2023 to USD 200–300m in 2030, corresponding to a CAGR of 20–30 %. Growing recognition of the microbiome’s vital role in human health is a key driver of China’s consumer microbiome testing market, and advances in e-commerce and digital health platforms have made these services more accessible and scalable. Combined with increased interest in personalized wellness, these factors are accelerating market adoption.
However, the recent increase in consumer testing has raised concerns regarding reliability, as many consumer tests are not regulated in the same way as laboratory-based diagnostics, thus providing high variability in results. Through the GA-map® platform, the Company’s DTC product is expected to address several of the current challenges in the consumer market, as the platform features validated microbiome diagnostic technology that compares results to a predetermined reference range developed through clinically validated studies. At the same time, it remains user-friendly and delivers fast results. User-friendliness is further enabled through Thalys’ mobile software, where customers may easily subscribe, pay, and view report results on their mobile devices.
In conclusion, Analyst Group views Genetic Analysis’ initial launch in the vast and fast-growing Chinese market positively. Thalys is considered to be a strong partner for the launch, with expertise in China’s healthcare ecosystem. The risk-reward profile is seen as attractive for Genetic Analysis in a business model where the Company supplies Thalys with reagent kits, while the partner is expected to be responsible for commercialization. Although competition is expected to be intense given the appealing market growth, Genetic Analysis and Thalys are assessed to hold competitive advantages, primarily through the diagnostic approach utilizing the GA-map® platform.
About Thalys Medical Technology Group Corporation
Thalys Medical Technology Group is a Chinese healthcare company specializing in diagnostic testing and laboratory solutions for hospitals. Founded in 1998 in Tianjin and listed on the Shanghai Stock Exchange since 2016, the company has grown into a major provider of integrated IVD (in vitro diagnostics) services. Thalys operates across more than 200 cities in China, supplying products and solutions to around 2,000 hospitals and 200 hospital laboratories. Its services range from supplying diagnostic reagents and lab automation systems to offering full medical supply chain management.
Thalys also owns and operates Thalys MedLab (TML), a high-tech, third-party medical testing laboratory based in Shanghai. TML offers a wide variety of diagnostic and precision medicine testing services to hospitals, research institutions, and pharmaceutical companies. The lab collaborates with international partners in cutting-edge technologies, including single-cell analysis and microbiome diagnostics. Thalys MedLab combines clinical application with scientific research, playing an active role in advancing precision diagnostics in China.
