How do genomics companies make money?

Genomics is a relatively young discipline, and it is also quite fragmented. There are bacterial genomics, cancer genomics, agrigenomics, pharmacogenomics, and so on.

Which leads me to this post's question: Which sub-discipline of genomics spins out the most companies? This is important, because it is related to the question of why we think that genomics is useful.

Main source of income for a panel of 72 genomics companies. More than half of companies generate their income by selling to the research community.

The result is that almost half of all genomics companies exist to support either academic or commercial research. I'm not an economist, but this is hardly what I would have expected from a mature and self-sustaining industry. Selling mainly to researchers should probably not be the long-term goal of the genomics industry as a whole.

The second biggest category is Genomic Diagnostics. This category would be even bigger if I hadn't split out Cancer Genomics separately. The implication is that most people think that the best way to make money in genomics, other than selling to researchers, is to develop diagnostics.

To decide whether this is true, it would be necessary to compare the sales and profit margins of the companies in my sample. This could warrant another blog post, but I'm not confident that I have enough data to make a call.

Methodology

The panel of genomics companies I used is the same than I used in previous analysis. It consists of 72 companies, all of which are listed on Crunchbase. All of them have received at least some third party funding.
 

I assigned a label to each company, depending on how they make money and who their customers are. If the customers are research labs or other genomics companies, I assigned the label Research Services and Equipment. To all remaining companies, I assigned one of the other labels, depending on how they claim to make most of their money according to their website.