DNA and genetic test kit company 23andMe's growth has slowed, primarily due to privacy concerns regarding the use of sensitive data by third-party research labs.

"The market definitely slowed last year," said the company's co-founder and CEO Anne Wojcicki, speaking in San Francisco. "My hypothesis is that you have some of the effect from Facebook, people concerned about privacy, you had Golden State killer and so people pause."

According to research firm Second Measure, 23andMe's direct-to-consumer sales only grew by a meager 5% from 2017 to 2018, which is low relative to its $2.4 billion valuation. What's more is that the consumer genetics market is a booming one with a low penetration rate; given the large potential for growth, 23andMe should in theory be doing better.

"The companies need to find ways now to attract people who are not power users but are a little interested in genetic testing or not interested at all," said David Mittelman, former chief scientific officer at Family Tree DNA.

One potential way to address the aforementioned suggestion is to expand its drug development pipeline and fuel further medical research. This way, the company can attract average consumers who have health concerns.

23andMe has been involved in around 110 peer-reviewed publications and created a therapeutics lab that third-party researchers are interested in due to the company's overwhelming database of over 4 million consumers. "There's leaks and hacks all over the place," said Dr. Arthur Caplan, head of the division of medical ethics at the New York University School of Medicine. "So your risk factors could be discovered and then you could find it difficult to get disability insurance or it could affect your job or even your marriage prospects."

Another issue is authenticity of information, as much of the results are insular and dependent on the previous, existing data pool. Dr. Jennifer Raff, Assistant Professor in the Department of Anthropology at the University of Kansas, said: "They have their own proprietary info based on those samples. If one of them has lots of individuals from a particular region and the other company does not, you're more likely to show up as having ancestry from that region whereas if the other company doesn't have that data represented in their database, it's going to show up as a different population."

Ultimately, 23andMe is going to have to figure out how to develop new drugs in an ethical and transparent fashion. Otherwise, its negative PR could overshadow its value proposition.