We recently had a one-on-one meeting with Mr. Glenn Gilbert, CEO of Rhythm Biosciences (ASX: RHY). As we do not cover the stock, the main purpose of this call was to get an initial understanding of the Company’s business model as we develop our knowledge on the stock.
RHY is a cancer diagnostics technology developer, with ColoSTAT, its first product in development. The next key Company milestone will be the completion of Study 7, with the results expected later this year or early next year (according to management). RHY announced on 16 March 2021:
1. Successful completion of Study 6 for its ColoSTAT product. Study 6 affirmed third-party commercially manufactured ColoSTAT prototype test-kid demonstrated a high level of accuracy for the detection of colorectal cancer via a simple blood test. Study 6 showed an increase in performance over RHY’s earlier testing results announced in November 2020.
2. RHY will now go onto Study 7 – a ~1000 patient clinical trial across ten clinical trial sites. The Company has commenced recruiting patients for the Study.
Below are the key points from our discussion.
Overview
RHY is a new-generation/disruptive cancer diagnostics technology developer, with ColoSTAT being its first product in development, representing a transformative diagnostic tool to more accurately detect colorectal cancer via a simple, accurate, low-cost blood test aimed at global mass-market screening (currently there is no low-cost blood test available for screening of colorectal cancer, with current screening being a Faecal Immunochemical Test, posing challenge of low compliance rate – only 40% compliance at present in Australia from last 10 years, and low success rate – 14% success rate as it only detects blood which can be for a variety of reasons leading to excessive costs by patients/government/insurers for colonoscopy).
The Company has undergone 13 years of R&D pioneered by CSIRO (The Commonwealth Scientific and Industrial Research Organisation), helping identify and patent 10 biomarkers (IP filed across all jurisdictions covering EU, Australia and the U.S., expiring 2031) to detect colorectal cancer.
ColoSTAT test is designed to integrate with existing pathology infrastructure & instrumentation (no additional capital spend, can reduce labour and will be equipment agnostic) and follows a medical device principal for approvals, leading to a well understood pathway from regulatory and clinical point of view globally.
ColoSTAT – Competitive Advantage
ColoSTAT is a simple (blood collected via a simple, routine and standard blood draw, making it patient friendly), accurate, low-cost blood test for the early detection of colorectal cancer designed for the global mass market, which detects protein biomarkers in the blood that are indicative of an increased likelihood of presence of colorectal cancer, providing more accuracy in screening (will analyse & consolidate individual biomarker results simultaneously, using its developed algorithm, to provide an indication of the likelihood of presence of colorectal cancer).
Additionally, the test is low-cost assay format designed to integrate with existing pathology lab infrastructure/equipment agnostic, making it suitable for the global mass market.
Market Opportunity
The Company has a significant market opportunity with mass-market screening marketplace worth$38+bn p.a. in the U.S., Europe, China, Japan & Australia of 50–74-year-old alone (and growing as U.S. Preventative Services Task Force recommends Colorectal Cancer Screening to commence at age 45, 5 years younger than it previously recommended, adding circa 20 million patients to the screening population in the U.S. alone).
Additionally, although ColoSTAT remains Company’s priority, the Company has also identified that two of its patented biomarkers are highly expressive in all major cancers and plans to consider getting into tests for other forms of cancers eventually.
This is only a snippet of the full report sent to BanyanTree Investment Group clients.
Find out more about BanyanTree Investment Group, their research, and portfolios by clicking here.
Investment Manager / Director at BanyanTree Investment Group
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