Getting The Disease Signature The Key For GSS
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Yet another example of world-class Australian-developed biotechnology that is having an impact on the global market is Genetic Signatures Limited (GSS). The company’s 3base molecular scanning technology platform offers a quicker and more effective method for detecting entire classes of microbial species, allowing it to screen for a wide range of pathogens and diseases. The technology can potentially address a very large global market for molecular diagnostics (MDx) of human disease.
The 3base technology has been built in to a range of pathogen detection tests under the company’s brand name of EasyScreen, which allow pathology laboratories to identify an increased number of pathogens more quickly than traditional methods, which can help to reduce the spread of infectious diseases. The platform is applicable in testing for both infectious diseases and chronic diseases, including cancers.
The EasyScreen technology can detect the presence of both DNA and RNA micro-organisms, and is very cost-effective because it works with traditional equipment currently used in laboratories today, meaning that the laboratory does not need to buy new equipment to use it. Using EasyScreen, pathology labs of any size can apply a high-throughput workflow from sample to result, performing more than 200 specimen tests a day – all while using their existing equipment.
Testing for multiple ‘nasties’ in one assay rather than singular testing of each target pathogen is a step change to the way this type of detection of pathogens has been carried out to date. Patients can be treated within hours, versus several days for other molecular diagnostic treatments.
The first EasyScreen products into the marketplace have tested for gastroenteritis and viral respiratory infections, identifying enteric (in the intestines) bacteria, protozoa, viruses and the spore-forming bacterium clostridium difficile (C. difficile). The enteric pathogen detection kit detects up to 22 gastroenteritis pathogens, including viral, bacterial and protozoan agents, while the respiratory virus detection kit detects up to 15 of the most common respiratory viral infections.
In November 2015, GSS made an important precursor move into the US market, announcing a collaboration with Dr. Scott Binder and his microbiology team at the University of California, Los Angeles (UCLA) to analyse molecular testing methods for bacteria, viruses and parasites as compared to traditional testing, in an effort to reduce the spread of infection in the US healthcare system.
GSS reported the results of the UCLA product trial in June: it was successful, and showed improved pathogen detection compared to traditional methods. UCLA says the GSS science “has many impactful applications benefiting patient health globally,” and has agreed to work with GSS to help roll out the technology in the USA. FDA approvals for full diagnostic kits are underway and GSS anticipates its first US sales to commence soon.
Also in June, Genetic Signatures launched its range of analyte specific reagents (ASRs) at the American Society of Microbiology conference in Boston in June. The company says this was another important milestone, as the ASRs are essentially the basic blocks for in-house testing: clinical labs can use these products to create their own proprietary tests. US laboratories regulated by the Clinical Laboratory Improvement Act (CLIA) may purchase and use ASRs to develop proprietary tests thereby enabling GSS’ products to be sold into potentially 11,000 CLIA certified laboratories.
In FY16, sales revenue surged by 75 per cent to $1.83 million, which has grown at a compound rate of 92 per cent a year over the three years since the first EasyScreen product was launched. But GSS says that only accounts for 3 per cent of the total Australian molecular diagnostics market, giving it plenty of room to grow revenue further.
About 80 per cent of revenue comes from gastroenteritis, with the balance coming from respiratory infections.
The current financial year is when meaningful sales from North America and Europe are expected to kick in. The company says the addressable global microbiology/virology market in 2017 will be worth US$2.1 billion ($2.8 billion).
In Europe GSS estimates the addressable market to be worth around US$435 million ($572 million): it is targeting its first significant sales in FY17 with four EasyScreen kits approved for detection of C. difficile and enteric protozoan and bacteria infections. GSS also have two more kits going through the European CE mark approval process for respiratory and enteric viral infections. GSS has also been certified by Health Canada, clearing the way for it to sell into the Canadian IVD market.
Genetic Signatures’ growth strategy is to enter multiple jurisdictions with multiple products. The twin drivers for GSS will be extending its pipeline of products, and growth in the molecular diagnostics market as MDx techniques replace traditional diagnostics. GSS expects the MDx market to be worth about US$7.6 billion ($10 billion) in 2017, representing just 11 per cent of the overall in vitro diagnostics (IVD) market, at $US69.1 billion ($90.9 billion). The company says the MDx market is forecast to grow at a compound rate of 9.3 per cent between 2014 and 2020, well above the 5.3 per cent growth rate expected for the IVD market.
The newest product will be the EasyScreen STI (sexually transmitted infection) detection kit, for which GSS presented the results of the clinical validation trial, conducted at St. Vincent’s Hospital in Sydney, earlier this month. STIs can be highly infectious and difficult to detect as often there are no immediately obvious symptoms: because of this, a more effective detection method to allow faster patient care and targeted treatment would be very welcome in the marketplace.
The company says its STI detection kit allowed the simultaneous identification of 12 of the most significant and commonly encountered STIs, with 100 per cent concordance with traditional and confirmatory methods. The assay offered improved accuracy and sensitivity, and actually identified additional STI pathogens not detected by existing testing techniques.
GSS says STIs have a significant impact on sexual and reproductive health, with the World Health Organisation (WHO) reporting that more than 1 million STIs are contracted every day. The company estimates the addressable STI testing market to be worth US$550 million ($723.7 million) in 2017.
The product pipeline in R&D features kits for detection of other diseases such as atypical pneumonia, meningitis, antibiotic resistance markers and flavivirus infections (including Zika, West Nile, Dengue and Yellow Fever), as well as applications across a range of non-infectious diseases.
Genetic Signatures listed in March 2015, after raising $15 million through a share issue at 40 cents. At 51 cents, GSS is capitalised at $35 million. In September, the company raised $14 million, at 47 cents a share: the over-subscribed issue received strong support from both offshore healthcare specialist investors and domestic institutional investors.
The company is cashed-up, and is poised for a big year of expansion into international markets. Genetic Signatures is a high-quality Australian biotech that looks certain to make a big mark on the disease diagnostic market worldwide.
James was founding editor of Shares magazine, and oversaw one of the most successful magazine launches in Australia. He has also written for BRW, Personal Investor, The Age and Management Today, and was subsequently personal investment editor at The Australian and editor of financial website, investorweb.com.au