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Special Report: A co-promotion deal could be a novel way for Aussie colon cancer play Rhythm Biosciences to get its blood test into the market, without having to set up an expensive sales network.

CEO and managing director Dr Trevor Lockett says they’re considering a number of methods to commercialise their technology — a new way to check for colorectal cancer risk — and believes a recent co-marketing deal in the US demonstrates an interesting option.

Melbourne-based Rhythm (ASX:RHY) is developing a blood test called ColoSTAT.

It uses antibodies to measure the levels of proteins in the blood that vary in the presence or absence of colorectal cancer.

A co-promotion arrangement in the US for a colorectal cancer test already on the market hints at innovative, cost-effective strategies for rapidly broadening the market visibility of ColoSTAT that Rhythm could well contemplate once its test enters the market around 2020.

From this month until 2021, Pfizer will use its sales network to market Exact Sciences’ Cologuard test.

Exact will handle the manufacturing and lab operations, while Pfizer will pay $US20m-24m of the marketing costs each year and get 50 per cent of all gross profits above a set baseline, starting at $441m in 2018.

Exact dramatically expands its sales network for minimal cost, while Pfizer makes extra cash with limited effort.

While co-marketing is not uncommon between Pharma companies, Dr Lockett says it’s the cross-industry nature if this deal — a diagnostics company and a pharma business – that’s novel.

Getting ColoSTAT into clinics

Rhythm estimates it is about 18 months away from commercialising its technology, a test that CSIRO started developing about 15 years ago, but it is conscious of how it will most effectively ‘sell’ it to both end users and the people paying for it.

Currently, the most common colorectal cancer screening test is a faecal test.

Adults, over 50 years of age are encouraged to collect a faecal sample at home and send it to in the mail to the lab for testing. But the ‘gross’ factor and cultural issues can put people off using it.

A blood test gets around those objections, but that isn’t enough to get it into clinicians’ hands.

“We are looking closely at the European market to really understand how it works, particularly what the key drivers are for the clinicians who will prescribe it and the people who will end up using it,” he said.

But the other side of the commercialisation equation is to speak to those paying the bills: insurers and governments.

“For example, in the US where people have employee health cover, many of those private companies and insurers take on particular tests if they see them as being good for business and for their clients,” Dr Lockett said

“Screening tests for bowel cancer would fall into that type of category. If detected early, the insurers will have less to pay out because the cost of treatments are less and the cure rates higher.”

In Australia, the conversation would be with the Medical Benefits Scheme (MBS), who decides which medical tests are subsidised and which are not.

So, there’s lots to think about when bringing a new a diagnostic to the market, beyond the performance of the test, and Rhythm is currently lining up its ducks.

 

Rhythm Biosciences is a Stockhead advertiser.

This advice has been prepared without taking into account your objectives, financial situation or needs. You should, therefore, consider the appropriateness of the advice, in light of your own objectives, financial situation or needs, before acting on the advice. If this advice relates to the acquisition, or possible acquisition, of a particular financial product, the recipient should obtain a disclosure document, a Product Disclosure Statement or an offer document (PDS) relating to the product and consider the PDS before making any decision about whether to acquire the product.