Q+A: Proteomics MD Richard Lipscombe on its potential US breakthrough with Sonic Healthcare

Proteomics is confident of finalising a deal with Sonic Healthcare to use its PromarkerD test in its US labs
Promising results of new blood test show it could transform how endometriosis is diagnosed in women
Morgans said a deal with Sonic would likely result in a rerate of one of its key picks in microcaps

Predictive diagnostics and bio-analytical services Proteomics International Laboratories (ASX:PIQ) has had a good start to 2023 with promising results for a potential new blood test to diagnose endometriosis and an expected deal with Sonic Healthcare (ASX:SHL) to use their PromarkerD test for diabetic kidney disease in their US labs.

Managing director Dr Richard Lipscombe said the expected deal with SHL will be a major catalyst for the company.

The CPT PLA (Proprietary Laboratory Analyses) code has been issued by the American Medical Association, and was a key approval in getting reimbursement coverage of the PromarkerD test by both Medicare and private health insurers in the US.

Lipscombe told Stockhead a deal with SHL would help get the PromarkerD test in the hands of doctors and patients in the world’s largest medical market.

“The US is a such a major market we see it as a breakthrough for getting the test widely known and therefore into the hands of doctors around the world,” he said.

“It is a pivotal point for the PromarkerD and getting broad adoption and on the back of that it helps to validate our platform for bringing other tests through like endometriosis.

“It’s a great foundation for bringing the endometriosis test through faster than we have been able to achieve for PromarkerD.”

Lipscombe said he is confident of an imminent deal with SHL, despite facing several key deadline extensions.

“That deal is very close, and we’ve been working on that for two or three years now and from an operational perspective everything is full steam ahead,” he said.

“We do have to finish the paperwork and get that agreement signed and that has been imminent for the last few weeks so we’re hoping to be able to talk more about that in the next week or so.”

Predicting onset of diabetic kidney disease

PIQ’s PromarkerD test is considered groundbreaking, able to predict the onset of diabetic kidney disease and future kidney function in patients with type 2 diabetes.

Diabetic kidney disease is the leading cause of chronic and end-stage kidney disease globally, with most sufferers not having symptoms. Prevention is better than a cure, transforming patient outcomes.

“Are we excited? We’ve been working on this for a number of years and it’s great to see it coming onto the market,” Lipscombe said.

“The milestones are around for sales, getting insurers signed up and building up from there.”

Transforming diagnosis of endometriosis

Lipscombe said endometriosis is a very poorly understood, common and painful disease affecting 1-in-9 women and girls. It is currently diagnosed by way of a laparoscopy operation.

“It’s apparent to us that the current diagnosis is very challenging and the laparoscopy that is performed is a major exercise and not as simple as putting in a camera and having a quick look,” he said.

“A lot of work has to be done in that operation to find the endometriosis and to be able to diagnose it properly.”

Lipscombe said the objective of PIQ was to come up with a blood test that would enable better pre-screening of patients.

The PIQ test is based on a simple blood test which measures the concentration of biomarkers in the blood that are associated with endometriosis, providing early screening to rule in or rule out the need for invasive surgery in women presenting with symptoms.

Also of high interest is that the biomarkers change in concentration as the severity of the conditions change.

“Treating doctors could say it’s highly likely you do have endometriosis and we need to do the laparoscopy and have a very close look or you don’t any indications of endometriosis and there is something else we may need to be concerned about but a laparoscopy would not be appropriate,” Lipscombe said.

Data was presented at the 70th Annual Meeting of the International Society for Reproductive Investigation in Brisbane on March 24. Results showed a high degree of both sensitivity and specificity in two different test versions with symptomatic control in no endometriosis vs moderate/severe and healthy controls vs severe.

“We’ve got some biomarkers to form a basis for a test for identifying patients with endometriosis,” Lipscombe said.

“It would become a test in the same way PromarkerD has become a test for diabetic kidney disease.

“We’re excited the markers identified all relate to pathways that could be associated to that uterine tissue growth in other parts of the body.”

Lipscombe said the difficulty with current treatment is a surgeon has to observe a lesion within the abdomen they think is endometriosis which is not absolute.

He said once a surgeon has done a biopsy of the lesion a pathologist must observe the tissue and say if they believe it is coming from the endometrium.

“There’s a risk there that misdiagnosis can occur and most of the time the doctors are correct,” he said.

“What we are hoping to achieve with our test is to give a better pre-screen so that when the surgeon goes in to have a look they can think all the evidence is from this bio-marker test that you have endometriosis so we’re going to try and find it.

“On the reverse of that if our test indicates there’s no sign of endometriosis there’s no point having the surgery to try and find it and perhaps it’s better to treat the patient in a different way.”

Global use for endometriosis blood test

Lipscombe said with such a large number of females affected by endometriosis it opens a huge market for PIQ globally.

“Currently some patients are waiting seven or eight years for a laparoscopy so if we can come in with a test that a GP can order and determine if they need surgery it will change the way those patients are treated,” he said.

“Obviously things can change over time so endometriosis may develop or be mild to start with so the test can be used as a repeat screening if pain continues.

“We do see it as a global test which we would seek to bring to market.”

Lipscombe said PIQ will start working on regulatory approvals for the test.

“The commercialisation of the test is key so we are starting to look at what is the technical platform that uses the test and how do we bring it to market quickly,” he said.

“We are looking at what diagnostic partners can we work with to bring the test through.”

Sonic deal will result in re-rate of stock

Morgans has a speculative buy on PIQ with a target price of $1.77. Healthcare research analyst Iain Wilkie told Stockhead the key near-term catalyst of a distribution deal with Sonic Healthcare USA for PromarkerD has a high likelihood of success, and is close to being finalised.

“We see confirmation would likely result in a rapid rerate of the share price with the key determining factor being the level of detail able to be provided to balance continuous disclosure requirements versus commercial in confidence detail,” he said.

“Our confidence continues despite several key term deadline extensions, backed by ongoing featuring of the test on SHUSA’s marketing material, the granting of US regulatory access protocols (filing joint PLA code for reimbursement), and our view that there is little reason to request continual extension of contract deadlines if its interest was declining.”

Wilkie said confirmation of the exclusive distribution agreement will mark entry into the world’s largest testing market with one of the country’s highest volume reference laboratories.

“Secondly, recent results from its endometriosis were excellent and while the pathway and timing for this asset hasn’t seen laid out, we see the simplicity of the test (being a diagnostic versus prognostic) makes this a highly attractive asset for potential partners.

“PIQ is one of our key picks in the microcaps.”

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