Prostate cancer is the most common form of cancer among men and is largely treated with surgery or radiation therapy to remove the cancerous tumor, known as radical treatment. These procedures often lead to severe side effects such as impotence and incontinence. At the same time, these invasive procedures are in many cases not necessary to save the patient's life, especially in low- and medium-risk groups where the risk of death is low.
Studies have determined that only 1.5-3 percent of those with low- and intermediate-risk prostate cancer would die without radical treatment. Yet, approximately 55 percent of patients in Sweden, and an even higher proportion elsewhere in the world, receive radical treatment. Current treatment practices therefore result in a high degree of overtreatment.
Prostatype facilitates the choice of treatment strategy
Prostatype Genomics The goal is that patients should not be treated with radical treatment unnecessarily. The company's prognostic genetic test, Prostatype, gives doctors an objective picture of the aggressiveness of prostate cancer. This way, patients can be better classified and a more accurate treatment decision can be made, resulting in a reduced proportion of overtreated patients.
It is not only the patient who benefits from such an outcome. Fewer treatments also benefit healthcare through a lower burden and shorter care queues, while reducing society's healthcare costs.
Genetic testing for embryonic cancer stem cells
The genetic test measures the gene expression of three embryonic cancer stem cell genes – IGFBP3, F3 and VGLL3 – which are strongly linked to the aggressiveness of the cancer. The cancer cells come from the biopsy sample taken at the time of diagnosis. The Prostatype test combines the genetic information with the patient's clinical parameters, enabling better prognosis and decision support regarding optimal treatment for each individual patient.
The company's test is used as a complement to current diagnostic and prognostic methods for confirmed prostate cancer. The test has been fully developed and validated in several studies and is now ready for commercialization. The company believes that this reduces risk from an investor perspective.
Updated strategy with clear focus
During 2022 and 2023, the company has focused on introducing Prostatype in a handful of European pilot markets and Taiwan. In parallel, they have conducted a market survey in the US, which is considered to be the single most profitable market for the company's product. The total US market is valued at approximately 600 million USD.
Based on experience from the launch work to date, the company has updated its commercialization strategy. The main focus is now on the US, along with the Nordic countries, Spain, the UK and Switzerland. In addition, Taiwan is seen as an important springboard into Asia.
Prostatype Genomics has been the first in many countries in Europe to launch a prognostic biomarker as a basis for treatment of confirmed prostate cancer, which has posed some challenges as many countries lack public reimbursement models and national guidelines for prognostic tools. However, the US market is significantly more established and mature for this type of product, which is why the company is now focusing heavily on a US launch.
Established market in the US with reimbursement system
Prognostic biomarkers have been used clinically by urologists in the United States for over 10 years and are covered by both public and private reimbursement systems, for example MedicareThe established reimbursement level is USD 3 per test, which is twice as much as in Europe.
To obtain Medicare funding and facilitate preparations for a US launch, Prostatype Genomics has established a subsidiary in the US and hired local staff. According to the company, the process has been faster than expected and it is now well positioned to be approved by Medicare by the end of 2024. The speed of the process is due to the fact that previous products have paved the regulatory path, and that an already established reimbursement code can be used.
Another advantage of the company's current strategy is that it will purchase lab services from already established – and FDA-accredited – laboratories. This avoids establishing its own lab and the otherwise long and costly process of FDA approval.
Overall, it provides a short and clearly defined path to market, which is rarely the case with life science projects.
Validation studies
An important step towards obtaining Medicare reimbursement, and thus being included in the insurance system's healthcare offering, is the ongoing validation study in the US with approximately 1300 patients. The first interim analysis is planned for Q2 and is expected to pave the way for Medicare reimbursement.
The company is also conducting other local validation studies, for example in Spain where positive interim results were recently presented. The results show that approximately 60 percent of patients are reclassified from one risk group to another and receive a changed treatment plan if Prostatype is used.
Competitors and previous deals
However, the fact that the American market is well-established means that there are a number of competitors, including Genomic Health, Veracyte and Myriad Genetics. These companies focus on measuring gene expression in proliferated stem cells, i.e. stem cells that have divided. Prostatype Genomics measures in embryonic cancer stem cells, which marks a differentiation compared to competitors. Another competitive advantage that the company highlights is that the test can be performed by independent external laboratories and that the test provides rapid test results.
In order to scale up to broad commercialization in the US, Prostatype Genomics intends to enter into a partnership with a resourceful partner with a broad network in urology. In this context, it is worth noting that several large deals have been completed in the area, including Veracytes buyout of decipher for 600 million USD in April 2023.
Capital raising for continued commercialization
Prostatype Genomics is now raising more capital in a rights issue to finance commercialization and study activities, primarily in the US. Upon full subscription, the company will receive net proceeds of approximately SEK 42,6 million, which will be used for the following areas:
- Repayment of bridge loan regarding already commenced commercialization and study activities in the USA, SEK 6 million
- Validation study USA, SEK 20 million
- Commercialization activities USA and Europe, SEK 5 million
- Strengthening of working capital and ongoing operations, SEK 11,6 million
The rights issue is guaranteed to approximately 45,0 percent through subscription commitments and guarantee commitments.
The offer in summary
| Terms & conditions | An existing share in the company entitles to one unit right. One unit right entitles to subscription for one unit, consisting of ten newly issued shares and four newly issued series 3 warrants. |
| Subscription period | 13 December 2023 – 27 December 2023. |
| Subscription price | The subscription price per unit is SEK 0,40, corresponding to SEK 0,04 per share. |
| Issue volume | Upon full subscription, the Company will receive net proceeds of approximately SEK 42,6 million. If all series 3 warrants are exercised for the subscription of shares, the Company will receive an additional at least SEK 4,8 million, depending on the final exercise price. |
| Dilution | Initial maximum dilution of approximately 90,9 percent |
Information and subscription
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More information about Prostatype's new issue can be found on the company's website. issue website. |
Company presentation
This material has been prepared for marketing purposes and is not, and should not be considered to constitute, a prospectus under applicable laws and regulations. The full terms of the rights issue and further information about the company have been disclosed in a prospectus on the company's website prostatypegenomics.com on 11 December.