Prostate cancer is one of the most common forms of cancer, affecting approximately 1,3 million men globally each year. However, prostate cancer often develops slowly and does not always require immediate treatment, underscoring the importance of accurate risk classification.

However, today's blunt instruments for prognostic assessment often lead to a preference for the more radical treatment options of surgery and radiation over active surveillance. Currently, a significant proportion of patients are overtreated, causing side effects such as impotence and incontinence.

Objective risk classification with Prostatype

With better prognostic tools, overtreatment and its negative health effects could have been avoided. Prostatype Genomics genetic test Prostatype is just such a tool. By providing a more precise risk assessment and a better basis for decision-making, Prostatype Genomics wants to reduce the proportion of prostate cancer patients who undergo radical treatment unnecessarily.

External clinical studies show that approximately 35 percent of all patients using Prostatype are reclassified from one risk group to another, enabling a better tailored treatment strategy for each individual patient.

Commercialization strategy with increased pace in the US

The company recently communicated an updated commercialization strategy that involves a clearer launch focus, primarily in the US, but also in selected markets in Europe and Asia.

In the US, genetic tests are already widely used, and there is thus an established market for Prostatype Genomics to target. In the US market in particular, the company intends to launch Prostatype as a so-called LDT product (Laboratory Developed Test), which means that a long and costly process for FDA approval is avoided. Furthermore, the company will work with a so-called “lab-in-lab solution”, which is significantly more cost-effective than establishing its own lab in the US.

Validation study to achieve subsidy status

Prognostic biomarkers for prostate cancer have been part of the American healthcare system for over 10 years. The tests are subsidized through Medicare and are also included in other American reimbursement systems, and are included in national guidelines for prostate cancer. The fact that these types of products are established in the market facilitates Prostatype's ambitions to obtain subsidy status and quickly get started with commercialization.

The goal is to obtain subsidy status in the US by the end of 2024. To achieve this, the company is now conducting a validation study in the country, which will, among other things, complement the company's existing data package regarding African-American patients, as requested by the US authority.

Prostatype Genomics plans to present an interim report from the study in the second quarter of 2024. An interim report that is expected to form the basis for the company's application for a subsidy from Medicare.

Issue finances commercialization strategy

The company is now raising approximately SEK 47,8 million in a rights issue to finance the continued commercialization work and the American validation study. BioStock contacted Prostatype Genomics CEO Fredrik Persson to learn more about the issue and commercialization strategy.

First of all, what are the biggest benefits for patients and healthcare providers of using the Prostatype genetic test for prostate cancer?

– It's easy to answer that question. Prostatype more precisely ensures that healthcare, and patients with confirmed prostate cancer, receive a more relevant answer to the question of which risk group the patient should end up in. This in turn determines whether the patient should receive radical treatment or not.

– The tools used today are blunt and outdated, with a high element of subjective assessments, which often leads to patients being treated unnecessarily. The benefits of Prostatype mean that fewer patients will be overtreated with the side effects that often occur in the form of impotence and incontinence. This in turn increases the quality of life for the patient and his relatives, while reducing healthcare costs.

How many clinics currently use Prostatype and what response have you received from them?

– In total, there are around 25 clinics that offer Prostatype today, of which around 15 are in Sweden. A large number of clinics are in the validation phase itself, the phase where, through practical use of Prostatype, you form your own opinion and understanding of which patients Prostatype will benefit the most. So far, we have received clear evidence that the clinical need for more accurate forecasts in confirmed prostate cancer is very clear, so we will see growth in the number of clinics that actively offer Prostatype during 2024, both in Sweden and internationally.

»So far, we have received clear evidence that the clinical need for more accurate prognoses in confirmed prostate cancer is very clear, so we will see growth in the number of clinics actively offering Prostatype during 2024 both in Sweden and internationally.

Could you tell us a little more about your new commercialization strategy and the motive behind the choice of priority markets?

– During 2022 and 2023, we have introduced Prostatype to a relatively large number of clinics in carefully selected markets based on size, patient population and type of healthcare system. Prognostic biomarkers for confirmed prostate cancer are not yet included in any national guidelines in Europe and are not reimbursed by insurance systems, so it has been important for us during 2022 and 2023 to identify the markets where we have the best conditions to really see continued sales growth. With this work as a basis, management and the board have chosen to focus on the markets where the conditions are best suited – and where even insurance companies reimburse Prostatype – which has resulted in a continued focus on Sweden, Spain, Switzerland, England and Taiwan.

– The decisions made also give us the opportunity to work even more efficiently, which in turn leads to our cost base being reduced by 30 percent on an annual basis. This without affecting our overall capacity or causing delays in achieving the milestones we are aiming for. This in turn leads to us freeing up the necessary resources for what is most important to us going forward – our entry into the American market.

– The US is a completely different market compared to Europe. There, prognostic biomarkers are included in both public and private healthcare systems as well as in clinical guidelines for prostate cancer. In the US, prognostic biomarkers have been used clinically by urologists for more than 10 years, so it is a significantly more mature market than Europe.

A key part of your US launch is a validation study. Could you tell us a little more about why it is being conducted?

– It is a comprehensive validation study being conducted in the USA in collaboration with one of the USA's absolute foremost and most respected urologists, Professor Stephen Freedland. Professor Freedland has extensive experience with prognostic biomarkers in confirmed prostate cancer. A total of approximately 1300 patients are included, of which just over half are of African-American origin. We are conducting the study primarily to further strengthen our clinical footprint, but also to obtain data that shows that Prostatype works just as well in the African-American population as in other ethnicities.

How do you plan to navigate the already established and competitive US market?

– There are three similar products on the American market, all of which are available as so-called LDT products (Laboratory Developed Test) with established reimbursement from Medicare. The current market size is approximately SEK 2 billion with an estimated total market of approximately SEK 6 billion. We will introduce Prostatype in exactly the same way as existing products, i.e. as an LDT test where we apply for the same reimbursement as our competitors. This means that we are deliberately not doing anything different compared to other products. The fact that we can use the same coding system that already exists gives us a huge advantage in terms of time and cost.

– What we are also working on, to optimize the introduction of Prostatype on the US market, are collaborations with several leading urologists in the US. We have already established such collaborations to ensure that clinical experience with Prostatype is created even before we have reimbursement in place. In other words, Prostatype will begin to be used clinically before a decision on reimbursement from Medicare is finally made and it will start in the first or second quarter of 2024.

»We are collaborating with several leading urologists in the US today to ensure that clinical experience with Prostatype is created even before we have reimbursement in place.«

In addition to competition, what challenges do you see in the commercialization of your genetic test?

– What we are doing in the US is actually an impressive introduction from both a cost and time perspective. The risk in this project is very limited because the results already exist as reimbursement and inclusion in national guidelines are already in place. Our goal is to obtain reimbursement from Medicare as early as Q4 2024 and this is possible thanks to the fact that we already have the American validation study underway, that reimbursement already exists and that we are launching the product as an LDT test as previously mentioned. This means that we do not need to set up our own laboratory with all that this entails in terms of costs and time.

You are currently involved in a rights issue of approximately SEK 47,8 million. How do you view Prostatype Genomics as an investment given the position you are in now?

– We live in a troubled world right now, which has been reflected in the development of the stock market in 2022 and 2023, although the glimmers of light are definitely starting to be seen more clearly now. In the current investment climate, I know that most investors are extra careful about the risk they are willing to take with their investments. Seen from that perspective, Prostatype Genomics should be an interesting investment considering that we offer a fully developed, market-approved product that is already being sold and where the absolute largest costs and time required for the development of the product have already been taken. We will always work on further developing the algorithms that are included in our product, but since we already have a very well-functioning product today, and continuously use AI and machine learning, the costs in this continuous development process are low. At the same time, they are extremely powerful.

– An additional parameter that reduces the risk is of course that our US project is associated with low risks, both from a time and cost perspective, as the results regarding clinical guidelines as well as the reimbursement issue from Medicare are already in place. Compared to many other companies that are planning for or working on a US introduction, we are exceptionally well positioned, so it is a very good opportunity to invest in Prostatype, precisely in terms of the balance between risk and reward.

How do you plan to use the capital from the rights issue to drive your commercialization strategy forward?

– As previously mentioned, we have already launched an efficiency program that has led to a 30 percent reduction in our costs. We can do this without affecting our operations, but above all, it ensures that we free up resources for the US launch. The capital from the issue will primarily go to the activities we want to implement at a high pace in the US in order to obtain reimbursement from Medicare as soon as possible. The largest part of the capital will be used to complete the US validation study.

»As previously mentioned, we have already launched an efficiency program that has led to a 30 percent reduction in our costs. We can do this without affecting our operations, but above all, it ensures that we free up resources for the US launch.«

Finally, what milestones are you looking forward to achieving in 2024?

– It is mainly about continuing to prioritize commercialization in the markets we have chosen to continue focusing on in Europe and Asia (Sweden, England, Switzerland and Taiwan) in addition to the most interesting thing, which is the work on the US introduction. Clear milestones in the US are that doctors start using Prostatype in the clinic (even before reimbursement from Medicare is in place), that we can obtain data from the African-American part of the population and that we get an agreement in place with the right laboratory partner. The big milestone is of course receiving reimbursement from Medicare.

More information about Prostatype's new issue can be found on the company's website. issue website.

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.