Genetic Technologies poised to unveil market moving news

By Trevor Hoey. Published at May 7, 2019, in ASX Biotechs

Genetic Technologies Ltd (ASX:GTG), a diversified molecular diagnostics company provided an update last week for the three months to March 31, 2019, a quarter that featured many positive developments for the group.

One of the highlights in terms of commercialisation was the establishment of a Memorandum of Understanding with TGen, an Arizona-based biomedical research institute dedicated to conducting ground-breaking research with life changing results.

TGen’s scope of works assists in understanding the genetic components of both common and complex diseases, including cancer, neurological disorders, infectious disease, and rare childhood disorders.

The group is affiliated with City of Hope in Duarte, California, a world-renowned independent research and treatment centre for cancer, diabetes and other life-threatening diseases.

The collaboration between the two parties will see an investigation of distribution channels, reimbursement strategies, the establishment of new laboratory facilities and the instigation of further research.

Highlighting the esteem in which Genetic Technologies’ research in this area is held, the collaboration agreement involves the transfer of its know-how to assist those jointly working towards initiatives such as establishing a US-based laboratory.

Importantly, the TGen collaboration opens up a number of potential distribution channels including US healthcare systems, national cancer centres, physician networks and disease consortiums.

Having a presence in the US also enhances the group’s chances of government recognition and collaboration.

While Genetic Technologies is having issues with its NASDAQ listing at the moment, it continues to forge ahead with its US plans and remains steady on the ASX.

Enhanced version of tests possible share price catalyst

Development of an enhanced version of the BREVAGenplus breast cancer test is nearing completion.

The test will broaden the applicability of BREVAGenplus and enable its use by women with an extended family history of disease.

By increasing the range of risk factors analysed, the test will provide clinically actionable insight for approximately 95% of women.

The company has also targeted the colorectal cancer industry with its first-to-market genetic risk assessment test for the cancer on track to be introduced to the market in fiscal 2019, making it the first of a suite of ground-breaking new products that the group expects to deliver in the next 12 months.

Other genetic assessment tests under development include those targeted at identifying the risks of cardiovascular disease, type II diabetes, prostate cancer and melanoma.

These new tests represent the culmination of long-term research initiatives, including that conducted in ongoing collaboration with The University of Melbourne.

Entry into US$800 billion Chinese health market

One of the most promising developments has been the company’s move into China, a market valued at more than US$800 billion.

Central to the company’s entry arrangements was the establishment of operations in China at the Hainan Resort Software Community (HRSC) Free Trade Zone (Hainan, China).

The move into China includes the formation of Genetic Technologies HK Limited and Hainan Aocheng Genetic Technologies Co. Ltd. in Hong Kong and Hainan, China respectively.

As a part of the HRSC, Genetic Technologies will receive assistance in obtaining China FDA approval for the company’s present and future genetic risk assessment tests, dramatically fast-tracking the ‘pathway to sales’ process.

In addition, as a part of the HRSC, the company can take advantage of significant tax benefits, subsidies, and facilitated investment.

The Chinese market is now the second largest single healthcare market outside of the US.

Over 4 million new cases of cancer are diagnosed annually in China each, and breast cancer is increasing at a rate of over 3.5% each year.

China identifies how to drive down costs

Similar to the way it has paved the way in the manufacturing industry, China has recognised that a ‘prevention is better than the cure’ approach is essential in containing the costs of healthcare.

Genetic Technologies’ entry into China aligns with the government’s Healthy China 2030 initiative that seeks to provide cost-effective healthcare to more than 1.5 billion people.

Disease prevention is critical to cost control as treatments for early stage disease carry a lower cost and result in better health outcomes.

Screening and other healthcare resources can be targeted at those with an elevated risk.

For example, screening every woman for breast cancer may be too costly, but it may be cost-effective to preferentially screen those with a mid-to-high risk score.

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