Sizhen Wang: Three Key Points in Early Cancer Screening

Through the control of production costs and the simplification of product operations, Genetron hopes to apply early screening for liver cancer on a wide scale in China.
CapitalWatch StaffNov 16,2020,15:51

After been listed on the Nasdaq for 55 days, Genetron Health, a domestic tumor genetic detecting and leading precision oncology platform, released its second-quarter financial report on August 6.

In the second quarter, the company reported its total revenue was 101.7 million yuan, representing an increase of 40.3% from the same period in 2019. Gross profit increased by 85.3%, and the gross profit margin increased to 63.1% compared with 47.8% in the same period last year. In addition, Genetron Health's operating loss in the second quarter narrowed by 20.6% year-over-year.

Founded in 2015, Genetron Health is a cancer precision medicine company focused on cancer genomics research and application. Moreover, it relies on advanced molecular detection technology and big data analysis capabilities to change cancer diagnosis and treatment methods.

Sizhen Wang, the co-founder and CEO of Genetron said, the company’s business back to normal under the effective prevention and control of the Covid-19 in the second quarter of 2020. However, the second outbreak of the virus in Beijing at the end of the quarter influenced the business again. Despite these challenges, Genetron delivered a good result in this quarter.

Genetron said: "The company has strong revenue growth and excellent gross profit margin. At the same time, the expense structure has also been optimized in this quarter."

Wang added, “In this quarter, pandemic gives the entire industry great challenges, but we believe that the company’s business will continue to grow. The company’s balance sheet has been significantly strengthened after listed on Nasdaq, and Genetron will continue to resolutely implement its long-term strategy while remaining flexible and agile to respond to the market’s rapidly changing environment.”

“Looking forward,” Wang said, “Genetron Health will focus on expanding in the market, enriching the company’s diagnostic and monitoring product portfolio, developing a pipeline of early screening products with high clinical value, and cooperating with more pharmaceutical companies."

Three Key Points About Genetron and Early Screening

Cancer, the “king” among all the diseases, has been regarded as a major disease threatening the lives and health of all human beings. Unfortunately, current cancer prevention and treatment still lack effective solutions. Wang believes that traditional cancer treatment methods have some problems.

To solve this problem is to obtain specific information about the target and the ability to find the target.

"Genomics and molecular diagnosis are the basis of precision medicine, and the underlying technology provides a strong impetus for the popularization and application of precision medicine," Wang explained.

Genetron focuses on the "full-cycle management," which means the company has a comprehensive and complete layout of cancer early screening diagnosis and monitoring drug research and development services in three business areas, and in each business sector has the international leading innovative technology product development and commercialization capabilities, reserves the industry's top talent and upstream and downstream resources.

Diagnostics and monitoring are currently the largest business segments Genetron Health is focused on. In addition, Genetron provides LDT testing services through the company's self-built central laboratory or co-built laboratories with hospitals, on the other hand, the company provides IVD in vitro diagnostic products such as instruments and kits.

Now, Generic Health has established strategic partnerships with more than 500 tertiary hospitals across the country.

As of March 31, 2020, Genetron Health has cooperated with approximately 100 national KOLs and approximately 130 regional KOLs. Also, the company Signed admission contracts with more than 30 hospitals, including in-hospital IVD product purchase agreements with 17 hospitals.

R&D is also expected to become a new key point for Genetron Health. In recent years, a large number of innovative oncology pharmaceutical companies with independent research and development capabilities have emerged in China, and companies engaged in genomics analysis also need to participate in the process of new drug research and development.

Genetron Health has cooperated with 26 biopharmaceutical companies including internationally renowned companies.

From new drug R&D to Phase 3 clinicals to commercialization, Genetron Health offers these pharmaceutical companies comprehensive supporting services such as the discovery of therapeutic efficacy markers, design and implementation of clinical trials, and the development, registration and commercialization of companion diagnostic kits.

Genetron Health's third key point, early cancer screening. It is still in its infancy on an international scale, and no company has been able to achieve large-scale commercialization. However, early cancer screening holds great potential in reducing the incidence and mortality of national cancers, improving quality of life for patients and reducing the medical burden.

Early Cancer Screening Is the Future

Established in 2016, Grail is focused on the development of cancer early screening technology. Grail uses comprehensive targeted panel and ultra-deep sequencing strategies to analyze blood samples, focusing on comparing the heterogeneity or diversity of cfDNA patterns between healthy people and patients with different stages and types of cancer. In May 2019, the early detection products for multiple cancers released by Grail have been approved by the US FDA as a breakthrough product.

Meanwhile, Genetron Health has invested heavily in research and development, quickly advancing capabilities to international leading status. The highly sensitive and specific Mutation Capsule technology was developed four years ago.

"Our products are leading in the early screening of liver cancer market. Now we have also made a series of layouts in the early screening of lung cancer and digestive tract cancer," Wang said.

As early as March 2019, Genetron Health announced the research results of early liver cancer screening in the Proceedings of the National Academy of Sciences. This study was conducted in a prospective cohort of hepatitis B virus carriers in cooperation with the National Cancer Center/Tumor Hospital of the Chinese Academy of Medical Sciences.

Following that, Genetron Health launched another study: "A prospective cohort study of 4,500 hepatitis B virus carriers for liver cancer early screening."

According to data from one of the research centers, the early screening method reached 92% sensitivity and 93% % specificity and 35% positive predictive value (PPV). "We will accelerate the advancement of registered clinical trials and let them serve the public as quickly as possible," Wang added.

However, he also said that there are many early cancer screening companies in the world and the industry still faces difficulties.

"First of all, early screening is a field with relatively high technical barriers from the perspective of genetic diagnosis, so companies must have their own original research technology. Secondly, compared with the development of general diagnostic products, early screening requires long-term data accumulation. This data accumulation is often achieved through a forward-looking cohort study, so the entire industrialization cycle will be very long," Wang mentioned, “Early cancer screening needs the funds, whether in the technological development and data accumulation of the research and development stage, or in the market education and industrialization development stage. But once these preparations are completed and finish the commercialization, the returns will be rich.”

Genetron: Ready to Shine

From the development of technology platforms to product access and large-scale commercialization, the road to becoming a leading player in such a nascent industry is not an easy one. But Wang believes the company is not only up for the task, but will have a bright future.

“Although a complete system for early cancer screening has not been established, we also know that it takes a relatively long process from the breakthrough of early screening technology to the completion of clinical registration and approval of products, and a lot of market education and popular science work are required, but we all know the strategy is good, and we need to achieve the goal as soon as possible. This is a 100 billion yuan level market. We hope that through the control of production costs and the simplification of product operations, early liver cancer screening can be applied on a large scale in China, and the number of deaths from liver cancer will drop significantly in the near future.”

The article is translated from http://finance.eastmoney.com/a/202008131592914378.html

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Topics:Genetron Health; China; U.S.
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