Thank you very much for having me here today. My name is Fredrik Rickman. I'm the CEO of Prostatype Genomics. We are in a very interesting phase with our company right now. It's not a new company. We were founded already back in 2007, a spinoff from Karolinska Institute in Stockholm, Sweden. We are active in the field of prostate cancer. What we have developed and launched already in Europe and the U.S. is a prognostic biomarker stratifying the right patient into the right risk group. I can spend two weeks talking about prostate cancer. It's a fantastic, it's a fascinating field. It's also very difficult from a clinical point of view, deciding how to treat the patient, if you should treat the patient at all. What is Prostatype then? Our product, our first product, I would like to say. It's a genetic test.
We are measuring gene expressions in embryonal cancer stem cells and put that information into different algorithms as we combine the data from the gene expressions with clinical parameters. To make it simple, the product consists of three different parts. One is a laboratory test where you extract RNA from cancer cells. As I said, you enter that data into different algorithms developed by the company. The company owns, of course, all those algorithms. We also are in possession of several databases with a lot of patient information, which is needed, obviously. This is an example of precision medicine. It's kind of a buzzword today, I know that, but we are a very good example of exactly that. These algorithms are, of course, continuously developed within the company, and we have many years of experience in using and utilizing these kinds of tools.
Compared to many other companies presenting here, we are not in a phase where we need to perform more studies. We have done that already. If you look at this chart, it is a huge chart. I am aware of that. If you look at it from a technical point of view, there is no technical risk in Prostatype or Prostatype Genomics anymore. The development processes are painful. It takes time. It costs a lot of money. My information to you is that we have taken those costs already. We have invested; there has been a lot of investments in this company over the years. Once you have a ready product, you enter into the regulatory path. That can take time as well. What we have done is that we have passed these phases.
We have launched the product already in Europe in limited scale. We have launched it in the U.S. as well in limited scale this far. A lot of the investments are already taken. We have come a long way down the road. Looking at the markets, like for many other companies, it's Europe and the U.S. that are most important. If we look at the U.S. market characteristic, it's completely different if you compare it with Europe. There is an existing reimbursement already in place in the U.S. This is so important from an investor point of view to understand really fully what this means. We don't have to create a new code for Medicare to work with. It's already existing, as we have three competitors in the U.S., actually. It's not only reimbursed by Medicare at a very interesting level.
It's also reimbursed at the majority of private insurance companies in the U.S. You see the usage of prognostic biomarkers is included in national clinical guidelines as well. As you can see, the final point, these kinds of products have been in use for many years in the U.S. Compared to Europe, completely different. That makes it for a small company like Prostatype Genomics quite challenging when you want to launch a new product in the European field. We have sales in Europe, but the strategy from a commercial point of view has to be completely different compared to the U.S. That's why our focus is on the U.S. and has been so since 2022, really. The market size, you can read on the slide here, approximately $400 million annually. The market penetration rate is about 40% already.
The market is expected to double by 2040, simply because the population grows older and older. Next, please. Looking at investments, it's not just to come to the U.S. and say, "Hey, I want to sell my product." There are a lot of activities that need to be taken, a lot of costs that need to be taken as well. We have done that. I'm not going through all of these areas here, but to show you a little bit of what we have done and why we are launch ready, so to speak. I would like to draw your attention to the bottom slide to the left, the fact that Prostatype is in clinical use in the U.S. already. Also, we have another interesting detail.
We have a billing partner up and running who supports us to actually get the income or revenue that we want to have. Also, one comment, second from the left bottom, we have just completed a huge U.S. study, very expensive study, I have to say, in collaboration with Cedars-Sinai Hospital , one of the leading urologists in the U.S. under the umbrella of Veterans Affairs. This study will be presented. I know the results already, but it will be published in, well, a couple of weeks' time, hopefully. It's not in our hands, so I cannot promise anything. We are prepared in the U.S. We have made all these investments as well. What we are waiting for to really kick off and to launch the product as we would like to do it in the U.S. is Medicare reimbursement approval.
We did expect that this should go quicker than it has done. The reason for that, as I mentioned, is that there is already a regulatory so-called LCD code in place, and there is an existing reimbursement level of $3,783. We have been going on for one year now with Medicare. From time to time, it's a bit frustrating. The questions that come, we have been able to answer all those questions. Still, it has taken a little bit longer than we expected. We are not influenced by the shutdown in the U.S. We cannot blame that, so to speak. It is simply the process. Regulatory processes are difficult to foresee when it comes to timing. We have a very nice report with Medicare, and we are continuing to talk to them.
Hopefully soon, we will have the reimbursement and then kick off the launch for real in the U.S. The reason why we have not started to really kick off in the U.S. yet is that we want to have the Medicare reimbursement in place first. Simply because Medicare is the largest payer in the U.S., approximately 60% of the market is covered by Medicare. The rest, 40%, is by numerous other private insurance companies in the U.S. We have started to bill the private insurance companies depending on the patient's setup. This is also processes that take time. We are waiting for the first approval, actually. We have sent out numerous invoices already. We are ready to go. One question I often get is, why do you not go together with someone? Why do you not partner up with someone?
Different companies obviously have different answers to this, different solutions to this. We have decided to launch on our own initially. There are many reasons for that. One is that you have to share quite a huge part of the revenue. We are not interested in that. The main point from our view is that own experience counts. We want to keep the control over the launch. Sooner or later, we will enter into a partnership. Believe me, I am in several discussions with several U.S. companies that are interested in Prostatype. I can understand that. We have decided not to jump onto any train yet. It might come in the future. Also, it depends on the kind of product you have, what kind of market you are in.
There could be other considerations for commercialization as Prostatype Genomics no longer is a one-product company. We have been that. We have invested in that. It's still our main priority. If the bar here represents the treatment decision, the patient has had surgery. Prostatype, you use Prostatype prior to the decision of treatment. What we have found recently is that there are a number of products that we will develop based on the Prostatype technology, based on the findings we already have. After a treatment, once you have had surgery, for example, it doesn't necessarily mean that you are treated. The PSA level can still rise after you have removed your prostate from the patient. That is not a good thing. The earlier you can know about the risk for so-called BCR or biochemical recurrence, the better it is.
There are multiple other clinical questions that Prostatype technology will be able to help to answer. The focus is also different from a commercial point of view. Prostatype focus is on payers, public and private payers. To the left of the bar, sorry, to the right of the bar, it's the clinician focus. It's two different business models. It's two different ways of operating. There are hidden assets in our company as we are opening up a new large market, approximately $1 billion per year, only in Europe and the U.S. We have actually completed the first study already, and it will be presented early next year. Being able to work on the already developed platform will help us with faster market launches and at significantly lower costs. Synergies, for sure.
When we talk about hormone therapy, which is also called ADT, we know there is a need for prognostic companion diagnostics. There are, as you can see on this slide, several pharmaceutical companies involved in this business. For them to have access to a companion diagnostic will definitely help them in strengthening their own cases when they are talking to the payers. This is something we are exploring. We have started to explore. We are in discussions with a couple of the companies already. We are very optimistic and very optimistic around this. My final slide, there are two areas I would like you to consider. The first one is Prostatype Genomics. Our main priority still is to receive the Medicare reimbursement and kick off the launch in the U.S. The major investments are already taken.
The product is launched in the U.S. and in Europe. The timing in terms of Medicare approval, I think, is very interesting. The new business area will be based on the technology we already possess. We have already utilized a lot of synergies in this developing phase. That will open up a number of interesting commercial partnerships. Thank you very much for finally, I cannot promise you a 100% return on investment. I would love to, but I think it would be wrong to say something like that, at least from my point of view. Thank you very much.
Fredrik, the obvious first question then is, how large a return are you comfortable promising?
One of our competitors in the U.S. was sold for $600 million back in 2021. Different times then, but SEK 6 billion.
Anyone interested can look at our market cap today, which is not in the region of $600 million, I can tell you. There is an upside for sure. Could be more than 100 x.
Who knows? You never said it was not.
No, I never. I did not.
Are you worried in terms of the competitive landscape that there is someone else who is in the U.S. developing this and who will go through Medicare? Or is there absolutely no concern that the slow process will.
No, the process is, from my point of view, from my point of view and from the shareholders' point of view, slow. Right? If you look at the processes, Medicare processes, it takes around a year to get an approval. We are close to that now.
You are still expecting it around?
Yeah, I am not going to.
Again, I'm not going to get you to promise anything.
No, I prefer to be careful.
Yeah. I think with that, we will say thank you.
Thank you very much. Pleasure. Thank you.