Good morning, and welcome to this webcast presentation, where we have Genetic Analysis presenting. And with us, we have the CEO, Ronny Hermansen, and Kari Furu, Head of Business and Product Development. If you have any questions, feel free to use the form that's located to the right, and we'll take the questions up during the Q&A section after the presentation. And, with that said, please go ahead, Ronny and Kari, with your presentation.
Thank you, Martin. Very nice to be here today. I'm the CEO, as we said, and Kari is by my side.
Hello.
Okay, so let's start then. So what is GA? Well, we are actually in something so exciting as the microbiome market, and we are supplying high-quality diagnostics to the microbiome market, and I will underline diagnostics. So, the company was founded all the way back in 2008, and as I said, we are a molecular diagnostics company. We focus corely on the microbiome, and for the time being, on the gastrointestinal diseases. We have developed and launched the patented GA-map Dysbiosis Test for gut microbiome assessment, and our GA-map test and our platform technology is well documented, with more than 50 peer-reviewed publications, and have been involved in more than 70 clinical trials. We have products in the market today. We are growing the sales globally, and we have a very exciting product pipeline of new tests coming onto our platform.
We have industry partnership with global leaders like DiaSorin, Luminex, and Bio-Rad, and we are listed on the Spotlight Stock Exchange in Sweden. So, first of all, I just want to give you a little video clip that introduce GA and what we are doing in a very nice way, I think.
What do you know about your gut? Do you, for example, know that it is 40x larger than the area of the skin, has its own neural network, produces around 20 hormones, has a microbiome with bacteria, fungi, viruses, and other microbes that together has 200x more genes than the human genome? And that the microbiome is responsible for programming 2/3 of the human immune system? The fact is that our gut and its symbiotic relationship to the microbiome is extremely complex, and we have a long way to go before fully understanding how it works. But the gut holds a lot of potential for improving our health. In recent years, there has been research indicating that an imbalance in our microbiome is closely linked to a number of conditions and diseases like IBS, IBD, obesity, autism, depression, Parkinson's, autoimmune diseases, diabetes, and even cancer.
So why aren't we testing it more? Well, until now, there hasn't been an easy, standardized way to test our gut microbiome composition, which makes it hard to both assess and compare the results. Genetic Analysis is working to change this, and through extensive gut health research, developed and patented the GA-map platform, which is the only routine diagnostics tool for gut microbiome testing. In short, it works like this: The patient uses a sample collection kit. The sample is sent to a lab, where it is analyzed using GA-map software. The healthcare specialist then gets a simple functional profile of your gut microbiome health. Genetic Analysis has already successfully launched in EU and in U.S., and is now aiming to become the world's leading company in gut microbiome testing. We have only started to scratch the surface of our gut's complex workings.
A standardized test could accelerate the possibilities to find better treatments for a number of diseases, better prevent gut microbiome imbalance, and help monitor disease progression. What is your gut telling you?
Okay. Thank you for this, and I will leave Kari to tell us more about the exciting world of microbiome.
Thank you, Ronny. So as the film gave us a brief introduction to the human gut microbiota consists of billions of microbes thriving in our gut. And not only do these microbes aid in our digestion, they have also been linked to long list of diseases and other functionalities important for our well-being and health. Diseases linked to the human gut microbiota includes IBS and IBD, where GA currently holds our strongest focus, but also several other diseases and disease areas, including cancer and even psychological disorders. IBS, or irritable bowel syndrome, and IBD, inflammatory bowel disease, are both chronic illnesses with increasing prevalence, particularly in the Western world. This means that these diseases are affecting millions of people, and since these are chronic diseases with a relatively early onset, they require lifelong treatment and follow-up, meaning that they-...
Impose a really strong cost on our healthcare systems. There is therefore a really strong need for improved diagnostic solutions in IBS and IBD management, which in turn means that improved diagnostics will enable personalized treatment and save patient suffering and healthcare costs. This strong link between human disease and the gut microbiota has sparked interest from researchers, doctors, and pharmaceutical industries alike, and that is why we see a huge growth in the microbiome testing market, as we can see in this figure. This growth is expected to keep increasing in the years to come. This is particularly enforced by the newly discovered ways of treating microbiota through gut microbiome-altering drugs. These are therapies meant to restore the microbiome of patients from a disease-promoting microbiome to a health-promoting microbiome.
More than $5 billion have so far been invested into the development of such drugs, and two have already been approved by the FDA in the U.S., both for the treatment of recurring Clostridium difficile infections, which is a huge problem worldwide, including here in Europe. With the development of such drugs comes a great need for accurate routine diagnostic solutions in the microbiome field, and this need has been acknowledged by the FDA and also by the pharmaceutical companies themselves. Here, this is represented by Dr. Ken Blount from Rebiotix, which is a Ferring company. He pointed out that there is a strong need for accurate routine diagnostics in the microbiome field, and we at Genetic Analysis, we have the perfect technology to tip into this market. We call this technology the GA-map.
This technology was used to develop, launch, and commercialize the first routine diagnostic assay for the microbiome analysis, the GA-map Dysbiosis Test. Commercialization of this product is now going on globally. Genetic Analysis holds a full value chain, where we develop and manufacture the GA-map Dysbiosis Test reagent kits and its software in our facilities in Oslo. We sell these reagent kits to laboratories worldwide. Further, we have a service lab here in Oslo, where we analyze samples from patients and also from research cohorts in collaboration with research groups worldwide and in collaboration with pharmaceutical companies. This is how the GA-map Dysbiosis Test works in a clinical settings in the laboratory. A patient visits his or her doctor complaining about abdominal problems.
The doctor suggests taking a gut microbiome test to learn more about what is the status of the patient's gut. The patient can then use a sample collection kit to take a fecal sample in the comfort of his or her own home. The sample is sent by regular post to the laboratory that has the GA-map technology installed. The lab will use the GA-map Dysbiosis Test reagent kit to analyze the sample and the GA-map Analyzer software to generate an easily interpreted patient report form that the doctor can use to say something about the status of the microbiome for the, of the patient and suggest treatment. There are several microbiome analysis platforms available on the market today, but most of these are based on research and do not have clinical validation or regulatory approval.
Some key features of the GA-map is that it is fast, easy to use, and cost-efficient for the laboratories. It also generates easy-to-interpret results. The assay is standardized and generates reproducible results. The results are compared to an intrinsic healthy reference range, and the results are clinically relevant.
Thank you, Kari. I will take us a little bit through the commercial growth of the company. As we said, we are quite global in GA. We don't really have much presence in Scandinavia yet, except from what we do from our service lab. But we do see global interest in what we are doing. And today, U.S. is our biggest market with one customer specifically pointing out. And we see Germany as a very exciting market. We see very good growth also in Eastern Europe, where patients are quite used to pay extra for their own health. And Asia is really coming up as an exciting market. You know, we have recently announced agreement for India, for China, and for Thailand, just to mention.
So we are really seeing global growth on our products, and we have very, very happy customers that really acknowledged our products and the quality of these products. So if we look more into what sort of market segments are we aiming at, and as Kari pointed out, this is a clinically validated diagnostic platform. It's CE-IVD, so we are addressing the medical diagnostic field. However, we do have some customers within clinical research, and clinical research or the research market is currently the biggest testing market for microbiome. It's dominated by other platform, more research-based platforms, but we see also that we want to take more out of this market, more revenues. So we, in October 2023, we launched the GA-map Discovery, which is a service product for specifically aimed at the research market.
Kari talked about the pharma companion diagnostics. You know, there are drugs now being launched that has FDA approval in the U.S., and these products needs diagnostics tools. We see, you know, that they want to have diagnostics that can follow up, see the effect of the treatment. Maybe they should give a dose number two, et cetera. And here is where FDA has been very clear that the need for diagnostics is imminent. Direct to consumer is a market we all know about, and you know, everything from the very well to the actual people having challenges.
We are not directly involved in the direct-to-consumer market today, but we have a lot of approaches from several companies who see that the GA-map is faster than other technologies around and can therefore fuel the consumer with quicker answers. So that is also a very interesting market for us going forward. Just also want to go a little bit into our product pipeline. We have some new markers in our pipeline, but one of the most exciting one is the new IBD marker, where we are aiming to predict, to use microbiota profiling to predict the disease course protection, progression in IBD patients. Gastroenterologist needs really better tools to predict, will this be a, a tough disease course or a slower disease course?
Then they can personalize the treatment and thus save the patient for a lot of sufferings and of course, save healthcare cost. It is not only GA that has pointed out that microbiota profiling is a very interesting tool in this area, but we are really focusing on developing a test that can predict this. We have quite a lot of funding from the Research Council of Norway on this project, so we are very happy that they also support us on this.
As you can see in this slide here, that we have already used our imminent, I mean, our excellent tools to segregate or to profile the microbiome and then, you know, make subgroups of the microbiome so we can easily look at this before we then finally concentrate on a test that can aid the gastroenterologist in this field. So if we look at our commercial strategy in summary, we are focusing on, I would say, three areas to ramp up our revenues in the coming years. One is to implement the GA-map into clinical laboratories globally. That is what we are currently doing, but we will ramp up that, get more system placement into the laboratories so we can generate reagent costs revenues.
We will also continue to team up with pharma companies to establish combined products, as we mentioned, so-called companion diagnostics. This is very interesting because if you get an FDA-approved, for example, pharma product, then to develop the diagnostics is usually also easier route to get regulatory approval. So and then we will launch pipeline of our own in-house GA-map markers, new markers, I mentioned IBD, for that matter. And all these areas will make us able to grow the revenues going forward significantly. And as you see that on the financial side, we are aiming to go from revenues in 2023, operating revenues of about NOK 20 million-NOK 25 million, up to NOK 40 million-NOK 60 million in 2025. And then also in 2025, and that turn into cash positive figures. So this is very driven by the current product line.
As I mentioned, we have significant bandwidth of our current products, but it will also be later in the period, fueled by new markers that comes into on our platform. So, if we look at GA as an investment opportunity, I mean, we have a highly skilled management that has been working in this industry for many, many, many years, and we are supported by a highly experienced board of executives. We have a unique position in this very exciting microbiome diagnostic market, and we are backed by global diagnostics and pharma partners. And as I mentioned, we will accelerate the commercial expansion of our growing products in Europe and Asia. And of course, we mentioned our product pipeline.
So all in all, we are in a phase now where the technical risk of our products is very, very limited, and, it's up now to take a part of this very booming market. Thank you for your attention.
Thank you very much for that, presentation. And now we'll jump into the Q&A section here. And we'll start with the first question. You have announced expansion into several Asian markets. Can you elaborate more on this and how the expansion is going, and what drives this huge interest in Asia?
Maybe I can answer that. You're right, we do see a lot of interest in Asia. And I think that the reason for this is at least twofold. First, they have a booming economy. We really see a really large growth in the number of people who are able to spend money on investment into their own health. Further, they are now becoming, like us, more and more Westernized in their lifestyle. And with that, we also experience increased prevalence of diseases such as IBS and IBD. And these are diseases that require, as we mentioned before, long-term attention and follow-up in the healthcare system.
But since we are still lacking really good ways of addressing these types of problems, people need to take matters into their own hands and seek help for their problems that they are having. So I think that those two are probably the main two reasons why we see such great interest for our product in Asia.
Okay, thank you. If we're looking at the regulatory changes, you talked about FDA approving microbiome-altering drugs. How is the landscape for diagnostics, would you say?
Yes, interesting. I would say, as we say now, you know, the market is driven by research. The whole diagnostic analytical market has been driven by research, and there are very good tools out there to do research. Those tools or those platform has been taken into the diagnostic field. But as FDA said, I was in Boston last year and listened to the FDA from the stage, and they said, "We really need diagnostic tools for in the microbiome field, and we need standardization." And they also urged pharma companies in this hall, they were asked to focus on diagnostics early. So in the U.S., there is great focus now on standardization, and that means also that they look at regulatory pathways for diagnostics.
And this is very, very good, I think, for GA, because, you know, that's all we focus on, is to make everything standardized. So we can kind of. We can say that if you take a patient sample, split it in two or three, and send one to a lab in U.S. and one to a lab in Europe, and even one to China, you get the same answer. That's what diagnostics is all about. And also in Europe now, there is a strong focus on, on, on this field with the new IVDR coming in to play. And that's also where they say that labs that has developed their own methods, they need to focus on the CE mark on this. And so we see that the regulatory landscape is really supporting GA and our ideas going forward.
Can you elaborate on the competitive landscape?
What do you say?
Yeah, thank you. Interesting question. I think, as Ronny mentioned, there are quite a few different platforms out there, and there are several companies that offer gut microbiome analysis. However, they are mostly in the non-regulated, non-standardized, more research-based field. So I would say we are in the forefront when it comes to diagnostics, and also we are in the forefront when it comes to standardization, reproducibility, and repeatability. So I would say that we have a very good position in terms of regulatory and high quality. We usually say that we offer a premium product into the diagnostics field of microbiome analysis.
All in all, I would also say that in the niche we are working in, which is the part that will grow going forward, really grow, that's, you know, the clinical diagnostics area. We don't really see any competitors out there that offers the same as us. Over the time being, I hope we will get competitors because that will drive the market even more.
Okay, thank you. Can you provide more insights into the factors contributing to the 34.5% year-to-date sales increase compared to 2022?
Yeah. As I maybe mentioned, I mean, we have, during the last 12 months, we have grown our active customer base by more than 200%, and we have grown our signed-up customer base, but customers that have not really implemented our platform yet, so they haven't started the sales, with more than 100%. So all these system implementations in labs around the world fuels, of course, reagent sales. And this is very good because it's not only the number of growing customers, but these customers will usually also grow their business because they are in a very strong growing market. So that's more or less the key essence, I think, of our growth, is that we are placing more and more systems out there.
Perfect. Thank you. In regards to your revenue target in 2025 and your goal to become cash positive the same year, what is the expected cost base in 2025, and what revenue level is the company cash positive?
Yeah. We are really now focusing on, I would say, reducing our cost spending. That means in a way that we will be able to grow the revenue significantly without really spending that much more costs. We do that by, for example, taking down our research and development costs. We will do more and more research through partners. So that will help us leverage the cost base. And difficult to judge in terms, but we usually say that about NOK 50 million in turnover will take us to a break-even point.
Can you elaborate on the evolving trends in the microbiome market that are favoring GA, particularly in terms of the diagnostic needs and regulatory guidance?
Yeah, we probably already said a little bit about it. I mean, the regulatory guidance with a focus in, in Europe, now, IVDR, is really aiding companies like GA that really focus on documenting everything we do clinically, you know. We have-- we haven't put so much effort into that yet, but we in GA has run healthy, normal population studies across the globe, more or less now. We had a huge population study in U.S., Canada. We have had it in, in Europe, consisting of the Nordics, you know, Italy, Germany, Spain, just to mention some, and also running those studies in China, in Thailand. And the great thing to see is that at least in the U.S. and in Europe, we have a very, very clear, healthy, normal microbiome. That and this is clinically validated.
We run tests with, you know, doctors and medical expertise, or clinical studies, I mean. So, all this will really benefit GA with its standardized CE mark product. So that's on that side. Other trends that will help us, aid us, is, I think we talked a little bit, touched upon the direct-to-consumer market. I mean, today it's fueled by a lot of, research by, based solutions, and, and this market hasn't so much talked about standardization, et cetera. But this will come, and, and the need also for faster, reports from the customer. You know, some of these customers, they don't want to send in their microbiome test and waits four weeks before they get an answer. They want quick responses, and, and this is really where GA can aid with their platform.
It's a lot of exciting areas out there where, you know, doing things in a proper way will help you in this matter. I mean, standardized, validated, clinically documented.
Okay, we'll take one final question here. What were the key insights gained during the visit to China, and how do you plan to leverage the opportunities in the Chinese market for microbiome assessments?
Oh, yeah, we can talk an hour about that. But no, I was... You know, I've been in China sometimes during my career, but I'm always amazed about the development you see there. I mean, and I will say that traveling around to visit research centers and their focus, everything is big, and they do things in such a huge quantities when it comes to studies. But I want to say is that the interest for microbiome is huge. They do a lot of fecal transplant, for example. Patients there pay sums that even in Norway will be ridiculously high. So this is... And the market is really now more and more focusing on having, again, standardized, validated, high-quality solutions in place. So, so I think it's very focused on having tools like the GA-map.
So we see great interest, but that is the. The market is of course divided into many areas. There are the very growing market that will come there and is coming is the direct-to-consumer market. I think they are really interested in this, and they look at various options. And of course, we collaborate with our partner and looking at the different aspects of the market. You know, we are, as we have announced, we are going the regulatory route first. We will start doing a laboratory developed test, so we can use it for research use. Then we will go the more regulatory routine road up to have a validated, clinically approved product. But we see direct-to-consumer is super interesting in China and is huge, the market, but also the research market.
So I have to say, you know, they've run such a big research studies and, I mean, yeah, China is fantastic in that matter. Very exciting market.
Okay. Thank you very much, Ronny and Kari, for presenting today and answering all of our questions. Also thank you to everyone who followed along for this company presentation of Genetic Analysis. Hope you have a great rest of the day, and until next time, thank you very much, and goodbye, everyone.
Thank you.