Analyst Group initiates equity research coverage on Genetic Analysis AS (“Genetic Analysis” or the “Company”), which includes equity research coverage with, among other things, equity research reports with quarterly updates, comments on press releases and CEO interviews.
About Genetic Analysis
Genetic Analysis is a Norwegian diagnostic company with more than 15 years of experience in research and product development within diagnostics of the human microbiome. The Company has developed the diagnostic platform GA-map for the analysis of human microbiomes. This platform provides cost-effective, standardized, and consistent results, forming the basis for diagnosing patients’ microbiomes. Test results are published directly via the Company’s software, eliminating the need for additional resources to interpret the data.
The business model includes recurring revenues from the sales of reagent kits and software to laboratories, as well as revenue from services offered by the Company’s service laboratory for users who do not have the necessary instrumentation for analysis. The Company’s current operations focus on the EU, the US, and Asia.
Three Reasons as to Why Genetic Analysis is an Attractive Investment:
User-Friendly and Efficient Platform Enables Growth Opportunities
The microbiome testing market is currently characterized by non-standardized, research-based tests. Through standardized technology, routine analyses are expected to be performed more efficiently while also providing improved conditions for an accurate diagnosis of the microbiome. Genetic Analysis aims to change this with the Company’s GA-map platform. The Company is the first to develop a CE IVD-marked (In Vitro Diagnostic) product for mapping microbiomes. GA-map is considered user-friendly and offers an automated comparison against a predefined microbiome within a ”healthy range,” while test results are published directly via the Company’s software, eliminating the need for additional resources to interpret the data.
A Platform Strategy Driving Recurring and Growing Revenues
Genetic Analysis’ business model is based on the Company’s GA-map platform, where the primary revenue driver today is sales of reagent kits required to perform tests that serve as the basis for diagnosing patients’ microbiomes. As more laboratories adopt the platform because of the user-friendliness with immediate result publication through the Company’s software, sales of reagent kits are expected to increase, generating recurring revenue streams for Genetic Analysis with high gross margins, amounting to ~83% in Q4-24. During 2024, sales of the reagent kits GA-map Dysbiosis Test grew 37%, which we see as proof of the potential with Genetic Analysis business model starting to materialize. Moreover, Q4-24 marked a breakthrough quarter for Genetic Analysis regarding profitability, being the first positive EBITDA result in the Company’s history, amounting to NOK 0.4m.
Increasing Interest in the Role of Microbiome in Health and Disease Drives Strong Market Growth
The human microbiome has been referred to as a ”newly discovered organ,” and in recent years, research has emphasized the interplay between gut health and the immune system, highlighting its essential role in human well-being. Moreover, several diseases have been linked to alterations in the composition and function of the microbiome. Given these insights, strong market growth is projected in the coming years. Global Market Insights estimates an annual market growth rate of 25.7% from 2024 to 2032, reaching a valuation of USD 6.5bn by the end of the forecast period. The primary growth driver is expected to be advances in research, which have revealed the microbiome’s potential in therapeutics, particularly for the treatment of infectious diseases, metabolic disorders, and immune-related conditions.
Genetic Analysis patented platform GA-map was used to develop and commercialize the first clinically validated and CE-IVD approved test for microbiome analysis, the GA-map Dysbiosis Test. The Company also has several patent families covering platform technology, algorithms and profiles related to treatment outcome. More players in the microbiome field are expected to seek clinically validated solutions with CE-IVD approval, given the attractive opportunities presented by market growth. However, Genetic Analysis holds a first-mover advantage, as the GA-map Dysbiosis Test is well-documented with more than 50 peer-reviewed publications and over 70 clinical studies, which Analyst Group considers a strong competitive advantage and validation of the platform.
Genetic Analysis published the Company’s interim report for the fourth quarter of 2024 on February 26, 2025.
Below are some highlights of the report:
- New sales record – net sales reached NOK 6.2m
- The EBITDA result amounted to NOK 0.4m, the first quarter with a positive result
- New collaboration with Ferring Pharmaceuticals to develop a new rapid microbiome diagnostic test
- Stable financial position
Strong Growth and new Sales Record
Genetic Analysis sales amounted to NOK 6.2m during Q4-24, corresponding to an increase of 63% compared to the same period last year. The Company’s core product, the GA-map Dysbiosis Test kits sales constituted of approx. 71% of sales, reaching NOK 4.4m during Q4-24, corresponding to a 49% growth. The majority of the remaining 29% came from sales of testing services, which is assumed to be sales from Genetic Analysis own service laboratory. Sales from services amounted to NOK 1.7m (0.8), corresponding to a growth of 115%.
For the full year 2024, sales amounted to NOK 15.9m (14.1), corresponding to a growth of 12 %. During 2024, Genetic Analysis executed a new strategy in which the Company has discontinued instrument sales, which instead is handled by the manufacturer. As a result, sales from instruments amounted to NOK 0.1m (1.5) during 2024. This strategic shift is partly due to instrument sales being a low-margin business, and as the focus shifts towards 2025, only a minimal portion of instrument sales remains in the comparative figures. Combined with the strong sales momentum across other product categories in Q4-24, this creates favorable conditions for accelerated growth and profitability in 2025 according to Analyst Group.
First Quarter with Positive EBITDA Result
Q4-24 marked an important milestone as the first quarter with a positive EBITDA result, amounting to NOK 0.4m. However, it should be noted that other income, which includes research work and grants, amounted to NOK 1.2m, adjusted for this, the EBITDA result amounted to NOK -0.8m. The discontinuation of instrument sales strengthened the gross margin, amounting to 83.1% compared to 57.7% in the comparison period. With the new strategy we expect the gross margin to stabilize at this higher level going forward.
Moreover, the operating expenses amounted to NOK 7.2m (11.5), corresponding to a decrease of 37%, which strengthened the result. The decreasing cost base is attributable to the fact that one of the development projects, GA-map IBD Dx, is in a less costly phase, as well as that cost saving has been made. With strong sales growth, an increasing gross margin and decreased cost base, we see good potential for Genetic Analysis to improve results in the upcoming year compared to 2024.
Genetic Analysis and Ferring Pharmaceuticals to Launch Rapid Microbiome-Based PCR Test
At the end of Q4-24, Genetic Analysis and Ferring Pharmaceuticals announced a partnership to complete the development of a rapid microbiome-based PCR test, combining Genetic Analysis’ GA-map platform with Ferring’s Microbiome Health Index biomarker. This test aims to reduce processing time from weeks to hours, lower costs, and enhance standardization in microbiome diagnostics. Set for launch as a Research Use Only (RuO) product in H1-25, Genetic Analysis holds exclusive commercialization rights without royalty or milestone obligations to Ferring. The project is funded by Ferring, Genetic Analysis, and Innovation Norway.
The test will initially target patients suffering from Clostridioides difficile infection (CDI), which is a new disease area to target for the GA-map platform. The launch, expected during H1-25, is expected to drive growth for Genetic Analysis by adding a new product to the portfolio within a new disease area for the Company, along with the aforementioned advantages. The collaboration with Ferring Pharmaceuticals is also part of Genetic Analysis’ strategy to establish strong partnerships in order to reduce the need for independent financing of similar projects.
Strengthened Cash Position and Improved Result Instills Confidence in the Financial Position.
The cash balance at the end of Q4-24 amounted to NOK 13.4m, compared to NOK 11.4m at the end of Q3-24. The strengthened cash position is primarily attributable to a slight increase in liabilities as well as a decrease in receivables and inventory, affecting the cash position positively. Genetic Analysis’ results in Q4-24 instill confidence that profitability is progressing in the right direction, and with this in mind, we consider the financial position to be stable. However, it is important to emphasize that Genetic Analysis remains in an early phase of the Company’s commercialization, which entails uncertainties regarding future revenue generation. As a result, the cash position will continue to be a key factor for investors to monitor going forward.
In summary, Analyst Group believes Genetic Analysis delivered a breakthrough quarter during Q4-24, delivering sales growth of 63% and a positive EBITDA result. We see this as evidence that the updated strategy, with the discontinuation of instrument sales, is leading to improved profitability in the business model. We also see potential for Genetic Analysis to further enhance the Company’s financial performance in 2025.
Analyst Group will follow up with an equity research report on Genetic Analysis.
Analyst Group Initiates Equity Research Coverage and Comments on Genetic Analysis Q4-24 report
2025-02-27
Analyst Group initiates equity research coverage on Genetic Analysis AS (“Genetic Analysis” or the “Company”), which includes equity research coverage with, among other things, equity research reports with quarterly updates, comments on press releases and CEO interviews.
About Genetic Analysis
Genetic Analysis is a Norwegian diagnostic company with more than 15 years of experience in research and product development within diagnostics of the human microbiome. The Company has developed the diagnostic platform GA-map for the analysis of human microbiomes. This platform provides cost-effective, standardized, and consistent results, forming the basis for diagnosing patients’ microbiomes. Test results are published directly via the Company’s software, eliminating the need for additional resources to interpret the data.
The business model includes recurring revenues from the sales of reagent kits and software to laboratories, as well as revenue from services offered by the Company’s service laboratory for users who do not have the necessary instrumentation for analysis. The Company’s current operations focus on the EU, the US, and Asia.
Three Reasons as to Why Genetic Analysis is an Attractive Investment:
User-Friendly and Efficient Platform Enables Growth Opportunities
The microbiome testing market is currently characterized by non-standardized, research-based tests. Through standardized technology, routine analyses are expected to be performed more efficiently while also providing improved conditions for an accurate diagnosis of the microbiome. Genetic Analysis aims to change this with the Company’s GA-map platform. The Company is the first to develop a CE IVD-marked (In Vitro Diagnostic) product for mapping microbiomes. GA-map is considered user-friendly and offers an automated comparison against a predefined microbiome within a ”healthy range,” while test results are published directly via the Company’s software, eliminating the need for additional resources to interpret the data.
A Platform Strategy Driving Recurring and Growing Revenues
Genetic Analysis’ business model is based on the Company’s GA-map platform, where the primary revenue driver today is sales of reagent kits required to perform tests that serve as the basis for diagnosing patients’ microbiomes. As more laboratories adopt the platform because of the user-friendliness with immediate result publication through the Company’s software, sales of reagent kits are expected to increase, generating recurring revenue streams for Genetic Analysis with high gross margins, amounting to ~83% in Q4-24. During 2024, sales of the reagent kits GA-map Dysbiosis Test grew 37%, which we see as proof of the potential with Genetic Analysis business model starting to materialize. Moreover, Q4-24 marked a breakthrough quarter for Genetic Analysis regarding profitability, being the first positive EBITDA result in the Company’s history, amounting to NOK 0.4m.
Increasing Interest in the Role of Microbiome in Health and Disease Drives Strong Market Growth
The human microbiome has been referred to as a ”newly discovered organ,” and in recent years, research has emphasized the interplay between gut health and the immune system, highlighting its essential role in human well-being. Moreover, several diseases have been linked to alterations in the composition and function of the microbiome. Given these insights, strong market growth is projected in the coming years. Global Market Insights estimates an annual market growth rate of 25.7% from 2024 to 2032, reaching a valuation of USD 6.5bn by the end of the forecast period. The primary growth driver is expected to be advances in research, which have revealed the microbiome’s potential in therapeutics, particularly for the treatment of infectious diseases, metabolic disorders, and immune-related conditions.
Genetic Analysis patented platform GA-map was used to develop and commercialize the first clinically validated and CE-IVD approved test for microbiome analysis, the GA-map Dysbiosis Test. The Company also has several patent families covering platform technology, algorithms and profiles related to treatment outcome. More players in the microbiome field are expected to seek clinically validated solutions with CE-IVD approval, given the attractive opportunities presented by market growth. However, Genetic Analysis holds a first-mover advantage, as the GA-map Dysbiosis Test is well-documented with more than 50 peer-reviewed publications and over 70 clinical studies, which Analyst Group considers a strong competitive advantage and validation of the platform.
Genetic Analysis published the Company’s interim report for the fourth quarter of 2024 on February 26, 2025.
Below are some highlights of the report:
Strong Growth and new Sales Record
Genetic Analysis sales amounted to NOK 6.2m during Q4-24, corresponding to an increase of 63% compared to the same period last year. The Company’s core product, the GA-map Dysbiosis Test kits sales constituted of approx. 71% of sales, reaching NOK 4.4m during Q4-24, corresponding to a 49% growth. The majority of the remaining 29% came from sales of testing services, which is assumed to be sales from Genetic Analysis own service laboratory. Sales from services amounted to NOK 1.7m (0.8), corresponding to a growth of 115%.
For the full year 2024, sales amounted to NOK 15.9m (14.1), corresponding to a growth of 12 %. During 2024, Genetic Analysis executed a new strategy in which the Company has discontinued instrument sales, which instead is handled by the manufacturer. As a result, sales from instruments amounted to NOK 0.1m (1.5) during 2024. This strategic shift is partly due to instrument sales being a low-margin business, and as the focus shifts towards 2025, only a minimal portion of instrument sales remains in the comparative figures. Combined with the strong sales momentum across other product categories in Q4-24, this creates favorable conditions for accelerated growth and profitability in 2025 according to Analyst Group.
First Quarter with Positive EBITDA Result
Q4-24 marked an important milestone as the first quarter with a positive EBITDA result, amounting to NOK 0.4m. However, it should be noted that other income, which includes research work and grants, amounted to NOK 1.2m, adjusted for this, the EBITDA result amounted to NOK -0.8m. The discontinuation of instrument sales strengthened the gross margin, amounting to 83.1% compared to 57.7% in the comparison period. With the new strategy we expect the gross margin to stabilize at this higher level going forward.
Moreover, the operating expenses amounted to NOK 7.2m (11.5), corresponding to a decrease of 37%, which strengthened the result. The decreasing cost base is attributable to the fact that one of the development projects, GA-map IBD Dx, is in a less costly phase, as well as that cost saving has been made. With strong sales growth, an increasing gross margin and decreased cost base, we see good potential for Genetic Analysis to improve results in the upcoming year compared to 2024.
Genetic Analysis and Ferring Pharmaceuticals to Launch Rapid Microbiome-Based PCR Test
At the end of Q4-24, Genetic Analysis and Ferring Pharmaceuticals announced a partnership to complete the development of a rapid microbiome-based PCR test, combining Genetic Analysis’ GA-map platform with Ferring’s Microbiome Health Index biomarker. This test aims to reduce processing time from weeks to hours, lower costs, and enhance standardization in microbiome diagnostics. Set for launch as a Research Use Only (RuO) product in H1-25, Genetic Analysis holds exclusive commercialization rights without royalty or milestone obligations to Ferring. The project is funded by Ferring, Genetic Analysis, and Innovation Norway.
The test will initially target patients suffering from Clostridioides difficile infection (CDI), which is a new disease area to target for the GA-map platform. The launch, expected during H1-25, is expected to drive growth for Genetic Analysis by adding a new product to the portfolio within a new disease area for the Company, along with the aforementioned advantages. The collaboration with Ferring Pharmaceuticals is also part of Genetic Analysis’ strategy to establish strong partnerships in order to reduce the need for independent financing of similar projects.
Strengthened Cash Position and Improved Result Instills Confidence in the Financial Position.
The cash balance at the end of Q4-24 amounted to NOK 13.4m, compared to NOK 11.4m at the end of Q3-24. The strengthened cash position is primarily attributable to a slight increase in liabilities as well as a decrease in receivables and inventory, affecting the cash position positively. Genetic Analysis’ results in Q4-24 instill confidence that profitability is progressing in the right direction, and with this in mind, we consider the financial position to be stable. However, it is important to emphasize that Genetic Analysis remains in an early phase of the Company’s commercialization, which entails uncertainties regarding future revenue generation. As a result, the cash position will continue to be a key factor for investors to monitor going forward.
In summary, Analyst Group believes Genetic Analysis delivered a breakthrough quarter during Q4-24, delivering sales growth of 63% and a positive EBITDA result. We see this as evidence that the updated strategy, with the discontinuation of instrument sales, is leading to improved profitability in the business model. We also see potential for Genetic Analysis to further enhance the Company’s financial performance in 2025.
Analyst Group will follow up with an equity research report on Genetic Analysis.