Interview with Genetic Analysis VD Ronny Hermansen

For those who have not heard of Genetic Analysis before, can you tell us a bit more about your business, what you do, and which markets you address?

Genetic Analysis is a molecular diagnostic company that focuses primarily on the microbiome, with a particular emphasis on the gut microbiome and gastrointestinal diseases. Over the years, Genetic Analysis has conducted extensive research in the microbiome field, leading to the development of the GA-map platform, which serves as a diagnostic tool for laboratories to analyze the microbiome. Currently, GA has two microbiome diagnostic products on the market that can be run on this platform, covered by as of now six patent families.

The GA-map platform and its GA-map Dysbiosis Test is well-documented as it has been used in around 75 clinical trials and presented in over 53 peer-reviewed publications. The gut microbiome is increasingly more recognized as a crucial component of human health, playing a vital role in the immune system. Imbalances in the gut microbiome have been linked to several severe diseases such as inflammatory bowel disease (IBD), diabetes, Parkinson’s disease, and irritable bowel syndrome (IBS), which affects 10-15% of the Western population.

Our diagnostic platform is designed to detect imbalances in the gut microbial ecosystem, thus enabling laboratories to categorize and understand where the imbalances lie. The platform is already deployed globally, primarily in routine laboratories, where specialists such as gastroenterologists can request the GA-map tests.

Genetic Analysis generates revenue through the sale of core reagent kits and advanced software required to run these tests. The diagnostics provided by us are vital in facilitating personalized treatment for patients with conditions like IBS and IBD, where tailored treatments are increasingly important.

We have been  involved in large-scale population studies across North America, Europe, and Asia to better understand what constitutes a healthy gut microbiome. This research is thereby used in our advanced algorithms and products.

In summary, Genetic Analysis technology supports the growing need for improved diagnostics to support personalized treatment, helping physicians decide the most effective course of action for their patients.

Can you tell us a bit more about your product GA-map, the benefits of it and how it compares to competitors within the market?

The gut microbiome analysis market is expanding rapidly, but it remains largely dominated by research-based platforms. While these systems are highly effective for research purposes, they often fall short when it comes to diagnostics, which require greater simplicity, speed, and precision. In diagnostics, consistency is key—whether a sample is tested in a lab in the US or in Germany, the results should be identical. This is where Genetic Analysis differentiates itself from competitors.

GA-map is specifically designed for diagnostic use. Unlike research-focused systems, GA-map uses a targeted approach, with pre-selected probes that focus on approximately 300 core commensal bacteria that are critical to gut health. This predefined focus mirrors how diagnostic tests typically operate, where the specific elements to be tested are clearly defined from the outset. Our advanced algorithms then compare the patient’s microbial composition to that of a healthy gut microbiome, highlighting any imbalances. This enables specialists to quickly determine whether a patient’s gut microbiome is imbalanced and pinpoint which functions are missing.

For example, among patients with IBS, around 70% have some form of microbial imbalance, while about 30% show no gut-related dysfunctions. For those with imbalances, it’s critical to subgroup them to identify which treatment would be most effective. This is where GA-map excels, as it provides the precise diagnostics necessary to support personalized treatment decisions. While research-based tools are valuable in a different setting, GA-map is purpose-built for diagnostic accuracy and efficiency.

Can you elaborate more on how the GA-map platform generates recurring revenue and if/how it is scalable?

The GA-map platform is critical for generating recurring revenue by being placed in laboratories around the world. The platform currently runs on Luminex instruments, which are already available in over 20,000 labs globally. This means that many customers do not need to invest in new equipment to use GA-map, which makes the platform highly accessible. Furthermore, this widespread presence enhances Genetic Analysis ability to collaborate on the development of new diagnostic tools and products within the microbiome field with other companies. This global reach also facilitates the launch of our own new products, as the existing customer base is already familiar with the platform, making the introduction of new tests faster and more efficient.

Genetic Analysis primary revenue comes from the sale of reagent kits as of now. Laboratories purchase these kits to run tests on patient samples, which can be analyzed in batches of up to 96 tests per plate, making them very efficient for large scale operations. These reagent kits are essential for running the GA-map tests, and as more labs adopt the platform, the demand for these kits grows, increasing revenue in a scalable manner.

Additionally, Genetic Analysis is starting to explore a subscription model for its cloud-based software. The software processes the raw data from the Luminex instruments and delivers patient-specific microbiome reports almost instantly. While the core software is included when labs purchase the reagent kits, we see a potential in offering premium features through a subscription model, as some labs must customize functionalities.

In H1-24, you have reduced operating costs by about 20%, can you tell us more about this and elaborate on how capital will be allocated in the future?

The 20% reduction in operating costs during H1-24 is the result of a deliberate cost-reduction strategy, as well as the conclusion of certain R&D projects, as planned. Moving forward, we intend to maintain a lean operation, but there will be a strategic focus on increasing investment in the commercial side of the business. This is crucial for growth, especially given the phase the company is in and the strong global demand for its products from laboratory customers.

On the R&D side, Genetic Analysis is exploring opportunities for co-funded projects with partners in diagnostics and pharma, reducing the need to allocate all capital from internal sources. This approach allows us to continue developing innovative solutions while sharing the financial burden with strategic partners. However, the primary focus in the near future will be on strengthening the commercial side to ensure broader market reach and better sales performance, which is often a challenge for highly innovative research-driven companies.

In Q2-24 you announced that your partner ProKarimi launched a Direct-to-Consumer (DTC) test platform for gut microbiome using your product GA-map. Can you tell us more about this partnership and commercialization? What is the market potential for DTC gut microbiome tests?

The direct-to-consumer (DTC) testing market for health, including gut microbiome tests, is rapidly growing worldwide as more people become interested in monitoring their health from home. Many individuals, even those who are generally healthy, are increasingly taking proactive measures to check their well-being. This trend is evident across various global markets, where consumers are willing to pay for at-home testing services that provide convenience and actionable insights.

A challenge in the current DTC market is the long turnaround time for results, which can take up to five weeks. Additionally, many existing players use research-based systems that are not optimized for quicker diagnostic results. Genetic Analysis recognized these pain points and decided to improve the speed of delivering test results without compromising the high quality of its GA-map system.

When Comono, a company led by experienced software developers in the healthcare sector, approached us, the idea was to create ProKarimi by merge GA-map’s excellence in gut microbiome analysis with Comono’s AI-driven software to provide more actionable, user-friendly results to consumers in a shorter timeframe. This collaboration is particularly interesting for Genetic Analysis as it marks our entry into the consumer testing space, an area where we have not previously focused on. The partnership is currently in its early stages, with the product launched in Norway, but the goal is to expand throughout Scandinavia, the Nordics, and eventually Europe.

While we remain focused on supplying our technology and testing, ProKarimi handles the consumer-facing aspect of the collaboration. This is a significant market opportunity for us, as more laboratories and healthcare providers are inquiring about solutions for the consumer market. The partnership allows Genetic Analysis to offer a solution to these inquiries through ProKarimi’s platform. Although the price point in the consumer market may be lower than in the professional sector, the scale of the market makes it an attractive area for growth.

As for actions consumers can take upon discovering an imbalance in their gut microbiome through GA-map, Genetic Analysis currently does not offer additional products like probiotics or dietary solutions. However, ProKarimi is exploring these options. The broader market trend shows that major consumer health companies are moving towards providing targeted probiotics and prebiotics based on individual test results, with potential dietary recommendations for patients with conditions like IBS. This collaboration sets the stage for possible future offerings in this space.

On June 13, your patent application (EP3526340) was granted in the EU. Since 2021, you have also held the same patent in the US. Can you tell us more about what the patents include and what it means for Genetic Analysis to hold patents in these two markets?

The patent granted in the EU and previously in the US focuses on a companion diagnostics method for treating IBS using dietary interventions or physical microbiota transplants. This is a significant step for Genetic Analysis as it aligns with the company’s goal of providing better diagnostics to personalize treatment for IBS patients.

The invention covered provides a diagnostic method using gut microbiome profiling to determine the likelihood that a patient with IBS will respond to treatments such as the well-known low-FODMAP diet or FMT, where healthy donor microbiota are transplanted into the patient. This is crucial in enabling more effective and tailored treatments for patients, which is becoming increasingly important in modern healthcare. Our patents also confirm that Genetic Analysis is a serious player in the forefront of the microbiome testing field.

Holding patents in both the US and EU, the two largest markets for these types of diagnostics, strengthens our position as an innovative leader in the field of microbiome diagnostics. These patents not only protect the company’s intellectual property but also demonstrate that Genetic Analysis is at the forefront of personalized medicine and diagnostics. Unlike companies that merely sell diagnostic tests, we are recognized for our cutting-edge, research-driven innovations.

Additionally, this shift towards treatment-focused patents, as opposed to purely technology-focused patents like in the past, shows the strategic evolution in developing tools that predict treatment outcomes, a key trend in personalized healthcare.

In 3 years, where do you see Genetic Analysis?

In three years, I foresee the microbiome market having undergone significant growth, as it is widely considered the next big advancement in healthcare. The microbiome field is expanding rapidly, and within that time, I expect to see many pharmaceutical companies launching therapeutic products designed to alter the microbiome, known as microbiome-altering drugs. Currently, two companies in the US have already received FDA clearance for their first products, but many more are expected to follow.

With the introduction of these new treatments, there will be an increasing demand for diagnostics—not only to identify which patients should receive the treatment but also to monitor their progress over time, determining whether additional doses are needed. This will significantly boost the need for microbiome diagnostics, and as Genetic Analysis is already at the forefront of this field, we are well-positioned to capture a substantial portion of this growing market.

Additionally, I expect we will have launched new products, further driving revenue growth. We aim to expand our platforms into more laboratories globally and, by that time, we anticipate being in a position where we are showing positive cash flow from our business operations.

Can you name three reasons as to why Genetic Analysis is a good investment today?

• High-Growth Market: Genetic Analysis operates in the rapidly growing microbiome space, which is widely recognized as one of the next major areas of advancement in healthcare. As the field of microbiome-based treatments continues to expand, with more pharma companies developing therapies, the demand for microbiome diagnostics is set to increase significantly. This positions us in a booming industry where treatment and diagnostics go hand-in-hand.
• Proprietary Technology: Genetic Analysis is uniquely positioned as a leader in microbiome diagnostics, thanks to its extensive experience and patented technologies. The company has developed a vast database and advanced diagnostic tools that keeps us at the forefront of microbiome research and clinical applications. These assets give Genetic Analysis a competitive edge and enable us to stay ahead in future developments in the microbiome market.
• Established Product Line with Proven Demand: Genetic Analysis already has products on the market that are being used globally and are appreciated by our customers. These products are helping thousands of patients worldwide, which not only showcases the practical application of the service we provide but also builds a strong foundation for future revenue growth as more products are launched and the customer base expands.