Genescopy On Transforming Gastrointestinal Health: RNA-Based Diagnostics, CRC Screening Opportunity and Platform Potential Ahead

Speaker 1:
Welcome to TD Cowen Insights, a space that brings leading thinkers together to share insights and ideas shaping the world around us. Join us as we converse with the top minds who are influencing our global sectors.
Dan Brennan:
Hello everyone. This is Dan Brennan, TD Cowan's Life Science Tools and Diagnostics Analyst.
So we just finished up our 5th annual ToolsDx Revolution Conference. It's a terrific panels-oriented event that looks to zoom out and discuss and debate some of the most exciting longer-term trends and themes facing the sector with a host of leading public and private industry executives and participants engaging both on the stage and networking that takes place over the three-day affair.
I'm thrilled to have with me today Andrew Barnell, who's the co-founder and CEO of Geneoscopy. They're a leading private diagnostics company who is targeting colon cancer screening with their product ColoSense, an RNA-based stool test that is both FDA approved and covered by Medicare.
So Andrew, it's great to have you here, and welcome.
Andrew Barnell:
Thanks for having me.
Dan Brennan:
Awesome. So Andrew, maybe let's kind of start at the beginning. What was the original problem you were trying to solve when you co-founded Geneoscopy? And what convinced you that stool RNA could become the foundation for an entirely new approach to disease detection?
Andrew Barnell:
Yeah, absolutely. So I'll go back to maybe the story of why we started the business. And it stemmed from an experience that our chief medical officer had while she was doing her medical training. She met a woman who had been diagnosed with stage 4 colorectal cancer, and that had happened because she had been too busy and hadn't wanted to get a colonoscopy. Simultaneously, she had been doing some research in a microbiome lab and had been part of developing a methodology to isolate human RNA from stool samples. And their research and the literature had convinced her that being able to isolate human RNA from stool was the perfect platform to develop really accurate, convenient at-home tests for GI health.
So her idea was to marry those two together, and not only to create an incredibly accurate at-home colorectal cancer screening test, but use that as a springboard into really changing the way we think about gastrointestinal health and impacting a number of other conditions as well, such as inflammatory bowel disease.
Dan Brennan:
That's awesome. As you evolved with the company and was formed, was there a specific moment when you thought, wow, this could actually become a commercial company, not just an interesting scientific idea?
Andrew Barnell:
Yeah, absolutely. In some ways, up until we delivered our first commercial result, which was pretty recently... There's a number of milestones along the way, a number of big ones from reading out the pivotal study, to getting FDA approval, to getting into guidelines and starting to see payers cover the test. But one of the things we've learned is that there's always another hurdle. There's always another milestone to overcome as we work to serve patients, but we're just incredibly excited with where we are today and the opportunity we have to impact colorectal cancer screening.
Dan Brennan:
For investors who may be familiar with blood-based diagnostics or DNA testing, can you explain what Geneoscopy is measuring in stool RNA, why that biology is unique, maybe what advantages it provides broadly in CRC screening?
Andrew Barnell:
Yeah, absolutely. So when we think about the way we do our process, everyone is constantly shedding enterocytes and lymphocytes from the lining of the colon into the lumen, and those cells and signals are passed from the body in a stool sample. So when we think about a GI condition, adenocarcinoma, or inflammation from an autoimmune condition, those cells are coming straight from that condition. So whether there's been precancerous change or whether you're seeing lymphocytes associated with the body's response to that autoimmune condition, we're capturing those cells and signals in a stool sample.
So I think that's incredibly powerful for two reasons. One, you're going straight to the source. In many instances, or in the vast majority of instances, these are cells and signals you aren't going to find elsewhere in the body. So you're uniquely tapping into them through a stool sample. And then, second, by looking at RNA, RNA can be challenging to isolate and stabilize, and interrogate, but that's exactly what our technology does. And once you've done that, you have something that's giving you a real-time quantitative phenotypic look at what's going on in the body.
So you combine those two things together, and you have this tremendous opportunity to develop accurate diagnostic tests. And RNA uniquely positions us to go outside of just oncology. We can start to tackle some of these other highly burdensome conditions of the gut that are, as I mentioned, autoimmune or inflammatory-related, and we're very excited about that as well.
Dan Brennan:
Interesting. That's actually a great segue to the next topic I wanted to address, which is I think many investors are trying to determine whether Geneoscopy should be viewed as a CRC company or as a broader RNA diagnostics platform. And you've already alluded to a little of this so far, but maybe how do you think about that distinction, and what could the company look like beyond CRC over the next decade?
Andrew Barnell:
Yeah, absolutely. I would encourage folks to very much think about us as an RNA diagnostics platform for gastrointestinal health. And I'll speak a little bit to our research and development program in inflammatory bowel disease.
So inflammatory bowel disease consists of Crohn's and ulcerative colitis, a highly burdensome chronic condition that affects several million Americans. These are patients that may undergo multiple colonoscopies a year or are on therapeutics that fail intermittently. And right now we have no good diagnostic tests to help monitor these patients, get the right therapy for these patients.
So we've done a tremendous amount of work to develop our second test, which does both therapeutic selection and monitoring for these patients. That test is well down the development pathway, and we expect to bring it to market here over the next couple of years. So, I think in many ways we've already proved out the platform. And in the near future, we look forward to bringing the second iteration of our pipeline to patients.
Dan Brennan:
Excellent. So circling back to your first target market, CRC screening. When you meet with physicians, payers, even investors, what do you believe is the most important thing they should understand about Geneoscopy that really differentiates the company versus other screening approaches?
Andrew Barnell:
Yeah, absolutely. I think there's three things that we do really well. I think we have a tremendously sensitive test with robust clinical utility and clinical validity data. Second, we have a test that is very easy for the patient to do. And third, we have a test that's broadly available. As you're aware, we recently announced the launch of our commercial collaboration with Labcorp, making the test available nationwide through that network.
And so combining accuracy with ease of use and broad availability is something that we're seeing is differentiating the test. It's leading to a lot of excitement and something that we look forward to continuing to build on.
Dan Brennan:
Interesting. So also kind of a segue into the next question, which in terms of building a durable business, when you think about what ultimately becomes your biggest moat, I mean, you touched upon a bunch of the factors in the prior answer, but between the underlying science, the clinical evidence, maybe the data asset, I'm interested to see how important that'll be, the platform itself, or just something else entirely. Could you zero in if you had to pick your favorite child? What do you think ultimately is your biggest competitive benefit?
Andrew Barnell:
Yeah, this is another area where I think you have to do, especially in a complex, highly regulated space like healthcare, you really need to do everything well. It certainly starts with the technology, which we talked a little bit about. We have a broad patent portfolio around the ability to isolate and interrogate human RNA in stool samples. We think that gives us a scientific competitive moat, but I think it's often underestimated what it takes to take good technology or interesting science to market.
I think we've built a world-class team on the product development and R&D side, the regulatory and quality know-how to take an idea from just that, through the bench research, through the product development, through the FDA. We've now done that for colorectal cancer screening. And what we've seen is that capability that we've built is allowing us to navigate that pathway much more quickly for our second and third product.
So I really think it's everything we've done in aggregate. Starts with the technology, includes the team, as well as all the know-how and capabilities we've built to bring our first test to market.
Dan Brennan:
Excellent. So ColoSense is entering a large, very under-penetrated market, millions of eligible screening patients. I think most of us quote 30 to 40 million patients are not compliant with getting their CRC screening. Where do you see the biggest commercial opportunity over the next several years? And what gives you confidence that Geneoscopy can capture a meaningful share?
Andrew Barnell:
Yeah, absolutely. The biggest opportunity is that we continue to have over 40 million people that are unscreened. I'm a big believer that the screening population with the data we've seen and the rising incidents in younger individuals, that the screening population is only going to increase in size over time. And so the biggest opportunity is to get more of those folks screened. That's a big focus for us. That's how we can impact population health. And I think our combination of broad access, easy to use, high sensitivity is going to have a meaningful impact.
And the test continues to evolve. Some of the ease of use capabilities that we have today are actually part of supplements and changes we made to the test after the original FDA approval, and we took those supplements through the FDA. So we have something today that we think is resonating and will continue to add capabilities over time.
Dan Brennan:
So if we go out 5 years, 10 years in the future, and we're looking back, what do you think will matter the most in determining winners in the CRC screening space? You've touched upon some of these, but is clinical performance the number one compliance? Obviously physician adopted is going to be critical. Coverage is important. Then you've got the size of the commercial team and the partnership. So there's a lot of things here, but when we look out 5, 10 years, looking back, what do you think will truly be the most important factors, or how would you tier those?
Andrew Barnell:
Yeah, absolutely. I kind of think of it in two categories. There's really big barriers to entry to get into the market and even have a chance to be one of those options that physicians prescribe. And then from there, it's how do you drive adoption?
So looking at Geneoscopy today, I'm thrilled that I think we've navigated so many of those barriers to entry. We are FDA-approved as a first-line test. We're now endorsed as a first-line or preferred test in both NCCN and ACS. We now have Medicare coverage, and we're seeing rapidly expanding commercial and Medicaid coverage. So all those things that can be barriers to a physician ordering or a patient wanting to use the test, I think we've really checked a lot of those boxes.
And from there; I think it really comes down to two things. Are you accurate, and will a patient do the test? And I think with the product we've put on the market, all of the hard work that's gone into the development and the thoughtfulness around those two things, we think we have something that's very powerful. It is going to be the test of choice for many physicians, health systems, and patients.
Dan Brennan:
So also, zooming out like a retrospective question. So if we're sitting here 3 years from now, let's say, and whatever external metrics you provide ultimately about where you think Geneoscopy should be able to perform in terms of tests and revenues, let's say you're well ahead of those 3 years from now, what do you think would've driven that? And what milestones or achievements would tell you that the company's outperforming your own vision today?
Andrew Barnell:
Yeah, absolutely. I think for us; it is down to execution at this point. I'll maybe talk a little bit about the access piece. We have a commercial collaboration with Labcorp that we're really excited about. The test is now in the hands of hundreds of reps. It's available broadly through EMR integrations. We have robust capabilities from a revenue cycle management perspective.
So as we think about 2026, 2027, 2028, it's really around execution, getting the message out there, educating folks on the capabilities of ColoSense, the wraparound programs we have, like patient navigation and how it can be a comprehensive solution for colorectal cancer screening. So that's what we're focused on: execution. And I think if we outperform expectations over the next couple of years, it will really come down to just that: strong execution.
Dan Brennan:
So AI certainly has become one of the most discussed topics across healthcare and diagnostics in the world. We touched upon this at our conference a few weeks ago, but I'd be interested to get your take where you believe AI will create the greatest value in diagnostics say over the next 5 or 10 years, and where do you think expectations on the flip side might be running ahead of reality?
Andrew Barnell:
Yeah, absolutely. I think one of the exciting things is we're testing it everywhere. We're seeing where it can play a role. I think where it's having the biggest impact right now are in processes where they're typically manual and repeatable processes. Things that are often done by a human: phone calls, text messages, emails, reviews of things, those are things that you can effectively train AI to do quickly and efficiently, oftentimes with some level of human intervention or oversight. So we're seeing a lot of impact there.
I think one of the things is we continue to do R&D and look at clinical trials, especially in a space like healthcare where you have FDA submissions, you have potentially long review times for data. One of the long poles in the tent with clinical studies is often enrolling patients. There's no silver bullet that turns a 10,000 patient study into something you can execute overnight, but I think we're certainly seeing impacts there as well.
So a lot of excitement, a lot of real progress today, but it doesn't replace a lot of the things I think we have to do that does take a long time in taking a healthcare innovation from an idea to bring it to a patient.
Dan Brennan:
So, maybe moving off the company for a moment. Andrew, it'd be great to hear from you maybe about a book, a business leader, or just really any individual that has influenced you about how to build companies.
Andrew Barnell:
Yeah, absolutely. When I think about one of the things I really wanted to focus on when I started this company was the culture, the people, how we wanted to operate, what sort of cultural norms we wanted to have. Combination of book and business leaders, someone that's really influenced me on those topics is Adam Grant. He's an author and a professor at Wharton, an organizational psychologist. A lot of my philosophies and beliefs around how you motivate people, how you build resilience, how you maximize creativity and potential, a lot of my ideas and thoughts and philosophies do come from his work. So that would be someone that I would mention.
Dan Brennan:
That's awesome. I'll have to look him up. I have not come across Adam Grant, but that'll be great.
So Andrew, I've asked you to look ahead and then do some retrospective, but maybe one more. Let's really zoom out. 10, 15 years from now, what do you hope people say about the impact that Geneoscopy had?
Andrew Barnell:
Yeah, and this is one where I go back to our mission. Our mission is to transform gastrointestinal health for patients and providers. We have a strong belief that gastrointestinal health is a relatively underserved area from a diagnostics perspective, but one that is highly burdensome, whether it's colorectal cancer screening, whether it's Crohn's ulcerative colitis, as I've already mentioned, celiac disease, irritable bowel syndrome, hereditary CRC. There is so much impact to patients' cost, mortality, interventions with the healthcare system. And today we think diagnostics are not playing the role that they can to help alleviate much of that.
So we really do think our technology can be a game changer for patients in that area. And in looking back, I hope that that's what folks realized Geneoscopy was able to do: transform the way we treat, monitor, and manage GI diseases.
Dan Brennan:
Well, that's awesome, Andrew. Listen, I think that's a wrap. I really enjoyed the conversation. Would love to have the opportunity to do it again in the future, maybe as you're putting points on the board with Geneoscopy. So, thank you for doing this.
Andrew Barnell:
That would be great. Thanks for having me, and would love to do this again in the future.
Speaker 1:
Thanks for joining us. Stay tuned for the next episode of TD Cowen Insights.