A Blood Test Instead of a Colonoscopy? Rhythm Biosciences (ASX:RHY) Takes Its First Commercial Step

Rhythm Biosciences Starts ColoSTAT Pilot, Revenue Still Unclear

Rhythm Biosciences (ASX: RHY) just hit a milestone the market has been waiting for, enrolling its first doctor in the ColoSTAT Access Program, a small pilot program that will test its blood-based bowel cancer screening product in real clinical settings for the first time. The share price has surged more than 400% from its 52-week low of A$0.047 to about A$0.24, giving the company a market value of roughly A$78 million. That is a significant valuation for a business that has not yet generated meaningful revenue from its main product.

The Access Program will include up to 20 doctors, and the first round of tests will be provided free of charge. The goal right now is to prove the product works effectively in real-world conditions, not to generate sales. The key challenge ahead is turning these free trials into paying customers. Whether Rhythm Biosciences can successfully move from testing to commercial revenue remains the big unanswered question.

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Why ColoSTAT Could Fill a Gap That Affects Millions

Here is the problem ColoSTAT is trying to solve. Bowel cancer is the second deadliest cancer in the world, yet fewer than half of eligible Australians return their government-issued stool screening kits. Many find the process unpleasant, and others simply cannot do it. That leaves millions unscreened for a disease far more treatable when caught early.

ColoSTAT takes a different approach. Instead of a stool sample, it uses a simple blood draw measuring five protein biomarkers to flag the likely presence of colorectal cancer. For patients who refuse or cannot complete a stool test, this could be what actually gets them screened. Australia sees more than 800,000 symptomatic colonoscopy referrals each year, and a reliable blood-based triage tool could help doctors decide who genuinely needs that invasive procedure.

What makes this more than just an idea is the progress behind it. NHS England announced in December 2025 that it is evaluating ColoSTAT, a meaningful vote of confidence from one of the world’s largest healthcare systems. Rhythm Biosciences has also locked in a multi-year manufacturing deal with US-based Quansys Biosciences, securing production capacity and fixed pricing for two years.

Separately, the company recently partnered with CancerIQ to integrate its geneType cancer risk test into a US platform serving more than 65 health systems, showing management is building commercial channels beyond ColoSTAT. But as we see it, building infrastructure and getting doctors to adopt and pay for a new test are very different challenges.

The Reality Check- What Investors Need to Watch

The company’s financial results are improving, but it is still in an early stage of growth.
In FY2025, Rhythm Biosciences reported revenue of A$3.3 million, which was up 91% compared to the previous year. This growth mainly came from a full year of sales from its geneType platform.

The company is still making a loss, but the loss has reduced. The net loss narrowed to A$3.8 million, down from A$6.9 million in FY2024. This shows the business is moving in the right direction, even though it is not profitable yet. Rhythm Biosciences recently raised A$3.75 million through a share placement and is expecting an R&D tax rebate. This gives it some short-term financial support.

However, its cash runway is still tight as it spends money expanding and commercialising its product. Only one analyst currently covers the stock. The rating is Hold, with a price target of A$0.23, which is close to the current share price.

After the recent strong rise in the share price, much of the positive news may already be reflected in the stock. If the company does not quickly turn interest into paying customers, it may need to raise more money. That could mean issuing new shares, which would dilute existing shareholders.

The Investor’s Takeaway for Rhythm Biosciences

We believe ColoSTAT is targeting a real and significant unmet medical need, and the interest from the NHS adds genuine credibility to the story. However, at current share prices, investors are paying for a growth narrative that still has several important milestones yet to be delivered.

Speculative investors may find the risk-reward attractive if they are comfortable investing in early-stage diagnostic businesses. More conservative investors may prefer to wait for clear proof of paid adoption before buying in. Key factors to monitor include paid conversions from the Access Program, the outcome of the NHS evaluation process, and the company’s next cash position update. Position sizing is important because it remains a calculated risk rather than a guaranteed outcome.