Rhythm Biosciences’ ColoSTAT has been commercialised and the roll out will ramp up fast!

Rhythm Biosciences‘ colorectal cancer test ColoSTAT is officially on the market and has made its first sale. In our view, this could mark the beginning of a major few years for this company.

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ColoSTAT is commercialised, albeit not as investors may have anticipated

The hope for investors that bought at Rhythm’s IPO and up until late 2023 was that ColoSTAT would receive conventional TGA approval and go on to replace the faecal test used in Australia’s bowel cancer screening program. These plans were put on hold in late 2023, signified by the withdrawal of the company’s TGA submission. This was not because there was doubt about ColoSTAt’s efficacy but more independent production batches were needed than the Company possessed at that time.

Rhythm now has these but made a move many investors may be forgiven for thinking is unconventional. Not in the sense it was never a legal path, but in the sense that not many companies follow this path.

ColoSTAT is being provided not as a product but as a clinical laboratory service offered by an ISO-accredited lab (RHY’s lab has ISO15189:2022 Accreditation). The risks and control systems are being managed by the lab’s quality system, and these quality systems are approved. Rhythm was offering ColoSTAT for use in individuals with symptoms consistent with colorectal cancer, particularly where stool-based testing is unsuitable or not preferred, although doctors had to use their own personal judgement on the test. Nonetheless, this did not stop the company signing a distribution deal with 4Cyte Pathology, one of Australia’s biggest players, and from signing its first customer.

A variation-to-scope assessment was achieved, then the first sale

Earlier in March 2026, Rhythm obtained a variation-to-scope assessment whereby ColoSTAT itself was approved within the company’s accredited laboratory services. To use the analogy of a bakery: the company’s ‘oven’ (the lab) was confirmed as the highest quality the prior December, but now all the bread (Rhythm’s tests) generated from the oven (the lab) was confirmed.

Indeed, the NATA green light was confirmation that ColoSTAT meets the highest internationally recognised standards for analytical quality, laboratory competence and result traceability in medical testing. This may not have been the kind of approval investors may have been expecting, but NATA approval is the most rigorous form of independent validation available for a clinical diagnostic service in Australia. Not just a check, but a confirmation that the science and technical competence is more than sufficient to have real confidence.

In the very same week the company announced the approval, the first sale occurred. The sample was collected by 4Cyte pathology, transported to RHY’s clinical laboratory, processed using assay and a result was reported to the ordering clinician. This was more than a symbolic milestone; it was a confirmation that the full pathway was good. The sample collection, logistics, assay processing and result reporting was all functioning effectively.

ColoSTAT distribution will ramp up quickly

The company believes it can scale quickly, not just because the process has been confirmed but also because of the interest it has received. The company’s key to expansion will be its Access Program. 7 participants signed up for it and the company plans to reach 20 before the end of March.

5 sites in 3 weeks have been officially onboarded, with 30 physicians being engaged with only one of which (a surgeon who was a referral site for cancer patients) declined to participate. Volumes will grow over time as physicians continue to engage with ColoSTAT. 4Cyte will promote the test across its network of clinicians and will support the volume that we generate directly. Rhythm expects to have approximately 20 reps selling ColoSTAT across Australia’s East Coast in a few weeks.

Rhythm has a base capacity without doing anything further (i.e. leaving its current facilities as they are now) of processing $4m of tests in a year (assuming a 200-day work year). The company has a TAM for Australia in the region of 500,000 patients per year and scale this easily. Investors may be wondering if ColoSTAT can get formal de Novo TGA approval and/or an MBS listing. First, we would note that Rhythm may find it has sufficient business just in its current scope.

Nonetheless, the company has begun the process to list on the MBS because it would cover non-laboratory users or environments not controlled by ISO 15189 and this would unlock the full market potential. The company believes it has a compelling enough value proposition that it may be on the MBS within 2-3 years, well ahead of the average time to be adopted by the MBS.

Overall, Rhythm believes there is a market size of nearly 300 million based on the annual eligible screening population and the proportion of the population that goes unscreened. This would amount to 22 million annual tests.

More milestones to come

Rhythm also has ambitions to expand overseas, starting in the UK where it is collaborating with the NHS Southern Hub Research Team which will evaluate ColoSTAT for suitability for general use over 2026. The company will transfer relevant equipment and reagents to the laboratory for an independent evaluation of ColoSTAT in a laboratory with extensive experience in the assessment of bowel cancer screening clinical tests. In the first instance, analytical performance will be independently assessed followed by a further clinical evaluation in patients recruited for this purpose.

And of course, we have neglected up to this point to mention Genetype. GeneType provides predictive risk scores that help healthcare practitioners assess susceptibility to cancer and other diseases — a complementary capability to Rhythm Biosciences’ blood-based diagnostics. Genetype could ultimately be a greater revenue maker than ColoSTAT, and in fact, the company derived revenues from GeneType first. 2025 saw these revenues, a legacy of the work Genetic Technologies did in years gone by, as well as several strategic agreements to facilitate the rollout of GeneType across various platforms including through pathology services and through cancer education providers.

For the moment, investors will be more excited about ColoSTAT because we will see faster revenue growth there thanks to the expanded NATA scope. In the longer-run, GeneType could derive more revenue given its higher market potential, by virtue of being applicable for a longer list of conditions. As with ColoSTAT, the key will be generating those revenues.

Conclusion

It is an exciting time to be a Rhythm shareholder with the company’s ambition to commercialise ColoSTAT realised. Investors should expect significant newsflow to come in the months ahead and the company to re-rate if the company meets its promises on a swift execution of its commercialisation plans. Pitt Street Research has valued the company at $0.45-0.69 per share, implying 114% and 229% upside, respectively.

Rhythm Biosciences is a research client of Pitt Street Research. Pitt Street directors own shares.