Can DNA markers improve cancer testing?

DNA testing is a powerful tool to detect changes in our genetic makeup which could indicate a risk of cancer. Exact Sciences’ testing kit is helping to diagnose colon cancer early.

• Exact Sciences’ stool-based DNA testing kit, Cologuard, is effective in screening for colon cancer.
• Rising cases among young people will drive demand growth for Cologuard.
• The ARK Genomic Revolution ETF is down 2.5% in the past six months.

The UK’s Health Security Agency (UKHSA) has unveiled a bold plan for a genomics transformation, which would revolutionise how outbreaks of infectious diseases in the UK are detected and dealt with.

The plan is part of the UK’s 10-year science strategy, focused on advancing the country’s position in a number of fields, including genomics, vaccine evaluation, surveillance, data science, diagnostics and toxicology, while also turning the country into a science powerhouse.

“We saw the art of the possible during the coronavirus… pandemic with genomic data allowing the rapid identification and characterisation of variants enabling the rapid development and evaluation of diagnostics, vaccines and therapeutics,” said UKHSA chief scientific advisor Isabel Oliver in a statement.

Government-owned Genomics England is partnering with Seqera Labs, a Spanish provider of data orchestration for life sciences that is backed by the Chan Zuckerberg Initiative, Mark Zuckerberg’s philanthropic investment group.

Seqera Labs will help Genomics England to scale its ability and capacity to develop models for disease diagnosis, prognosis and treatment response. Edwin Clark, senior product manager at Genomics England, said in a press release that the partnership “will accelerate our pipeline development”.

The UK is hoping that it can leverage genomics to address some of the healthcare inequalities that exist in cancer diagnosis and improve patient outcomes in the process.

Analysing DNA markers

Genomics is essentially the research of DNA sequences within a particular organism, in this case, a human body. A field that started by simply mapping human genomes has extended into developing novel technologies that can edit those DNA sequences.

On 26 May, Exact Sciences [EXAS] announced that it will present new data on long-term outcomes for patients diagnosed through multi-cancer early detection testing at a health conference in early June. The findings are expected to show that its DNA testing kit Cologuard, which analyses stools for DNA markers, has a positive impact on colon cancer screening.

“New modelling data show superior health outcomes in colorectal cancer screening with Cologuard compared to blood-based tests, including lower mortality and more life-years gained,” the company stated in a release.

Exact Sciences is clearly seen as a long-term winner. Cathie Wood snapped up shares in the company last week, adding 56,987 shares between 22 May and 25 May to the ARK Genomic Revolution ETF [ARKG], according to daily trades data.

Wood also added to other positions in the ETF: Adaptive Biotechnologies [ADPT], buying 437,347 shares in the week commencing 22 May; and UiPath [PATH], buying 725,271 shares in the same period.

Rapid increase in tests using Cologuard

The prevalence of colon cancer among young adults has been rising in recent years. While there’s no definitive answer as to why this is, lifestyle and dietary choices are likely to be a factor, but changes in gut microbiomes are also playing a part, according to scientists.

Awareness of colon cancer is growing and more people are getting tested, especially when they experience symptoms that could be mistaken for other bowel conditions. Exact Sciences has seen demand for its Cologuard product accelerate.

Cologuard was launched in the US back in 2014 following Food and Drug Administration (FDA) approval, with 4,000 people tested in the first three months the product was on the market, and 100,000 within the first year. It took the company three and a half years to meet the million-test milestone. In the first quarter of 2023 alone, 1.2 million people were screened using Cologuard, according to CEO Kevin Conroy on Exact Sciences’ most recent earnings call.

Screening revenue in the three months to the end of March increased 45% year-over-year to $443m, while overall revenue was up 24% to $602m. Approximately 10,000 new healthcare professionals ordered Cologuard in the quarter.

Blood-based DNA tests not yet as effective

In order to catch colon cancer at an early stage and for best treatment and outcomes, it’s recommended that people over the age of 45 years take a DNA test every two or three years.

While stool-based tests remain the king of cancer screening, a number of companies, including Exact Sciences, are developing blood-based tests. But it’ll likely be some time before they receive FDA approval and are brought to market.

In a trial, Guardant Health’s [GH] blood-based DNA test identified 83% of colon cancers, according to data published last December. In comparison, the Cologuard stool-based DNA test finds 92% of colon cancers.

AI to increase testing accuracy

Artificial intelligence (AI) is expected to transform future cancer diagnoses. Swiss healthcare giant Roche [ROG.SW] has partnered with Israeli start-up Medial EarlySign, which has developed ColonFlag, a machine learning-based algorithm used to identify individuals at an elevated risk of colon cancer.

AI is poised to unlock plenty of opportunities in the genomics market. A report published by MarketsandMarkets in May found that the revenue derived from AI’s integration in genomics should be approximately $500m this year, rising at a CAGR of 32.3% to $2bn by 2028.

“AI has the potential to improve patient outcomes, lower costs for industry participants, and revolutionise the pharmaceutical industry,” wrote VanEck associate product manager Dylan Desai in research published last month. “As AI technology continues to evolve, we will likely see even more innovative and transformative applications of this technology in healthcare,” he added.

Funds in focus: ARK Genomic Revolution ETF

The ARK Genomic Revolution ETF holds Exact Sciences as its top holding as of 30 May. The portfolio offers exposure to CRISPR gene-editing technology, targeted therapeutics, molecular diagnostics, stem cells, bioinformatics and agricultural biology. The fund is weighted heavily in favour of North America (95.18%), with the rest allocated to companies in Western Europe. It’s down 5.8% in the past year and down 2.5% in the past six months.

The Franklin Genomic Advancements ETF [HELX], which holds Exact Sciences, is focused primarily on life sciences tools and services (48.39%), biotechnology (33.41%) and pharmaceuticals (5.73%) as of 29 May. The fund is down 12.4% in the past year and down 1.2% in the past six months.

The Global X Genomics & Biotechnology ETF [GNOM] offers broad geographical exposure, with 78.9% of the portfolio allocated to US companies. The Netherlands (5.5%), China (4.1%), Switzerland (3.7%), Germany (3.4%), Italy (3.4%) and Japan (1.0%) account for the rest of the allocation as of 30 April. The fund is flat over the past year and down 8.3% in the past six months.