The Rhythm Biosciences Ltd (ASX: RHY) share price has continued its positive run on Tuesday.
At one stage, the medical device company’s shares were up 15% to a record high of $1.30.
This is almost 1,000% higher than this time last year, making it a “ten-bagger” for investors.
Why is the Rhythm Biosciences share price on fire?
Investors have been buying the company’s shares since the release of two positive announcements in December.
The first announcement revealed that Rhythm Bioscience has appointed France-based Biotem as the global manufacturer of its ColoSTAT test-kit.
ColoSTAT is Rhythm’s lead product and is intended to be a simple, affordable, minimally invasive, and effective blood test for the early detection of bowel cancer. The company expects the product to be comparable to, if not better than, the current standard of care, the faecal immunochemical test (FIT), but at a lower cost.
Management also notes that ColoSTAT provides an alternative for those who choose not to, or are unable to, be assessed using standard screening programs.
According to the aforementioned announcement, Biotem was chosen following a robust due diligence process to select a manufacturer for the product that could execute on its ambition to address the global unmet need for the early detection of colorectal cancer.
It feels Biotem has the capability to deliver the optimisation and process validation of the manufacturing procedure due to its 40+ years of immunoassay development and manufacturing experience.
The second announcement that got investors excited revealed that it has been granted a patent for its key ColoSTAT biomarkers in the United States.
This is particularly positive given that the United States represents one of the largest diagnostic markets in the world. The addition of a US patent sees Rhythm expand its global footprint and ultimately, access to a global addressable screening market of close to 800 million people.
Rhythm’s CEO, Mr Glenn Gilbert, commented: “The granting of this US patent further strengthens Rhythm’s global position as an emerging leader in the diagnosis of cancer, initially in the area of colorectal cancer.”
“The significance of this patent cannot be overstated, as it expands our access to a growing global market, and importantly, with ColoSTAT being a simple, low-cost option, means that we are in a position to access the mass market opportunity in each key country. Having patent coverage in all the major global markets is a significant value-add for the Company,” he added.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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