The dream Rhythm Biosciences (ASX:RHY) investors have held ever since the company listed in 2017 has been realised: ColoSTAT has been approved and commercialised, even if slightly different to what investors may have earlier anticipated.

The ColoSTAT rollout has begun

Rhythm Biosciences completed the first sale of ColoSTAT earlier this month, which represented not only validation of ColoSTAT itself, but also the entire customer pathway – specifically the sample collection, logistics, assay processing, and reporting of the results; proving it all functions effectively. ColoSTAT’s coming to market has been made possible by NATA accreditation last week, which is effectively a kind of TGA approval and is a similar pathway to what Lumos Diagnostics pursued with its FebriDx test. This is in addition to the November 2025, accreditation of RHY’s laboratory. Taken together, customers can be reassured that the lab and
ColoSTAT clinical test meets the highest international standards for analytical quality, laboratory competence, and results traceability.

The rollout will speed up in the coming weeks

Rhythm expects ColoSTAT adoption to speed up from here. 4Cyte will promote the test across its network of clinicians and Rhythm will have sales representatives of its own promoting ColoSTAT. There is a base capacity of processing $4m worth of tests in a year and the company’s TAM in Australia is 500,000 patients per year.

There has been significant interest based on the large pool of clinicians participating in the Access Program the company has been running. And the company believes, given the compelling economic value proposition in a reduction of unnecessary colonoscopies, ColoSTAT could be on the MBS within 2-3 years.

Valuation range of A$0.45-0.69 per share

We continue to value Rhythm Biosciences at $0.45 per share in a base case scenario and $0.69 per share in an optimistic (or bull) case scenario.