Interesting Investment Verticals Within Oncology to Keep An Eye On

Oncology is a very broad sector of healthcare with many subsectors. Broadly speaking, therapeutics dominate investors’ mindshare when thinking about oncology. However, analysts from Bridge Point Capital believe there are a few specific areas within oncology diagnostics which are worthy of consideration as high growth areas in the near to medium term:

  • Liquid biopsy: blood screens for cancer biomarkers

  • Companion diagnostics: testing for certain biomarkers which will help determine whether certain therapeutics will be effective for each patient

  • Lateral flow assays: point-of-care test for sequence-specific molecules (can be protein or nucleic acid)

It seems a bit obvious to point out that cancer is a major and growing cause of deaths worldwide. Below we’ve enclosed the latest IHME data on worldwide cancer deaths by type (https://ourworldindata.org/cancer).

One of the more interesting theories in cancer epidemiology is the concept of the “cancer transition”: “developing” countries face different cancer burdens than “developed” countries. There's a difference primarily driven by a decline in infectious disease-related cancers as countries “develop” (https://www.medrxiv.org/content/10.1101/2020.11.25.20238832v1.full). From an investment perspective, this is highly relevant to China, as it is a large market that is currently in this transition state (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7219092/#:~:text=Lung%20cancer%20had%20the%20greatest%20contribution%20(24.3%25)%20to%20the,of%20cancer%20DALYs%20in%20China.), with a high incidence of lung and upper digestive tract cancers, but with growing incidence of colorectal, prostate, and breast cancers.


The aforementioned high growth areas are interesting for the following reasons:


Liquid Biopsy

  • Liquid biopsies hold very high potential value, as early detection of cancer dramatically improves the effectiveness of treatment and likelihood of survival

  • Currently, liquid biopsy is viewed by US doctors as a rather non-specific test. Doctors tend to shy away from them as a result—it is more likely to get a disproportionate amount of false positives, and the amount of psychological burden it places on a patient to be told they may have cancer is not worth the high probability of the tests being inaccurate in their current state

  • In addition, if we were able to detect cancer biomarkers in the blood, it would be difficult to trace them back to their tissue of origin

  • Per oncology research and our understanding of how cancer biomarkers differ from how our normal cell signals expand, liquid biopsy test specificity will improve and these blood screens will become increasingly relevant

Companion Diagnotics

  • Companion diagnostics may be a way to participate in the wave of biomarker-specific therapeutics that are dominating the oncology therapeutics space

  • The vast majority of oncology therapeutics under research currently are focused on a particular pathway for a particular cancer, and clinical trials and FDA approvals are also focused as such. Drug regimens such as this are very specific, and if a patient’s cancer does not have deregulation in the specific pathway targeted by the drug, then the drug is unlikely to be effective for them

  • As the oncology therapeutics market accelerates, its rate of approvals continues to focus on pathway-specific drugs, and it follows that diagnostics that confirm whether a patient can be effectively treated with said drugs will be highly necessary

Lateral Flow Assay

  • The most widely used lateral flow assay is the pregnancy test. Lateral flow assays are popular and highly useful for conditions which can be detected in this format in a sensitive and specific way, as they are inexpensive, require a small amount of sample, and typically provide very quick and accurate results

  • Lateral flow assays are further developed for oncology than most of us probably realize. There are already nearly two dozen specific and sensitive lateral flow assays on the market for a variety of cancers, including prostate, colorectal, bladder, oral, cervical, ovarian, liver, and more. It’s interesting to note that many of these cancers are those more common in the “post-transition stage” “developed” countries. As such, these assays may have increasing importance as China and other large Asian markets continue through their “cancer transition”