Climbing the Diagnostics Mount Everest: The BCAL (ASX: BDX) Story

It’s no accident that I’ve gone down a rabbit hole of the ASX-listed diagnostics products.

After the Rhythm lunch, I also had the chance to speak with Jayne Shaw, Chairman of BCAL Diagnostics (ASX: BDX).

Like Rhythm, BCAL is at the very early stages of its commercial journey for a blood-based cancer test in Australia.

This time, for breast cancer.

The first proof-of-concept studies began way back in 2013…

After years of honing the test, multiple studies and an IPO, BCAL brought its Breast Cancer diagnostics product to market in March last year.

Big achievement.

But as I wrote about for Rhythm, getting a test to market is just the starting line for any diagnostics company… now the real work begins.

There are a few signals that I wanted to briefly touch on that have emerged for BCAL…

FIRST, one of the top shareholders (the Snow Family Foundation) has been buying up the stock:

SECOND, the Chairman also bought shares on the market last week:

Now these signals are just that… signals.

Good sign, but the rest of the market needs to believe the story, too.

BCAL Diagnostics (ASX: BDX) has been developing its breast cancer test to support screening and early detection.

Mammograms are the current standard of care…

But it doesn’t always work. 

The sensitivity drops from 90% to 64% for women who have dense breasts.

So, BCAL’s BREASTEST product works alongside a mammogram for high-risk patients as a rule-out test, meaning, in some circumstances, patients won’t need additional testing. 

This is a big cost-saving to the healthcare industry and a better imaging solution for women. 

BCAL also signed a deal with ClearNote (a large private US company) to license and sell two other cancer screening tests in Australia and New Zealand.

The two targets are pancreatic and ovarian cancer.

I like this strategy.

Why?

BCAL doesn’t need to spend years developing these tests… they exist.

This does cap the upside for pancreatic and ovarian cancer just to Australia and New Zealand… however, there is plenty of blue upside baked into the breast cancer test already.

This is about getting to revenues fast.

ALSO, BCAL can leverage all of the health economic studies, patient data, and other important clinical utility studies already conducted by ClearNote to obtain reimbursement.

(Reimbursement is like the holy grail for these diagnostics companies).

So that’s three cancer tests that BCAL will sell in Australia…

Their own breast cancer “rule-out” test for those with dense breasts, and two other tests for pancreatic and ovarian cancer. 

(With a fourth “multi-cancer” test scheduled to launch in May).

Some information on BDX’s profile:

Here is how the stock has traded over the last few years, with a strong overcorrection as traders who play the “approvals catalyst” wash out up until June and then more patient money comes in over the last six months:

Quick notes on the addressable markets for each of these tests…

Pancreatic Cancer 

BCAL will be targeting the 120,000 ‘high-risk’ Australians who have a genetic condition that increases the risk of pancreatic cancer. 

Test price $1,500. TAM = $180 million.

Growing if BCAL expands to broader patient populations. 

Ovarian Cancer

BCAL will take the ~160,000 ‘high-risk’ Australian women who are at risk of ovarian cancer. 

Test price $1,500. TAM = $240 million.

Growing if BCAL expands to broader patient populations.

Breast Cancer

There are 1.2 million mammograms conducted each year in Australia. 

The test costs about ~$200 Australian. 

(I’m not sure if BCAL has publicly stated the cost of the test, but I’ve just reverse-engineered the price based on the income-to-date and the number of tests conducted… so take this number with a grain of salt)

So the TAM in Australia is about $240 million.

In the US, there are 40 million mammograms per year. Meaning the US TAM is much larger at ~$8 billion.

So, across BCAL’s three tests, it’s roughly a $750 million-per-year target market, with a blue-sky $8 billion opportunity in the US.

Now the question is, how does it get there?

On Monday, I revealed the four pillars of any diagnostics business.

Approvals: just get you to the starting line, but they are necessary to bring the product to market.

Logistics: all the unsexy work of collecting samples, ensuring they are properly stored, and managing and maintaining records.

Adoption: Will people use it? Will doctors prescribe it? This requires extensive education and thought leadership from key opinion leaders in the field.

Finally, Reimbursement (by the government or insurance companies). Get paid.

Underpinning it all is clinical evidence, which is built up over time.

So, let’s see how BCAL has progressed against each of these pillars.

In December 2024, BCAL secured NATA accreditation for its lab in North Ryde, New South Wales.

This lab is where it will be processing all three (soon to be four) of its cancer tests for breast, ovarian and pancreatic cancer.

Right now, BCAL is operating in a lab-developed test, which limits its scale but brings the product to market much faster:

BCAL will still be able to develop a sustainable business from the Lab Developed Tests in Australia (provided it can secure reimbursement), but in the US, it will likely need to move to a sell-the-kit model.

Logistics is the least sexy part of operating any business.

When things go wrong, it hurts… when things go right, well, that’s supposed to be business as usual.

There are no pats on the back by the market if the logistics are working.

BUT, it is a very important part of the story.

BCAL has secured agreements with Helius and Sonic Healthcare to collect the blood from patients; these are two highly credible organisations that underpin BCAL’s supply chain.

In the half-yearly report, BCAL’s Chairman noted that the initial rollout of the BREASTEST product encountered logistical challenges, leading to a slower-than-expected rollout.

This logistical challenge is likely at the root of the flat sales growth in BREASTEST since the product was first released in March last year.

This can happen with a company launching a new product.

Regardless, BCAL needs to overcome this challenge.

(No logistical issues with the pancreatic or ovarian cancer tests though)

For a diagnostics company, adoption is where the company lives or dies. 

Right now, BREASTEST is available in 20 clinics, with 90 doctors supporting it.

Pancreatic and ovarian cancer tests have just rolled out in Melbourne and Sydney.

Brisbane next. 

The company is pounding the pavement when it comes to education.

Running multiple, well-attended seminars for doctors and clinicians to train them on the test and the patient benefits behind it.

The website earlydetection.com.au was set up to capture inbound interest, and after a strong media push, it received over 1,000 enquiries.

The Pancreatic and Ovarian cancer tests are still quite expensive… 

~$1,500 individually or ~$1,900 for both.

I worry that at this price point, even those who fall into the high-risk category (either family history or genetic predisposition) will be slow to take up the test.

BUT if BCAL secures reimbursement, sales should take off.

So, ultimately, the biggest driver of adoption will likely be the next pillar…

Reimbursement.

Securing reimbursement is the holy grail.

For BCAL, this is registration in the Medicare Benefits Schedule. 

(in Australia)

If it is able to secure reimbursement in the MBS it should be a significant re-rating event for the company and change it entirely from an early-stage commercial diagnostics company to a sustainable business. 

It is the most valuable thing to BCAL… but is the hardest thing to obtain.

The government is not just going to pay for a test because it shows promise…

The test needs:

These are the critical requirements before reimbursement can be granted… It's not enough that the test works…

In the half-year results presentation, BCAL outlined a multi-step plan to secure reimbursement for its pancreatic and ovarian cancer test within the next 18 months.

(and Jayne spoke in the presentation about rubbing shoulders with key decision makers in parliament who want to see this test made broadly available)

… but there is work to be done.

Here is the strategy and timeline:

So, by April next year (according to BCAL’s timelines), we could know if BCAL has a reimbursable product in the market.

The company has been quiet on the US front while focusing on the Australian launch.

Of its three cancer tests, BREASTEST is its ‘house’ product, and this would be the one to take overseas.

Speaking with Jayne, finding a partner within the US to support its launch would be the preferred strategy.

But I’ve seen this story before.

A distribution partner is only as good as the synergies between the product and their own business.

So finding the right partner will be critical for BCAL.

There are also ongoing US studies.

BCAL has all the necessary patents for the US and a subsidiary set up there as well.

So as soon as a partner is found (and potentially some more data is collected) BCAL will be ready to launch overseas. 

Obviously, the US is a much larger market than Australia, but the diagnostics game is much different - particularly on the third pillar adoption.

There is a much bigger focus on advertising.

… which can be incredibly expensive if not done right (for not much return).

So, BCAL has launched its BREASTEST in Australia as a pilot market to work out all the kinks in market position, education, logistics, and adoption before it moves to the US.

Short Term: BCAL secures reimbursement for pancreatic and ovarian cancer screening tests targeting the hundreds of thousands of Australians in the high-risk categories for these cancers.

Blue Sky: Breastest becomes a standard global test with mammograms, and there is broad reimbursement from major healthcare insurers.

The main risk for the entire business right now is execution risk.

Will doctors and patients adopt the test?

Will BCAL get reimbursement?

These are questions that punters will be betting on over the next 18 months.

What works in BCAL’s favour is that this product wasn’t an overnight launch… it has been in development for over ten years with Jayne at the helm.

She has been talking to the market, doctors, patients, politicians, and key opinion leaders about this test for a long time.

There will be some broader market education, but the company is not starting from scratch.

It’s been unfortunate that the BREASTEST hasn’t launched as fast as the market may have hoped, but it appears that the other cancer assets are gaining more traction.

The US market entry piece will be interesting.

Particularly if they can find a partner with strong synergies.

But what I am looking forward to most is whether they can secure reimbursement within the timeframe they have set for themselves.

The cash runway takes it almost up to a reimbursement decision… which will be make or break for the company

Fortunately for us, there is a clear timeframe and strategy to get there

A big thank you to Jayne Shaw for sharing the BCAL story with me.

See you tomorrow,

The Armchair Analyst.

There is a noticeable lack of material news out today…

Chimeric Therapeutics (ASX: CHM) will hold an EGM in April to vote on the tranche 2 placement and convertible notes (totalling $6.1 million). Also, a vote on a proposed share consolidation. (CHM)

🪑Normally, I wouldn’t highlight an EMG update, but this one caught my eye. I’m a CHM shareholder, and one of the biggest hangups for the company has been liquidity.

Trading between 0.003 and 0.004 means that, with about $150,000 on the bid and $300,000 on the ask, it is extremely difficult for smaller investors to trade the stock.

If I like CHM, I need to buy the stock at 0.004, hoping it goes to 0.005 - but knowing that there is a $300,000 wall standing in my way.

I think this consolidation will do wonders for the company's trading activity.

In a study published in Nature this month, an AI system called DeepRare outperformed experienced specialist physicians at diagnosing rare diseases. (Nature)

🪑We are only scratching the surface of the AI applications in healthcare. 

Tim Boreham at Stockhead published his Biotech Investor Guide for 2026. (LinkedIn)

🪑I went for a beer with Tim a few weeks back. It was great to chat about biotech stocks and hear his story. A lot of effort went into this one, so I wanted to share it.

EBOS (ASX: EBO) reports HY26 revenue growth of 13% to $6.8B and underlying EBITDA of $300M (+3.2%), reaffirming FY26 guidance. (EBO)

Paragon Care (ASX: PGC) reports FY26 H1 revenue growth of 3% to $1.90B, gross margin increasing 6% to $173.9M, but a net loss of $21.3M due to one-off costs and acquisitions. Also, Carmen Riley has been appointed Managing Director. (PGC)

🪑Appears that the market hadn’t fully priced in the cost of the Infinity Group receivership back in December, and now the numbers are starting to become clearer.

Doctor Care Anywhere (ASX: DOC) reports FY25 net profit of £1.2M and underlying EBITDA of £5.3M (13.9% margin) on £38M revenue (+6.5% YoY). Guidance reaffirmed. (DOC)

Acrux Limited (ASX: ACR) reports a 109% increase in revenue to $3.5M and a net profit of $165K for the half-year ended 31 December 2025.

🪑 Decent quarterly result for a company that is capped at just $6 million.

Anagenics (ASX: AN1) reports a maiden 1H26 net profit of $126k, with revenue at $2.64M. (AN1) 

🪑 Another decent quarterly result for a company that is capped at just $6 million.

… why are all these tiny market cap companies turning a profit? 

Hey, big guys. Pay attention!

Rhythm Biosciences (ASX: RHY) secures underwriting of the 20-cent RHYO options at a minimum of $4.5M and up to $6.0M. (RHY)

🪑As I mentioned in my Rhythm Biosciences note, this underwriting for the marginally in-the-money options is a very bullish signal for the stock.

Is the Secondary Market Replacing the IPO in the US? (Second Opinion) 

🪑A good read to get an idea of the non-public market market for biotech companies in the US and how even private companies can get liquidity. 

Astellas and Vir Biotechnology partner on masked prostate cancer bispecific. US$335M upfront, US$1.7B total (Fierce Biotech)

China’s outlicensing wave rolls on with Solstice Oncology licensing an anti-CTLA-4 antibody from Harbour BioMed. US$105M upfront, US$1.2B total. (First World Pharma) 

🪑I’m starting to wonder whether all this China M&A is hurting late-stage Australian biotechs looking for licensing deals. 

There is now this whole big market that has emerged as a competitor for Big Pharma $$.

Let me know what you think…