Rhythm Biosciences (ASX: RHY) is up 85% today on the back of an announcement of receiving a UKCA. This is indeed a necessary step to be able to market in the UK. It's also one of those things that really isn't worth the $60 to $70 million (AUD) that it seems to have added to the RHY market capitalisation on Wednesday. Don't think of UKCA as being like an FDA approval in the US. It's rather more like gaining a barcode. Perhaps that's not wholly and exactly correct but if we have a spectrum of paperwork and approvals a UKCA is much further toward the second end than that first.
The announcement is here and everything in it is entirely true. You must have a UKCA before marketing in the UK. Gaining a UKCA does open that UK market. Just as having a CE Mark opens up the EU market and also, to complete the quartet, you must have a CE Mark before marketing in the EU. But it's the implication here that appears to us to be misunderstood.
If you want to market a medical test, treatment or device in the US then you must have FDA authorisation. To gain this the FDA will demand substantial investment in testing and further, insist that you can prove efficacy and efficiency. Gaining FDA approval is the sort of thing that doubles, triples, the value of the company that gains it. Excellent - but the CE Mark and the UKCA (which is the post-Brexit replacement for the UK) work in an entirely different way.
Rhythm Biosciences share price from ASX
The UKCA process is described here. The CE Mark here. Or the official UKCA guide here. This simply isn't a form of government testing for efficacy or efficiency. It's also not a form of government approval - it doesn't instruct the NHS to buy it, nor place it on any list of things doctors should think about or anything else. It is, in fact, just a piece of government form filling. Fill out the form correctly, pay £500 and gain your UKCA Mark.
Yes, you do have to have one, it's an essential precondition of marketing in the UK. But it really is some form filling and a modest fee to file the paperwork. It's not a testing, endorsement or approval by government in any sense at all. In this it's much more like getting a barcode so that automatic tills can recognise the product. Useful, good to have but really not an approval of a medical test.
Yes, Rhythm Biosciences needs a UKCA to sell in the UK. But it's not a process nor document that's worth $60 million.