Contract analysis

From: Miriam Calloway <mcalloway@calderwoodharkness.com> To: Theresa Nakamura <tnakamura@genomedx.com> Cc: Kevin Driscoll <kdriscoll@genomedx.com> Date: Mon, 01 Apr 2024 09:47:00 -0000 Subject: Preliminary Assessment — CLARITY-LUNG Interim Results and Impact on OncoPrecise GXP-47 Coverage Strategy

Thank you for promptly sharing the CLARITY-LUNG interim analysis results on Friday. I understand the urgency, and I wanted to provide Calderwood & Harkness's initial assessment of the implications of the interim data for the OncoPrecise GXP-47 Medicare coverage and coding strategy before the week gets away from us. I want to emphasize that what follows is our preliminary reaction based on the materials received; we w

**A. Summary of Interim Results and Core Concern**

We have reviewed the interim analysis report from the CLARITY-LUNG trial (NCT05891247). As you know, the interim analysis was performed at 50% enrollment (n=600) against the trial's pre-specified primary endpoint performance benchmarks. The key findings are as follows:

- Positive predictive value (PPV): **0.68**, against a pre-specified target threshold of **≥ 0.75** - Negative predictive value (NPV): **0.71**, against a pre-specified target threshold of **≥ 0.80**

Neither primary endpoint metric met its pre-specified performance benchmark. The PPV fell 7 percentage points below the target, and the NPV fell 9 percentage points below the target.

We understand that the Data Safety Monitoring Board meeting is scheduled for April 5, and that GDT's board will receive the DSMB's formal recommendation thereafter. We will obviously want to see that recommendation before finalizing our analysis. However, I want to flag the core concern now: from a Medicare coverage perspective, interim clinical validation data that falls below the test's own pre-specified performanc

**B. Impact on LCD Filing Timeline and MolDx Technical Assessment**

*MolDx Technical Assessment.* As you are aware, Ridgeline Administrative Services, as the MolDx program contractor, applies rigorous evidentiary standards for clinical validation of molecular diagnostic tests. The MolDx framework specifically requires demonstration that a test's clinical validity meets or exceeds the performance benchmarks established by the test developer's own validation study protocol. Interim res

*LCD Application to Cascade Fiscal Intermediaries.* Dr. William Hargrove, the Medical Director for molecular diagnostics coverage at CFI, and Sandra Phu, the LCD Analyst for genomic diagnostics, will evaluate the clinical evidence dossier against CFI's established coverage criteria for molecular diagnostic tests. I want to be candid about a critical risk: filing an LCD request supported only by interim data that miss

*Original Timeline Impact.* Our original strategy contemplated filing the LCD application in August 2024, following the PLA code assignment from the AMA CPT Editorial Panel's September 2024 meeting (with the PLA application submission deadline of June 28, 2024). The PLA code application itself is not directly affected by the clinical data — it is a coding designation, not a coverage determination — but the overall co

**C. Preliminary Strategic Considerations**

Based on our initial assessment, we believe the team should consider the following paths forward:

1. **Defer the LCD filing** until final CLARITY-LUNG data is available. The final readout was originally projected for Q4 2024, though this timeline may shift depending on enrollment pace. Current enrollment stands at approximately 847 of the 1,200 target patients (roughly 70.6%), which suggests a final data readout could extend into Q1 or potentially Q2 2025 depending on the enrollment trajectory and follow-up requi

2. **Supplement the clinical evidence package** with additional retrospective analyses, sub-group analyses from the interim dataset, or supporting literature from the 43 peer-reviewed publications currently in the dossier bibliography, with the goal of bridging the gap between the interim performance metrics and the evidentiary threshold required for coverage. This approach carries some risk — supplemental analyses a

3. **Proceed with the PLA code application on the original timeline** (submission by June 28, 2024 for the September 2024 AMA CPT Editorial Panel meeting) while deferring the LCD filing. This preserves optionality on coding even if coverage is delayed, since coding and coverage are independent processes. Having the PLA code in hand positions GDT to move quickly on the LCD once the clinical evidence matures.

4. **Engage proactively with Ridgeline (MolDx) on an informal pre-submission basis** to gauge their receptivity to interim data and to understand whether there are specific analyses or data presentations that might influence their assessment. I should note that this approach carries the risk of telegraphing weakness in the evidence package before we have had the opportunity to present a complete and optimized dossier

Each of these options has trade-offs for GDT's broader commercialization timeline and, importantly, for the revenue projections modeled by Verdant Life Sciences Capital. As you and Kevin are aware, the Year 1 projected test volume of 8,500 tests and the corresponding Year 1 projected Medicare revenue of approximately $20,290,500 — based on the $3,850 per test target rate with a 62% Medicare payer mix — are predicated

I would also flag — and I raise this with appropriate sensitivity to the fact that this is ultimately a business judgment for GDT's leadership — that Kevin and Raymond Ota should begin socializing internally the possibility of timeline slippage in the reimbursement strategy. This includes any downstream implications for financial covenants, investor communications, and partnership discussions that are contingent on t

**D. Forthcoming Deliverable: Clinical Evidence Gap Analysis Memorandum**

Calderwood & Harkness will prepare a detailed Clinical Evidence Gap Analysis memorandum that formally analyzes the interim results against MolDx and LCD evidentiary standards, identifies specific gaps in the current evidence package, and recommends a revised evidence development strategy with concrete action items and timelines. Sean Morrissey will lead the drafting of this memorandum under my oversight, and we are t

To keep this matter moving forward efficiently, I would suggest the following near-term steps:

- **Scheduling a call this week:** I would like to arrange a call with you and Kevin to discuss your initial reactions, GDT's internal perspective on the interim results, and any additional context from the clinical team that may inform our analysis. Sean and I are available Wednesday or Thursday afternoon.

- **Board engagement:** Could you let us know whether GDT's board intends to convene before or after the April 5 DSMB meeting to discuss the implications of the interim data? Calderwood & Harkness is available to present our preliminary assessment to the board if that would be helpful.

- **MolDx Dossier work authorization:** We would like to request authorization to continue work on the draft MolDx Technical Assessment Dossier (v1.0) so that GDT has a substantially complete draft in hand regardless of the ultimate filing timeline decision. Pausing the dossier work now would create additional delay if the team ultimately decides to proceed on an accelerated basis.

- **Clinical team input:** We would appreciate it if you could confirm whether Dr. Sundaram has any preliminary view on whether the final data — with a revised projection potentially extending to Q2 2025 depending on enrollment trajectory — might be expected to improve materially over the interim results. Her perspective on the likely trajectory of PPV and NPV with the full dataset would be highly relevant to our str

I want to close by putting this in perspective. While the interim results are undeniably a setback for the coverage timeline, they do not foreclose a successful reimbursement strategy for OncoPrecise GXP-47. The question before us is fundamentally one of timing and evidence maturity, not one of viability. We remain confident in the underlying science and in the strength of the crosswalk pricing rationale — the $3,850

Calderwood & Harkness remains fully committed to advancing this matter, and we will keep the team informed as our analysis develops over the coming days. Please do not hesitate to reach out if you would like to discuss any of this before our call later this week — I am available at your convenience.

**Miriam Calloway** Partner, Healthcare & Life Sciences Calderwood & Harkness LLP 1700 K Street NW, Suite 900 Washington, DC 20006 T: (202) 555-4180 E: mcalloway@calderwoodharkness.com

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