Contract analysis

I. Purpose and Scope of Memorandum This memorandum was prepared at the direction of Miriam Calloway, Responsible Partner, in connection with Calderwood & Harkness LLP's engagement by Genome Dx Therapeutics Inc. ("GDT" or the "Company") to develop and execute a comprehensive Medicare coverage and coding strategy for GDT's OncoPrecise GXP-47 genomic diagnostic test (the "Test" or "GXP-47"). The purpose of this memorand

II. Overview of Medicare Coverage Determination Framework A. Statutory and Regulatory Foundation Medicare coverage for clinical laboratory tests, including molecular diagnostic tests, is governed by a well-established statutory and regulatory framework. At its core, Medicare Part B covers diagnostic laboratory tests that are "reasonable and necessary for the diagnosis or treatment of illness or injury or to improve t

1. Initiation. An LCD may be initiated by the MAC based on its own assessment of coverage needs, or in response to a request from a laboratory, manufacturer, physician, or other stakeholder. In the molecular diagnostics context, the MolDx Technical Assessment process (discussed in Section III below) effectively serves as the initiation mechanism, as a positive MolDx TA recommendation triggers the MAC's development of

2. Draft LCD. The MAC prepares a draft LCD that sets forth the proposed coverage criteria, indications and limitations, applicable coding, and documentation requirements. The draft is reviewed by the MAC's Medical Director responsible for the relevant clinical area.

3. Notice and Comment Period. The MAC publishes the draft LCD and opens a public comment period of not less than 45 days, as required by Section 1869(f)(2)(B) of the Social Security Act. Comments are accepted from interested parties, including laboratories, physicians, patient advocacy organizations, and industry stakeholders.

4. Comment Review and Final LCD. The MAC reviews all public comments, and the Medical Director may revise the LCD in response to substantive comments. The MAC then publishes the final LCD with a summary of comments received and the MAC's responses.

5. Effective Date. The final LCD becomes effective no sooner than 45 days after publication, providing affected parties with advance notice. LCD Reconsideration and Appeal. Parties aggrieved by an LCD may seek reconsideration through the procedures set forth in 42 C.F.R. Part 426. An LCD reconsideration request may be filed by a Medicare beneficiary whose claim has been denied based on the LCD, or by an aggrieved par

1. Formal NCD Request or CMS Self-Initiation. An NCD may be requested formally by any interested party by submitting a written request to CMS's Coverage and Analysis Group ("CAG"). Unlike LCDs, NCDs cannot be directly initiated by the laboratory or manufacturer; rather, the decision to accept an NCD request for review lies within CMS's discretion. CMS may also self-initiate an NCD review.

2. CMS Acceptance for Review. CMS reviews the formal NCD request and determines whether to accept it for internal review. Acceptance is not guaranteed, and CMS considers factors such as the significance of the item or service, the strength of the evidence base, and whether an NCD is warranted given existing local coverage decisions.

3. CAG Review. Upon acceptance, CMS's Coverage and Analysis Group conducts a comprehensive review of the clinical evidence, including published literature, clinical trial data, professional society guidelines, and other relevant materials.

4. MEDCAC Input. For complex or novel determinations, CMS may convene the Medicare Evidence Development and Coverage Advisory Committee ("MEDCAC"), a federal advisory committee that provides independent expert input on the strength and adequacy of the clinical evidence. MEDCAC convening is at CMS's discretion and is not required for every NCD.

5. Proposed Decision. CMS publishes a proposed NCD decision (either coverage, non-coverage, or coverage with conditions) and opens a public comment period, typically 30 days.

6. Final NCD. Following review of public comments, CMS issues the final NCD, which becomes effective on the date of issuance. NCD Timeline. The NCD process is significantly longer than the LCD process. CMS's statutory timeline for NCD decisions is generally six months from the date of acceptance for internally generated reviews and twelve months for externally requested reviews. However, in practice, NCDs for complex

III. The MolDx Program: Structure, Requirements, and Procedures A. Overview and History The Molecular Diagnostic Services ("MolDx") program was established in 2011 to provide a standardized, evidence-based framework for evaluating and establishing Medicare coverage for molecular diagnostic tests. Prior to MolDx, Medicare coverage determinations for molecular diagnostic tests were made independently by individual MACs

1. Test Description and Intended Use. The dossier must contain a detailed description of the test methodology, the specific analytes measured, the specimen type and collection requirements, the clinical indication for which the test is intended, and the intended patient population. For OncoPrecise GXP-47, this section will describe: the 47-gene RNA expression panel; the FFPE NSCLC tumor tissue specimen type; the prop

2. Analytical Validation. The dossier must include comprehensive evidence demonstrating the test's analytical performance characteristics. Analytical validation encompasses demonstration of test accuracy, precision (both intra-run and inter-run reproducibility), reportable range and analytical sensitivity, reference intervals, specimen stability across various storage and handling conditions, and interference testing

3. Clinical Validation. The dossier must demonstrate that the test accurately identifies the clinical condition or predicts the clinical outcome it is intended to assess. For predictive biomarker tests like GXP-47, clinical validation requires evidence that the test output (in this case, the TRI score) is associated with the clinical outcome of interest (in this case, response to ICI therapy, as measured by 12-month

4. Clinical Utility. The dossier must include evidence that use of the test improves patient outcomes, changes clinical management decisions, or provides actionable information to physicians. Clinical utility is often the most challenging evidentiary standard to satisfy, as it requires demonstration that the test's results lead to tangible improvements in clinical care — not merely that the test accurately measures w

5. Health Economic Analysis. The dossier should include cost-effectiveness and budget impact analyses demonstrating that the test provides value relative to existing diagnostic and treatment paradigms. Health economic evidence, while not always dispositive, can strengthen a TA dossier by demonstrating that the test produces cost savings or cost-effective outcomes at the population level. This analysis is also being p

6. Bibliography. The dossier must include a comprehensive annotated bibliography supporting all evidence claims. Calderwood & Harkness will compile and annotate this bibliography, which is expected to encompass approximately 43 peer-reviewed publications spanning the analytical validation of GXP-47, the molecular biology of the gene expression signatures included in the panel, the clinical evidence for ICI therapy in

IV. Survey of Existing LCDs and NCDs for Comparable Molecular Diagnostic Tests A. Methodology To inform GDT's coverage strategy, Calderwood & Harkness conducted a comprehensive survey of existing Medicare coverage determinations for molecular diagnostic tests comparable to OncoPrecise GXP-47. The survey covered the CMS Medicare Coverage Database (available at https://www.cms.gov/medicare-coverage-database), MolDx and

1. Elara Genomic Sciences, Inc. — "GeneSight Onco-48" (PLA Code 0250U) Elara Genomic Sciences, Inc. is a Massachusetts-based molecular diagnostics company that offers GeneSight Onco-48, a 48-gene expression panel for solid organ tumors. GeneSight Onco-48 analyzes RNA expression across 48 genes from FFPE tumor tissue specimens and generates an algorithmic composite score output used to characterize tumor biology and i

2. Marlowe Asset Management Molecular Diagnostics, Inc. — "TumorMap Pro" (PLA Code 0239U) Marlowe Asset Management Molecular Diagnostics, Inc. is a California-based molecular diagnostics company that offers TumorMap Pro, an NGS-based comprehensive genomic profiling panel. TumorMap Pro performs both DNA and RNA sequencing across a broad panel of genes and generates a comprehensive genomic profile that identifies actio

3. CPT Code 81455 — NGS, Solid Organ Neoplasm, 51+ Genes CPT Code 81455 is a Category I CPT code applicable to NGS panels analyzing 51 or more genes for solid organ neoplasms. This is not a PLA code; rather, it is a general category code available to any laboratory performing a qualifying NGS panel meeting the code's criteria. The current Medicare reimbursement rate for CPT 81455 is $2,919 per test. Relevance to GDT.

4. Other Relevant LCDs Surveyed Calderwood & Harkness's survey identified several additional LCDs for gene expression profiling tests in oncology that, while not direct crosswalk comparators, provide useful precedent for GDT's submission strategy: • Breast Cancer Gene Expression Panels. Several breast cancer gene expression profiling tests with algorithmic composite scores have obtained favorable LCDs through the Mol

1. CMS NCD for NGS in Advanced Cancer (NCD 90.2) CMS issued a National Coverage Determination for NGS-based diagnostic tests in advanced cancer patients, designated NCD 90.2. This NCD represents a landmark coverage decision for the molecular diagnostics field and establishes a framework for Medicare coverage of NGS-based testing in patients with advanced cancer. Scope of Coverage. NCD 90.2 covers NGS as a companion d

2. Other Relevant NCDs Calderwood & Harkness's survey identified several additional NCDs affecting molecular diagnostics that, while not directly applicable to GXP-47, provide useful context for understanding CMS's approach to coverage for genomic and molecular diagnostic tests. These include NCDs for pharmacogenomic testing, which addresses the use of genetic testing to guide medication selection and dosing, and NCD

V. Coding Pathways: CPT, PLA, and HCPCS Considerations A. CPT Coding for Molecular Diagnostic Tests The Current Procedural Terminology ("CPT") coding system, maintained by the American Medical Association ("AMA"), provides the procedural codes used for billing and reimbursement of molecular diagnostic tests under Medicare. The CPT coding hierarchy for molecular diagnostics includes several categories of codes, each w

VI. Recent CMS Policy Developments Affecting Genomic Diagnostics A. CLFS Payment Rate Reforms The Protecting Access to Medicare Act of 2014 ("PAMA"), Pub. L. No. 113-93, § 216, introduced significant reforms to the methodology by which Medicare Clinical Laboratory Fee Schedule ("CLFS") payment rates are determined. Under PAMA, CMS requires applicable laboratories to report data on private payer rates and test volumes