Contract analysis

I. PURPOSE AND SCOPE The purpose of this memorandum is to provide Solstice Biomedical Devices Ltd. ("Solstice Ireland") and Solstice Biomedical Inc. ("Solstice U.S." and, together with Solstice Ireland, "Solstice" or the "Company") with a comprehensive legal analysis of the applicable U.S. Food and Drug Administration ("FDA") device classification for the Solstice Lumina™ Continuous Glucose Monitoring System (the "Lu

1. Identification of the appropriate product code. We analyze whether product code QKQ ("Electrode, Glucose, Subcutaneous") is the correct product code for the Lumina CGM System and distinguish QKQ from other potentially applicable product codes.

2. Identification of the applicable regulation number. We assess the applicability of 21 C.F.R. § 862.1355 ("Glucose test system") to the Lumina CGM System and examine the regulatory text, scope, and classification tier under that regulation.

3. Class II classification rationale. We set forth the basis for the Class II classification determination, including the requirement for premarket notification (510(k)) and the inapplicability of the Premarket Approval Application (PMA) pathway, provided that substantial equivalence to a legally marketed predicate device can be demonstrated.

4. Identification of applicable special controls. We identify and describe the special controls applicable to devices classified under product code QKQ, including analytical and clinical performance testing, biocompatibility, electromagnetic compatibility, software verification and validation, cybersecurity, and labeling requirements.

5. Impact of the FDA reclassification order effective March 2024. We analyze the March 2024 reclassification order that updated the classification framework for glucose test systems under 21 C.F.R. § 862.1355, and we assess its implications for the Lumina CGM System's submission strategy. The intended audience for this memorandum is the Solstice regulatory affairs and U.S. operations teams. This analysis is intended

II. EXECUTIVE SUMMARY Based on our analysis of the applicable FDA regulations, guidance documents, reclassification orders, and predicate device history, we conclude the following: Classification. The Solstice Lumina™ CGM System is appropriately classified under product code QKQ ("Electrode, Glucose, Subcutaneous") and regulation number 21 C.F.R. § 862.1355 ("Glucose test system"). The System is a Class II medical de

III. DEVICE DESCRIPTION This Section provides a description of the Solstice Lumina™ CGM System, including its two primary components — the C14 implantable sensor and the R7 wearable reader/transmitter — as well as the associated mobile application. The device description set forth below is based on information provided by Solstice's engineering and regulatory affairs teams and is consistent with the technical specifi

III.A. Lumina C14 Implantable Sensor The Lumina C14 is a subcutaneously implantable continuous glucose monitoring sensor designed to measure glucose concentrations in interstitial fluid. The sensor is inserted by the patient into the subcutaneous tissue, typically in the upper arm or abdomen, using a single-use, disposable insertion tool (the Lumina Inserter, Model LI-100) that is packaged with each sensor unit. The

III.B. Lumina R7 Wearable Reader/Transmitter The Lumina R7 is a wearable reader and transmitter device designed to be worn on the patient's upper arm in close proximity to the implanted C14 sensor. The R7 reader serves as the primary user interface for the Lumina CGM System. It receives glucose data wirelessly from the C14 sensor via BLE 5.2, processes the data using Solstice's proprietary glucose prediction algorith

III.C. System-Level Classification Rationale FDA has consistently treated continuous glucose monitoring systems as integrated device systems for classification and premarket submission purposes. Under this approach, the subcutaneous sensor and the associated reader/transmitter are viewed as components of a single device system, rather than as separate, independently classified devices. This integrated-system approach

IV. PRODUCT CODE ANALYSIS — QKQ

IV.A. Product Code QKQ Definition FDA product code QKQ is defined as "Electrode, Glucose, Subcutaneous." This product code falls within the Clinical Chemistry panel (Panel 75) and is reviewed by the Office of Health Technology 2 ("OHT2"), Division of Chemistry and Toxicology Devices, within the Center for Devices and Radiological Health ("CDRH"). Product code QKQ encompasses subcutaneous electrochemical glucose monit

IV.B. Comparison with Other Potentially Applicable Product Codes In determining that product code QKQ is the correct product code for the Lumina CGM System, we have considered and rejected the following alternative product codes that might, on a superficial reading, appear potentially applicable: Product Code NBW — System, Test, Blood Glucose, Over the Counter. Product code NBW applies to blood glucose test strip rea

IV.C. Predicate Device Product Code Alignment A critical element of the product code analysis is confirming that the predicate devices upon which Solstice intends to rely for its substantial equivalence determination are classified under the same product code as the subject device. Alignment of product codes between the subject device and the predicate devices is not an absolute legal requirement — FDA may find subst

V. REGULATION NUMBER ANALYSIS — 21 C.F.R. § 862.1355

V.A. Regulatory Text and Scope The Lumina CGM System falls within the scope of the device classification regulation codified at 21 C.F.R. § 862.1355, which governs the "Glucose test system" classification. This regulation is part of Subchapter H (Medical Devices) of Title 21 of the Code of Federal Regulations and is located within Part 862 (Clinical Chemistry and Clinical Toxicology Devices), Subpart B (Clinical Chem

V.B. Classification: Class II with Special Controls Under 21 C.F.R. § 862.1355, as updated by the March 2024 reclassification order, continuous glucose monitoring systems with subcutaneous sensors are classified as Class II medical devices. The Class II classification means that:

1. General controls alone are insufficient. FDA has determined that general controls — the baseline regulatory requirements applicable to all medical devices, including establishment registration, device listing, good manufacturing practice requirements, labeling requirements, and medical device reporting — are by themselves insufficient to provide reasonable assurance of the safety and effectiveness of CGM devices.

2. Special controls are necessary. In addition to general controls, special controls are necessary to provide reasonable assurance of safety and effectiveness. Special controls may include performance standards, postmarket surveillance requirements, patient registries, special labeling requirements, and premarket data requirements, among others. The specific special controls applicable to CGM devices classified under

3. Premarket notification (510(k)) required. As a Class II device, the Lumina CGM System requires FDA clearance through the premarket notification (510(k)) process before it may be commercially distributed in the United States. Under the 510(k) process, Solstice must demonstrate that the Lumina CGM System is "substantially equivalent" to one or more legally marketed predicate devices — that is, that the Lumina system

4. No PMA required. Because the Lumina CGM System is appropriately classified as Class II, a Premarket Approval Application ("PMA") — the more rigorous and costly premarket review pathway required for Class III devices — is not required. The Class II / 510(k) pathway represents a significantly less burdensome regulatory path than the PMA pathway, both in terms of the scope of data required and the anticipated FDA rev

V.C. General Controls Applicable As a Class II medical device, the Lumina CGM System is subject to the general controls applicable to all medical devices marketed in the United States under the Federal Food, Drug, and Cosmetic Act ("FDCA") and its implementing regulations. The key general controls applicable to the Lumina CGM System are summarized below: Registration and Listing (21 C.F.R. Part 807). Solstice Biomedi

VI. SPECIAL CONTROLS APPLICABLE TO PRODUCT CODE QKQ

VI.A. Overview of Special Controls Framework The special controls applicable to CGM devices classified under product code QKQ have been developed and refined over time through a combination of FDA guidance documents, reclassification orders, De Novo classification decisions, and the accumulated experience of FDA's review staff in evaluating CGM submissions. The special controls framework represents FDA's determinatio

VI.B. Analytical Performance Testing Analytical performance testing is a core component of the special controls applicable to CGM devices. This testing is designed to demonstrate that the sensor and system meet defined performance criteria across the full measurement range and under the conditions of use for which the device is intended. The following categories of analytical performance testing are required for the

VI.C. Clinical Performance Testing In addition to bench-level analytical performance testing, FDA requires clinical study data demonstrating the performance of the CGM system in a representative population of intended users under real-world conditions of use. Clinical performance testing is a critical element of the special controls for CGM devices classified under product code QKQ. Solstice has designed the LUMINA-U

VI.D. Biocompatibility. The Lumina CGM System includes components that come into direct or indirect contact with the patient's body, and biocompatibility testing is required to demonstrate that these patient-contacting components do not pose unacceptable risks of adverse biological responses. Biocompatibility testing must be conducted in accordance with ISO 10993-1:2018 ("Biological evaluation of medical devices — Pa

VI.E. Electromagnetic Compatibility (EMC) and Electrical Safety The R7 reader/transmitter is an active electronic medical device that incorporates wireless communication functionality (BLE 5.2). As such, it is subject to electromagnetic compatibility and electrical safety testing requirements as part of the special controls for product code QKQ. Electromagnetic Compatibility (EMC). EMC testing must be performed in ac

VI.F. Software Validation and Verification The Lumina CGM System incorporates multiple software components that are integral to its function and that directly affect the safety and effectiveness of the device. Software verification and validation ("V&V") is a critical special control for CGM devices, and FDA expects comprehensive software documentation in the 510(k) submission. Software Level of Concern. Based on the

VI.G. Cybersecurity. The Lumina CGM System incorporates wireless communication capabilities and connectivity to external devices (smartphones), which creates potential cybersecurity risks that must be addressed as part of the special controls. FDA's guidance document "Cybersecurity in Medical Devices: Quality System Considerations and Content of Premarket Submissions" (September 2023) establishes the framework for cy

VI.H. Labeling. The labeling for the Lumina CGM System must comply with the general labeling requirements of 21 C.F.R. Part 801 as well as the specific labeling-related special controls applicable to CGM devices classified under product code QKQ. Key labeling requirements include: Adequate Directions for Use and Warnings. The labeling must include complete and adequate directions for use, including instructions for s

VII. FDA RECLASSIFICATION ORDER EFFECTIVE MARCH 2024

VII.A. Background and Purpose of the Reclassification Order FDA issued a reclassification order effective March 2024 that updated the classification framework for glucose test systems classified under 21 C.F.R. § 862.1355. This reclassification order was the culmination of a multi-year effort by FDA to modernize and rationalize the regulatory classification of glucose monitoring devices in light of the significant te

VII.B. Key Changes Introduced by the Reclassification Order The March 2024 reclassification order introduced several key changes to the classification framework for glucose test systems under 21 C.F.R. § 862.1355: Updated Device Identification Language. The reclassification order updated the device identification language under 21 C.F.R. § 862.1355 to explicitly encompass continuous glucose monitoring systems that us