Matter: Genome Dx Therapeutics Inc. — Medicare Coverage & Coding Strategy (Matter No. 1043-00002)
Theresa,
Thank you for the prompt follow-up after yesterday's board meeting. I appreciate the board communicating its direction so quickly, and I want to confirm that we have received and fully understand the request to reassess the LCD filing strategy for OncoPrecise GXP-47 in light of the CLARITY-LUNG interim analysis results released on March 29. As you may recall, I flagged preliminary concerns about the interim data in my April 1 email — specifically the PPV of 0.68 against the target threshold of ≥0.75 and the NPV of 0.71 against the target of ≥0.80. The board's decision to pause and reassess before proceeding further is both well-timed and prudent given the significance of these evidentiary gaps.
**Scope of the Revised Analysis**
In response to the board's request, Calderwood & Harkness will prepare two deliverables:
*1. Clinical Evidence Gap Analysis Memorandum*
This memorandum will provide a detailed assessment of the impact of the CLARITY-LUNG interim results on both the LCD application and the MolDx technical assessment dossier. Specifically, we will analyze:
- The shortfall in PPV (0.68 vs. ≥0.75) and NPV (0.71 vs. ≥0.80) and how Cascade Fiscal Intermediaries ("CFI") and Ridgeline Administrative Services (through the MolDx program) are likely to evaluate these results. We have a reasonably well-developed understanding of the analytical frameworks that Dr. William Hargrove at CFI and Dr. Catherine Embry at Ridgeline apply to molecular diagnostic performance data, and this will inform our risk assessment. - The risk that filing with the current interim data could result in a non-coverage determination from CFI. I want to underscore — as I expect the board appreciates — that a non-coverage LCD creates significant precedential headwinds for any subsequent re-application. This is a central consideration in the timing analysis. - Whether supplemental evidence strategies could bridge the evidentiary gaps — including retrospective analyses, sub-group analyses from existing CLARITY-LUNG data, and literature-based evidence from analogous assay validation studies. - The DSMB's April 5 recommendation to continue enrollment, coupled with its characterization of the interim results as "inconclusive and below pre-specified performance benchmarks." We will assess how the MAC and MolDx reviewers would likely interpret the DSMB's own assessment, which in our experience carries meaningful weight in the technical review process.
We will also consider the current CLARITY-LUNG enrollment status — 847 of 1,200 patients, approximately 70.6% enrolled — and whether the remaining enrollment trajectory and extended follow-up timeline affect the strategic calculus.
To complete this analysis, we will need to coordinate with Dr. Priya Sundaram's team on several clinical data questions, and Sean Morrissey will be reaching out to that end. We will also coordinate with Dr. Nathan Ostroff at Larkfield Health Economics regarding any necessary revisions to the HEOR analysis that may be implicated by the interim data shortfalls.
*2. Revised LCD/MolDx Strategy Memorandum*
This memorandum will present a revised strategic recommendation on LCD filing timing, structured around multiple scenarios:
- **Option A:** Proceed with LCD filing on the original August 2024 timeline using interim CLARITY-LUNG data supplemented by retrospective and literature-based evidence. - **Option B:** Defer LCD filing until final CLARITY-LUNG data is available, noting that the revised projection for final data readout has shifted from Q4 2024 to Q2 2025. - **Option C:** Explore intermediate approaches, such as pre-submission engagement with CFI and Ridgeline to gauge receptivity before committing to a formal filing.
For each option, we will address the downstream timeline impacts on the following workstreams:
- *PLA Code Application:* The draft application delivered on March 22 was targeting submission to the AMA CPT Editorial Panel by the June 28, 2024 deadline for consideration at the September 2024 meeting. We will assess whether the PLA application should proceed independently of the LCD decision. While a PLA code assignment does not require clinical validation data, the reimbursement rate and commercial utility of the code are substantially dependent on coverage status. - *MolDx Technical Assessment Dossier:* Version 1.0 is currently in preparation with a targeted delivery date of April 30. We will recommend whether to finalize on schedule, place on hold, or revise in light of the interim data. - *NCD Pathway Planning:* As you know, the NCD pathway presupposes a successful LCD, and any delay to the LCD timeline cascades accordingly. - *Revenue Projections and Financial Modeling:* Each scenario carries different implications for the Year 1 projected Medicare revenue of approximately $20.3 million (based on the $3,850/test target rate, 8,500-test volume, and 62% Medicare mix), which we understand Verdant Life Sciences Capital has incorporated into GDT's forward valuation models. We will frame the timeline impacts in terms that facilitate the board's financial planning discussions.
**Joel Strauss's Involvement**
I have asked Joel Strauss (copied here) to participate in the revised strategy analysis, particularly on the health technology assessment and FDA/CMS regulatory intersection dimensions. CMS's evolving approach to LDT oversight may have implications that are relevant to the timing decision, and Joel's expertise in this area will strengthen the analysis.
**Coordination with Other Advisors**
Kevin, I would ask that you coordinate with Janet Carraway at Carraway Regulatory Advisors regarding any impact on the PLA code application mechanics and timeline. We will provide the strategic recommendation on whether and when to proceed with the PLA submission, and Janet can advise on the AMA submission logistics and any procedural considerations on her end. As noted above, the draft PLA code application delivered on March 22 remains substantively ready, but any changes to the LCD filing strategy could affect the supporting narrative in the PLA application, and we want to ensure alignment.
**Estimated Delivery Timeline**
- **Clinical Evidence Gap Analysis Memorandum:** Targeted delivery by Monday, April 15, 2024 (approximately 5 business days). - **Revised LCD/MolDx Strategy Memorandum:** Targeted delivery by Monday, April 22, 2024 (approximately 8 business days following the Gap Analysis). We have sequenced these intentionally so that the Gap Analysis conclusions can inform and anchor the strategic recommendations.
Sean Morrissey will be the primary drafter on both deliverables and will be reaching out to Kevin and Dr. Sundaram's team for additional clinical data inputs as needed. Please do let us know the best points of contact and any scheduling constraints on your end.
**Board Availability**
Would the board like Calderwood & Harkness to prepare a presentation or participate in a follow-up board call to discuss the revised strategy once the memoranda are delivered? We are happy to update the board presentation materials that were prepared for the April 9 meeting and tailor them to the revised analysis. Please let me know your preference, and we will build that into our timeline.
**Closing Thoughts**
Theresa, I want to assure you and the board that we are committed to providing a thorough and clear-eyed assessment. While the interim data are undeniably a setback, the situation is not uncommon in the molecular diagnostics coverage landscape. We have navigated analogous evidentiary challenges with other clients, and there are well-established pathways to address it — the key is making the right strategic decisions now to preserve GDT's options and avoid unnecessary risk.
Please do not hesitate to call me or Kevin if any questions arise in the interim. I am available on my direct line at (202) 555-4180 or on my mobile at (202) 555-7293.
Best regards,
Miriam Calloway Partner, Healthcare & Life Sciences Calderwood & Harkness LLP 1700 K Street NW, Suite 900 Washington, DC 20006 Phone: (202) 555-4100 Direct: (202) 555-4180 Mobile: (202) 555-7293 Email: mcalloway@calderwoodharkness.com
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