Miriam,
I am writing to inform you and the Calderwood & Harkness team of a significant decision by the Genome Dx Therapeutics board of directors. At its meeting yesterday, May 22, 2024, the board acted on matters directly affecting the OncoPrecise GXP-47 Medicare coverage and coding engagement (Matter No. 1043-00002), and I want to communicate the outcome and our resulting instructions as promptly as possible.
**Board Decision — Indefinite Deferral of GXP-47 Commercial Launch**
The GDT board of directors unanimously resolved to defer the commercial launch of OncoPrecise GXP-47 indefinitely. The decision was driven by two primary factors:
1. **Inconclusive CLARITY-LUNG Interim Results.** The interim analysis released on March 29, 2024, at 50% enrollment (n=600), showed a positive predictive value (PPV) of 0.68 against a pre-specified threshold of ≥0.75 and a negative predictive value (NPV) of 0.71 against a threshold of ≥0.80. Neither primary endpoint met the pre-specified performance benchmarks. At its April 5, 2024 meeting, the Data Safety Monitoring Board, chaired by Dr. Evelyn Matsuda, recommended continuing enrollment but characterized the results as "inconclusive and below pre-specified performance benchmarks."
2. **Pinnacle Health Ventures' Formal Recommendation.** On May 17, 2024, Elena Marchetti, on behalf of Pinnacle Health Ventures — GDT's largest shareholder at 41.3% of fully diluted equity — formally recommended deferring the GXP-47 launch until final CLARITY-LUNG data is available.
The revised projection for the CLARITY-LUNG final data readout is Q2 2025. Current enrollment stands at 847 of the 1,200-patient target (approximately 70.6%). The board determined that it would be premature to proceed with commercialization activities — including Medicare coverage and coding submissions — in advance of those results. I would note that your team's own Revised LCD/MolDx Strategy Memorandum, delivered April 22, 2024, which recommended deferral of the LCD filing until final trial data were in hand, was squarely before the board and informed its thinking.
**Wind-Down Instructions**
Accordingly, GDT is instructing Calderwood & Harkness to wind down the engagement effective immediately. Our specific requests are as follows:
1. **Cease All Active Work.** Please cease all active work on the OncoPrecise GXP-47 Medicare coverage and coding strategy, including:
- The draft PLA code application targeted for AMA CPT Editorial Panel submission by the June 28, 2024 deadline (September 2024 meeting) — this application should **not** be submitted; - The draft LCD request letter to Cascade Fiscal Intermediaries, LLC, targeted for August 2024 filing — this should **not** be sent; - The draft MolDx Technical Assessment Dossier (Version 1.0), delivered April 30, 2024 — finalization is not needed at this time; and - Any further work on the NCD Feasibility Assessment or Reimbursement Rate Analysis.
2. **Work Product Preservation Summary.** I would ask that Calderwood & Harkness prepare a comprehensive memorandum summarizing all work product delivered during the engagement, identifying any pending or incomplete deliverables, and outlining recommendations for preservation and potential reactivation of the coverage and coding strategy when — and if — GDT resumes commercialization efforts. Please include an index of all documents and deliverables produced over the course of the matter.
3. **PCNB Covenant Consideration.** As you may appreciate, the launch deferral may have implications for the milestone covenant under Section 7.14 of the Pacific Coast National Bank Revolving Facility Credit Agreement (Ref. PCNB-GDT-RF-2023-0922), which requires GDT to obtain a final Medicare coverage determination for at least one proprietary laboratory developed test by December 31, 2024. We currently have $9.2 million drawn on the $15 million facility. I would be grateful if, as part of the wind-down, Calderwood & Harkness could provide a brief analysis of this issue, including whether GDT's existing LCD for OncoPrecise GXP-12 (LCD L38472, effective August 15, 2021) might satisfy the covenant on its terms. Please note that Raymond Ota (our CFO) and Harrison Whitford at Whitford & Sable LLP are also engaged on this question, and we will coordinate as appropriate.
4. **Final Invoice.** Please issue a final invoice covering all outstanding fees and disbursements through the completion of the wind-down deliverables described above. GDT has paid Invoices INV-1043-00002-001 ($62,437.50) and INV-1043-00002-002 ($78,747.62) in full. We would appreciate a complete final accounting at your earliest convenience.
5. **Coordination with Other Advisors and Third-Party Communications.** GDT will separately notify Janet Carraway at Carraway Regulatory Advisors and Dr. Nathan Ostroff at Larkfield Health Economics of the deferral decision. I must ask that Calderwood & Harkness **not** communicate the board's decision to any third parties — including Cascade Fiscal Intermediaries or Ridgeline Administrative Services — without GDT's prior written approval.
**Appreciation and Future Engagement**
Miriam, I want to express my sincere appreciation for the quality and thoroughness of your team's work over the past three months. The deliverables — particularly the Coding Strategy Memorandum, the Clinical Evidence Gap Analysis, the Revised LCD/MolDx Strategy Memorandum, and the Reimbursement Rate Analysis — represent an exceptional body of work that will be invaluable when GDT is in a position to reactivate the coverage strategy. This is a deferral, not an abandonment, and we very much hope to re-engage Calderwood & Harkness when the CLARITY-LUNG final data readout is available, projected for Q2 2025, and the board reassesses the commercial launch timeline.
On a personal note, Dr. Anisha Raval asked me to convey the board's thanks to you and your team for the dedication and expertise you have brought to this engagement.
Please give me a call when you have a moment to discuss logistics and timeline for the wind-down deliverables. I am available on my direct line today and tomorrow.
Thank you, Miriam. I look forward to speaking with you.
Best regards,
**Theresa Nakamura** General Counsel & VP of Regulatory Affairs Genome Dx Therapeutics Inc. 4720 Torrey Pines Road, Suite 300 San Diego, CA 92130 Tel: (858) 447-3100 Email: tnakamura@genomedx.com
---
*CONFIDENTIALITY NOTICE: This email message, including any attachments, is for the sole use of the intended recipient(s) and may contain information that is privileged, confidential, and exempt from disclosure under applicable law, including attorney-client privilege and attorney work product doctrine. If you are not the intended recipient, or an agent responsible for delivering this message to the intended recipient, you are hereby notified that any review, dissemination, distribution, or copying of this communication is strictly prohibited. If you have received this message in error, please notify the sender immediately by reply email and permanently delete the original message and all copies. Thank you.*