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OncoPrecise GXP-47: Medicare Coverage & Coding Strategy Overview
Prepared for the Board of Directors of Genome Dx Therapeutics Inc.
April 9, 2024
Presented by: Miriam Calloway, Partner, and Sean Morrissey, Senior Associate — Calderwood & Harkness LLP, Healthcare & Life Sciences Practice
CONFIDENTIAL — Attorney-Client Privileged
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Agenda
1. Executive Summary & Engagement Scope
2. OncoPrecise GXP-47 — Product & Clinical Overview
3. CLARITY-LUNG Trial — Interim Results & Implications
4. Coding Strategy — PLA Code Application
5. Medicare Coverage Pathway — LCD via MolDx Program
6. National Coverage Determination (NCD) — Feasibility & Timeline
7. Reimbursement Rate Analysis — Crosswalk & Pricing
8. Revenue Projections — Medicare & Commercial
9. Risk Factors & Key Considerations
10. Recommended Next Steps & Decision Points
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Executive Summary & Engagement Scope
Calderwood & Harkness engaged February 14, 2024 to develop and execute a comprehensive Medicare coverage and coding strategy for OncoPrecise GXP-47
Scope: (1) Obtain unique PLA code via AMA CPT Editorial Panel; (2) Secure LCD from Cascade Fiscal Intermediaries (Jurisdiction E MAC); (3) Establish Medicare reimbursement rate via crosswalk/gapfill; (4) Assess NCD pathway through CMS
Engagement team: Miriam Calloway (Responsible Partner), Joel Strauss (Partner), Sean Morrissey (Lead Associate), Christopher Aiken (Associate)
Coordinating with Carraway Regulatory Advisors (Janet Carraway — coding mechanics) and Larkfield Health Economics (Dr. Nathan Ostroff — HEOR analysis), both retained directly by GDT
Key milestone: PLA code application submission deadline — June 28, 2024 (AMA CPT Editorial Panel September 2024 meeting)
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OncoPrecise GXP-47 — Product Overview
Laboratory-developed test (LDT) performed exclusively at GDT's CLIA-certified, CAP-accredited reference laboratory in San Diego (CLIA No. 05D2187432; NPI 1902847365)
47-gene RNA expression panel using formalin-fixed, paraffin-embedded (FFPE) NSCLC tumor tissue
Produces proprietary Therapy Response Index (TRI) score (0–100): High Response Likelihood (≥70), Intermediate (40–69), Low Response Likelihood (<40)
Intended use: Guide oncologist decision-making on first-line ICI therapy vs. platinum-based chemotherapy in Stage IIIB/IV NSCLC
Analytical validation completed December 2022; published in Journal of Molecular Oncology Diagnostics (Vol. 18, Issue 4, pp. 412–429)
GDT holds 14 issued U.S. patents and 7 pending applications related to the OncoPrecise platform
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CLARITY-LUNG Trial — Design & Status
Prospective, multi-site, blinded clinical validation study (NCT05891247); PI: Dr. Priya Sundaram
14 clinical sites across the United States; enrollment target: 1,200 patients with newly diagnosed Stage IIIB/IV NSCLC
Enrollment as of late March 2024: ~600 patients at interim analysis (50% of target)
Primary endpoint: PPV and NPV of TRI score for 12-month progression-free survival on ICI therapy
Pre-specified performance benchmarks: PPV ≥ 0.75; NPV ≥ 0.80
Total trial budget: $28.5M; expenditures through interim: ~$19.1M (67% of budget)
DSMB chaired by Dr. Evelyn Matsuda (Carrington Cancer Institute)
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CLARITY-LUNG Interim Analysis Results — March 29, 2024
Interim analysis performed at n=600 (50% enrollment)
Positive Predictive Value (PPV): 0.68 — BELOW target of ≥ 0.75
Negative Predictive Value (NPV): 0.71 — BELOW target of ≥ 0.80
Neither primary endpoint met pre-specified performance benchmarks at interim
DSMB meeting (April 5, 2024): Recommended continuing enrollment but characterized results as 'inconclusive and below pre-specified performance benchmarks'
Revised final data readout projection: Q2 2025 (previously Q4 2024)
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Impact of Interim Results on Coverage Strategy
LCD/MolDx technical assessment requires demonstration of clinical validity — interim data alone is insufficient and potentially harmful
Risk of non-coverage determination: CFI (Dr. William Hargrove, Medical Director) and RAS (Dr. Catherine Embry, MolDx Technical Assessment Director) may issue non-coverage based on inconclusive data
A non-coverage determination creates negative precedent and significantly complicates future re-submission
MolDx dossier includes 43 peer-reviewed publications, but CLARITY-LUNG is the pivotal study — supplemental retrospective data cannot substitute for conclusive prospective validation
Clinical Evidence Gap Analysis (to be delivered April 15) will detail specific evidence shortfalls and supplemental strategies
Recommendation emerging: Defer LCD filing until final CLARITY-LUNG data is available
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Coding Strategy — PLA Code Application
Calderwood & Harkness recommends a Proprietary Laboratory Analyses (PLA) code rather than billing under existing CPT Code 81455 (NGS, solid organ neoplasm, 51+ genes)
PLA code advantages: Captures proprietary TRI algorithm; supports premium reimbursement; establishes unique product identity in Medicare fee schedule
Proposed descriptor: 'OncoPrecise GXP-47 (Genome Dx Therapeutics Inc.), genomic profiling, NSCLC, 47-gene RNA expression panel, FFPE tissue, algorithm-derived TRI score'
Draft PLA code application completed March 22, 2024 (prepared jointly with Carraway Regulatory Advisors)
AMA CPT Editorial Panel submission deadline: June 28, 2024 (September 2024 Panel meeting)
Decision needed: Proceed with PLA submission on schedule despite LCD deferral, or delay PLA filing as well?
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Medicare Coverage Pathway — LCD via MolDx Program
Primary coverage pathway: Local Coverage Determination (LCD) issued by Cascade Fiscal Intermediaries (CFI), the MAC for Jurisdiction E (California)
MolDx technical assessment administered by Ridgeline Administrative Services (RAS) — required for all molecular diagnostic tests seeking Medicare coverage
MolDx Technical Assessment Dossier (Version 1.0) in preparation — target delivery: April 30, 2024
Dossier components: Test description, analytical validation, clinical validation (CLARITY-LUNG + retrospective studies), clinical utility evidence, health economic analysis, 43-publication bibliography
Original LCD filing target: August 2024 (post-PLA code assignment)
Revised recommendation: Defer LCD filing to post-CLARITY-LUNG final data (Q2 2025 or later)
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National Coverage Determination (NCD) — Feasibility & Timeline
NCD provides nationwide Medicare coverage — eliminates need for jurisdiction-by-jurisdiction LCD process
Two CMS pathways under consideration: Traditional NCD and Coverage with Evidence Development (CED)
CED framework may be applicable if final CLARITY-LUNG data shows promise but does not fully meet traditional evidence thresholds
Estimated NCD timeline: 18–24 months from LCD issuance
Strategic recommendation: Pursue LCD first, then initiate NCD process — parallel track not advisable at this stage
NCD Feasibility Assessment Memorandum in preparation (target delivery: May 10, 2024)
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Reimbursement Rate Analysis — Crosswalk Pricing
Target Medicare reimbursement rate: $3,850 per test
Crosswalk methodology — three primary comparators identified:
• PLA 0250U — Elara Genomic Sciences 'GeneSight Onco-48': $3,742/test
• CPT 81455 — NGS solid organ neoplasm, 51+ genes: $2,919/test
• PLA 0239U — Marlowe Asset Management Molecular Diagnostics 'TumorMap Pro': $4,206/test
Weighted average of comparators: $3,622.33/test
Requested $3,850 represents a 6.28% premium over weighted average, justified by proprietary TRI algorithm and predictive specificity
Gapfill pricing is the alternative if crosswalk is not accepted — more uncertain outcome
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Revenue Projections — Medicare & Commercial
Projected annual test volume at full commercial launch: Year 1: 8,500
Medicare payer mix: 62% of total volume; Commercial payer mix: 38%
Year 1 projected Medicare revenue: 8,500 × 62% × $3,850 = $20,290,500
Year 3 projected Medicare revenue: 22,000 × 62% × $3,850 = $52,514,000
Commercial payer average reimbursement: $4,400/test (blended rate); Year 1 commercial revenue: $14,212,000
Year 1 total projected revenue: $34,502,500
Projections developed by Verdant Life Sciences Capital (Christine Lau, Managing Director) — reimbursement assumptions validated by Calderwood & Harkness
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Risk Factors & Key Considerations
Clinical validation risk: CLARITY-LUNG interim PPV (0.68) and NPV (0.71) below targets; final data not expected until Q2 2025
Premature LCD filing risk: Non-coverage determination would create negative precedent and delay any future filing
PLA code timing risk: June 28, 2024 submission deadline; missing it delays code assignment by ~6 months
Financial covenant risk: PCNB Revolving Facility (Section 7.14) requires Medicare coverage determination by December 31, 2024 — launch deferral may trigger covenant issue; $9.2M currently outstanding under $15M facility
Potential covenant argument: GXP-12's existing LCD (L38472) may satisfy covenant, though 'obtain' language suggests a new determination is required
Cash runway considerations: ~$34M annual burn rate against ~$187M total funding raised; CLARITY-LUNG at 67% of $28.5M budget
Competitive risk: Delay in coverage allows competing genomic diagnostic tests to establish market position
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Recommended Next Steps & Decision Points for the Board
1. Defer LCD filing with CFI and MolDx submission to RAS until final CLARITY-LUNG data is available (projected Q2 2025)
2. Proceed with PLA code application by June 28, 2024 deadline to preserve AMA September 2024 Panel slot — PLA assignment is independent of coverage determination
3. Complete draft MolDx Technical Assessment Dossier (v1.0) by April 30 for readiness upon final data availability
4. Commission supplemental evidence strategies (sub-group analyses, retrospective studies) — coordinate with Dr. Sundaram and Larkfield Health Economics
5. Engage Whitford & Sable on PCNB covenant interpretation; consider proactive lender dialogue with Pacific Coast National Bank
6. Verdant Life Sciences Capital to revise financial projections reflecting delayed launch timeline
7. Calderwood & Harkness deliverables: Clinical Evidence Gap Analysis (Apr 15), Revised LCD/MolDx Strategy Memo (Apr 22), MolDx Dossier v1.0 (Apr 30), NCD Feasibility Assessment (May 10), Reimbursement Rate Analysis (May 14)
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Appendix A: Engagement Timeline — Key Milestones & Deliverables
Feb 14, 2024 — Engagement letter executed; matter opened
Feb 28, 2024 — Kickoff meeting (GDT, Calderwood & Harkness, Carraway, Larkfield)
Mar 11, 2024 — Coding Strategy Memorandum (PLA vs. CPT analysis) delivered
Mar 22, 2024 — Draft PLA code application delivered
Mar 29, 2024 — CLARITY-LUNG interim results released
Apr 5, 2024 — DSMB meeting; continuation recommended
Apr 9, 2024 — GDT Board Meeting (this presentation)
| Apr 15 (target) — Clinical Evidence Gap Analysis | Apr 22 — Revised LCD/MolDx Strategy Memo | |
| Apr 30 (target) — Draft MolDx Dossier v1.0 | May 10 — NCD Feasibility Assessment | May 14 — Reimbursement Rate Analysis |
Jun 28, 2024 — PLA code application AMA submission deadline
Sep 2024 — AMA CPT Editorial Panel meeting
Aug 2024 (original target) — LCD filing with CFI
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Appendix B: Crosswalk Comparator Detail
PLA Code 0250U — Elara Genomic Sciences, 'GeneSight Onco-48': $3,742/test (multi-gene oncology NGS panel; closest functional comparator)
CPT Code 81455 — NGS, solid organ neoplasm, 51+ genes: $2,919/test (generic CPT code; lower rate reflects lack of proprietary algorithm)
PLA Code 0239U — Marlowe Asset Management Molecular Diagnostics, 'TumorMap Pro': $4,206/test (multi-gene tumor profiling; highest-rate comparator)
Weighted average: ($3,742 + $2,919 + $4,206) ÷ 3 = $3,622.33
GDT target rate: $3,850 (6.28% premium over weighted average)
Premium justification: Proprietary TRI algorithm, predictive specificity for ICI therapy response, unique 47-gene panel composition
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Appendix C: GDT Corporate & Financial Snapshot
Incorporated: June 12, 2018 (Delaware); HQ: 4720 Torrey Pines Road, Suite 300, San Diego, CA 92130
CLIA-certified, CAP-accredited reference laboratory operational since March 15, 2019
Total funding raised: ~$187M (Series A through C); Series C: $78M led by Pinnacle Health Ventures (March 2022); PHV fully diluted equity: 41.3%
FY2023 Revenue: $6.2M (OncoPrecise GXP-12 only)
Annual operating burn rate: ~$34M
PCNB Revolving Facility: $15M (SOFR + 3.75%); $9.2M drawn; maturity September 22, 2026
14 issued U.S. patents; 7 pending applications (OncoPrecise platform)
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Contact Information & Questions
| Miriam Calloway, Partner — mcalloway@calderwoodharkness.com | (202) 555-0147 | 1700 K Street NW, Suite 900, Washington, DC 20006 |
| Joel Strauss, Partner — jstrauss@calderwoodharkness.com | (415) 555-0233 | 555 California Street, Suite 3200, San Francisco, CA 94104 |
| Sean Morrissey, Senior Associate — smorrissey@calderwoodharkness.com | (202) 555-0189 | |
| Christopher Aiken, Associate — caiken@calderwoodharkness.com | (415) 555-0271 |
GDT Day-to-Day Contact: Kevin Driscoll, VP of Market Access & Reimbursement
GDT Legal Contact: Theresa Nakamura, General Counsel & VP of Regulatory Affairs