PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP Attorneys at Law
1700 K Street NW, Suite 900 Washington, DC 20006
555 California Street, Suite 3200 San Francisco, CA 94104
Matter No.: 1043-00002
Date: May 10, 2024
MEMORANDUM
TO:
Theresa Nakamura, General Counsel & VP of Regulatory Affairs, Genome Dx Therapeutics Inc.
Kevin Driscoll, VP of Market Access & Reimbursement, Genome Dx Therapeutics Inc.
Dr. Anisha Raval, Co-Founder & CEO, Genome Dx Therapeutics Inc.
FROM:
Miriam Calloway, Partner, Healthcare & Life Sciences Practice, Calderwood & Harkness LLP
Joel Strauss, Partner, Healthcare & Life Sciences Practice, Calderwood & Harkness LLP
RE:
National Coverage Determination (NCD) Feasibility Assessment — OncoPrecise GXP-47 (47-Gene RNA Expression Panel for Stage IIIB/IV NSCLC Therapy Response Prediction)
DATE:
May 10, 2024
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I. EXECUTIVE SUMMARY
This memorandum assesses the feasibility, strategic value, and projected timeline for pursuing a national coverage determination ("NCD") through the Centers for Medicare & Medicaid Services ("CMS") for Genome Dx Therapeutics Inc.'s ("GDT") OncoPrecise GXP-47, a 47-gene RNA expression panel designed to predict therapy response in patients with Stage IIIB/IV non-small-cell lung cancer ("NSCLC"). This analysis builds upon and should be read in conjunction with Calderwood & Harkness's Revised LCD/MolDx Strategy Memorandum dated April 22, 2024, which recommended deferral of the local coverage determination ("LCD") filing with Cascade Fiscal Intermediaries, LLC ("CFI") until final data from the CLARITY-LUNG clinical validation trial is available, now projected for Q2 2025.
This memorandum evaluates two primary NCD pathways available to GDT: (1) the traditional NCD pathway, which would result in unrestricted national Medicare coverage if CMS issues a positive determination, and (2) the Coverage with Evidence Development ("CED") pathway, which would provide conditional Medicare coverage contingent upon GDT's participation in a CMS-approved clinical study or registry. Each pathway is analyzed in terms of evidentiary requirements, procedural timelines, resource demands, and strategic implications for GDT's commercial and financial objectives.
Key Conclusions. Our analysis yields the following principal conclusions:
First, pursuit of an NCD is strategically valuable and, ultimately, essential for GDT to achieve nationwide Medicare access for OncoPrecise GXP-47. Without an NCD, GDT's Medicare coverage would be limited to the jurisdiction of the issuing Medicare Administrative Contractor ("MAC"), which in this case would be CFI's Jurisdiction E covering California. National coverage is critical to realizing the projected Year 3 Medicare revenue of $52,514,000 modeled by GDT and Verdant Life Sciences Capital, LLC.
Second, NCD pursuit should follow — not precede or run parallel to — a successful LCD through CFI and the MolDx program administered by Ridgeline Administrative Services, LLC ("RAS" or "Ridgeline"). The LCD-first sequencing is the optimal strategy for evidentiary, strategic, and risk management reasons, as detailed in Section IV.B below.
Third, the current evidentiary posture of OncoPrecise GXP-47 does not support an NCD request at this time through either the traditional or CED pathway. The CLARITY-LUNG interim analysis released March 29, 2024, reported a positive predictive value ("PPV") of 0.68 and a negative predictive value ("NPV") of 0.71, both of which fall below the trial's pre-specified performance benchmarks of PPV ≥ 0.75 and NPV ≥ 0.80. As noted in the Clinical Evidence Gap Analysis memorandum dated April 15, 2024, these results represent significant evidentiary gaps that bear directly on NCD feasibility.
Fourth, the estimated timeline to NCD issuance is approximately 18–24 months from LCD issuance, yielding a total estimated time to national coverage of approximately 3–4 years from the date of this memorandum. This timeline is contingent on the CLARITY-LUNG final data meeting or exceeding pre-specified performance thresholds.
Recommendation. We recommend that GDT defer initiation of the NCD process until a positive LCD has been obtained through CFI and the MolDx program, and use the intervening LCD period to accumulate additional clinical evidence — including final CLARITY-LUNG trial data and post-market real-world evidence — to strengthen the NCD submission. We further recommend that GDT begin low-cost preliminary planning for a CED study protocol in the event that CMS directs CED as the NCD coverage mechanism.
This recommendation was developed in the context of the GDT board's April 9, 2024 directive to reassess all coverage pathways following the CLARITY-LUNG interim results, and reflects the board's stated priority of pursuing a coverage strategy that is evidence-supported, financially prudent, and aligned with GDT's long-term commercial objectives.
II. BACKGROUND
A. OncoPrecise GXP-47 — Test Overview
OncoPrecise GXP-47 is a laboratory-developed test ("LDT") performed exclusively at GDT's reference laboratory, which is certified by the Clinical Laboratory Improvement Amendments ("CLIA") program under CLIA Certificate No. 05D2187432 and accredited by the College of American Pathologists ("CAP") under CAP Accreditation No. 9074821. The laboratory is located at 4720 Torrey Pines Road, Suite 300, San Diego, California 92130, and operates under National Provider Identifier ("NPI") No. 1902847365. As an LDT, OncoPrecise GXP-47 is developed, validated, and performed within this single laboratory facility, and is not currently the subject of an FDA premarket submission, although GDT has retained regulatory optionality with respect to future FDA engagement as discussed in prior Calderwood & Harkness memoranda.
The test consists of a 47-gene RNA expression panel that utilizes RNA extracted from formalin-fixed, paraffin-embedded ("FFPE") non-small-cell lung cancer tumor tissue specimens. The panel interrogates the expression levels of 47 genes selected through GDT's proprietary bioinformatics pipeline for their demonstrated association with response to immune checkpoint inhibitor ("ICI") therapy in NSCLC. The assay output is a composite Therapy Response Index ("TRI") score ranging from 0 to 100, which is reported to the ordering oncologist to inform therapeutic decision-making.
TRI scores are stratified into three clinically actionable categories: a score of 70 or above indicates a High Likelihood of Response to first-line ICI therapy; a score of 40 to 69 indicates an Intermediate Likelihood of Response; and a score below 40 indicates a Low Likelihood of Response. These thresholds were established during the analytical validation phase and refined through retrospective clinical analyses.
The intended clinical use of OncoPrecise GXP-47 is to guide oncologist decision-making regarding the selection of first-line immune checkpoint inhibitor therapy — including, but not limited to, pembrolizumab (Keytruda), nivolumab (Opdivo), and atezolizumab (Tecentriq) — versus platinum-based chemotherapy in patients with Stage IIIB or Stage IV NSCLC. The test is designed to address a well-recognized clinical need: while ICI therapy has demonstrated significant survival benefits in a subset of NSCLC patients, a substantial proportion of patients do not respond to ICI therapy and may experience disease progression during treatment. Existing biomarkers, including PD-L1 immunohistochemistry and tumor mutational burden, have limited predictive accuracy for individual patient outcomes. OncoPrecise GXP-47 is intended to provide superior predictive accuracy through its multi-gene expression profiling approach.
Analytical validation of OncoPrecise GXP-47 was completed on December 14, 2022, and the results were published in the peer-reviewed Journal of Molecular Oncology Diagnostics, Volume 18, Issue 4, pages 412–429 (December 2022). The validation demonstrated acceptable analytical performance characteristics including precision, reproducibility, accuracy, reportable range, and specimen stability in accordance with established molecular diagnostic validation standards.
GDT holds a substantial intellectual property portfolio related to the OncoPrecise platform, consisting of 14 issued United States patents and 7 pending United States patent applications covering various aspects of the gene panel composition, the TRI scoring algorithm, bioinformatics methods, and related technologies. This patent portfolio constitutes a meaningful competitive moat that should be emphasized in any NCD submission to distinguish OncoPrecise GXP-47 from competing molecular diagnostic products, as discussed further in Section V.D below.
B. Current Status of Clinical Validation — CLARITY-LUNG Trial
The clinical validation of OncoPrecise GXP-47 is being conducted through the CLARITY-LUNG trial, a prospective, multi-site, blinded clinical validation study registered on ClinicalTrials.gov under identifier NCT05891247. The study is being conducted at 14 clinical sites across the United States and is designed to evaluate the predictive performance of the TRI score for immunotherapy response in the intended-use population.
The enrollment target for CLARITY-LUNG is 1,200 patients with newly diagnosed Stage IIIB or Stage IV NSCLC. As of May 2024, the trial has enrolled 847 patients, representing 70.58% of the target enrollment. The study's primary endpoint is the PPV and NPV of the TRI score for 12-month progression-free survival ("PFS") on ICI therapy, with pre-specified performance thresholds of PPV ≥ 0.75 and NPV ≥ 0.80.
The trial's interim analysis, conducted at the pre-specified 50% enrollment milestone (n = 600), was released on March 29, 2024. The interim results reported a PPV of 0.68 and an NPV of 0.71. Neither metric met the pre-specified performance benchmarks established in the trial's statistical analysis plan. These results have significant implications for the coverage strategy analysis presented in this memorandum, as they represent the most current clinical validation data available for OncoPrecise GXP-47.
The trial's Data Safety Monitoring Board ("DSMB"), chaired by Dr. Evelyn Matsuda, MD, PhD, of the Carrington Cancer Institute in Houston, Texas, convened on April 5, 2024 to review the interim results. The DSMB recommended that enrollment continue to the full 1,200-patient target, but characterized the interim results as "inconclusive and below pre-specified performance benchmarks." The DSMB's recommendation to continue enrollment is a moderately favorable signal — a recommendation to halt enrollment would have been significantly more adverse — but the characterization of the results as "inconclusive" underscores the evidentiary challenges facing GDT's coverage strategy.
The total budget for the CLARITY-LUNG trial is $28,500,000. Expenditures through May 2024 total approximately $19,100,000, representing 67.02% of the total trial budget. The remaining budgetary commitment of approximately $9,400,000 reflects the costs of completing enrollment, follow-up, data collection, and analysis through the final data readout. The final data readout was originally projected for Q4 2024 but has been revised to Q2 2025 following the interim analysis, reflecting both the pace of enrollment and the need for sufficient follow-up time to assess the 12-month PFS endpoint in later-enrolled patients.
The CLARITY-LUNG trial's principal investigator is Dr. Priya Sundaram, GDT's VP of Clinical Development, who has been responsible for trial design, site selection, enrollment oversight, and coordination with the DSMB. Dr. Sundaram's dual role as both trial PI and GDT executive is a point that may require careful framing in the NCD submission to address potential CMS concerns about investigator independence, although this arrangement is common for sponsor-investigator studies of laboratory-developed tests.
C. Current Reimbursement Strategy Posture
The current reimbursement strategy for OncoPrecise GXP-47 was refined in Calderwood & Harkness's Revised LCD/MolDx Strategy Memorandum dated April 22, 2024. That memorandum recommended deferral of the LCD filing with CFI — specifically, with the office of Dr. William Hargrove, Medical Director, and Sandra Phu, LCD Analyst — and deferral of the MolDx technical assessment submission to Ridgeline — specifically, to the office of Dr. Catherine Embry, MolDx Technical Assessment Director — until the final CLARITY-LUNG data is available, now projected for Q2 2025. GDT management accepted this recommendation, subject to the April 9, 2024 board directive to reassess all coverage pathways, which is the directive to which this memorandum responds with respect to the NCD pathway.
The draft MolDx Technical Assessment Dossier (Version 1.0) was delivered by Calderwood & Harkness to GDT on April 30, 2024. This dossier incorporates the health economics and outcomes research ("HEOR") analysis prepared by Larkfield Health Economics, LLC, under the direction of Dr. Nathan Ostroff, and includes a bibliography of 43 peer-reviewed publications relevant to the clinical and analytical validation of OncoPrecise GXP-47 and the clinical utility of RNA expression profiling in NSCLC therapy selection. The dossier has not yet been submitted to Ridgeline and remains in draft form pending GDT board direction and the availability of final CLARITY-LUNG data.
With respect to coding, a Proprietary Laboratory Analyses ("PLA") code application has been prepared in collaboration with Carraway Regulatory Advisors, Inc., led by Janet Carraway, CPC, CCS-P. The original target for submission was the AMA CPT Editorial Panel's September 2024 meeting, with a submission deadline of June 28, 2024. However, given the board's April 9, 2024 directive and the ongoing reassessment of coverage strategy, the submission status is currently pending GDT board direction. If the June 28, 2024 deadline is not met, the next available submission opportunity would be in H2 2025, as discussed in the projected timeline at Section VI below.
The target Medicare reimbursement rate for OncoPrecise GXP-47 is $3,850 per test, based on a crosswalk analysis that will be detailed in the forthcoming Reimbursement Rate Analysis Memorandum currently under preparation by Calderwood & Harkness. This reimbursement target reflects GDT's assessment of comparator test pricing, cost-of-goods considerations, and market positioning relative to competing molecular diagnostic products.
It is relevant to note that GDT has prior experience with the MAC and MolDx coverage process. GDT's existing commercial product, OncoPrecise GXP-12 — a 12-gene breast cancer panel — was the subject of a successful LCD application and currently holds LCD L38472, effective August 15, 2021, issued by CFI. This prior successful engagement with CFI and the MolDx program constitutes favorable precedent for the GXP-47 LCD application and demonstrates GDT's institutional familiarity with the requirements and expectations of the MAC review process. The GXP-12 LCD experience also provides a model for structuring the GXP-47 LCD application and will be referenced in both the LCD and eventual NCD submissions to establish GDT's track record.
D. Revenue Context
GDT's projected annual test volume for OncoPrecise GXP-47 at full commercial launch, as modeled by GDT in collaboration with Verdant Life Sciences Capital, LLC, is as follows: Year 1 — 8,500 tests; Year 2 — 15,200 tests; Year 3 — 22,000 tests. These projections assume a ramp-up in physician adoption and market penetration over the three-year period following commercial launch.
The anticipated payer mix for OncoPrecise GXP-47 is approximately 62% Medicare and 38% commercial payers, reflecting the demographics of the Stage IIIB/IV NSCLC patient population, which is disproportionately concentrated among Medicare-eligible beneficiaries aged 65 and older. This payer mix underscores the critical importance of Medicare coverage — both local and national — to GDT's revenue projections and commercial viability.
Based on the target Medicare reimbursement rate of $3,850 per test, Year 1 projected Medicare revenue is calculated as follows: 8,500 tests × 0.62 (Medicare mix) × $3,850 = $20,290,500. Year 3 projected Medicare revenue is calculated as: 22,000 tests × 0.62 × $3,850 = $52,514,000. These figures assume nationwide Medicare coverage, which would require either an NCD or adoption of LCD coverage across all MAC jurisdictions — the former being the more reliable and efficient path to nationwide access.
Year 1 total projected revenue, including commercial payer revenue at a blended average reimbursement rate of $4,400 per test, is approximately $34,502,500. This total revenue projection is a central input to the financial models prepared by GDT and Verdant Life Sciences Capital, LLC, and is relevant to GDT's capital planning, including potential Series D financing or initial public offering considerations.
National coverage via NCD would significantly expand the addressable Medicare beneficiary population beyond CFI's Jurisdiction E (which covers California) to all MAC jurisdictions nationwide. The importance of this expansion cannot be overstated: California represents only a fraction of the national Medicare NSCLC population, and absent NCD or cross-jurisdictional LCD adoption, GDT's Medicare revenue potential would be materially constrained. The revenue implications of the LCD-only versus NCD coverage scenarios are discussed further in Section V.A below.
III. NCD PATHWAY OVERVIEW
A. Statutory and Regulatory Framework
The legal authority for national coverage determinations derives from Section 1862(a)(1)(A) of the Social Security Act, 42 U.S.C. § 1395y(a)(1)(A), which provides that Medicare will not pay for items or services that "are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member." This statutory "reasonable and necessary" standard is the fundamental evidentiary threshold that any NCD request must satisfy. CMS interprets this standard to require that a covered diagnostic test have sufficient evidence of analytical validity, clinical validity, and clinical utility to support its use in the diagnosis or treatment of Medicare beneficiaries.
The procedural framework for NCDs is set forth in 42 C.F.R. Part 405, Subpart I, which governs the initiation, review, public participation, and issuance of national coverage determinations. These regulations were substantially revised in 2003 to implement the provisions of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 ("MMA"), which established formal procedural requirements for the NCD process, including statutory timelines for CMS action.
In addition to the regulations, CMS has published detailed procedural guidance in its Manual on NCD Procedures, which describes the administrative processes for NCD requests, evidence reviews, public comment periods, and decision memoranda. The manual provides guidance on the types of evidence CMS considers, the role of the Coverage and Analysis Group ("CAG") in conducting evidence reviews, and the criteria for convening the Medicare Evidence Development & Coverage Advisory Committee ("MEDCAC"), a federal advisory committee that CMS may consult during particularly complex or novel NCD reviews.
It is important to distinguish between NCDs and LCDs for purposes of this analysis. NCDs are national in scope and, once issued, are binding on all MACs and apply to all Medicare beneficiaries nationwide. NCDs are issued exclusively by CMS at the national level and represent the highest tier of Medicare coverage policy. LCDs, by contrast, are issued by individual MACs and are binding only within the issuing MAC's jurisdiction. An LCD issued by CFI, for example, would govern coverage only for claims processed within CFI's Jurisdiction E (California). While LCDs can be adopted or referenced by other MACs through cross-jurisdictional processes, this adoption is discretionary and not guaranteed. The jurisdictional limitation of LCDs is the primary strategic rationale for pursuing an NCD for OncoPrecise GXP-47 following successful LCD issuance.
The CMS Coverage and Analysis Group is the agency unit within the Center for Clinical Standards and Quality responsible for conducting NCD analyses, managing the NCD process, and preparing decision memoranda for CMS leadership. The CAG employs medical officers, health services researchers, and policy analysts who evaluate the clinical evidence submitted in support of NCD requests. Engagement with the CAG is a critical component of the NCD process, and the quality and completeness of the evidence package submitted to the CAG is often determinative of the NCD outcome.
The Medicare Evidence Development & Coverage Advisory Committee is a standing federal advisory committee established under the Federal Advisory Committee Act that CMS may convene to provide independent expert review and recommendations during an NCD proceeding. MEDCAC panels are typically convened for NCDs involving novel technologies, complex evidentiary questions, or significant public health implications. While MEDCAC recommendations are advisory and not binding on CMS, they carry substantial weight in the NCD decision-making process. Given the novelty of OncoPrecise GXP-47's multi-gene expression approach and its application to ICI therapy selection in NSCLC, it is possible — though not certain — that CMS would choose to convene a MEDCAC panel during an NCD review for this test. MEDCAC preparation, if required, would involve significant advance work, including the identification and preparation of expert witnesses, development of presentation materials, and rehearsal of testimony, all of which must be factored into NCD resource planning.
B. Traditional NCD Pathway
The traditional NCD pathway proceeds through a structured series of steps, each governed by regulatory requirements and CMS internal procedures:
Initiation. An NCD proceeding may be initiated either through an external request submitted by any interested party — including a manufacturer, physician, professional society, Medicare beneficiary, or other stakeholder — or through CMS's own internal initiation. External requests are submitted to the CAG using CMS's standard NCD request form and must include a description of the technology, the proposed coverage criteria, and the supporting clinical evidence. CMS retains discretion to accept or decline external NCD requests based on its assessment of the request's completeness, the significance of the coverage question, and CMS's available resources. For GDT's purposes, GDT would submit an external NCD request, and the quality and completeness of that request would significantly influence CMS's decision to accept it for review.
Tracking Sheet Posting. Within 30 calendar days of accepting a formal NCD request, CMS is required to post a public tracking sheet on the CMS website that identifies the technology under review, the NCD tracking number, and the anticipated timeline for the review. The posting of the tracking sheet is the formal public signal that CMS has initiated an NCD proceeding, and it is closely monitored by industry, payer, and clinical stakeholders.
Evidence Review Period. Following acceptance of the NCD request, the CAG conducts a comprehensive review of the published clinical evidence relevant to the technology. For diagnostic tests such as OncoPrecise GXP-47, CMS evaluates evidence across three domains: analytical validity (the accuracy and reliability of the test in measuring the intended analyte), clinical validity (the strength of the association between the test result and the clinical condition or outcome of interest), and clinical utility (the extent to which use of the test improves patient health outcomes through changes in clinical management). CMS applies a rigorous evidence hierarchy in which prospective clinical validation data from well-designed studies is given the greatest weight, followed by large retrospective analyses, observational studies, and expert consensus. Retrospective data alone is generally insufficient for a positive coverage determination for a novel molecular diagnostic test.
Proposed Decision Memorandum. Upon completion of its evidence review, CMS publishes a proposed NCD decision, which may take one of three forms: (1) a positive coverage determination (the test is "reasonable and necessary" and is covered nationally), (2) a non-coverage determination (the test does not meet the "reasonable and necessary" standard and is not covered), or (3) a coverage with evidence development determination (the test may be covered conditionally, subject to specified evidence generation requirements). The proposed decision memorandum includes CMS's detailed analysis of the evidence and the rationale for the proposed determination. CMS provides a 30-day public comment period following publication of the proposed decision, during which any interested party may submit written comments.
Final Decision Memorandum. After considering public comments, CMS issues a final NCD decision memorandum. Under Section 1869(f)(1)(B) of the Social Security Act, CMS is required to issue the final NCD within 12 months of accepting the formal NCD request. This statutory timeline is intended to ensure timely resolution of coverage questions, although in practice, CMS has at times exceeded this timeline for particularly complex NCDs.
Actual Historical Timelines. Based on our review of recent NCD proceedings for molecular diagnostic tests, actual timelines from request acceptance to final decision have ranged from approximately 9 to 18 months for traditional NCDs. However, NCDs involving CED can significantly exceed these timelines due to the additional complexity of establishing CMS-approved study protocols and implementation procedures. Of particular relevance is CMS's National Coverage Determination for Next-Generation Sequencing (NCD 90.2), which established a framework for Medicare coverage of NGS-based diagnostic tests in oncology. NCD 90.2 provides useful precedent for understanding CMS's evidentiary expectations for multi-gene molecular diagnostic panels in oncology, although it should be noted that NCD 90.2 was focused primarily on somatic mutation testing for therapy selection rather than RNA expression-based predictive testing, which is the modality employed by OncoPrecise GXP-47. The distinctions between DNA-based NGS testing and RNA expression profiling should be carefully articulated in any NCD submission to ensure that CMS evaluates GXP-47 on its own merits rather than applying NCD 90.2 criteria that may not be directly applicable.
Key Evidentiary Requirements. CMS has consistently emphasized that for novel molecular diagnostic tests, the NCD evidence package should demonstrate: (i) robust analytical validation establishing the test's technical performance characteristics; (ii) clinical validation demonstrating a statistically significant and clinically meaningful association between the test result and the clinical outcome or condition of interest; (iii) clinical utility demonstrating that use of the test leads to changes in clinical management that improve patient health outcomes; and (iv) sufficient evidence regarding the test's performance in the Medicare-eligible population, which may differ from the general population in terms of age, comorbidities, and treatment tolerance. The clinical utility requirement is often the most challenging element for molecular diagnostic test sponsors to satisfy, as it typically requires evidence — ideally from prospective clinical studies — that physicians change treatment decisions based on the test result and that those changes lead to improved outcomes.
C. Coverage with Evidence Development (CED) Framework
Coverage with Evidence Development is a mechanism by which CMS provides conditional Medicare coverage for a technology while requiring the generation of additional clinical evidence to resolve remaining uncertainties about the technology's clinical effectiveness. CED recognizes that certain technologies show sufficient promise to warrant Medicare access but have not yet accumulated the body of evidence that would support unrestricted national coverage under the traditional NCD standard.
CED encompasses two subtypes. The first is Coverage with Appropriateness Determination ("CAD"), under which CMS provides coverage subject to the requirement that the technology be furnished in accordance with specified clinical criteria or practice guidelines. CAD does not require enrollment in a formal clinical study but does impose clinical eligibility and appropriateness requirements that must be documented by the ordering physician. The second subtype is Coverage with Study Participation ("CSP"), under which CMS provides coverage only for beneficiaries who are enrolled in a CMS-approved clinical study, which may take the form of a prospective registry, a prospective cohort study, or a randomized controlled trial. CSP is the more common and more rigorous of the two CED subtypes and is typically applied when CMS has identified specific evidentiary questions that can only be answered through structured data collection.
CMS typically applies the CED framework when one or more of the following conditions exist: (a) the technology demonstrates clinical promise based on preliminary evidence, including early-phase clinical trials or retrospective analyses, but the existing evidence is not yet sufficient to support a determination that the technology is "reasonable and necessary" for unrestricted coverage; (b) there is a strong clinical rationale for providing coverage to ensure beneficiary access while additional evidence is generated; or (c) the magnitude of the clinical benefit remains uncertain and additional data is needed to characterize the benefit-risk profile in the Medicare population.
CED imposes several procedural and operational requirements. The technology sponsor (in this case, GDT) must propose a CMS-approved study protocol that addresses the specific evidentiary questions identified by CMS. The study protocol must receive Institutional Review Board ("IRB") approval. The sponsor must establish and maintain the infrastructure for data collection, including patient enrollment, follow-up, outcomes measurement, and data quality assurance. The sponsor must report data to CMS on a periodic basis and in accordance with specified endpoints and timelines. CMS retains authority to modify or terminate the CED coverage if the study does not proceed as planned or if interim data raises safety concerns.
Relevance to OncoPrecise GXP-47. Given the current evidentiary posture of GXP-47 — specifically, the inconclusive CLARITY-LUNG interim results showing PPV of 0.68 and NPV of 0.71, both below pre-specified performance thresholds — CED may represent the most realistic initial NCD pathway for this test. If GDT were to pursue an NCD in the near term, CMS would likely view the existing evidence as insufficient for unrestricted coverage but potentially sufficient to support conditional coverage through CED, provided GDT can propose a credible CMS-approved study protocol. Such a protocol could potentially build upon or extend the existing CLARITY-LUNG trial, or alternatively, could establish a post-market clinical registry to collect prospective real-world evidence on GXP-47's predictive performance and clinical utility in the Medicare population.
However, the CED pathway carries several significant risks and operational burdens that must be weighed against its potential benefits:
First, CED imposes substantial operational burden on GDT's laboratory and clinical operations team. Under a CSP framework, GDT would be responsible for establishing and managing a patient registry or clinical study, including enrollment processes, informed consent, data collection, follow-up, adverse event reporting, and periodic reporting to CMS. These responsibilities require dedicated personnel, information technology infrastructure, and ongoing operational expenditure.
Second, CMS may specify narrow coverage criteria in a CED determination that limit the test volume eligible for coverage. For example, CMS could restrict CED coverage to specified patient subpopulations, particular clinical settings (e.g., NCI-designated cancer centers), or specific treatment contexts. Such restrictions would materially reduce the number of Medicare beneficiaries for whom GXP-47 would be covered, thereby limiting the revenue impact of coverage.
Third, CED coverage may be perceived negatively by commercial payers. In our experience, some commercial payers interpret a CED determination — as opposed to unrestricted NCD coverage — as evidence that the clinical validation of the technology is incomplete or equivocal. This perception can make commercial payer coverage negotiations more difficult and may result in lower reimbursement rates or more restrictive coverage policies. GDT's commercial payer strategy should account for this possibility.
Fourth, CED studies have ongoing monitoring and reporting obligations that generate sustained operational cost throughout the study duration. CED study durations typically range from 2 to 5 years, during which GDT would bear the costs of data collection, analysis, IRB renewals, CMS reporting, and study administration. We estimate these ongoing costs at $1.5 million to $3.0 million over the study duration, as detailed in Section VII below.
CED Timelines. Based on historical precedent, the timeline from NCD request acceptance to CED implementation — including the NCD evidence review, proposed decision, public comment, final decision, and study protocol finalization — typically ranges from 18 to 24 months. This timeline does not include the subsequent study duration, which as noted above typically ranges from 2 to 5 years. The total elapsed time from NCD request to completion of the CED study and transition to unrestricted coverage (if the evidence supports such a transition) may therefore be 4 to 7 years, significantly longer than the traditional NCD pathway.
IV. FEASIBILITY ANALYSIS
A. Evidentiary Readiness for NCD
An accurate assessment of GDT's evidentiary readiness for an NCD request requires a candid evaluation of the current evidence base supporting OncoPrecise GXP-47, the gaps in that evidence base, and the prospects for closing those gaps within a timeframe that supports NCD pursuit.
Current Evidence Base. GDT's existing evidence base for OncoPrecise GXP-47 consists of the following components:
Analytical Validation. Analytical validation was completed on December 14, 2022, with results published in the Journal of Molecular Oncology Diagnostics, Volume 18, Issue 4, pages 412–429 (December 2022). The analytical validation data demonstrates that the GXP-47 assay meets accepted performance standards for precision, reproducibility, accuracy, and related technical parameters. This element of the evidence base is well-established and is unlikely to be challenged in an NCD proceeding.
CLARITY-LUNG Interim Analysis. The most current clinical validation data is the CLARITY-LUNG interim analysis released March 29, 2024, which reported PPV of 0.68 and NPV of 0.71 at the 50% enrollment milestone (n = 600). As noted, these results are below the trial's pre-specified performance thresholds of PPV ≥ 0.75 and NPV ≥ 0.80. The DSMB characterized the results as "inconclusive and below pre-specified performance benchmarks."
Prior Retrospective Studies. The MolDx Technical Assessment Dossier (Version 1.0) includes a bibliography of 43 peer-reviewed publications relevant to GXP-47's scientific basis, including retrospective analyses of the gene panel's predictive performance, biological rationale studies, and related literature. While these publications provide contextual support, retrospective studies carry less evidentiary weight in CMS's evidence hierarchy than prospective clinical validation data.
HEOR Analysis. Larkfield Health Economics, LLC, under the direction of Dr. Nathan Ostroff, has prepared a health economics and outcomes research analysis demonstrating the potential cost-effectiveness of GXP-47 in guiding ICI therapy selection in NSCLC. This analysis is incorporated in the draft MolDx Technical Assessment Dossier and would be included in any NCD submission.
Assessment for Traditional NCD. The current evidence base is insufficient for a traditional NCD requesting unrestricted national coverage. The CLARITY-LUNG interim results would be the primary clinical validation data available at the time of any NCD submission filed in the near term. CMS's Coverage and Analysis Group would, in our assessment, view a PPV of 0.68 and NPV of 0.71 as below the evidentiary threshold for a positive coverage determination under the "reasonable and necessary" standard. The CAG has historically required clinical validation data demonstrating performance characteristics that meet or exceed pre-specified benchmarks, and a submission relying on data that falls short of the test sponsor's own pre-specified thresholds would be particularly vulnerable to a non-coverage determination.
Moreover, as detailed in the Clinical Evidence Gap Analysis memorandum dated April 15, 2024, the existing evidence base has additional gaps beyond the interim results themselves, including limited data on the test's performance in key Medicare subpopulations (e.g., patients age 75 and older with significant comorbidities), limited evidence of clinical utility (i.e., evidence that physician treatment decisions actually change based on the TRI score and that those changes improve outcomes), and absence of comparative effectiveness data vis-à-vis existing biomarkers (PD-L1, TMB). These gaps would be highlighted in the CAG's evidence review and would further undermine the prospects for a positive traditional NCD determination.
Assessment for CED Pathway. The existing evidence may be sufficient to support a CED request, provided GDT can propose a credible CMS-approved study protocol that addresses the identified evidentiary gaps. The analytical validation data is strong, the CLARITY-LUNG trial is ongoing and demonstrates GDT's commitment to rigorous clinical validation, and the biological rationale for multi-gene RNA expression profiling in ICI response prediction is supported by the published literature. A CED request would essentially argue that GXP-47 shows sufficient promise to warrant conditional coverage while the remaining evidentiary questions are resolved through a structured study. However, as noted in Section III.C above, the CED pathway carries significant operational burdens and risks, and is not recommended at this time for the reasons discussed in Section IV.B below.
Post-CLARITY-LUNG Final Data Scenario. The viability of both the traditional NCD and CED pathways is heavily dependent on the CLARITY-LUNG final data readout, projected for Q2 2025. If the final data, based on the full 1,200-patient enrollment, meets or exceeds the pre-specified performance thresholds (PPV ≥ 0.75, NPV ≥ 0.80), the evidentiary profile improves materially and a traditional NCD becomes significantly more viable. In that scenario, the combination of robust analytical validation, positive prospective clinical validation, supporting retrospective literature, and favorable HEOR analysis would constitute a strong evidence package for a traditional NCD request. If the final data exceeds the pre-specified thresholds by a meaningful margin, the case for unrestricted national coverage would be further strengthened and the likelihood of CED (as opposed to unrestricted coverage) would diminish correspondingly.
Conversely, if the final data fails to meet the pre-specified thresholds, the NCD pathway may not be viable absent CED, and even the CED pathway would face heightened scrutiny. In that scenario, GDT would need to evaluate whether modifications to the trial design, additional clinical studies, or refinements to the TRI algorithm could improve the test's predictive performance before proceeding with any national coverage strategy.
B. Comparative Analysis: LCD-First vs. Parallel LCD/NCD vs. NCD-Only Strategies
We have evaluated three potential strategic approaches to the sequencing of LCD and NCD pursuit for OncoPrecise GXP-47. Our analysis considers each approach's advantages and disadvantages across multiple dimensions, including evidentiary strength, timeline, resource requirements, risk profile, and strategic positioning.
1. LCD-First Strategy (Recommended). Under this approach, GDT would pursue an LCD through CFI under the MolDx program as its initial coverage objective. Once the LCD is obtained and GXP-47 has established a coverage track record within Jurisdiction E (California), GDT would use the LCD as a foundation and springboard for an NCD request to CMS. This is the approach that Calderwood & Harkness recommends, for the following reasons:
Advantages:
(a) Lower evidentiary threshold. LCD coverage through the MolDx program, while rigorous, generally requires a lower quantum of evidence than a traditional NCD. The MolDx technical assessment process evaluates analytical validity, clinical validity, and clinical utility, but the MAC-level review is typically less exhaustive than the CMS CAG's NCD review, and the evidence requirements are calibrated to the MAC level. This lower threshold increases the probability of obtaining initial coverage on the available evidence base, particularly if the CLARITY-LUNG final data meets or approaches the pre-specified thresholds.
(b) Favorable precedent. A successful LCD demonstrates that the test has been reviewed and accepted by a MAC medical director and the MolDx program, which operates as a specialized molecular diagnostics assessment program with recognized expertise. This acceptance creates favorable precedent that CMS can reference during its NCD review. CMS decision memoranda for molecular diagnostics NCDs frequently note the existence (or absence) of prior LCD coverage as a factor in the agency's assessment.
(c) Revenue generation during NCD review. LCD coverage in Jurisdiction E would allow GDT to begin generating Medicare revenue from California-based beneficiaries while the NCD is being pursued. This revenue stream, while representing only a portion of the total projected Medicare revenue, would provide meaningful cash flow to support ongoing operations, the CLARITY-LUNG trial completion, and the NCD process itself. The alternative — pursuing an NCD without prior LCD coverage — would leave GDT without any Medicare revenue until the NCD is resolved, which given the projected 18–24 month NCD timeline could create significant financial strain.
(d) Real-world evidence generation. The period of LCD coverage provides an opportunity to accumulate real-world evidence on GXP-47's predictive performance and clinical utility in routine clinical practice. This evidence — including data on test utilization patterns, physician treatment decisions, patient outcomes, and clinical workflow integration — can strengthen the NCD submission by supplementing the CLARITY-LUNG trial data with practice-based evidence. CMS has increasingly emphasized the value of real-world evidence in its coverage deliberations, and the ability to present such evidence would be a significant advantage in an NCD proceeding.
(e) Cross-MAC LCD adoption potential. Following issuance of an LCD by CFI, other MACs may adopt similar coverage policies through cross-jurisdictional LCD adoption processes. While cross-MAC adoption is not guaranteed and depends on the policies and priorities of individual MACs, it is a realistic possibility that could expand Medicare coverage for GXP-47 beyond Jurisdiction E even before an NCD is obtained. Any cross-MAC adoption would further strengthen the NCD request by demonstrating broader MAC acceptance of the test.
Timeline. Under the LCD-first strategy, the projected timeline is as follows: LCD filing targeted for Q3 2025 (contingent on positive CLARITY-LUNG final data in Q2 2025); LCD processing and issuance estimated for Q1–Q2 2026 (approximately 6–9 months processing time); post-LCD real-world evidence accumulation period of approximately 6–12 months (Q2 2026 through Q4 2026); NCD request submission targeted for Q4 2026 through Q1 2027; CMS NCD evidence review and final decision estimated for Q3 2027 through Q2 2028. The total estimated time to NCD issuance under this strategy is approximately 3–4 years from the date of this memorandum (May 2024).
Assessment. The LCD-first strategy is the recommended approach. It is the most prudent sequencing given the current evidentiary posture, as it allows GDT to build evidence, establish coverage precedent, generate revenue, and demonstrate clinical adoption before engaging with CMS at the national level. The principal disadvantage — the extended timeline to national coverage — is a real cost, but it is outweighed by the risk mitigation and strategic advantages described above.
2. Parallel LCD/NCD Strategy. Under this approach, GDT would file the LCD application with CFI and the MolDx technical assessment submission with Ridgeline while simultaneously submitting an NCD request to CMS. The intent would be to pursue both coverage pathways concurrently, potentially accelerating the timeline to national coverage.
Advantages:
(a) Potential timeline acceleration. If both the LCD and NCD proceedings were to proceed on their respective timelines without interference, the parallel approach could theoretically accelerate the timeline to national coverage by the 6–12 month period that would otherwise be spent accumulating post-LCD real-world evidence before filing the NCD request.
(b) Concurrent CMS engagement. Filing an NCD request concurrently with the LCD application would put CMS on notice of GDT's interest in national coverage and would initiate the CMS evidence review process earlier than under the LCD-first strategy.
Disadvantages:
(a) CMS deferral risk. CMS may, in its discretion, defer acceptance of the NCD request pending the outcome of the LCD proceeding. The CAG has historically taken the position that for novel LDTs without any existing coverage track record, the MAC/LCD process should be exhausted before CMS undertakes an NCD review. If CMS defers, the parallel filing achieves no time savings and merely front-loads expenditures.
(b) Negative LCD precedent risk. If the LCD results in non-coverage or limited coverage — a realistic possibility given the inconclusive CLARITY-LUNG interim data and the evidentiary gaps identified in the April 15, 2024 memorandum — this creates negative precedent that would undermine the NCD request. A non-coverage LCD by CFI would signal to the CMS CAG that GXP-47 has already been evaluated by a MAC with expertise in molecular diagnostics and found wanting. This signal would be significantly more damaging to the NCD than the absence of any LCD coverage at all.
(c) Resource duplication. The parallel strategy effectively doubles the resource expenditure for coverage strategy execution. GDT would simultaneously bear the legal fees, regulatory consulting costs, and management attention demands associated with both the LCD and NCD proceedings. Given GDT's existing financial commitments — including the remaining $9,400,000 CLARITY-LUNG trial budget and the $9,200,000 outstanding balance on the PCNB Revolving Facility — the incremental resource burden of parallel proceedings may not be advisable.
(d) Historical CMS reluctance. As noted above, CMS has historically been reluctant to accept NCD requests for tests that lack any existing coverage history. This reluctance is rooted in CMS's preference for allowing the MAC-level review process to generate an initial coverage assessment before committing CMS's own limited resources to a national review. Filing an NCD request for a test without any LCD coverage would be swimming against this institutional current.
(e) No incremental evidentiary advantage. If the CLARITY-LUNG final data is still pending at the time of the parallel NCD filing, the evidence base presented to CMS in the NCD request would be identical to the evidence base presented to CFI in the LCD application. There would be no incremental evidentiary advantage to the NCD filing — the same data would simply be reviewed by two different bodies at two different levels, with the NCD review applying a higher evidentiary standard.
Assessment. The parallel LCD/NCD strategy is not recommended at this time. The potential timeline savings are speculative and are outweighed by the risks of CMS deferral, negative LCD precedent, resource duplication, and the absence of any incremental evidentiary advantage. This assessment could change if GDT's evidentiary posture improves materially — for example, if the CLARITY-LUNG final data significantly exceeds pre-specified thresholds — but under current conditions, the parallel approach is not advisable.
3. NCD-Only Strategy (Bypass LCD). Under this approach, GDT would forego the LCD application entirely and file an NCD request directly with CMS, seeking national coverage without first obtaining local coverage.
Advantages:
(a) Immediate national scope. If successful, an NCD would provide immediate nationwide Medicare coverage, avoiding the jurisdiction-by-jurisdiction LCD process entirely.
(b) Administrative simplicity. An NCD-only approach avoids the need to navigate the MolDx technical assessment process and the CFI LCD review separately from the CMS NCD process, reducing the number of distinct regulatory interactions required.
Disadvantages:
(a) Absence of coverage track record. CMS generally expects tests to have an existing coverage track record before it undertakes an NCD review, particularly for novel LDTs. The absence of any LCD coverage for GXP-47 would place the test at a significant disadvantage in the NCD process, as CMS would lack the benefit of a MAC's independent assessment and coverage decision.
(b) Higher probability of non-coverage or restrictive CED. Without the favorable precedent of an LCD, an NCD request is more likely to result in either a non-coverage determination or a CED determination with restrictive conditions. The risk of non-coverage is particularly acute given the inconclusive CLARITY-LUNG interim data.
(c) Nationwide negative precedent risk. A negative NCD determination would be binding nationwide and would effectively preclude Medicare coverage for GXP-47 in all jurisdictions until the NCD is reconsidered — a process that typically requires the generation of substantial new evidence and a formal NCD reconsideration request. By contrast, a negative LCD is binding only within the issuing MAC's jurisdiction and does not preclude coverage in other jurisdictions or at the national level. The asymmetric consequences of a negative outcome make the NCD-only strategy significantly riskier than the LCD-first approach.
(d) No Medicare revenue during processing. Under the NCD-only strategy, GDT would have no Medicare revenue stream from GXP-47 during the entire NCD processing period, which could extend 12–18 months or longer. This absence of revenue during a critical commercialization phase would place additional financial pressure on GDT.
Assessment. The NCD-only strategy is not recommended. The risk/reward profile is unfavorable under current conditions. The strategy carries the highest downside risk (a binding nationwide non-coverage determination) with the lowest probability of a favorable outcome (given the absence of LCD precedent and the inconclusive clinical evidence). This strategy should only be considered if GDT accumulates overwhelming clinical evidence that makes a positive NCD determination virtually certain — a scenario that is not supported by the current or near-term evidentiary outlook.
C. Regulatory Interaction Considerations
Several ancillary regulatory considerations bear on the NCD feasibility analysis and strategy planning:
CMS Informal Pre-Request Consultation. CMS's Coverage and Analysis Group occasionally engages in informal pre-submission discussions with prospective NCD requestors. These consultations are not guaranteed, are not governed by formal procedures, and do not bind CMS in any way, but they can provide valuable intelligence regarding CMS's receptivity to a particular NCD request, the CAG's preliminary assessment of the evidence base, and any specific evidentiary concerns that should be addressed before formal submission. Calderwood & Harkness recommends exploring whether such a consultation is feasible after the LCD is obtained, as the existence of an LCD would provide a more credible foundation for engaging CMS in a pre-request dialogue. We have contacts within the CAG who may facilitate such a consultation at the appropriate time.
Coordination with Ridgeline/MolDx. The MolDx technical assessment completed for the LCD application will serve as the foundation for the NCD evidence package. It is important that the MolDx technical assessment dossier (currently in Version 1.0 draft) be structured and documented in a manner that facilitates its subsequent adaptation for NCD use. Calderwood & Harkness recommends that GDT coordinate with Dr. Catherine Embry, MolDx Technical Assessment Director at Ridgeline, during the LCD application process to ensure that the technical assessment addresses the evidence domains that CMS will scrutinize during an NCD review — including, in particular, clinical utility evidence, which is sometimes less emphasized in the MolDx assessment than in the CMS NCD review. Early coordination on this point can avoid the need for a substantial rework of the evidence package when the NCD process is initiated.
AMA CPT Editorial Panel and PLA Code Assignment. A PLA code assignment for OncoPrecise GXP-47 would strengthen the NCD request by demonstrating that the test has an established, test-specific coding framework within the AMA CPT system. PLA codes are specific to a single laboratory and a single test, and their existence signals to CMS that the test has undergone the AMA's code assignment process and has a defined place in the medical coding infrastructure. As noted in Section II.C above, the PLA code application prepared by Carraway Regulatory Advisors, Inc., was originally targeted for the AMA CPT Editorial Panel's September 2024 meeting, but the submission status is currently pending board direction. If the June 28, 2024 submission deadline is missed, the next available submission cycle would be in H2 2025. We recommend that the PLA code application be submitted at the earliest available opportunity, regardless of the LCD and NCD timeline, as the PLA code is a foundational element of the reimbursement infrastructure that benefits both the LCD and NCD processes. If a PLA code is obtained in a future submission cycle, it should be prominently referenced in the NCD request.
V. STRATEGIC CONSIDERATIONS
A. Impact on Revenue Projections and Commercial Strategy
The choice between LCD-only coverage and NCD national coverage has profound implications for GDT's revenue projections and commercial strategy. As noted in Section II.D above, the revenue projections modeled by GDT and Verdant Life Sciences Capital, LLC, assume nationwide Medicare coverage. Without NCD coverage, GDT's Medicare revenue would be limited to beneficiaries within CFI's Jurisdiction E (California), plus any beneficiaries in jurisdictions where other MACs have adopted cross-jurisdictional LCD coverage.
To quantify this impact, California's share of the national Medicare NSCLC population is estimated at approximately 10–12% based on cancer incidence data and Medicare enrollment statistics. Even with optimistic assumptions regarding cross-MAC LCD adoption — which, in our experience, typically captures an additional 20–30% of the national Medicare population over a 12–24 month period following initial LCD issuance — GDT's addressable Medicare beneficiary population under an LCD-only strategy would likely represent no more than 30–40% of the national total. This would reduce Year 1 projected Medicare revenue by an estimated 60–70% from the $20,290,500 projected under the nationwide coverage assumption, potentially to a range of approximately $6,100,000–$8,100,000.
The revenue gap between LCD-only coverage and NCD national coverage widens significantly in subsequent years as test volume ramps up. Year 3 projected Medicare revenue of $52,514,000 under nationwide coverage would be reduced to approximately $15,750,000–$21,000,000 under an LCD-only scenario — a shortfall of $31,500,000 to $36,750,000 annually. Over the 3–4 year period from present to projected NCD issuance, the cumulative revenue foregone due to the absence of national coverage is substantial and directly impacts GDT's financial trajectory, capital requirements, and equity valuation.
NCD coverage is therefore not merely a desirable objective but a strategic imperative for GDT's commercial success. The recommendation to pursue an LCD-first strategy is not a recommendation to forego national coverage; rather, it is a recommendation regarding optimal sequencing designed to maximize the probability of ultimately obtaining national coverage while managing risk and generating intermediate revenue.
Verdant Life Sciences Capital, LLC's financial models for GDT's Series D financing or potential IPO should incorporate updated NCD timeline assumptions based on the analysis in this memorandum. We recommend that GDT's CFO, Raymond Ota, coordinate with Verdant (Christine Lau, Managing Director) to update the financial projections to reflect three scenarios: (i) LCD-only coverage (lower bound), (ii) LCD plus cross-MAC adoption (intermediate), and (iii) NCD national coverage (upper bound), each with its own associated timeline and revenue ramp assumptions.
B. Impact on Pacific Coast National Bank Revolving Facility Covenant
The NCD timeline presented in this memorandum has direct implications for GDT's compliance with the Pacific Coast National Bank ("PCNB") Revolving Facility. The PCNB Revolving Facility (Reference No. PCNB-GDT-RF-2023-0922), a $15,000,000 revolving credit facility with $9,200,000 currently outstanding, contains a milestone covenant at Section 7.14 requiring GDT to "obtain a final Medicare coverage determination" for at least one proprietary LDT by December 31, 2024.
The NCD timeline analyzed in this memorandum — which projects an NCD decision no earlier than Q3 2027 at the most optimistic — clearly cannot satisfy the December 31, 2024 covenant deadline. Similarly, the LCD timeline under the recommended strategy — which projects LCD issuance no earlier than Q1 2026, given the recommended deferral of LCD filing until Q3 2025 — also cannot satisfy the covenant deadline.
The covenant compliance question is further complicated by the ambiguity in the covenant language regarding whether a "final Medicare coverage determination" encompasses only the GXP-47 test or whether GDT's existing OncoPrecise GXP-12 LCD (LCD L38472, effective August 15, 2021) may satisfy the requirement. A colorable argument can be made that the GXP-12 LCD constitutes a "final Medicare coverage determination" for a GDT proprietary LDT, thereby satisfying Section 7.14 on its terms. However, this argument requires careful analysis of the covenant language, the credit agreement's definitions, and the parties' negotiating history.
A separate analysis of these covenant implications is currently being prepared by Calderwood & Harkness and will be delivered to GDT together with the Wind-Down Memorandum referenced in prior correspondence. We