−Removed: We are advancing the field of immune-driven medicine by harnessing the inherent biology of the adaptive immune system to transform the diagnosis and treatment of disease.
+Added: We are advancing the field of immune medicine by harnessing the inherent biology of the adaptive immune system to transform the diagnosis and treatment of disease.
We believe the adaptive immune system is nature’s most finely tuned diagnostic and therapeutic for most diseases, but the inability to decode it has prevented the medical community from fully leveraging its capabilities.
−Removed: Our immune medicine platform applies our proprietary technologies to read the diverse genetic code of a patient’s immune system and understand precisely how it detects and treats disease in that patient.
−Removed: We capture these insights in our dynamic clinical immunomics database, which is underpinned by computational biology and machine learning, and use them to develop and commercialize clinical products and services that we are tailoring to each individual patient.
−Removed: We have two commercial products and services and a robust pipeline of clinical products and services that we are designing to diagnose, monitor and enable the treatment of diseases such as cancer, autoimmune conditions and infectious diseases.
−Removed: Since our inception in 2009, we have characterized over 37 billion immune receptors, established partnerships and commercial relationships with over 165 biopharmaceutical companies and launched two product lines.
+Added: Our immune medicine platform applies our proprietary technologies to read the diverse genetic code of a patient’s immune system and aims to understand precisely how the immune system detects and treats disease in that patient.
+Added: We capture these insights in our dynamic clinical immunomics database, which is underpinned by computational biology and machine learning, and use these insights to develop and commercialize clinical products and services that we are tailoring to each individual patient.
+Added: We have three commercial products and services and a robust pipeline of clinical products and services that we are designing to diagnose, monitor and enable the treatment of diseases such as cancer, autoimmune conditions and infectious diseases.
+Added: Since our inception in 2009, we have characterized over 58 billion immune receptors, established partnerships and commercial relationships with 175 biopharmaceutical companies and launched three product lines.
Our goal is to understand the adaptive immune system and translate it into new products with unprecedented scale, precision and speed.
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The cornerstone of our platform and core immunosequencing product, immunoSEQ, serves as our underlying research and development engine and generates revenue from academic and biopharmaceutical customers.
−Removed: Our first clinical diagnostic product, clonoSEQ, is the first test authorized by the Food and Drug Administration (“FDA”) for the detection and monitoring of minimal residual disease (“MRD”) in patients with multiple myeloma (“MM”) and B cell acute lymphoblastic leukemia (“ALL”) and is being validated for patients with other blood cancers.
−Removed: Leveraging our collaboration with Microsoft Corporation (“Microsoft”) to create a map of the interaction between the immune system and disease (“TCR-Antigen Map”), we are also developing a diagnostic product, immunoSEQ Dx, that may enable early detection of many diseases from a single blood test.
−Removed: We have established proof of concept for immunoSEQ Dx in acute Lyme disease, such that we can proceed to clinical validation, and continue to pursue signals for other disease states.
+Added: Our first clinical diagnostic product, clonoSEQ, is the first test authorized by the Food and Drug Administration (“FDA”) for the detection and monitoring of minimal residual disease (“MRD”) in patients with multiple myeloma (“MM”), B cell acute lymphoblastic leukemia (“ALL”) and chronic lymphocytic leukemia (“CLL”) and is also available as a CLIA-validated laboratory developed test (“LDT”) for patients with other lymphoid cancers.
+Added: Leveraging our collaboration with Microsoft Corporation (“Microsoft”), we are creating a map of the interaction between the immune system and disease (“TCR-Antigen Map”).
+Added: We are using this map to develop research solutions by disease called immunoSEQ T-MAP and a diagnostic product for many diseases from a single blood test called T-Detect.
+Added: T-Detect was formerly known as immunoSEQ Dx.
+Added: T-Detect COVID, for which we have applied for Emergency Use Authorization (“EUA”), confirms past SARS-CoV-2 infection, the virus that causes COVID-19, and is also the first indication for the T-Detect product line.
+Added: We are finalizing clinical validation of T-Detect for Lyme disease and continue to pursue signals for other disease states in parallel.
Our therapeutic product candidates, being developed under our collaboration agreement with Genentech, Inc.
−Removed: (“Genentech”), leverage our platform to identify specific immune cells to develop into cellular therapies in oncology.
+Added: (“Genentech”), leverage our platform to identify specific receptors on immune cells to develop into cellular therapies in oncology.
We believe this approach has the potential to be applicable to patients across a wide range of cancers.
−Removed: Immune-driven medicine is one of the largest global addressable markets in healthcare.
+Added: We also extended our platform to identify highly potent neutralizing antibodies against SARS-CoV-2 and we believe this differentiated approach may be leveraged across multiple disease states.
+Added: Immune medicine is one of the largest global addressable markets in healthcare.
We estimate the potential market opportunity for our portfolio to be $54.7 billion, including $1.0 billion for research products, $22.3 billion for clinical diagnostics and $31.4 billion for cellular therapy in oncology.
−Removed: We use multiple sources and assumptions to estimate the total addressable market for immune-driven medicine.
+Added: We use multiple sources and assumptions to estimate the total addressable market for immune medicine.
While we believe them to be reasonable, these sources and assumptions may be incorrect or subject to change due to any number of factors.
−Removed: In particular, our drug discovery initiatives are still in the early stages of development, which may make our assumptions and estimates more uncertain.
+Added: In particular, the indications we choose to commercialize for T-Detect may vary depending on ongoing signal validation and market considerations.
+Added: In addition, our drug discovery initiatives are still in the early stages of development and the market opportunity excludes neutralizing antibodies, which may make our assumptions and estimates more uncertain.
Despite the novelty of this area, we believe we are uniquely positioned to develop and commercialize a pipeline of immune-driven diagnostic and therapeutic products across multiple disease states by leveraging the cumulative learning from our immune medicine platform.
+Added: Despite operating with challenges presented by the global COVID-19 pandemic, we were able to achieve and progress towards many key milestones in 2020 in each business area:
+Added: We extended our collaboration with Microsoft to decode the population-wide T-cell immune response to COVID-19.
+Added: We believe that quantifying virus-specific T cells may provide important research and diagnostic advantages because T cells appear earlier than antibodies and persist longer.
+Added: Together, we implemented the ImmuneCODE Program to quantitatively assess the T-cell immune response to the virus in over 5,000 individuals from around the world and we have made this data publicly available.
+Added: As a result of this work, we have broadened our product portfolio in our life sciences research and clinical diagnostic business areas.
+Added: In addition, we also leveraged these samples to contribute to our research and development efforts to identify potent neutralizing antibodies against the virus, which extended our drug discovery capabilities.
+Added: In clinical diagnostics, we now have two products on the market – clonoSEQ and T-Detect.
+Added: For clonoSEQ, we grew our test volume by 49% to 15,186 tests delivered.
+Added: We increased the all-time number of unique patients tested by more than 50% to over 15,000 patients by the end of 2020.
+Added: We also achieved an expansion of our FDA label to include CLL from both bone marrow and blood and have filed to expand our existing label for ALL in bone marrow to include blood .
+Added: For T-Detect, we launched the first indication, T-Detect COVID, to confirm past SARS-CoV-2 infection.
+Added: Our data demonstrates that our T-cell based test outperforms antibody serology to confirm past infection.
+Added: We will be completing our ImmuneSENSE Lyme clinical validation study and are preparing for commercialization in 2021, and we announced another clinical signal for Crohn’s Disease.
+Added: In life sciences research, we launched the upgraded immunoSEQ RUO kit, which has been selected by 35 core labs and user groups at premier institutions and by two global clinical research organizations (“CROs”), Q2 Solutions LLC (“Q2 Solutions”) and Laboratory Corporation of America Holdings (“Labcorp”), to offer gold standard immunosequencing to their research clientele.
+Added: In the third quarter, leveraging our work with Microsoft, we launched a new product extension called immunoSEQ T-MAP COVID to accurately and reproducibly measure the T-cell immune response to vaccines and track the persistence of that response over time, and we are in late-stage discussions with several companies developing next-generation vaccines.
+Added: This is the first application of the immunoSEQ T-MAP product extension whereby we will be offering access to the mapped sequence data generated by our platform.
+Added: In the fourth quarter of 2020, we entered into our first multi-year immunoSEQ T-MAP cancer collaboration with AstraZeneca plc (“AZ”) to generate data from antigen-specific T-cell immune responses across AZ’s oncology drug portfolio.
+Added: T-MAP data may inform early disease intervention to help improve patient outcomes, with the potential for additional opportunities to develop companion diagnostic or novel therapeutics with AZ.
+Added: We also signed two additional collaborations with Genentech and GlaxoSmithKline plc to use the research application of our MRD product to support clinical development and potential regulatory approval or label extensions of novel blood cancer therapies.
+Added: In drug discovery, Genentech is planning to file an investigational new drug (“IND”) submission in the first half of 2021 for our first shared cellular therapy product and we are in late-stage characterization of our next cancer-specific immune receptor that could be selected by Genentech for the potential development of a second shared cellular therapy product.
+Added: We are scaling our research and development efforts and plan to generate proof of concept data for the personalized approach and are on track to open our dedicated prototype lab in South San Francisco in early 2021.
+Added: For our neutralizing antibody efforts, we identified several highly potent neutralizing antibodies against SARS-CoV-2 and are in active partnering discussions.
+Added: Key financial highlights for 2020 include full year revenue up 16% to $98.4 million, cash, cash equivalents and marketable securities of $806.8 million and clinical sequencing volumes up 50% to 15,216 tests, which now includes both clonoSEQ and T-Detect tests.
+Added: In addition, we expect to complete construction and move into our new corporate headquarters in Seattle, Washington in the second half of 2021.
+Added: This approximately 100,000 square foot facility is designed to enable us to quadruple our volume over time and allow for continued scaling and growth.
Our Immune Medicine Platform
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These instructions enable these cells to identify, bind and destroy pathogens or human cells presenting foreign signals of disease (“antigens”) using receptors on their cell surface.
−Removed: Unlike all other genes in the human genome, the genetic sequences of T cell receptors (“TCRs”) and B cell receptors (“BCRs”) rearrange over time creating massive genetic diversity.
+Added: Unlike all other genes in the human genome, the genetic sequences of TCRs and B cell receptors (“BCRs”) rearrange over time creating massive genetic diversity.
The resulting diversity of the adaptive immune repertoire, which consists of over 100 million different genes in a healthy adult compared to approximately 30,000 genes in the static human genome, gives the immune system the ability to detect and respond to millions of different antigens associated with human disease.
−Removed: Our immune medicine platform combines a suite of proprietary technologies, bioinformatics, software and machine learning to generate clinical immunomics data to decode the adaptive immune system.
+Added: Our immune medicine platform combines a suite of proprietary chemistry, computational biology and machine learning to generate clinical immunomics data to decode the adaptive immune system.
It extracts and interprets insights from the adaptive immune system with the scale, precision and speed required to enable the design of clinical products tailored to the specific genetics of each patient’s immune system.
−Removed: Our Immune Medicine Platform
Our immune medicine platform performs the following key functions related to immune receptors:
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TruTCR characterizes binding, cytotoxicity and safety properties of antigen-specific, paired TCRs to identify a subset that is therapeutic-grade, enabling the discovery and development of optimal clinical candidates to be engineered into TCR-mediated cellular therapies.
−Removed: The massive amount of data generated by our immune medicine platform is stored in our dynamic clinical immunomics database of over 58 billion immune receptors, of which we have data rights to over 37 billion.
+Added: TruAB is our high-throughput antibody discovery process that enables the selection of potent, naturally occurring, full length antibodies for therapeutic or prophylactic development.
+Added: The massive amount of data generated by our immune medicine platform is stored in our dynamic clinical immunomics database of over 58 billion immune receptors.
We believe the application of machine learning, supported by our collaboration with Microsoft, has the potential to exponentially accelerate our ability to derive novel insights from this database and use them to inform our robust product development efforts.
+Added: The current coronavirus pandemic is highlighting the critical importance of understanding the immune response to disease broadly, making our technology more relevant than ever.
+Added: We are focused on translating the genetic language of the adaptive immune system into clinical products to diagnose and treat disease, and we are committed to leveraging our immune medicine platform to support the efforts to combat the COVID-19 pandemic.
+Added: By elucidating immune receptor data specific to SARS-CoV-2, we developed multiple products.
+Added: In our research business, for the first time, we offered a product that not only sequences, but also maps the immune response to the virus.
+Added: This product, called immunoSEQ T-MAP COVID, provides a better way for vaccine developers and researchers to include the T-cell response in their studies.
+Added: We are pleased to see top-tier vaccine developers recognizing the power of this product.
+Added: Leveraging the same data, we launched a clinical diagnostic called T-Detect COVID to confirm past infection.
+Added: In addition, we created an antibody discovery platform to find highly potent neutralizing antibodies against COVID-19 that is applicable not only to the current pandemic, but also in the unfortunate event of future pandemics and other diseases states.
+Added: Importantly, we believe we can leverage what we accomplished for COVID-19 using disease-specific immune receptor data across other disease states going forward.
+Added: We believe COVID-19 brought the role of the immune system to the forefront of society and has created the opportunity for us to be positioned as the “go to” company to rapidly and reproducibly assess the T-cell response to any pathogen, including future pandemics.
Our Current Products and Pipeline
Our current portfolio includes commercial products and services in life sciences research and clinical diagnostics, and we are developing products and services in both clinical diagnostics and drug discovery.
−Removed: Our commercial research product, immunoSEQ, primarily serves as our underlying research and development engine to develop and validate our clinical pipeline.
+Added: Our commercial research products, immunoSEQ and immunoSEQ T-MAP, primarily serve as our underlying research and development engine to develop and validate our clinical pipeline.
We plan to continue to invest in our immune medicine platform to develop additional clinical products, which we prioritize based on clinical actionability, unmet medical need and commercial viability.
Life Sciences Research
−Removed: Our immunoSEQ research service and kit are used to answer translational research questions and discover new prognostic and diagnostic signals.
−Removed: Our technology has been used for research purposes by over 2,200 academic researchers and more than 165 biopharmaceutical companies and incorporated into over 600 clinical trials since our inception in 2009.
−Removed: We have completed development of a next generation, sample-type agnostic research use only (“RUO”) kit that is now available.
−Removed: Our goal is to achieve global distribution of our research product.
−Removed: We are working to analytically validate the improved version of immunoSEQ so that all research data generated using immunoSEQ can be used for clinical validation of potential diagnostic applications.
+Added: Our immunoSEQ research service and kits are used to answer translational research questions and discover new prognostic and diagnostic signals.
+Added: Our technology has been used for research purposes by over 2,400 academic researchers and 175 biopharmaceutical companies and incorporated into over 650 clinical trials since our inception in 2009.
+Added: We have completed development of a next generation, sample-type agnostic research use only (“RUO”) kit that has been selected by 35 academic core labs and user groups in the United States and we continue to expand these collaborations.
+Added: Additionally, we announced our first distribution agreement with two CROs, Q2 Solutions and Labcorp, and we are in discussions with several others.
+Added: By enabling academic core labs and CROs as centers of excellence with our gold standard immunoSEQ RUO kit, we expect to set the foundation for long term growth going forward.
+Added: Importantly, immunoSEQ is analytically validated so that all research data generated using immunoSEQ can be used for clinical validation of potential diagnostic applications.
+Added: We launched immunoSEQ T-MAP COVID in August 2020 for vaccine developers and researchers to accurately and reproducibly measure the T-cell immune response to vaccines and track the persistence of that response over time.
+Added: A key objective with T-MAP COVID is to answer many outstanding questions about durability of COVID-19 vaccines, especially in light of new variants of the virus.
+Added: Our T-MAP product offers significant advantages over other technologies to detect and monitor T cells at scale using a small amount of blood without the need for live cells that require special sample handling.
+Added: To date, we have sequenced a subset of patient samples (pre- and post-vaccination) from clinical trials sponsored by several top-tier vaccine developers, including AZ, University of Oxford, Bill and Melinda Gates Foundation and several prestigious academic labs who are studying the impact of COVID-19 vaccines on patients receiving other immune-mediated therapies.
+Added: Using our immunoSEQ T-MAP COVID product, we can identify and track expanded T cells induced by a vaccine, which can be distinguished from a natural infection, in order to monitor vaccine efficacy.
+Added: In vaccinated subjects who test positive for the virus utilizing the two-step multiplex polymerase chain reaction (“PCR”) amplification process, immunoSEQ T-MAP COVID can specifically track vaccine-induced T cells and correlate response with improved patient outcomes.
+Added: In addition, we are also in late-stage discussions with several companies developing next-generation vaccines.
+Added: In the fourth quarter of 2020 , we entered into our first multi-year immunoSEQ T-MAP c ancer collaboration with AZ to generate data from antigen-specific T-cell immune response s across AZ ’s oncology drug portfolio .
+Added: T-MAP data may inform early disease intervention to help improve patient outcomes , with the potential for additional partnership opportunities to develop companion diagnostics or novel therapeutics with AZ .
+Added: The partnership also allows for data sharing between us and AZ that benefit s our independent efforts.
+Added: We expect this will help expedite our ability to map the large antigenic space in cancer.
Clinical Diagnostics
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In September 2018, clonoSEQ was granted marketing authorization from the FDA, under the de novo process, for patients with MM and ALL to monitor their MRD from bone marrow samples.
−Removed: clonoSEQ is also available for use in other lymphoid cancers as a laboratory developed test (“LDT”).
+Added: In August 2020, the clonoSEQ label was expanded to include patients with CLL from bone marrow and blood samples.
+Added: clonoSEQ is also available for use in other lymphoid cancers as an LDT.
In January 2019, clonoSEQ received Medicare coverage aligned with the FDA label and National Comprehensive Cancer Network (“NCCN”) guidelines for longitudinal monitoring in MM and ALL.
−Removed: In 2019, we secured payor coverage for clonoSEQ aligned with our FDA label with Medicare, five national private payors and several large regional plans for a total of over 175 million covered lives.
−Removed: Most recently, Medicare coverage has also been extended to include patients with chronic lymphocytic leukemia (“CLL”).
+Added: Throughout 2019 and 2020, we secured additional payor coverage for clonoSEQ aligned with our FDA label with Medicare, national private payors and large regional plans for a total of over 225 million covered lives for ALL and MM and over 110 million covered lives for CLL.
clonoSEQ testing has been ordered by clinicians for over 15,000 unique patients and used by more than 40 biopharmaceutical companies in over 190 clinical trials.
−Removed: We continue to deepen our commercial investments to expand clinical adoption of clonoSEQ and have increased the size of our specialized sales organization and infrastructure in the United States while exploring partnerships in other parts of the world.
−Removed: We believe clonoSEQ has broad applicability across all lymphoid malignancies and we are pursuing FDA clearance to expand the clonoSEQ label to multiple additional indications.
−Removed: Specifically, we recently submitted a 510(k) premarket notification for CLL from blood samples in December 2019 and are actively validating the test for patients with non-Hodgkin’s lymphoma (“NHL”) disease types.
−Removed: Importantly, we are validating the use of clonoSEQ to monitor MRD in patients with ALL and MM also from blood samples, which is less invasive than bone marrow samples, and may facilitate more frequent monitoring and broader physician adoption.
−Removed: Leveraging Microsoft’s machine learning capabilities to create the TCR-Antigen Map, we are developing a diagnostic product, immunoSEQ Dx, that may enable early detection of many diseases from a single blood test.
−Removed: Initially, we are validating early detection testing for a set of discrete diseases for which there is a significant unmet medical need for better diagnostic testing and early intervention, and where antigen specificity is well-known.
−Removed: These include certain prevalent cancer types, infectious diseases and autoimmune disorders.
−Removed: In the third quarter of 2019, we established proof of concept in acute Lyme disease from two independent, retrospective cohorts of over 200 patients.
−Removed: In both of these studies, we compared to standard of care, two-tiered serology testing.
−Removed: Our data shows a reduction in both false positive and false negative rates compared to standard of care, as well as an overlap of TCRs specific for Lyme disease between the two patient cohorts.
−Removed: The signal in Lyme establishes proof of concept of the science behind immunoSEQ Dx by demonstrating that machine learning can be leveraged to develop diagnostic signals, even without the large cohorts of prospective patient data often required for diagnostics development.
−Removed: We also continue to progress toward identifying signals for other disease states, such as celiac disease.
−Removed: In addition to continually assessing retrospective patient cohort analyses, in the third quarter of 2019, we opened a research study for 1,000 volunteers who believe they may have celiac disease.
−Removed: We have already enrolled over 400 people, with a projected study close in the second half of 2020.
−Removed: We plan to sponsor several other such studies in additional disease states in the near future.
−Removed: We believe we are uniquely positioned to rapidly identify signals for early detection across many disease states simultaneously because our immune medicine platform works with retrospective sample sets, and uses machine learning and computational statistics to continuously improve our detection and accuracy.
−Removed: Data generated from multiple sources, including retrospective patient cohorts, Adaptive-sponsored trials and machine learning applied to our clinical immunomics database, will all be used in ongoing discussions with the FDA to demonstrate the concept and potential of immunoSEQ Dx in early 2020, with a planned submission for one indication by the end of 2020.
+Added: We continue to deepen our commercial investments to expand clinical adoption of clonoSEQ and have increased the size of our specialized sales and customer support organization and supporting infrastructure in the United States, and we have successfully transferred the technology to seven labs in other parts of the world.
+Added: We also signed a co-promotion agreement with Labcorp to leverage their growing oncology salesforce to expand our commercial reach and further deepen our market penetration.
+Added: We believe clonoSEQ has broad applicability across all lymphoid malignancies.
+Added: We recently submitted a 510(k) premarket notification for ALL from blood samples in February 2021 and are actively advancing validation studies in certain non-Hodgkin’s lymphoma (“NHL”) sub-types.
+Added: We are also awaiting results from a clinical study using clonoSEQ to assess MRD in blood for multiple myeloma.
+Added: Importantly, we have also implemented collaborations with Labcorp and Phlebotek Solutions Corporation (“Phlebotek”) to ease access to blood sample collection for patients.
+Added: We believe these solutions may facilitate more frequent monitoring and benefit patients longer term as they enable a convenient and safe alternative to inpatient visits.
+Added: Leveraging Microsoft’s machine learning capabilities to create the TCR-Antigen Map, we are developing a diagnostic product, T-Detect, that may enable early or accurate detection of many diseases from a single blood test.
+Added: Initially, we are validating detection of a set of discrete diseases for which there is a significant unmet medical need for better diagnostic testing and early intervention, and where antigen specificity is well-known.
+Added: These include infectious diseases, autoimmune disorders and certain prevalent cancer types.
+Added: In December 2020, we launched an early access program for T-Detect COVID as the first indication of T-Detect, which came a year earlier than originally planned.
+Added: The formal launch of T-Detect COVID, which includes a virtual provider to authorize the prescription, occurred in February 2021.
+Added: Leveraging the infrastructure built to support this initial indication, we are on track to launch T-Detect Lyme in our CLIA lab towards the end of 2021.
+Added: Additionally, we have early clinical signals in gastrointestinal disorders such as Celiac disease and Crohn’s disease, and we have built a robust research and development pipeline to rapidly identify signals across many disease states simultaneously.
+Added: Our immune medicine platform enables parallel development because it can work with retrospective sample sets and uses machine learning and computational statistics to continuously improve our detection and accuracy which is applied to all of the diagnostic algorithms.
+Added: For T-Detect, we launched the first indication, T-Detect COVID, to confirm past SARS-CoV-2 infection, which represents a stepping-stone to the long-term vision of T-Detect where a single blood sample can provide information about what diseases a person’s immune system has seen or is currently fighting.
+Added: In two real-world studies with convalescent patients, including our own IRB-sponsored study called ImmuneRACE, our T-cell based test shows higher sensitivity than multiple antibody serology tests to confirm past infection.
+Added: Additionally, data demonstrates that the T-cell response is more persistent than the antibody response to the virus, persisting to at least five months following initial infection and that the performance of T-Detect COVID is equivalent to or better than antibody testing at all timepoints evaluated.
+Added: The test was launched in December 2020, primarily targeting groups and individuals for whom knowledge of past COVID-19 infection or exposure is valuable, including self-pay consumers, employers and concierge medicine physician groups.
+Added: Our market research shows that there are many people who were unable to access testing in spring of 2020 or had unexpected results from antibody or PCR testing, and are still curious or skeptical about a previous infection.
+Added: This is particularly true for individuals who were asymptomatic or had mild symptoms, in whom antibody testing may be less reliable.
+Added: Additionally, our research indicates high interest among consumers in understanding immunity to COVID-19.
+Added: Therefore, we are offering the ability to contribute to on-market research to quantitatively assess the duration of immunity as defined by the persistence of SARS-CoV-2 specific T cells.
+Added: T-Detect Lyme is the second indication planned for the T-Detect product line, with an anticipated market launch towards the end of 2021 as a CLIA-service offering , leveraging the infrastructure built for T-Detect COVID.
+Added: An interim analysis of the ImmuneSense Lyme study comparing our T-cell based diagnostic to current standard of care testing will support the CLIA launch.
+Added: We have enrolled 91% of the subjects needed for the interim analysis.
+Added: We intend to continue full enrollment of the 990 subject study, of which approximately 420 will have either a clinical diagnosis or clinical suspicion based on a physician's assessment of Lyme disease.
+Added: The remaining subjects will include negative controls from both endemic and non-endemic regions and potential cross-reactive diseases.
+Added: There are approximately 3.4 million Lyme diagnostic tests performed annually.
+Added: Initially, we are focused on generating data that supports market entry for early and more accurate diagnosis of Lyme disease for patients with non-descript symptoms that are suspected to be caused by Lyme.
+Added: This population is over 600,000 patients in the US each year.
+Added: In terms of other T-Detect indications in the pipeline, we recently confirmed our third clinical signal in Crohn’s disease.
+Added: Crohn’s is a gastrointestinal disorder that is often confused with other conditions with similar symptom presentation and there is a significant unmet need for a highly specific and sensitive non-invasive test.
+Added: Leveraging acceleration from our T-Detect COVID efforts, we are now able to assess an increasing number of diseases in parallel across the five stages of our research and development pipeline.
+Added: We begin the process with diseases that meet key market attractiveness criteria such as high unmet medical need, understanding of the antigenic space, and our access to samples with metadata.
+Added: We then seek early clinical signals in prioritized disease states and continue to refine our modeling for those that appear promising.
+Added: For each signal, we generate data in several ways:
+Added: run naïve blood to map receptors to antigens, collaborate on studies with control groups, and leverage a database of unlabeled samples.
+Added: Once a signal is confirmed in additional independent cohorts and the product profile is deemed attractive, we proceed with a full commercial validation and generation of a locked-down algorithm to take into clinical validation and regulatory submission.
+Added: There are many economic advantages of T-Detect both in the research and development stage and as a commercial product.
+Added: For the research and development pipeline, we leverage the same capital expenditures and workflow for signal generation across all diseases allowing us to study multiple diseases in parallel without requiring substantial workflow adjustments or significant new capital expenditures for specific new disease states.
+Added: Once commercialized, again, we use the same blood sample and the same underlying chemistry for all diseases with a small incremental investment in software for each individual disease, enabling a long-term high margin profile.
Drug Discovery
+Added: Our drug discovery efforts to date are focused on identifying therapeutic-grade TCRs and antibody-secreting BCRs to enable our partners to engineer, manufacture and commercialize therapeutic candidates.
Our TruTCR process characterizes TCRs against shared antigens for use in the development of therapeutics.
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The shared products will use “off-the-shelf” TCRs identified against cancer antigens shared among patients (“Shared Products”).
−Removed: We are on track for a planned investigational new drug (“IND”) submission by Genentech for the first shared product targeting a selected shared cancer antigen by the end of 2020.
+Added: Genentech is planning its first IND submission for the first shared product targeting a selected shared cancer antigen in the first half of 2021.
+Added: We continue to screen and characterize TCRs against clinically relevant targets in solid tumors and we are in late-stage characterization of several promising TCRs that could be considered by Genentech for the development of a second Shared Product.
Personalized Product.
The personalized product will use patient-specific TCRs identified by real-time screening of TCRs against cancer antigens in each patient (“Personalized Product”).
−Removed: In parallel, we plan to evaluate an investment in facilities for the screening of patient-specific TCRs to shorten the time from patient blood draw to infusion of the Personalized Product.
−Removed: We believe this investment would position us to potentially pursue additional opportunities outside of this collaboration, including cellular therapy in other disease states and cancer vaccines.
+Added: In the second half of 2020, we started screening blood from cancer patients to identify TCRs specific to a patient’s tumor mutations and our goal is to generate proof of concept data by early 2021.
+Added: To support our near-term and long-term objectives for our private product, we plan to open our dedicated prototype lab in South San Francisco in 2021, which will have capacity to perform first-in-human clinical trials.
+Added: We believe this investment positions us to potentially pursue additional opportunities outside of this collaboration, including cellular therapy in other disease states and cancer vaccines.
+Added: Our TruAB process, similar to our TruTCR process, leverages our high-throughput capabilities to screen millions of BCRs to identify unique antibodies from the blood of COVID-19 patients.
+Added: In several months, we used blood from over 300 patients to identify hundreds of thousands of antibodies, of which we synthesized and characterized over 3,300 antibodies that bind to various parts of the SARS-CoV-2 virus.
+Added: Our lead TruAB candidates that neutralize live virus at very low concentrations, which means that a very small amount of each of these antibodies is able to block the virus from infecting cells.
+Added: Importantly, our drug discovery approach is differentiated from other groups because of the scale and throughput of our TruAB approach that allows us to identify a much broader set of naturally-occurring, fully human antibody candidates to select the best ones for clinical development.
+Added: The first potential clinical application of our antibodies is to treat patients who are actively fighting or have recently recovered from COVID-19.
Our Clinical Portfolio and Pipeline
−Removed: Product candidates in development as part of our worldwide collaboration and license agreement with Genentech.
−Removed: The “1st Shared” and “2nd Shared” product candidates refer to the two lead clinical product candidates selected from our library of TCRs that target cancer antigens present in many cancer patients.
−Removed: Genentech will determine the timing of discussions with, and submissions to, the FDA.
Our Competitive Strengths
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Our clinical immunomics database provides a robust product development engine.
−Removed: Our dynamic clinical immunomics database of over 37 billion immune receptors, now being annotated with antigens using machine learning, drives our ability to rapidly discover and develop potential diagnostic and therapeutic applications.
+Added: Using the adaptive immune system as our source-code, we are building a dynamic clinical immunomics database of over 58 billion immune receptors, now being annotated with antigens using machine learning, that drives our ability to rapidly discover and develop potential diagnostic and therapeutic applications.
Our aim is to translate the natural capabilities of the immune system into the clinic by capturing the millions of diverse unique receptors present in a patient’s blood.
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Regulatory and reimbursement expertise will help inform future clinical product development.
−Removed: Having successfully obtained FDA marketing authorization, and coverage for clonoSEQ from Medicare and five national private payors, we believe we have developed valuable core capabilities that will facilitate future product development through to regulatory approval and reimbursement.
+Added: Having successfully obtained FDA marketing authorization and coverage for clonoSEQ from Medicare and several national private payors, we believe we have developed valuable core capabilities that will facilitate future product development through to regulatory approval and reimbursement.
We believe this capability will inform future development of other clinical products, including early detection tests.
Transformational collaborations with industry leaders validate our platform.
−Removed: Our collaborations with industry-defining leaders such as Genentech and Microsoft validate our unique approach to advancing the promise of immune-driven medicine.
+Added: Our collaborations with industry-defining leaders such as Genentech and Microsoft validate our unique approach to advancing the promise of immune medicine.
We will continue to seek opportunities to optimize our ever-growing clinical immunomics database to drive product development and commercial success and facilitate efficient use of capital.
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Our focus is to leverage our immune medicine platform and competitive strengths to develop transformative clinical solutions accessible to patients around the world.
−Removed: Advance the promise of immune-driven medicine.
+Added: Powering the age of immune medicine.
We facilitate the development of the immune medicine field by providing a platform to encourage generation of immunomics data to facilitate a deeper understanding of, and biological discovery from, the adaptive immune system.
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Integrate proven chemistry into our clinical products in development, avoiding the need to re-engineer new products for every clinical application.
−Removed: We do this by serially identifying new applications of immunoSEQ Dx for early detection of disease using retrospective datasets without requiring live cells from large cohorts of patients, and by characterizing TCRs for therapeutic use.
+Added: We do this by serially identifying new applications of T-Detect for early detection of disease using retrospective datasets without requiring live cells from large cohorts of patients, and by characterizing TCRs for therapeutic use.
As our platform expands into new indications across cancer, autoimmune conditions and infectious diseases, we believe we will benefit from economies of scale and drive margin improvement over time.
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Position our platform as the gold standard for the validation of potential immune-driven clinical discoveries in late-stage clinical trials.
−Removed: Since inception, our products and services have been used by more than 165 biopharmaceutical companies and incorporated into over 600 clinical trials, and clonoSEQ has proven to be the MRD test of choice for select registrational trials.
+Added: Since inception, our products and services have been used by 175 biopharmaceutical companies and incorporated into over 650 clinical trials, and clonoSEQ has proven to be the MRD test of choice for select registrational trials.
To deepen our established position as a partner of choice, we provide end-to-end support, including hypothesis-driven trial design, extensive data analyses, parallel regulatory support, compliant data transfers and novel target screening.
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Fuel the promise and potential that our platform offers to help patients better manage their disease by translating insights from our world-class team, which includes 124 people with medical or doctoral degrees with expertise in biology, chemistry, bioinformatics, software, drug discovery, development and commercialization, into clinical products and services.
−Removed: We plan to continue to expand our team to advance the promise of immune-driven medicine.
+Added: We plan to continue to expand our team to advance the promise of immune medicine.
The Adaptive Immune System
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We built a platform that can reveal and translate these properties of the adaptive immune system with the scale, precision and speed required to enable the development of Personalized Products, including disease monitoring, clinical diagnostic tests for early detection and immune-based therapeutics.
−Removed: Our immune medicine platform combines a suite of proprietary technologies, bioinformatics, software and machine learning to generate clinical immunomics data to decode the adaptive immune system and transform the diagnosis and treatment of disease.
−Removed: The massive amount of data generated by our immune medicine platform is stored in our dynamic clinical immunomics database of over 58 billion immune receptors, of which we have data rights to over 37 billion.
−Removed: We believe the application of machine learning with Microsoft has the potential to exponentially accelerate the growth of novel insights from this database, which we expect will further inform our product development efforts, as demonstrated by our clinical signal which establishes of proof of concept in acute Lyme disease.
+Added: Our immune medicine platform combines a suite of proprietary chemistry, computational biology and machine learning to generate clinical immunomics data to decode the adaptive immune system and transform the diagnosis and treatment of disease.
+Added: The massive amount of data generated by our immune medicine platform is stored in our dynamic clinical immunomics database of over 58 billion immune receptors.
+Added: We believe the application of machine learning with Microsoft has the potential to exponentially accelerate the growth of novel insights from this database, which we expect will further inform our product development efforts, as demonstrated by the growing number of clinical signals we are generating.
Sequence with immunoSEQ
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The key innovation in the development of immunoSEQ, pioneered by Dr.
−Removed: Harlan Robins and a team of leading immunologists at the Fred Hutchinson Cancer Research Center (“Fred Hutch”), was a novel approach utilizing a two-step multiplex polymerase chain reaction (“PCR”) amplification process, hybridization and sequencing of rearranged TCRs to determine the sequences in millions of rearranged TCR genes, as shown in the figure below.
+Added: Harlan Robins and a team of leading immunologists at the Fred Hutchinson Cancer Research Center (“Fred Hutch”), was a novel approach utilizing PCR, hybridization and sequencing of rearranged TCRs to determine the sequences in millions of rearranged TCR genes, as shown in the figure below.
We apply a similar approach for BCR sequencing.
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Pairing is difficult because the two chains of the Y-shaped receptor are located on different chromosomes, which get separated when DNA is extracted from a cell for sequencing.
−Removed: By pairing TCRs, we rapidly detect thousands of complete chain sequences to develop new TCR-mediated cellular therapies.
−Removed: Additionally, this technology may be used for downstream target discovery for novel therapies.
−Removed: pairSEQ has also been developed for BCRs which may enable improvements to current methods of antibody development and engineering.
+Added: By pairing TCRs or BCRs, we rapidly detect thousands of complete chain sequences to develop new TCR-mediated cellular therapies or to develop differentiated antibodies.
Characterize with TruTCR
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In collaboration with Genentech, we plan to apply a similar process to screen, identify and characterize in real-time what we believe are the most promising patient-specific TCRs targeting the patient’s specific cancer antigens, advancing the next generation of cellular therapy in oncology.
+Added: Discover with TruAB
+Added: TruAB enables the discovery and characterization of BCRs for use as therapeutic antibodies.
+Added: Our key differentiator is the ability to tap into the massive diversity of the B-cell repertoire to identify naturally-occurring, fully human antibodies at unprecedented scale.
+Added: In April 2020, we deployed our platform to identify neutralizing antibodies to the SARS-CoV-2 virus that causes COVID-19.
+Added: We processed blood from more than 300 recovered and symptomatic COVID-19 patients.
+Added: We then applied our high-throughput BCR pairing technology and paired more than 490,000 antibody heavy and light chains.
+Added: We evaluated these BCR sequences in silico and selected more than 3,300 likely attractive antibody candidates for downstream functional characterization, including affinity binding and live virus neutralization.
+Added: As of November 12, 2020, Amgen, Inc.
+Added: declined its option to negotiate an agreement to develop, manufacture and commercialize our neutralizing antibodies against the SARS-CoV-2 virus.
+Added: We are evaluating several options to further advance our lead candidate(s).
+Added: Beyond COVID-19, we believe these efforts represent a differentiated platform extension that will position us to pursue additional potential antibody discovery opportunities in a variety of disease states, including in autoimmunity where there is an unmet need.
Clinical Immunomics Database
−Removed: We are developing a large, dynamic clinical immunomics database, which currently contains over 58 billion immune receptors, of which we have data rights for over 37 billion.
−Removed: We use our proprietary software and core competency in computational biology to structure and store data and to create tools for rapid analysis and easy visualization.
+Added: We are developing a large, dynamic clinical immunomics database, which currently contains over 58 billion immune receptors.
+Added: We use our proprietary software and core competency in computational biology to structure and store immune receptor data and to create tools for rapid analysis and easy visualization.
All immunosequencing data is processed and uploaded to a secure cloud-based database.
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We plan to map, both directly and through machine learning, an estimated 10 15 TCRs to thousands of clinically relevant antigens, which we believe will allow us to annotate this immunosequencing data with information about disease states, increasing the value of the data over time.
−Removed: We leverage our database to fuel our pipeline of immune-driven medicine products.
−Removed: With data rights for over 37 billion immune receptors, our platform enables us to work with retrospective samples which serve as training sets to which our Microsoft collaborators apply machine learning and computational statistics to improve the accuracy of certain of our clinical products and services.
+Added: We leverage our database to fuel our pipeline of immune medicine products.
+Added: With over 58 billion immune receptors, our platform enables us to work with retrospective samples which serve as training sets to which our Microsoft collaborators apply machine learning and computational statistics to improve the accuracy of certain of our clinical products and services.
Our Products and Services
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Our commercial research product, immunoSEQ, primarily serves as our underlying research and development engine to develop and validate our clinical pipeline.
−Removed: The technologies underlying our current research and diagnostic products, immunoSEQ and clonoSEQ, respectively, leverage the sequencing and tracking capabilities of our immune medicine platform and comprise our sequencing revenue.
−Removed: Our pipeline of clinical diagnostics for early detection and our TCRs for drug discovery are informed by the mapping function of our platform, which we are optimizing with Microsoft’s machine learning capabilities.
−Removed: The selection of TCRs for drug discovery also leverages the pairing and characterization components of our platform.
−Removed: We have strategically scaled our drug discovery efforts in 2019 to expedite the path to the clinic for the cellular therapy product candidates we are developing in collaboration with Genentech, which generates most of our development revenue.
+Added: Our first commercial diagnostic product, clonoSEQ, is our FDA-cleared test to monitor MRD in patients with select blood cancers.
+Added: In the fourth quarter of 2020, we initiated the launch of our second commercial diagnostic product, T-Detect COVID, for the confirmation of past COVID-19 infection.
+Added: Our commercial research and clinical products leverage the sequencing and mapping capabilities of our immune medicine platform and the revenue generated by these products largely contributes to sequencing revenues.
+Added: Our pipeline of clinical diagnostics for the early and accurate detection of many diseases will be commercialized under the expanding T-Detect product line and will continue to grow our sequencing revenues over time.
+Added: Our drug discovery efforts to date are focused on identifying therapeutic-grade TCRs (TruTCR) and antibody-secreting BCRs (TruAB) to enable our partners to engineer, manufacture and commercialize therapeutic candidates.
+Added: With Genentech, we are advancing our pipeline of both shared and private TCR-mediated cellular therapies for cancer patients.
+Added: We also extended our platform to identify highly potent neutralizing antibodies against SARS-CoV-2 and this differentiated approach can be leveraged across other disease states.
+Added: Our drug discovery pipeline leverages the sequencing, mapping, pairing and characterization components of our platform and generates most of our development revenue.
We plan to continue to invest in our platform to develop additional clinical applications, which we prioritize based on rigorous data requirements for clinically actionability, unmet medical need and commercial viability.
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We believe immunoSEQ is positioned to become the global standard for immunosequencing due to the quality and reliability of our data and the analytics and data visualization tools that are easily accessible to customers in the immunoSEQ Analyzer, whether sequenced as a service or a kit.
−Removed: Since inception, immunoSEQ has been used for research purposes by over 2,200 academic researchers and more than 165 biopharmaceutical companies and incorporated into over 600 clinical trials to answer translational research questions relating to the adaptive immune system, monitor response to therapies and discover new prognostic and diagnostic signals.
+Added: Since inception, immunoSEQ has been used for research purposes by over 2,400 academic researchers and 175 biopharmaceutical companies and incorporated into over 650 clinical trials to answer translational research questions relating to the adaptive immune system, monitor response to therapies and discover new prognostic and diagnostic signals.
These research questions are answered by using the data generated by immunoSEQ and uploaded to the immunoSEQ Analyzer to study different properties and dynamics of all of the sequences in an immune repertoire, such as frequency or abundance, and by tracking specific sequences over time in clinical trials.
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We recently launched an improved version of immunoSEQ to our research customers.
−Removed: We incorporated these chemistry improvements into a new RUO kit, which was completed in the fourth quarter of 2019 and is now available.
+Added: We incorporated chemistry improvements into a new RUO kit, which was completed in the fourth quarter of 2019 and launched in 2020.
We expect this service and kit offering to become the technology upon which we clinically validate the early detection diagnostics we are developing using our TCR-Antigen Map.
The kit improvements will further enhance the quantitation of the data and allow for any sample type to be used, including stored cancer tumor tissue sections, which is more readily available globally amongst researchers in the field of cancer immunotherapy.
+Added: The RUO kit has been selected by 35 academic core labs and user groups in the United States and we continue to expand these collaborations.
+Added: Additionally, we announced distribution agreements with two CROs, Q2 Solutions and Labcorp, and we are in discussions with several others.
+Added: By enabling academic core labs and CROs as centers of excellence with our gold standard immunoSEQ RUO kit, we expect to set the foundation for long term growth going forward.
+Added: immunoSEQ T-MAP
+Added: In 2020, we identified some key opportunities to expand our research product offering to include mapping data generating by our platform.
+Added: Sequences mapped to clinically relevant antigens has many benefits beyond just repertoire sequencing dynamics and we plan to offer immunoSEQ T-MAP across many disease states in the future.
+Added: We launched our first immunoSEQ T-MAP product extension in August 2020 for COVID-19 vaccine developers and researchers to accurately and reproducibly measure the T-cell immune response to vaccines and track the persistence of that response over time.
+Added: Our immunoSEQ T-MAP product offers significant advantages over other technologies to detect and monitor T cells at scale using a small amount of blood without the need for live cells that require special sample handling.
+Added: To date, we have sequenced a subset of patient samples (pre- and post-vaccination) from clinical trials sponsored by several top-tier vaccine developers, including AZ, University of Oxford, Bill and Melinda Gates Foundation and several prestigious academic labs who are studying the impact of COVID-19 vaccines on patients receiving other immune-mediated therapies.
+Added: Using our immunoSEQ T-MAP COVID product, we can identify and track expanded T cells induced by a vaccine, which can be distinguished from a natural infection, in order to monitor vaccine efficacy.
+Added: In vaccinated subjects who test positive for the virus utilizing the two-step multiplex PCR amplification process, immunoSEQ T-MAP COVID can specifically track vaccine-induced T cells and correlate response with improved patient outcomes.
+Added: In addition, we are also in late-stage discussions with several companies developing next-generation vaccines.
+Added: In the fourth quarter of 2020, we entered into our first multi-year immunoSEQ T-MAP cancer collaboration with AZ to generate data from antigen-specific T-cell immune responses across AZ’s oncology drug portfolio.
+Added: T-MAP data may inform early disease intervention to help improve patient outcomes, with the potential for additional opportunities to develop companion diagnostics or novel therapeutics with AZ.
+Added: The partnership also allows for data sharing between us and AZ that benefits our independent efforts.
+Added: We expect this will help expedite our ability to map the large antigenic space in cancer.
Clinical Diagnostics
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Monitoring MRD with clonoSEQ
−Removed: Our first diagnostic product, clonoSEQ, is an FDA-authorized test for the detection and NGS-based monitoring of MRD in bone marrow samples in patients with MM and ALL.
−Removed: In these blood cancers and others, such as CLL and NHL, the malignant cell is derived from a T cell or B cell.
+Added: Our first diagnostic product, clonoSEQ, is an FDA-authorized NGS test for the detection and monitoring of MRD in bone marrow or blood samples in patients with select lymphoid malignancies in which the malignant cell is derived from a T cell or a B cell.
MRD refers to the presence and number of these malignant T or B cells that may remain in a patient’s body during and following treatment.
Because our technology quantifies the frequency of every T cell or B cell in a sample, we can monitor MRD accurately at a sensitivity of 1 out of 1,000,000 cells, given sufficient sample input.
−Removed: By taking a baseline measurement prior to starting therapy and then tracking the number of cells at several time points following therapy initiation, hematologists can improve their ability to detect relapse early, help predict patient outcomes and monitor response to therapy.
+Added: By taking a baseline measurement prior to starting therapy and then tracking the number of cells at several time points following therapy initiation, hematologists can improve their ability to assess treatment response, predict long-term patient outcomes, monitor disease burden over time and detect potential relapse.
+Added: clonoSEQ is FDA-authorized for patients with MM and ALL from bone marrow samples and for patients with CLL from bone marrow and blood samples.
+Added: clonoSEQ is also currently available as an LDT for use across lymphoid malignancies and sample types, including those which have not been authorized by the FDA.
NCCN Guidelines recommend using a validated test to measure MRD to define the burden of disease and assess response to therapy in MM and ALL after each treatment stage.
−Removed: NGS-based MRD testing has been added to these guidelines and we plan to seek expansion of the recommendations to include additional time points in each disease state and to incorporate clonoSEQ specific data.
+Added: NGS MRD testing has been added to these guidelines and we plan to seek expansion of the recommendations to include additional time points in each disease state and to incorporate clonoSEQ specific data.
+Added: To that end, in 2020, NCCN published favorable updates to their myeloma guidelines and pediatric ALL guidelines to include more specifics related to how and when to measure MRD, the importance of using a sensitive and validated test, and a reference to the necessity of collecting a baseline sample at diagnosis.
MRD monitoring is becoming increasingly important in the hematologic oncology field because highly effective new therapies are extending survival.
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We believe we are uniquely positioned to benefit from these industry dynamics with both our clinical and biopharmaceutical customers.
−Removed: clonoSEQ testing has been ordered by clinicians for over 10,000 unique patients.
−Removed: We believe increased adoption of clonoSEQ will now be possible due to the extensive coverage policies granted in 2019 by Medicare to assess MRD at multiple time points throughout therapy in MM, ALL and CLL, and five national private payors, and several large regional payors, together representing over 175 million total covered lives.
+Added: In the clinic, clonoSEQ testing has been ordered by clinicians at centers all around the country, including all 30 NCCN centers, for over 15,000 unique patients.
+Added: We believe increased adoption of clonoSEQ will now be possible due to the extensive coverage policies granted in 2019 and 2020 by Medicare to assess MRD at multiple time points throughout therapy in MM, ALL and CLL, and several national private payors and large regional payors, together representing over 225 million total covered lives in ALL and MM and over 110 million covered lives in CLL.
We are in active discussions with other large private national and regional payors.
−Removed: Additionally, we believe clonoSEQ will remain the preferred commercial test among biopharmaceutical companies using MRD in their registrational trials.
+Added: To further develop the mounting real world evidence demonstrating the actionability of MRD monitoring, we launched a clinical registry in 2020.
+Added: This prospective, multicenter, observational study will include approximately 500 adult patients with lymphoid malignancies in the United States.
+Added: Among biopharmaceutical companies, we believe clonoSEQ will remain the preferred commercial test for MRD monitoring in their registrational trials.
To that end, clonoSEQ is now being used by more than 40 biopharmaceutical companies in over 190 clinical trials.
To continue demonstrating clinical utility across disease settings and lines of therapy, clonoSEQ is also being used in 79 ongoing prospective investigator-led clinical trials, and our MRD data have been included in over 92 peer-reviewed publications.
−Removed: clonoSEQ is also currently available as an LDT for use across lymphoid malignancies and sample types, including those which are not yet authorized by the FDA.
−Removed: We continue to pursue FDA clearance to expand the clonoSEQ label to multiple additional indications.
−Removed: Specifically, we recently submitted a 510(k) premarket notification for CLL from blood samples in December 2019 and are actively validating the test for patients with NHL disease types.
−Removed: Importantly, we are validating the use of clonoSEQ to monitor MRD in patients with ALL and MM also from blood samples, which is less invasive than bone marrow samples, and may facilitate more frequent monitoring and broader physician adoption.
+Added: We believe clonoSEQ has broad applicability across all lymphoid malignancies.
+Added: Specifically, we recently submitted a 510(k) premarket notification for ALL from blood samples in February 2021 and are actively validating the test for patients with non-Hodgkin’s lymphoma (“NHL”) disease types.
+Added: Importantly, we have also implemented collaborations with Labcorp and Phlebotek to ease access to blood sample collection for patients.
+Added: We believe these solutions may facilitate more frequent monitoring and benefit patients longer term as they enable a convenient and safe alternative to inpatient visits.
+Added: We continue to deepen our commercial investments to expand clinical adoption of clonoSEQ and have increased the size of our specialized sales and customer support organization and supporting infrastructure.
+Added: We have also added a new team of demand generation representatives who are hematology specialists and are working closely with our key account managers in accounts that are onboarded.
+Added: We are also building another team focused on Integrated Delivery Networks.
+Added: Outside of the United States, we have successfully transferred the technology to seven labs across France, Germany, Italy, UK, Spain, Australia and Japan which provide local testing options, primarily in support of collaborative group and investigator-sponsored studies.
The Technology
−Removed: clonoSEQ is our FDA-authorized, NGS-based MRD technology that is designed to sequence all rearranged receptor sequences in a tumor in parallel to ensure accurate, sensitive and robust MRD monitoring.
+Added: clonoSEQ is our FDA-authorized, NGS MRD technology that is designed to sequence all rearranged receptor sequences in a tumor in parallel to ensure accurate, sensitive and robust MRD monitoring.
A summary of the steps for FDA-authorized usage is as follows:
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Patient support program
−Removed: Adaptive Assist is our patient support program to facilitate access to clonoSEQ testing services for patients who could benefit from the clinical insights provided by NGS-based MRD testing.
+Added: Adaptive Assist is our patient support program to facilitate access to clonoSEQ testing services for patients who could benefit from the clinical insights provided by NGS MRD testing.
Patients can call to discuss their individual circumstances with one of our dedicated patient support representatives in order to better understand their coverage prior to clonoSEQ testing and to navigate the insurance process, including appeals for denied claims.
We also offer financial assistance for qualified uninsured and under-insured patients who cannot afford their patient financial responsibility for clonoSEQ.
−Removed: Clinical Validation in FDA Filing for MM and ALL
−Removed: Our clonoSEQ test has been shown to help better predict patient outcomes and add insight to the evaluation of disease response to therapy because we have clinically validated clonoSEQ’s ability to detect MRD at a sensitivity greater than the current recommended clinical standard for all lymphoid malignancies.
−Removed: clonoSEQ has demonstrated sensitivity of 1 out of 1,000,000 cells (10 -6 ), given sufficient sample input, which is a deeper resolution than the current accepted standard of 1 out of 100,000 cells (10 -5 ) or 1 out of 10,000 cells (10 -4 ) for MM and ALL, respectively.
+Added: Clinical Validation in FDA Filing for MM, ALL and CLL
+Added: Our clonoSEQ test has been shown to help better predict patient outcomes and add insight to the evaluation of disease response to therapy because we have clinically validated clonoSEQ’s ability to detect MRD at a sensitivity greater than the current clinical standard for all lymphoid malignancies.
+Added: clonoSEQ has demonstrated sensitivity of 1 out of 1,000,000 cells (10 -6 ), given sufficient sample input, which is a deeper resolution than the current accepted standard of 1 out of 100,000 cells (10 -5 ), 1 out of 10,000 cells (10 -4 ) or 1 out of 10,000 cells (10 -4 ) for MM,ALL and CLL, respectively.
Based on these results, as further illustrated below, we believe clinical standards for MRD sensitivity may be increased to 10 -6 to better predict patient outcomes.
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sensitivity of clonoSEQ, have a higher probability of EFS.
+Added: Clinical validation in CLL was demonstrated in two studies.
+Added: The first, a 337 patient randomized phase III registrational study in previously untreated CLL patients sponsored by Roche (CLL14), evaluated the ability of clonoSEQ to predict PFS at a primary cutoff of 10 -5 and across continuous MRD measures from blood.
+Added: The study demonstrates that MRD negative patients had significantly better PFS, independent of treatment regimen.
+Added: The second was a prospective, phase 2 clinical trial in previously untreated CLL patients in which MRD was assessed from both blood and bone marrow.
+Added: MRD negativity at multiple cutoffs (10 -4 , 10 -5 , and 10 -6 ) was significantly associated with better PFS.
+Added: MRD was also prognostic of PFS when disease burden was assessed as a continuous measure (no MRD threshold).
+Added: This study demonstrates that MRD is predictive of better PFS and can be assessed from either bone marrow or blood.
+Added: CLL Patients with lower levels of MRD in blood have a higher probability of EFS
Strategy to Achieve Market Leadership
We aim to drive adoption and achieve market leadership for MRD monitoring with clonoSEQ for all lymphoid malignancies.
−Removed: To do so, we are executing against the following strategic initiatives:
+Added: To do so, we are executing upon the following strategic initiatives:
Expand reimbursement with public and private payors.
−Removed: We are working with payors to develop appropriate coverage policies, generate healthcare economic information and provide robust billing and patient access infrastructure.
−Removed: In 2019, we secured payor coverage for clonoSEQ aligned with our FDA label with Medicare, five national private payors and several large regional plans for a total of over 175 million covered lives.
−Removed: Most recently, Medicare coverage has also been extended to include patients with CLL.
−Removed: We expect to seek broader coverage in line with our planned FDA label expansions and we continue to invest in health economic research and real-world evidence to demonstrate the benefits of including MRD testing across indications.
+Added: We are working with new payors to develop appropriate coverage policies, generate healthcare economic information and provide robust billing and patient access infrastructure.
+Added: As of December 31, 2020, we secured Medicare and private payor coverage for clonoSEQ for over 225 million covered lives for MM and ALL and over 110 million covered lives for CLL.
+Added: We continue to seek broader coverage in line with our planned FDA label expansions and we continue to invest in health economic research and real-world evidence generation to demonstrate the actionability of MRD monitoring.
+Added: We launched a watch registry in 2020 as a prospective, multicenter, observational study of approximately 500 adult patients with lymphoid malignancies in the United States to support these efforts.
Entrench clonoSEQ in biopharmaceutical clinical trials.
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Validate clonoSEQ in additional indications for use.
−Removed: With the end goal of clonoSEQ becoming a universal MRD test for all lymphoid malignancies, we have developed a robust lifecycle development plan to generate sufficient clinical evidence to support the extension of the FDA label beyond ALL and MM.
−Removed: We submitted for label expansion to include CLL in December 2019, and are actively generating clinical validation data to support a future submission in NHL.
+Added: With the end goal of clonoSEQ becoming a universal MRD test for all lymphoid malignancies, we have developed a robust lifecycle development plan to generate sufficient clinical evidence to support the extension of the FDA label across lymphoid malignancies.
+Added: We are already cleared in ALL and MM from bone marrow and CLL from bone marrow and blood.
+Added: At the same time, we are increasing marketing support for clonoSEQ usage as a CLIA-validated lab-developed testing service, where samples for any lymphoid cancer indication and a range of sample types (including blood) are acceptable, and payer coverage is already in place for blood-based testing in ALL and myeloma.
+Added: Going forward, we will continue to evaluate the optimal commercial path (FDA or CLIA) for each additional indication.
Validate clonoSEQ in blood to offer a minimally invasive alternative.
−Removed: Our CLL 510(k) submission is based on data generated from blood samples and we expect to also submit data to the FDA in 2020 to add blood as a validated sample type to our FDA label for MM and ALL, which may enable more frequent monitoring of patients over longer periods of time.
Testing with blood is less invasive for patients and less expensive as compared to MRD testing from bone marrow samples, and it may only be possible because of the deep sensitivity of our clonoSEQ diagnostic test.
−Removed: Invest in an experienced, specialty salesforce.
+Added: Therefore, blood-based MRD testing may enable more frequent monitoring of patients over longer periods of time.
+Added: We have already received FDA clearance for clonoSEQ from blood samples for patients with CLL, we recently submitted for FDA clearance for ALL from blood samples, and we will continue to expand testing with blood to other indications over time.
+Added: Invest in commercial initiatives to increase awareness and usage.
We are expanding our sales organization to target key customer segments, including academic centers, integrated health networks and community clinicians, in a tiered manner based on patient volume.
−Removed: In 2019, we focused on Tier 1 and Tier 2 accounts, which we estimate to drive 75% of the market potential.
−Removed: As adoption increases, we will drive uptake in Tier 3 and Tier 4 accounts.
−Removed: Develop a decentralized testing solution.
+Added: In 2019 and 2020, we focused on Tier 1 and Tier 2 accounts, which we estimate to be the sites of care for approximately two-thirds of the patients that comprise the potential market.
+Added: With increasing adoption and our recent CLL label expansion, we are beginning to drive uptake in Tier 3 community accounts.
+Added: We will continue to increase the size of our specialized sales organization and supporting infrastructure, including building out our teams focused on community oncology centers and integrated delivery networks.
+Added: We also launched a variety of patient educational initiatives and peer to peer programming to spread awareness about the impact of MRD status to inform clinical decision-making.
+Added: Evaluate a decentralized testing solution.
We continue to explore options to service the MRD opportunity in institutions and markets where local testing is needed or required.
−Removed: One way to achieve this goal is to develop, in partnership with Illumina, Inc.
−Removed: (“Illumina”), a clonoSEQ IVD kit which could be sold to trained high complexity molecular labs.
Expand internationally.
We have expanded our technology transfer program to select centers to conduct investigational studies that further demonstrate the value of clonoSEQ and are essential for reimbursement submissions.
−Removed: We have already completed successful technology transfer labs in Toulouse, France in 2017 and Bologna, Italy and Heidelberg, Germany in 2019.
−Removed: Additionally, we are in the process of selecting additional select sites in Europe in 2020.
+Added: We have already completed successful technology transfers in France, Germany, Italy, UK, Spain, Australia and Japan.
In 2019, we obtained a Conformité Européene (“CE”) mark for our clonoSEQ reagents, which is intended to support our reimbursement efforts in Europe.
We expect these market development activities to enhance our commercialization efforts and accelerate international market acceptance over the next three to five years.
−Removed: Early Detection with immunoSEQ Dx
−Removed: By learning to read the antigen specificity of a patient’s immune system, we are developing the immunoSEQ Dx diagnostic test for early detection across a broad range of diseases, including certain prevalent cancer types and autoimmune disorders.
−Removed: We believe the adaptive immune system presents an ideal model for diagnostic tools for early detection of disease.
−Removed: Treatment is typically most effective early in the course of a disease, when there is a minimal amount of disease-specific antigen present.
+Added: Early or Accurate Detection with T-Detect
+Added: By learning to read the antigen specificity of a patient’s immune system, we are developing the T-Detect test for early or accurate detection across a broad range of diseases, including infectious diseases, autoimmune disorders, and certain prevalent cancer types.
+Added: We believe the adaptive immune system presents an ideal model for diagnostic tools for early or accurate detection of disease.
+Added: In many cases, treatment is typically most effective early in the course of a disease, when there is a minimal amount of disease-specific antigen present.
TCRs recognize this very small amount of antigen before it is detectable by conventional methods and then they expand exponentially.
Given this large response in proportion to the amount of antigen present, we believe we will be able to see this signal of disease much sooner than is possible with other methods of early disease detection.
−Removed: We are leveraging our existing immunoSEQ technology to develop immunoSEQ Dx for the early detection of many diseases simultaneously.
+Added: Additionally, in some disease states, knowledge of prior infection from certain pathogens, e.g., COVID-19 and Lyme, may inform the basis of clinical decision-making or ongoing patient care.
+Added: Finally, the ability to rapidly and accurately identify the cause of non-descript symptoms may increase efficiency and compress the timeline between symptom and diagnosis, thus reducing the diagnostic odyssey that patients often endure in the current diagnostic paradigm.
+Added: We are leveraging our existing immunoSEQ technology to develop T-Detect for the early or accurate detection of many diseases simultaneously.
This is possible because our platform works with retrospective sample sets and uses machine learning and computational statistics to continuously improve accuracy without requiring large cohorts of prospective patients.
−Removed: Before pursuing broad population screening tests, however, we are initially developing immunoSEQ Dx for the early detection of specific disease states that meet the following criteria:
+Added: We began by developing T-Detect for the early detection of specific disease states that meet the following criteria:
Clinically relevant antigens are known and understood.
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Availability of sample sets with patient outcomes.
−Removed: We have initially chosen to pursue a small subset of indications that meet these criteria.
−Removed: In the third quarter of 2019, we established proof of concept in acute Lyme disease, as we continue to progress toward identifying signals for other disease states.
−Removed: Our goal is to make a submission in the fourth quarter of 2020 and to run analytical validation studies for the technology in parallel.
−Removed: We plan to repeat this process for additional disease states as we expand our knowledge about the antigen specificity of millions of TCRs in our clinical immunomics database.
−Removed: Using these clinical signals and validation studies, we then plan to pursue FDA clearance, authorization or approval of immunoSEQ Dx in one or more of these initial indications as an IVD conducted in our Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) certified, College of American Pathologists (“CAP”) accredited, ISO 13485-certified laboratory.
−Removed: We believe the same blood test will ultimately be able to be used to detect multiple diseases simultaneously.
−Removed: The TCR-Antigen Map
−Removed: In order to detect disease from a blood sample, the TCRs sequenced by immunoSEQ must be annotated with their disease-specific antigens by cross-referencing our TCR-Antigen Map in the cloud.
−Removed: We are building our TCR-Antigen Map as part of our strategic collaboration with Microsoft established in December 2017.
−Removed: Together we are using immunosequencing, proprietary computational modeling and machine learning to map TCR sequences to the antigens they bind.
−Removed: Using these data, we aim to translate the natural diagnostic capability of the immune system into the clinic.
+Added: Using these data, we aim to simulate the natural diagnostic capability of the immune system into the clinic where we will use the map for the early or accurate detection of many diseases.
+Added: The potential economic model for T-Detect of becoming "one test with many results" is very compelling.
+Added: When multiple tests are ordered at the same time, the marginal cost for each additional test result is negligible.
+Added: Through iterative data generation efforts, we continue to improve the accuracy of the TCR signatures of each disease by running blood samples from healthy donors, collaborating on retrospective studies with control groups in select disease states, and leveraging our database for additional sequences to include in the TCR signatures.
+Added: We see the evolution of T-Detect in three phases over time:
+Added: Launch T-Detect disease by disease with a more accurate test versus current standard of care.
+Added: Introduce T-Detect panel(s) for the differentiated diagnosis of disease when the symptoms are shared among several diseases.
+Added: Enable T-Detect for population immunomics, where anything we map, we will be able to diagnose from a single blood sample.
Proof of Concept
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We believe this approach has the potential to significantly reduce the time and number of individuals, and ultimately the cost, required to accurately validate our clinical diagnostics across different diseases.
+Added: First Commercial Indication:
+Added: T-Detect COVID
+Added: In response to the COVID-19 pandemic, we and Microsoft committed to decode the population-wide T cell immune response to COVID-19.
+Added: We believe that quantifying virus-specific T cells may provide important diagnostic advantages because T cells appear earlier than antibodies and persist longer.
+Added: Timing and Persistence of T-cell Response 1,2,3,4,5,6,7
+Added: Gallais et al., Peng et al., Snyder et al., Subbarao et al., Channappanavar et al., and Zuo et al.
+Added: Zuo J, Dowell A, Pearce H, Verma K, Long HM, Begum J, et al.
+Added: Robust SARS-CoV-2-specific T-cell immunity is maintained at 6 months following primary infection.
+Added: 2020 Nov 2;2020.11.01.362319.
+Added: Gallais F, Velay A, Wendling M-J, Nazon C, Partisani M, Sibilia J, et al.
+Added: Intrafamilial exposure to SARS-CoV-2 induces cellular immune response without seroconversion.
+Added: 2020 Jun 22;2020.06.21.20132449.
+Added: Peng Y, Mentzer AJ, Liu G, Yao X, Yin Z, Dong D, et al.
+Added: Broad and strong memory CD4+ and CD8+ T cells induced by SARS-CoV-2 in UK convalescent individuals following COVID-19.
+Added: 2020;21(11):1336–45.
+Added: Snyder TM, Gittelman RM, Klinger M, May DH, Osborne EJ, Taniguchi R, et al.
+Added: Magnitude and dynamics of the T-cell response to SARS-CoV-2 infection at both individual and population levels.
+Added: 2020.07.31.20165647.
+Added: Subbarao K, Mahanty S.
+Added: Respiratory virus infections:
+Added: Understanding COVID-19.
+Added: 2020;52(6):905–9.
+Added: Channappanavar R, Zhao J, Perlman S.
+Added: T cell-mediated immune response to respiratory coronaviruses.
+Added: 2014;59(1–3):118–28.
+Added: Together, we implemented the immuneCODE Program to quantitatively assess the T-cell immune response to the virus in over 5 ,000 individuals from around the world and we have made this data publicly available.
+Added: To date, we have mapped hundreds of thousands of TCRs to all of the immunogenic parts of the SARS-CoV-2 virus, inclusive of but not limited to the spike protein.
+Added: T-Detect COVID confirms past SARS-CoV-2 infection, which represents a stepping-stone to the long-term vision of T-Detect where a blood sample can provide information about what diseases a person’s immune system has seen or is currently fighting.
+Added: In two real-world studies with convalescent patients, including our own IRB-sponsored study called ImmuneRACE, our T-cell based test demonstrated higher sensitivity than multiple antibody serology tests to confirm past infection.
+Added: Additionally, data demonstrates that the T-cell response is more persistent than the antibody response to the virus, persisting to at least five months following initial infection, and performance of T-Detect COVID is equivalent to or better than antibody testing at all timepoints evaluated.
+Added: T-Detect COVID was launched in December 2020, primarily targeting groups and individuals for whom knowledge of past COVID-19 infection or exposure is valuable, including self-pay consumers, employers and concierge medicine physician groups.
+Added: Our market research shows that there are many people who were unable to access testing in spring of 2020 or had unexpected results from antibody or PCR testing, and are still curious or skeptical about a previous infection.
+Added: This is particularly true for individuals who were asymptomatic or had mild symptoms, in whom antibody testing may be less reliable.
+Added: Additionally, our research indicates high interest among consumers in understanding immunity to COVID-19.
+Added: Therefore, we are offering the ability to contribute to on-market research to quantitatively assess the duration of immunity as defined by the persistence of SARS-CoV-2 specific T cells.
+Added: The commercial and operational infrastructure needed to deliver T-Detect COVID will be critical as we move T-Detect forward in additional indications.
+Added: These efforts will set the base of our near-term commercial focus in infectious diseases including COVID-19 and Lyme disease and a medium-term expansion into autoimmune disorders.
+Added: Clinical Validation in FDA EUA filing for Detection of Recent or Past SARS-CoV-2 Infection
+Added: Our T-Detect COVID test is a novel T-cell based assay that has demonstrated high percent positive and percent negative agreement (PPA and NPA) to identify or exclude prior SARS-CoV-2 infection in PCR-confirmed SARS-CoV-2 cases and lack of cross-reactivity to several viral and/or respiratory pathogens.
+Added: PPA was demonstrated in two studies 1) a primary PPA study evaluating residual blood samples (N=205) from subjects diagnosed with SARS-CoV-2 infection based on the EUA Abbott RealTime SARS-CoV-2 RT-PCR test from a single US reference lab (Discovery Life Sciences, New York);
+Added: and 2) a secondary PPA study using both retrospectively and prospectively collected samples from multiple cohorts (N=77;
+Added: ImmuneRACE and ImmuneSense™ COVID-19) and identified as positive based on a variety of EUA testing methods performed by a number of different labs.
+Added: T-Detect COVID demonstrated high PPA particularly in the timeframe of ≥15 days since diagnosis (97.1%) as well as ≥15 days since symptom onset (94.5%) (Table 1).
+Added: Positive Percent Agreement (PPA) of T-Detect COVID Assay with SARS-CoV-2 RT-PCR according to days since symptom onset or days since diagnosis.
+Added: RT-PCR+ Samples (N)
+Added: T-Detect Positive (N)
+Added: T-Detect PPA (95% CI)
+Added: 71.4 (53.7 - 85.4)
+Added: 93.9 (92.7 - 99.3)
+Added: 97.1 (92.7 - 99.2)
+Added: All (range 0-91 days)
+Added: Symptom Onset
+Added: 53.8 (25.1 - 80.8)
+Added: 77.8 (40.0 - 97.2)
+Added: 94.5 (84.9 - 98.9)
+Added: All (range 0-106 days)
+Added: NPA was demonstrated in two studies:
+Added: 1) a primary NPA including 124 retrospective frozen clinical remnant blood samples collected prior to December 2019 and thus presumed negative for SARS-CoV-2 infection;
+Added: and 2) a secondary NPA study using blood samples from subjects enrolled prospectively (ImmuneSense COVID-19) from Oct-Nov 2020 who presented with SARS-CoV-2 symptoms but tested negative for SARS-CoV-2 using RT-PCR EUA, BioFire RP V2.1, and EUA antibody tests.
+Added: T-Detect COVID demonstrated NPA of approximately 100% in individuals who had compatible symptoms of infection but were either presumed or confirmed negative for SARS-CoV-2 by PCR and antibody testing (Table 2).
+Added: Negative Percent Agreement (NPA) of T-Detect COVID Assay with pre-pandemic samples sourced retrospectively (DLS) and prospectively enrolled subjects (ImmuneSense COVID-19) negative for SARS-CoV-2 by EUA RT-PCR and antibody testing.
+Added: T-Detect Negative Results (N)
+Added: 100 (95.8 – 100)
+Added: ImmuneSense COVID-19
+Added: 98.7 (93.1 – 99.97)
+Added: Second Indication in Late-Stage Development:
+Added: T-Detect Lyme
In the third quarter of 2019, we established proof of concept in acute Lyme disease from two independent, retrospective cohorts of over 200 patients.
In both of these studies, we compared to standard of care, two-tiered serology testing.
−Removed: Our data shows a reduction in both false positive and false negative rates compared to standard of care, as well as an overlap of TCRs specific for Lyme disease between the two patient cohorts.
−Removed: The signal in Lyme establishes proof of concept of the science behind immunoSEQ Dx by further demonstrating that machine learning can be leveraged to develop diagnostic signals, even without the large cohorts of prospective patient data often required for diagnostics development.
−Removed: Strategic Plan to Evolve Early Detection of Disease
+Added: Results demonstrate a doubling of sensitivity of our test compared to standard two-tiered serology in acute patients.
+Added: We have also seen that our test can confirm an ongoing infection in patients who were treated with standard 2-3 weeks of doxycylcine but still have lingering symptoms.
+Added: The signal in Lyme further demonstrates that machine learning can be leveraged to develop diagnostic signals, even without the large cohorts of prospective patient data often required for diagnostics development.
+Added: For T-Detect Lyme, we launched the ImmuneSENSE Lyme study with the goal to enroll 990 participants.
+Added: Even though Lyme visits and diagnoses were down in 2020 due to COVID-19, by the end of 2020, we enrolled 91% of the subjects needed for the interim analysis.
+Added: We intend to continue full enrollment of the 990 subject study, of which approximately 420 will have either a clinical diagnosis or clinical suspicion based on a physician's assessment of Lyme disease.
+Added: The remaining subjects will include negative controls from both endemic and non-endemic regions and potential cross-reactive diseases.
+Added: We expect to launch as a CLIA-service offering at the end of 2021, leveraging the infrastructure built for T-Detect COVID.
+Added: T-Detect Pipeline
To achieve our goal of developing a diagnostic test for early detection across a broad range of diseases, we are pursuing the following strategic plan:
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Demonstrate clinical signals for early detection using mapped TCRs in select indications.
−Removed: Launch one TCR sequencing technology, immunoSEQ Dx, for initial indications.
+Added: Launch one TCR sequencing technology, T-Detect, for initial indications.
Broaden utility to a wide range of diseases without requiring large prospective trials.
+Added: Over the past year, we have optimized our five-stage research and development funnel and expanded our lab capacity to expedite our ability to move many diseases through the funnel in parallel.
+Added: We start by prioritizing diseases that meet key market attractiveness criteria such as high unmet medical need, understanding of the antigenic space, and our access to samples with metadata.
+Added: Once an early signal is identified, we refine our modeling with additional case control studies and by leveraging our clinical immunomics dataset.
+Added: Once we confirm a signal, we proceed with a full commercial validation and generation of a locked-down algorithm to take into clinical validation and regulatory submission.
+Added: We have about four to five diseases under study in each of the earlier stages of the research and development funnel and continue to invest heavily in the speed and robustness of this funnel with people and data analytic capabilities.
+Added: T-Detect R esearch and D evelopment Funnel
+Added: In the third quarter of 2020, we announced the confirmation of our third clinical signal in Crohn’s disease.
+Added: Crohn’s is a gastrointestinal disorder that is often confused with other conditions with similar symptom presentation and there is a significant unmet need for a highly specific and sensitive non-invasive test.
+Added: Data will be shared in a scientific forum next year.
+Added: Other indications such as celiac, ovarian cancer and other autoimmune disorders continue under development within our research and development funnel and we will update you on future progress as they advance.
+Added: There are many economic advantages of T-Detect both in the research and development stage and as a commercial product.
+Added: For the research and development pipeline, we use the same capex and workflow for signal generation across all diseases allowing us to study multiple disease in parallel.
+Added: Once commercialized, again, we use the same blood sample and the same underlying chemistry for all diseases with a small incremental investment in software for each individual disease, enabling a long-term high margin profile.
Drug Discovery
−Removed: Our aim is to develop immune-mediated therapies in oncology and other disease areas by using the full functionality of our immune medicine platform, including TruTCR for TCR characterization.
−Removed: We are currently working to leverage our TCR discovery capabilities to enable commercialization of novel therapies by collaborators.
−Removed: In the future, we may explore expanding our end-to-end capabilities for the development of cellular therapies and vaccines.
−Removed: TCR Discovery for Cellular Therapy
+Added: Our aim is to develop immune-mediated therapies in oncology and other disease areas by using the full functionality of our immune medicine platform, including TruTCR and TruAB for TCR and antibody characterization, respectively.
+Added: We are currently working to leverage our immune receptor discovery capabilities to enable commercialization of novel therapies by collaborators.
+Added: In the future, we may explore expanding our own end-to-end capabilities for the further development of our own portfolio of therapeutic candidates.
+Added: TCR Discovery for Cellular Therapy using TruTCR
We have developed a high-throughput TCR screening process that allows for the discovery of antigen-specific TCRs that occur in low frequencies in healthy individuals.
22 unchanged sentences
The Shared Products will use “off-the-shelf” TCRs identified against cancer antigens shared among patients.
−Removed: We are on track for a planned IND submission by Genentech for the first shared product targeting a selected shared cancer antigen by the end of 2020.
+Added: Genentech is planning its first IND submission for the first shared product targeting a selected shared cancer antigen in the first half of 2021.
+Added: We continue to screen and characterize TCRs against clinically relevant targets in solid tumors and we are in late-stage characterization of several promising TCRs that could be considered by Genentech for the development of a second Shared Product.
Personalized Product.
The Personalized Product will use patient-specific TCRs identified by real-time screening of TCRs against cancer antigens in each patient.
+Added: In the second half of 2020, we started screening blood from cancer patients to identify TCRs specific to a patient’s tumor mutations and our goal is to generate proof of concept data in early 2021.
+Added: To support our near-term and long-term objectives for our private product, we plan to open our dedicated prototype lab in South San Francisco in 2021, which will have capacity to perform first-in-human clinical trials.
+Added: We believe this investment positions us to potentially pursue additional opportunities outside of this collaboration, including cellular therapy in other disease states and cancer vaccines.
Under the terms of the agreement, we received a $300.0 million initial upfront payment in February 2019, and we may be eligible to receive approximately $1.8 billion in aggregate milestone payments upon achievement of specified development, regulatory and commercial milestones.
2 unchanged sentences
We will be responsible for the screening and identification of TCRs that can most effectively recognize and directly target specific cancer antigens, including neoantigens.
−Removed: In parallel, we plan to evaluate an investment in facilities for the screening of patient-specific TCRs to shorten the time from patient blood draw to infusion of the Personalized Product.
−Removed: We believe this investment would position us to potentially pursue additional opportunities outside of this collaboration, including developing and commercializing cancer vaccines and cellular therapies in other disease states.
+Added: In parallel, we plan to evaluate an investment in additional facilities that would allow us to scale our end-to-end screening of patient-specific TCRs for potential future late-stage clinical trials and commercialization of the Personalized Product.
+Added: We believe this investment would position us to potentially pursue additional opportunities outside of this collaboration, including developing and commercializing vaccines and cellular therapies in other disease states.
+Added: Developing neutralizing antibodies using TruAB
+Added: Our TruAB process, similar to our TruTCR process, leverages our high-throughput capabilities to screen millions of BCRs to identify unique antibodies from human blood.
+Added: Our first proof of concept is for patients who are actively fighting or have recently recovered from COVID-19.
+Added: In just several months, we collected blood from over 300 patients and hundreds of thousands of antibodies, of which we synthesized and characterized over 3,300 antibodies to various parts of the SARS-CoV-2 virus.
+Added: To date, we identified several candidates that neutralize live virus at very low concentrations, which means that a very small amount of each of these antibodies is able to block the virus from infecting cells.
+Added: Using our TruAB antibody discovery approach, we identified several lead antibody candidates that strongly bind to different parts of the virus.
+Added: Our growing portfolio of novel antibodies includes candidates that don’t bind the classic RBD region and instead bind to S1, Trimer or S2.
+Added: We believe we are one of the only groups that has identified S2-specific antibodies that neutralize the virus.
+Added: This could have important advantages in a cocktail strategy that targets different mechanisms of action to inhibit the virus and potentially virus variants.
+Added: Importantly, our drug discovery approach is differentiated from other groups because of the scale and throughput of our TruAB approach that allows us to identify a much broader set of naturally-occurring, fully human antibody candidates to select the best ones for clinical development.
+Added: Beyond COVID-19, we are exploring applications of TruAB discovery in other diseases, including autoimmunity.
Our People and Culture
−Removed: Our employees, internally referred to as “Adapters,” are passionate about immune-driven medicine, empowered by scientific discipline and fueled by our foresight and curiosity about the adaptive immune system.
−Removed: As of December 31, 2019, we had 453 full-time employees of which 189 had advanced degrees, including 98 who hold medical or doctoral degrees.
+Added: Our employees, internally referred to as “Adapters,” are passionate about immune medicine, empowered by scientific discipline and fueled by our foresight and curiosity about the adaptive immune system.
+Added: As of December 31, 2020, we had 622 full-time employees of which 124 hold medical or doctoral degrees.
None of our employees are subject to a collective bargaining agreement and we have not experienced any work stoppages.
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We believe our employees are highly engaged, and we were recognized consecutively in 2018, 2019 and 2020 by the Puget Sound Business Journal as one of Washington State’s Best Places to Work.
+Added: Diversity and Inclusion
+Added: We pride ourselves on inclusive team building, product design and gender diversity at all levels of management.
+Added: We are committed to creating and maintaining a culture of belonging.
+Added: In 2020, we expanded and implemented several diversity and inclusion initiatives.
+Added: We launched multiple employee resource groups, including Women@Adaptive, Adaptive PRIDE, Black Adapter Network and Working Life and Wellness.
+Added: We developed diversity sourcing programs and implemented hiring manager diversity training.
+Added: We also established an Equity Advisory Council of senior leaders focused on specific objectives looking at clinical studies, commercial engagement, recruiting, and retention through a diversity and inclusion lens.
+Added: We integrated hidden bias training into our Leader of People Program.
+Added: Most recently, we launched a STEM minority mentoring program with a local university.
+Added: Compensation and Benefits
+Added: We strive to provide compensation and benefits that are competitive to market and create incentives to attract and retain employees.
+Added: Our compensation package includes market-competitive base pay, performance-based short-term incentives, health care, retirement benefits, paid time off and family leave.
+Added: In addition, we offer employees the benefit of equity ownership in the Company through stock option and restricted stock unit awards.
+Added: We also provide access to a variety of health and wellness resources.
+Added: Employee Development & Training
+Added: We prioritize employee development and training and have established programs to support a culture of employee development.
+Added: Specifically, in 2020, we offered multiple learning solutions, including our Leader Orientation Program, our Leader of People Program, and our L-re:combinator Program.
+Added: Our Leader Orientation Program is an eight-week blended learning program that features self-paced online learning and live virtual training, designed to train new line to mid-level leaders about our culture, HR policies, communication, motivation, and more.
+Added: Our Leader of People Program is a three-part, 15-week program designed to train leaders on change management, interviewing and hiring the best, having difficult discussions and creating alignment.
+Added: Our L-re:combinator Program is a peer-to-peer learning group that provides mid-level managers with education, support, and collaboration opportunities.
+Added: In 2020, over 100 Adapters attended leadership development programs and consumed over 2,000 hours of training.
+Added: COVID-19 Preparedness
+Added: In response to the emergence of the COVID-19 pandemic, management formed a cross-functional COVID-19 preparedness committee to regularly monitor the progress of the disease, stay apprised of expert external guidance, discuss and implement preparedness plans as needed and provide clear communication to all Adapters.
+Added: We implemented measures to reduce the risk of exposure of COVID-19 to the employees who continue to work on site, including the implementation of work-from-home policies for certain employees, as well as the implementation of shifts and zones to physically distance employees who remain on site and extra sanitation measures.
+Added: For those employees working remotely, we provided additional equipment to support their ergonomic and technology needs.
Strategic Collaborations and Other Agreements
6 unchanged sentences
Genentech will also pay us tiered royalties at a rate ranging from the mid-single digits to the mid-teens on aggregate worldwide net sales of the Shared Products and the Personalized Product arising from the strategic collaboration, subject to certain reductions, with aggregate minimum floors.
−Removed: For the year ended December 31, 2019, the Genentech Agreement accounted for approximately 41.3% of our revenue.
+Added: For the year ended December 31, 2020 and 2019, the Genentech Agreement accounted for approximately 53.7 % and approximately 41.3% of our revenue , respectively .
The Genentech Agreement will continue until the expiration of all royalty payments, but may be terminated by mutual agreement, upon an uncured material breach by either party, upon insolvency of either party, or by Genentech for convenience upon prior written notice.
9 unchanged sentences
Concurrently with entry into the Microsoft Agreement, Microsoft purchased shares of our Series F-1 convertible preferred stock which were converted into common stock upon the closing of our initial public offering in July 2019.
−Removed: Illumina Agreement
−Removed: In September 2019, we entered into a non-exclusive development and supply agreement with Illumina for the development and commercialization of IVD kits for clonoSEQ and immunoSEQ Dx (“Illumina Agreement”).
−Removed: Pursuant to the Illumina Agreement, Illumina will develop custom software for us to support use of the IVD kits and provide regulatory and related support for the custom software and the Illumina components of the IVD kits.
−Removed: Illumina will retain ownership of the custom software, subject to an exclusive license to us, and we will retain ownership of the IVD kits.
−Removed: Each party will be responsible for distributing and otherwise commercializing its respective products to end users.
−Removed: We have agreed to pay Illumina two technology access milestone payments related to the development of the custom software modules, payable upon our acceptance of a verified custom software module that meets the specification requirements set forth in the development plan for the first IVD kit, and the installation of the custom module at a clinical trial site.
−Removed: We have also agreed to pay Illumina tiered revenue share payments on net sales of the IVD kits, subject to certain customary reductions, ranging from a low to mid-single digit percentage of future net sales.
−Removed: During the development phase of the Illumina Agreement, we will purchase instruments and consumables from Illumina as needed to support the pre-commercial development of the IVD kits.
−Removed: The Illumina Agreement has a six-year term, but may be earlier terminated by either party in the event of an uncured material breach by the other party, the bankruptcy or insolvency of the other party or if at any time after the second anniversary of the effective date of the agreement there are no active development plans in place.
Processing and Manufacturing
7 unchanged sentences
We also work with a third-party vendor to manufacture our immunoSEQ RUO kit using our proprietary primer mix and other materials.
+Added: We also use Illumina to develop IVD kits and provide related support for clonoSEQ and T-Detect, pursuant to a September 2019 development and supply agreement with a six-year term and payments to Illumina based on Illumina achieving milestones and revenue share payments ranging from a low to mid-single digit percentage of future net sales, subject to customary reductions.
For our TCR-Antigen Map and drug discovery initiatives, we conduct our current operations at our laboratories in Seattle, Washington and South San Francisco, California.
1 unchanged sentence
We use a limited number of suppliers, or in some cases single suppliers, for our laboratory equipment and materials.
−Removed: We manage this concentration risk by targeting levels of surplus stock that, we believe, would allow us to locate alternative suppliers if needed.
+Added: We manage this concentration risk by targeting or building to levels of surplus stock that, we believe, would allow us to locate alternative suppliers if needed.
However, if one of our suppliers fails to perform adequately or fulfill our needs, we may be required to incur significant costs and devote significant efforts to find new suppliers and may face delays in processing samples or developing and commercializing our products and services.
+Added: Beginning in 2020, we have faced delays in the form of longer lead times for equipment that is subject to increased demand due to public health measures taken to combat the COVID-19 pandemic, such as freezers.
In particular, we have purchased the Illumina NextSeq System, and Illumina also supplies us with reagents that have been designed for use solely with this sequencer.
6 unchanged sentences
Our drug discovery efforts are focused on large biopharmaceutical companies.
−Removed: We have completed an improved RUO kit that can be used with various sample types, which we expect to enable global distribution of our research product.
−Removed: We plan to utilize a third-party global distributor.
−Removed: We may not be able to engage a distributor in a timely manner or on commercially reasonable terms.
+Added: We have entered into relationships with distributors to leverage an improved RUO immunoSEQ kit that can be used with various sample types, which we expect to enable global distribution of our research product.
+Added: We plan to utilize a third-party global distributor but may not be able to engage a distributor in a timely manner or on commercially reasonable terms.
Intellectual Property
3 unchanged sentences
Our patent claims extend to not only adaptive immune receptor molecules, but also to uniquely powerful techniques for sequencing immune cell receptors, determining clonality and immune competency, diagnosing disease, predicting responses to immunotherapy and identifying new drug candidates.
−Removed: Our patent protections generally expire in years ranging from 2029 to 2038.
+Added: Our patent protection generally expires in years ranging from 2029 to 2040.
Critical know-how we develop is protected by a trade secrecy program to ensure against inappropriate disclosure or use.
9 unchanged sentences
24 patent families directed to methods and tools useful in our immune medicine platform for non-target specific immunosequencing and research, including immunoSEQ;
−Removed: 14 patent families directed to methods and tools useful in diagnosis, prognosis and disease monitoring, including clonoSEQ and the TCR-Antigen Map;
+Added: 17 patent families directed to methods and tools useful in diagnosis, prognosis and disease monitoring, including clonoSEQ, T-Detect and the TCR-Antigen Map;
12 patent families directed to methods and tools useful in drug discovery, including TruTCR, MIRA and pairSEQ;
+Added: 1 patent family directed to therapeutic antibodies;
+Added: 1 patent family directed to gene sequencing technology;
28 trademarks registered and pending registration worldwide.
12 unchanged sentences
Granted claims extend to the use of particular sets of amplification primers, while pending claims are being pursued to capture additional assessment techniques.
−Removed: Licensed exclusively to us by Fred Hutch, the application has since spawned 31 additional patent applications, from which 12 patents have been granted as of December 31, 2019, including U.S.
+Added: Licensed exclusively to us by Fred Hutch, the application has since spawned more than 31 additional patent applications, many of which have been granted as of December 31, 2020, including U.S.
Optimizing Nucleic Acid Amplification Reactions
2 unchanged sentences
The claimed approach utilizes synthetic templates, reflecting nucleic acid sequences for rearranged V and J receptor segments in the sampled cells.
−Removed: Twenty-eight related patent applications have since been filed, from which 16 patents have been granted as of December 31, 2019, including U.S.
+Added: More than twenty-eight related patent applications have since been filed, many of which have been granted as of December 31, 2020, including U.S.
9,371,558 and 10,214,770.
3 unchanged sentences
TCR and BCR DNA, RNA or cell-free DNA from samples, including blood and bone marrow, are used to detect, prognose and monitor disease, including autoimmune disease, infection and cancer.
−Removed: One hundred twelve patents have been granted in the portfolio as of December 31, 2019, including U.S.
+Added: More than one hundred twelve patents have been granted in the portfolio as of December 31, 2020, including U.S.
8,628,927 and 8,236,503.
−Removed: Our diagnostic methods also apply to the detection of MRD, the target of our clonoSEQ diagnostic test for assessing how disease burden changes in response to treatment or during remission.
−Removed: Nine patents have been granted from additional applications filed by us, including U.S.
+Added: Our diagnostic methods also apply to the detection of MRD (the target of our B cell-based clonoSEQ diagnostic test for assessing how disease burden changes in response to treatment or during remission) and T-Detect (our T cell-based diagnostic tests).
+Added: Multiple patents have been granted from additional applications relating to diagnostic methods and diagnostically significant TCRs filed by us, including U.S.
TCR-Antigen Map
1 unchanged sentence
Pre-collaboration, we filed 10 related patent applications for methods to produce antigen-exposed enriched T cell populations and identify their antigen specificities by comparison to a pre-exposure population of cells or by use of an algorithm.
−Removed: We have filed additional patent applications relating to TCRs and algorithmic-based methods to characterize antigen specificities and will continue to do so as our work proceeds with Microsoft.
+Added: We have filed additional patent applications relating to algorithmic-based methods to characterize antigen specificities and will continue to do so as our work proceeds with Microsoft.
We developed and are pursuing patent protection for bioinformatic-based methods to determine the antigen specificity of TCRs by exposing T cells to a panel of multiple antigens.
2 unchanged sentences
These methods may also be used to pair the two TCR chains as well as to identify high avidity TCRs.
−Removed: Eight related patent applications have been filed, from which three patents have been granted as of December 31, 2019, including U.S.
+Added: Several patents have been granted as of December 31, 2020, including U.S.
In nature, TCRs and BCRs exist as a heterodimer of paired chains, each of which is encoded on a different chromosome.
2 unchanged sentences
Our methods also allow for identification of receptor chain pairs which are specific to particular antigen targets.
−Removed: Fifty-four related patent applications have been filed, from which 21 patents have been granted as of December 31, 2019, including U.S.
+Added: Over fifty related patent applications have been filed, nearly half of which have matured into granted patents as of December 31, 2020, including U.S.
Assessing Responsiveness to Immunotherapy
1 unchanged sentence
To those ends, rearranged TCR or BCR sequences are quantified and their levels or frequencies compared at different points in time.
−Removed: Twenty-three related patent applications have been filed, from which 15 patents have been granted as of December 31, 2019, including U.S.
+Added: More than 20 related patent applications have been filed, most of which have been granted as of December 31, 2020, including U.S.
+Added: Therapeutic Antibodies
+Added: We developed a therapeutic antibody discovery process called TruAB from which neutralizing antibodies to SARS-CoV-2 have been produced.
+Added: A patent application to these antibodies was filed in 2020 and is pending.
In-Licensed and Acquired Intellectual Property Rights
22 unchanged sentences
Given the breadth and promise of immune medicine, we face substantial competition from many different sources, including life sciences tools, diagnostics, pharmaceutical and biotechnology companies, academic research institutions and governmental agencies and public and private research institutions across various components of our platform and product and service offerings.
−Removed: Due to the significant interest and growth in immune-driven medicine more broadly, we expect the intensity of the competition to increase.
+Added: Due to the significant interest and growth in immune medicine more broadly, we expect the intensity of the competition to increase.
However, we believe our scale, precision and speed, and the resulting clinical applicability, distinguish us from our competitors.
2 unchanged sentences
We may also face competition from companies developing early cancer detection testing products for indications that do not currently compete with clonoSEQ.
−Removed: In drug discovery, clinical trials in the field of immune-driven medicine are being pursued by a number of industry and academic players.
+Added: In drug discovery, clinical trials in the field of immune medicine are being pursued by a number of industry and academic players.
Immune medicine is being pursued by several biotechnology companies as well as by large-cap biopharmaceutical companies.
8 unchanged sentences
Life Sciences Research Use Only Technologies
−Removed: Our core research product, immunoSEQ, is an RUO tool in the United States that provides data to third parties such as biopharmaceutical companies that are themselves engaged in the research and development of potential diagnostic and therapeutic products and services for which they may later pursue investigation and clearance, authorization or approval from regulatory authorities, such as the FDA.
+Added: Our core research product, immunoSEQ, is a RUO tool in the United States that provides data to third parties such as biopharmaceutical companies that are themselves engaged in the research and development of potential diagnostic and therapeutic products and services for which they may later pursue investigation and clearance, authorization or approval from regulatory authorities, such as the FDA.
RUO products belong to a separate regulatory classification under a long-standing FDA regulation.
9 unchanged sentences
Our first diagnostic product, clonoSEQ, was granted marketing authorization by the FDA for the detection and monitoring of MRD in bone marrow samples in patients with MM and ALL under the de novo process, which classified clonoSEQ and future DNA-based tests to measure MRD in hematological malignancies as Class II devices, as explained further below.
−Removed: We recently submitted a 510(k) premarket notification seeking clearance of clonoSEQ for CLL in blood samples.
+Added: In August 2020, we received our third FDA clearance for clonoSEQ, following a 510(k) submission, for CLL in bone marrow as well as blood samples.
In the United States, medical devices are subject to extensive regulation by the FDA under the FDCA and its implementing regulations, and other federal and state statutes and regulations.
2 unchanged sentences
Predictive, prognostic and screening tests can also be IVDs.
−Removed: Devices must undergo premarket review by and receive clearance, authorization or approval from the FDA prior to commercialization, unless the device is of a type exempted from such review by statute, regulation or pursuant to the FDA’s exercise of enforcement discretion.
−Removed: For example, the FDA, to date, has generally exercised enforcement discretion over most LDTs, which are tests that are designed, manufactured, validated and used within a single laboratory, subject to certain other limitations such as the LDT not being offered directly to consumers.
−Removed: Pursuant to the FDCA, medical devices are subject to varying degrees of regulatory control and are classified in one of three classes depending on the controls the FDA determines necessary to reasonably ensure their safety and effectiveness.
−Removed: Class I devices are deemed to be low risk.
−Removed: Class II devices are deemed to be moderate risk.
−Removed: Class III devices are generally the highest risk devices and are subject to the highest level of regulatory control to provide reasonable assurance of the devices’ safety and effectiveness.
−Removed: Class I devices are those for which reasonable assurance of safety and effectiveness can be provided by adherence to the FDA’s “general controls” for medical devices.
−Removed: General controls apply to all classes of devices and include FDA’s QSR, labeling requirements, premarket review, establishment registration and device listing, the medical device reporting (“MDR”) regulation, which requires that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur, and the Reports of Corrections and Removals regulation, which requires manufacturers to report recalls and field actions to the FDA if initiated to reduce a risk to health posed by the device or to remedy a violation of the FDCA.
−Removed: Most Class I devices are exempt from premarket regulation;
−Removed: however, some Class I devices require premarket clearance by the FDA through the 510(k) premarket notification process described below.
−Removed: Class II devices are subject to the FDA’s general controls, and any other “special controls,” such as performance standards, post-market surveillance and the FDA guidelines, deemed necessary by the FDA to provide reasonable assurance of the devices’ safety and effectiveness.
−Removed: Premarket review and clearance by the FDA for Class II devices are accomplished through the 510(k) premarket notification pathway, although some Class II devices are exempt from the 510(k) requirements.
−Removed: Premarket notifications are subject to user fees, unless a specific exemption applies.
−Removed: To obtain 510(k) clearance, a manufacturer must submit a premarket notification demonstrating that the proposed device is “substantially equivalent” to a legally marketed predicate device, which is usually a previously 510(k)-cleared device.
−Removed: In determining substantial equivalence, the FDA assesses whether the proposed device has the same intended use as the predicate device, and the same technological characteristics as the predicate device, or, if the proposed device has different technological characteristics, that the information submitted in the premarket notification demonstrates the proposed device is as safe and effective as and does not raise different questions of safety and effectiveness than the predicate device.
−Removed: Premarket notifications typically include bench, analytical, and preclinical data, and sometimes include clinical data.
−Removed: The 510(k) pathway usually takes from three to nine months from the time of submission to the FDA, but it can take longer, particularly for a novel type of product.
−Removed: If the FDA determines that a device is substantially equivalent to a predicate device, the subject device may be marketed.
−Removed: However, if the FDA makes a not substantially equivalent determination, then the device would be regulated as a Class III device, discussed below.
−Removed: If a manufacturer obtains a 510(k) clearance for its device and then makes a modification that could significantly affect the device’s safety or effectiveness or constitutes a major change or modification in the intended use of the device, a new clearance, authorization or approval may be required.
−Removed: Class III devices are deemed by the FDA to pose the greatest risk, such as those for which reasonable assurance of the device’s safety and effectiveness cannot be assured solely by the general controls and special controls described above and that are life-sustaining or life-supporting.
−Removed: Some pre-amendment Class III devices, for which the FDA has not yet required a Premarket Approval Application (“PMA”), require the FDA’s clearance of a premarket notification in order to be marketed.
−Removed: However, most Class III devices are required to undergo the PMA process in which the manufacturer must demonstrate reasonable assurance of the safety and effectiveness of the device for its proposed intended use to the FDA’s satisfaction.
−Removed: The PMA pathway is costly, lengthy and uncertain.
−Removed: A PMA must provide valid scientific evidence, typically extensive preclinical, analytical and clinical trial data and information about the device and its components regarding, among other things, device design, manufacturing and labeling.
−Removed: PMAs and supplemental PMAs are subject to significantly higher user fees than are 510(k) premarket notifications.
−Removed: Some PMAs are exempt from a user fee, such as a small business’ first PMA.
−Removed: As part of its PMA review process, the FDA will typically inspect the manufacturer’s facilities for compliance with QSR requirements, which impose elaborate testing, control, documentation and other quality assurance procedures.
−Removed: The PMA review process typically takes one to three years from submission but can take longer.
−Removed: Novel devices are placed in Class III by default if the device type was not previously classified by the FDA and has no predicate.
−Removed: Manufacturers of such novel devices may request that the FDA reclassify the device to Class II or Class I via a de novo request.
−Removed: The Food and Drug Administration Modernization Act of 1997 established a route to market for low to moderate risk medical devices that are automatically placed into Class III due to the absence of a predicate device, called the “Request for Evaluation of Automatic Class III Designation,” or the de novo classification procedure.
−Removed: This procedure allows a manufacturer whose novel device is automatically classified into Class III to request down-classification of its medical device into Class I or Class II on the basis that the device presents low or moderate risk, rather than requiring the submission and approval of a PMA.
−Removed: Prior to the enactment of the Food and Drug Administration Safety and Innovation Act (“FDASIA”) in July 2012, a medical device could only be eligible for de novo classification if the manufacturer first submitted a 510(k) premarket notification and received a determination from the FDA that the device was not substantially equivalent.
−Removed: FDASIA streamlined the de novo classification pathway by permitting manufacturers to request de novo classification directly without first submitting a 510(k) premarket notification to the FDA and receiving a not substantially equivalent determination.
−Removed: FDASIA sets a review time for the FDA of 120 days following receipt of the de novo application, but the FDA does not routinely meet this timeline and has publicly only committed to a review of 150 days for 55% of applications.
−Removed: If the manufacturer seeks reclassification into Class II, the manufacturer must include a draft proposal for special controls that are necessary to provide a reasonable assurance of the safety and effectiveness of the medical device.
−Removed: The FDA may reject the reclassification petition if it identifies a legally marketed predicate device that would be appropriate for a 510(k) or determines that the device is not low to moderate risk or that general and special controls would be inadequate to ensure the safety and effectiveness of the device.
−Removed: If the FDA agrees with the down-classification, the FDA will grant the device market authorization and establish a classification regulation for the device type.
−Removed: The device can then be used as a predicate device for future 510(k) submissions by the manufacturer or a competitor.
−Removed: In December 2018, the FDA issued proposed regulations to govern the de novo classification process, which include requirements beyond what has historically been required in de novo submissions.
−Removed: If finalized, these regulations could further impact this path to market.
−Removed: A clinical trial may be required in support of a 510(k) or de novo submission and generally is required for a PMA.
−Removed: These trials require an Investigational Device Exemption (“IDE”) approved by the FDA for a specified number of patients and sites, unless the product is exempt from IDE requirements or deemed a non-significant risk device eligible for more abbreviated IDE requirements.
−Removed: Most clinical studies of IVDs are exempt from the IDE requirements, if certain requirements are met.
−Removed: The IDE application must be supported by appropriate data, such as animal and laboratory testing results, showing that it is safe to test the device in or on humans and that the testing protocol is scientifically sound.
−Removed: Clinical trials may begin 30 days after the submission of the IDE application unless the FDA disapproves the IDE or places the trial on clinical hold.
−Removed: Additionally, clinical trials may not begin until their protocol and informed consent receive approval from the appropriate ethical review boards, including institutional review boards (“ IRBs ”) .
−Removed: Unless an exemption applies, clinical trials intended to assess the safety or efficacy of a device must be conducted in accordance with the FDA’s IDE requirements.
−Removed: Clinical investigations that are not assessing safety and effectiveness but are being used to generate other data to support FDA submissions are subject to the more broadly applicable informed consent and IRB regulations.
−Removed: Even if regulatory clearance, authorization or approval of a device is granted, the FDA may impose limitations on the uses and indications for which the device may be labeled and promoted, and the device remains subject to significant regulatory requirements.
−Removed: Medical devices may be marketed only for the uses and indications for which they are cleared, authorized or approved.
−Removed: After a device, including a device exempt from FDA premarket review, is placed on the market, numerous post-market regulatory requirements apply.
−Removed: These requirements are as discussed above in the general controls.
−Removed: Some manufacturers also may be subject to post-market surveillance regulations.
−Removed: Facility records and manufacturing processes are subject to periodic unscheduled inspections by the FDA.
−Removed: Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include, among other things:
−Removed: untitled letters, public warning letters, fines, injunctions, civil or criminal penalties, recall or seizure of products, operating restrictions, partial suspension or total shutdown of production, delays in or refusals of 510(k), de novo or PMA submissions, withdrawing existing clearance, authorization and approval, and a recommendation by the FDA to disallow a device manufacturer from entering into government contracts.
−Removed: If certain conditions are met, the FDA also has the authority to order manufacturers to repair, replace or refund the cost of any devices that present an unreasonable risk of substantial harm to the public health.
−Removed: In the event that a supplier fails to maintain compliance with FDA or the device manufacturer’s quality requirements, the manufacturer may have to qualify a new supplier and could experience manufacturing delays as a result.
+Added: After a medical device is placed on the market, numerous regulatory requirements apply.
+Added: These include:
+Added: compliance with the FDA’s QSR, which requires manufacturers to follow stringent design, testing, control, documentation, record maintenance, including maintenance of complaint and related investigation files, and other quality assurance controls during the manufacturing process;
+Added: labeling regulations, which prohibit the promotion of products for uncleared, or unapproved uses, or “off-label” uses, and impose other restrictions on labeling;
+Added: obligations to investigate and report to the FDA adverse events, including deaths, or serious injuries that may have been or were caused by a medical device and malfunctions in the device that would likely cause or contribute to a death or serious injury if it were to recur.
+Added: Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include sanctions, including but not limited to, warning letters;
+Added: fines, injunctions, and civil penalties;
+Added: recall or seizure of the device;
+Added: operating restrictions, partial suspension or total shutdown of production;
+Added: refusal to grant 510(k) clearance or premarket approvals (“PMAs”) of new devices;
+Added: withdrawal of clearance or approval;
+Added: and civil or criminal prosecution.
Position in the European Union
12 unchanged sentences
Until that time, our products must continue to meet the requirements of IVDD for commercialization in the EU.
−Removed: Laboratory Developed Tests in the United States
−Removed: clonoSEQ is available as an LDT for use in assessing MRD for other lymphoid malignancies, including CLL and NHL, at our Seattle, Washington laboratory.
−Removed: LDTs have generally been considered to be tests that are designed, developed, validated and used within a single laboratory.
−Removed: The FDA has taken the position that it has authority to regulate such tests as medical devices under the FDCA, but the FDA has historically exercised enforcement discretion and has not required clearance, authorization or approval of LDTs prior to marketing.
−Removed: Laboratories certified as “high complexity” under CLIA may develop, manufacture, validate and run LDTs.
−Removed: The CLIA requirements are discussed below in “ —U.S.
Federal and State Regulation of Laboratories
−Removed: Although we believe we are within the scope of the FDA’s policy on enforcement discretion for LDTs, the initial commercialization and continued commercial availability of an LDT is subject to uncertainty given the FDA’s latitude in interpreting and applying its laws and policies.
−Removed: For example, the FDA does not consider tests to be subject to its LDT enforcement discretion if they were or are designed or manufactured completely, or partly, outside of the laboratory that offers and uses them, or if they are offered “over-the-counter,” as opposed to being available to patients only when prescribed by a healthcare provider.
−Removed: Even for tests that appear to fall within the FDA’s previously stated enforcement discretion, the FDA may decide to take action against certain LDTs on a case-by-case basis at any time if the FDA views them as presenting a risk to patients.
−Removed: The FDA Commissioner and the Director of the CDRH have expressed significant concerns regarding potential disparities in accuracy and quality between some LDTs and IVDs that have been reviewed and cleared, authorized or approved by the FDA.
−Removed: In addition, the U.S.
−Removed: Congress has been considering various legislative proposals that would reform the FDA’s regulation of laboratory tests, and such legislation might lead to heightened FDA scrutiny of LDTs, particularly new LDTs, in the future.
−Removed: Whether such legislation will pass and, if so, what effect it may have on how the FDA regulates laboratory tests, including LDTs, is unknown.
−Removed: If the FDA disagrees with a laboratory test’s LDT status, the FDA may consider the test to be an unapproved medical device, may subject us to FDA enforcement action, including, without limitation, requiring us to seek clearance, authorization or approval for the laboratory test.
−Removed: On October 3, 2014, the FDA issued two draft guidance documents proposing a new regulatory paradigm for oversight of LDTs.
−Removed: These draft guidance documents proposed more active review of LDTs.
−Removed: The draft guidance documents were the subject of considerable controversy, and in November 2016, the FDA announced that it would not be finalizing the 2014 draft guidance documents.
−Removed: On January 13, 2017, the FDA issued a discussion paper which laid out elements of a possible revised future LDT regulatory framework, but did not establish any regulatory requirements.
−Removed: The FDA’s recent efforts to regulate LDTs have prompted the drafting of legislation governing diagnostic products and services that seeks to substantially revamp the regulation of both LDTs and IVDs.
−Removed: Congress may act to provide further direction to the FDA on the regulation of LDTs and substantially modify the regulation of IVDs, which might result in heightened FDA scrutiny of LDTs, particularly new LDTs, in the future.
−Removed: Federal and State Regulation of Laboratories
Given that aspects of our business at certain facilities involve acting as a clinical laboratory, we are required to hold certain federal and state licenses, certifications and permits to conduct our business.
19 unchanged sentences
If a clinical laboratory is found to be out of compliance with CLIA certification, CAP accreditation or a state license or permit, the applicable regulatory agency may, among other things, suspend, restrict or revoke the certification, accreditation, license or permit to operate the clinical laboratory, assess civil monetary penalties and impose specific corrective action plans, among other sanctions.
−Removed: In December of 2018, Congress released draft legislation to establish a framework for overseeing in vitro clinical tests (“IVCTs”), such as test kits and LDTs, the Verifying Accurate Leading-edge IVCT Development Act (“VALID Act”).
−Removed: The draft legislation would establish a risk-based approach to IVCT regulation, prioritizing FDA resources for the highest-risk tests that expose patients to serious or irreversible harm.
−Removed: The legislation, if passed in its current form, also would establish a precertification program for lower-risk tests that are not otherwise required to go through premarket review.
−Removed: Precertification would allow the FDA to establish standard validity requirements, while also lowering the burden on labs and developers and protecting continued innovation.
−Removed: High-risk tests, such as novel tests, would be required to undergo premarket review to verify analytical and clinical validity.
−Removed: The FDA could require that any test undergo premarket review after providing the developer an opportunity to address issues identified by the agency.
−Removed: The VALID Act is a priority focus for the FDA, as well as certain members of Congress, and they have been working with industry to understand potential issues around the discussion draft.
−Removed: To date, a revised draft of the discussion draft has not been publicly communicated nor has any legislation been introduced.
+Added: Laboratory Developed Tests in the United States
+Added: The FDA has historically exercised enforcement discretion to not regulate most LDTs.
+Added: As such, LDTs have not been subject to FDA’s marketing clearance and approval processes, or post-marketing controls, for medical devices.
+Added: LDTs are generally considered to be tests that are designed, developed, validated and used within a single laboratory.
+Added: Laboratories certified as “high complexity” under CLIA may develop, manufacture, validate and run LDTs.
+Added: clonoSEQ is available as an LDT for use in assessing MRD for other lymphoid malignancies, including CLL and NHL, at our Seattle, Washington laboratory.
+Added: In that respect, Congress introduced legislation to establish a framework for FDA to oversee marketing of in vitro clinical tests (“IVCTs”), such as test kits and LDTs (the Verifying Accurate Leading-edge IVCT Development Act, or “VALID Act”).
+Added: Under the VALID Act, FDA would oversee IVCTs, requiring pre-market review for high-risk IVCTs which expose patients to serious or irreversible harm and novel IVCTs.
+Added: As currently drafted, existing LDTs at the time of VALID Act passage would be grandfathered as approved.
+Added: For new low risk IVCTs, developers would submit a representative IVCT to FDA for review and issuance of a technology certification for the specific IVCT reviewed and later developed test within the scope of the certification.
+Added: It is not certain whether or in what form the VALID Act bill will pass Congress, but passage could increase the stringency of regulatory review required for our LDT products.
+Added: If the VALID Act does not pass, FDA may decide to exercise enforcement discretion for LDTs, especially if it perceives a LDT as posing a risk to patients.
+Added: Therefore, the regulatory path for marketing of LDTs is subject to uncertainty given the FDA’s latitude in interpreting and applying its laws and policies.
+Added: As of November 2020, the U.S.
+Added: Department of Health and Human Services instructed the FDA to review voluntary EUA submissions of LDTs for COVID-19 in order to extend certain statutory immunities to liability for those laboratories under the federal Public Readiness and Emergency Preparedness Act (“PREP Act”).
+Added: Failure to obtain an EUA for a COVID-19 LDT can impair such immunity and could make payor reimbursement for COVID-19 LDTs under the Family First Coronavirus Act unavailable.
+Added: We are seeking an EUA for our T-Detect COVID test and could be at risk of product liability or lack of payor reimbursement if the EUA is not granted.
Federal and State Privacy, Security and Breach Notification Laws
10 unchanged sentences
Additionally, to the extent that we submit electronic healthcare claims and payment transactions that do not comply with the electronic data transmission standards established under HIPAA and HITECH, payments to us may be delayed or denied.
−Removed: Although there is no private right of action, HIPAA has been used as the standard of care in negligence actions brought under state law.
Section 5(a) of the Federal Trade Commission Act (“FTCA”) has also been used to regulate data privacy and security at the federal level.
2 unchanged sentences
The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business and the cost of available tools to improve security and reduce vulnerabilities.
−Removed: In addition, certain state laws govern the privacy and security of health information, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
+Added: Although we have and maintain a system for compliance with privacy laws and regulations, failure to comply with them could expose us to potential FTC enforcement action and fines.
+Added: In addition, certain state laws govern the privacy and security of health information, some of which are more stringent than HIPAA (including providing for patient enforcement of these state laws) and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
In addition, there are state breach notification laws in every state.
−Removed: The HIPAA regulations establish a federal “floor” of protection and do not supersede state laws that may be more stringent or provide individuals with greater rights with respect to the privacy or security of, and access to their records containing health information.
Failure to comply with these laws, where applicable, can result in the imposition of significant civil or criminal penalties and private litigation.
−Removed: For example, California recently enacted legislation, the California Consumer Privacy Act (“CCPA”), which went into effect January 1, 2020 and will be enforceable as of July 1, 2020.
−Removed: The CCPA, among other things, creates new data privacy obligations for covered companies and provides new privacy rights to California residents, including the right to opt out of certain disclosures of their information.
−Removed: The CCPA also creates a private right of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with a data breach.
−Removed: Alastair Mactaggart, the founder and board chair of Californians for Consumer Privacy (which backed the ballot initiative that led to the enactment of the CCPA), announced a new initiative that he hopes to get on the November 2020 ballot in California.
−Removed: Mactaggart filed the initiative with the California Attorney General on September 25, 2019.
−Removed: The initiative is called the California Privacy Rights and Enforcement Act, which is being referred to as “the moat” around the CCPA or CCPA 2.0.
−Removed: If the law is approved by voters in November 2020, most provisions would be operative on January 1, 2021.
−Removed: Certain provisions, however, would be operative within days after enactment, giving businesses little time to prepare for the stringent new requirement in addition to the CCPA.
−Removed: The law would provide some clarity as to health data that the CCPA is lacking.
General Data Protection Regulation in the EU
70 unchanged sentences
Physician Referral Prohibitions
−Removed: The Criminal Health Care Fraud Statute and The Ethics in Physician Referrals Act (“Stark Law”) prohibits physicians from referring patients to entities with which the physician or an immediate family member has a financial relationship, such as ownership, investment or compensation, for designed health services (“DHS”) payable by Medicare and Medicaid, unless the financial arrangement meets an applicable exception.
+Added: The Physician Self-Referral Law (“Stark Law”) prohibits physicians from referring patients to entities with which the physician or an immediate family member has a financial relationship, such as ownership, investment or compensation, for designed health services (“DHS”) payable by Medicare and Medicaid, unless the financial arrangement meets an applicable exception.
DHS includes clinical laboratory tests.
+Added: Penalties for violating the Stark Law include the return of funds received for all prohibited referrals, fines, civil monetary penalties and possible exclusion from federal health care programs.
+Added: In addition to the Stark Law, many states have their own self-referral bans, which may extend to all self-referrals, regardless of the payor.
See “ Risk Factors—Risks Relating to Government Regulation—We are subject to various laws and regulations, such as healthcare fraud and abuse laws, false claim laws and health information privacy and security laws, among others, and failure to comply with these laws and regulations may have an adverse effect on our business .”
27 unchanged sentences
On the other hand, some proposals could impose additional limitations on the prices we will be able to charge for our tests or on the coverage of or the amounts of reimbursement available for our tests from payors, including commercial payors and government payors.
−Removed: The federal physician payment transparency requirements (“ Physician Payments Sunshine Ac t”) and its implementing regulations, which requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the State Children’s Health Insurance Program, with certain exceptions, to annually report to HHS information related to certain payments or other transfers of value made or distributed to physicians, defined to include doctors, dentists, optometrists, podiatrists and chiropractors, and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.
+Added: The federal physician payment transparency requirements (“Physician Payments Sunshine Act”) and its implementing regulations, which requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the State Children’s Health Insurance Program, with certain exceptions, to annually report to HHS information related to certain payments or other transfers of value made or distributed to physicians, defined to include doctors, dentists, optometrists, podiatrists and chiropractors, and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.
The SUPPORT Act, under a provision entitled “Fighting the Opioid Epidemic with Sunshine,” extends the Physician Payments Sunshine Act to payments and transfers of value to physician assistants, nurse practitioners and other mid-level healthcare providers, with reporting requirements going into effect in 2022 for payments and transfers of value made to these practitioners in 2021.
+Added: There are also state “sunshine” laws that require manufacturers to provide reports to state governments on pricing and marketing information.
+Added: Several states have enacted legislation requiring medical device manufacturers to, among other things, establish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales and marketing activities, and such laws may also prohibit or limit certain other sales and marketing practices.
+Added: These laws may adversely affect our sales, marketing, and other activities by imposing administrative and compliance burdens on us.
+Added: Although we have a system for tracking and reporting “sunshine” law required information, if we fail to do so as required, we could be subject to government enforcement action and potential penalties.
Coverage and Reimbursement Generally
−Removed: Patients who have diagnostic tests ordered or are prescribed treatments and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs.
−Removed: Sales of our products and services will therefore depend substantially, both domestically and abroad, on the extent to which the costs of our products and services will be paid by third-party payors, including health maintenance, managed care and similar healthcare management organizations, or reimbursed by government health administration authorities, such as Medicare and Medicaid, private health insurers.
−Removed: In the United States, our ability to commercialize and the commercial success of our product and service offerings will depend in part on the extent to which governmental payor programs at the federal and state levels, including Medicare and Medicaid, private health insurers and other third-party payors provide coverage for and establish adequate reimbursement levels for these offerings.
−Removed: Government authorities, private health insurers and other organizations generally decide which devices they will pay for and establish reimbursement levels for healthcare.
−Removed: Medicare is a federally funded program for the elderly and disabled managed by CMS, through local contractors that administer coverage and reimbursement for certain healthcare items and services.
−Removed: Medicaid is an insurance program for certain categories of patients whose income and assets fall below state defined levels that is funded jointly by federal and state governments and managed by each state.
−Removed: Similarly, the federal government manages other healthcare programs, including the Veterans Health Administration, the Indian Health Service, and Tricare, the healthcare program for military personnel, retirees and related beneficiaries.
−Removed: Many states have also created pharmacy assistance programs for individuals who do not qualify for federal programs.
−Removed: In the United States, private health insurers and other third-party payors often provide reimbursement for products and services based in part on the coverage and payment rates set by the Medicare or Medicaid programs.
−Removed: Certain countries, including a number of member states of the EU, set prices and make reimbursement decisions for diagnostics and pharmaceutical products, or medicinal products, as they are commonly referred to in the EU.
−Removed: In addition, an increasing number of countries are taking initiatives to attempt to control the healthcare budget by focusing cost-cutting efforts on medicinal products, and to a lesser extent, medical devices, provided under their state-run healthcare systems.
−Removed: These international price-control efforts have impacted all regions of the world, but have been most drastic in the EU.
+Added: Reimbursement and billing requirements of applicable laws and payors for diagnostic services are highly complex.
+Added: Laboratories must bill various payors, such as private third-party payors, including managed care organizations (“MCO”), and state and federal health care programs, such as Medicare and Medicaid, and each may have different billing requirements.
+Added: Depending on the reimbursement arrangement and applicable law, the party that reimburses us for our services may be a third party who provides coverage to the patient, such as an insurance company or MCO;
+Added: a state or federal healthcare program;
+Added: or the patient.
+Added: Additionally, the audit requirements we must meet to ensure compliance with applicable laws and regulations, as well as our internal compliance policies and procedures, add further complexity to the billing process.
+Added: As such, we are at risk of being paid less or no part of our price for our products for reasons including:
+Added: variability in coverage and information requirements among various payors;
+Added: patient financial assistance programs;
+Added: missing, incomplete or inaccurate billing information provided by ordering physicians;
+Added: billings to payors with whom we do not have contracts;
+Added: disputes with payors as to which party is responsible for payment;
+Added: disputes with payors as to the appropriate level of reimbursement.
+Added: In addition, we may not be free to determine the price charged for our products.
+Added: Certain countries, including a number of member states of the EU, set prices and make reimbursement decisions for diagnostics and pharmaceutical products.
Additionally, some countries require approval of the maximum sale price of a product before it can be marketed, and this price may be reviewed during the product lifecycle, or mandatory discounts or profit caps may be applied.
In many countries, the pricing review period begins after marketing or product licensing approval is granted or the CE mark is obtained.
−Removed: Federal programs in the United States also sometimes impose price controls through mandatory ceiling prices on purchases by federal agencies and federally funded hospitals and clinics and mandatory rebates on retail pharmacy prescriptions paid by Medicaid and Tricare.
−Removed: These restrictions and limitations influence the purchase of healthcare services and products.
−Removed: Legislative proposals to reform healthcare or reduce costs under government programs may result in lower reimbursement for our products and services or exclusion of our products and services from coverage.
−Removed: In addition, government programs like Medicaid include what are in effect substantial penalties for increasing commercial prices of certain products over the rate of inflation which can affect realization and return on investment.
−Removed: Increasing efforts by governmental and third-party payors, in the United States and abroad, to cap or reduce healthcare costs may cause such organizations to limit both coverage and level of reimbursement for newly approved healthcare products.
−Removed: At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological program pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
−Removed: As a result of the above trends, we may need to conduct expensive studies in order to demonstrate the medical necessity and cost effectiveness of our products and services, in addition to the costs required to obtain the FDA and other comparable foreign regulatory authority approvals.
−Removed: Our products and services may not be considered medically necessary or cost effective, or the discount percentages required to secure coverage may not yield an adequate margin over cost.
−Removed: There is often pressure to renegotiate pricing and reimbursement levels, including, in particular, in connection with changes to Medicare coverage and reimbursement.
−Removed: Third-party payors continue to demand discounted fee structures, and the trend toward consolidation among third-party payors tends to increase their bargaining power over price structures.
−Removed: If third-party payors reduce their rates for our products and services, then our revenue and profitability may decline and our operating margins will be reduced.
−Removed: Because some third-party payors rely on all or portions of Medicare payment systems to determine payment rates, changes to government healthcare programs that reduce payments under these programs may negatively impact payments from third-party payors.
−Removed: Our inability to maintain suitable financial arrangements with third-party payors could have a material adverse impact on our business.
−Removed: Additionally, the reimbursement process is complex and can involve lengthy delays.
−Removed: Third-party payors may disallow, in whole or in part, providers’ requests for reimbursement based on determinations that certain amounts are not reimbursable under plan coverage, that the services provided were not medically necessary or that additional supporting documentation is necessary.
−Removed: Retroactive adjustments may change amounts realized from third-party payors.
−Removed: Delays and uncertainties in the reimbursement process may adversely affect market acceptance and utilization of our candidate products, resulting in reduced revenue.
−Removed: The unavailability or inadequacy of third-party coverage and reimbursement could negatively affect the market acceptance of our products and services and the future revenue we may expect to receive from those products and services.
−Removed: In addition, we are unable to predict what additional legislation or regulation relating to the healthcare industry or third-party coverage and reimbursement may be enacted in the future, or what effect such legislation or regulation would have on our business.
−Removed: Many hospitals implement a controlled and defined process for covering and approving diagnostic tests and medical devices.
−Removed: Any marketing efforts that are determined to have violated such policies could result in the denial or removal of our products from that hospital’s list of approved products.
−Removed: Moreover, a payor’s decision to provide coverage for a device does not imply that an adequate reimbursement rate will be approved.
−Removed: Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in device development.
−Removed: Legislative proposals to reform healthcare or reduce costs under government insurance programs may result in lower reimbursement for our products and services or exclusion of our products and services from coverage.
−Removed: The cost containment measures that healthcare payors and providers are instituting and any healthcare reform could significantly reduce our revenue from the sale of any approved products and services.
−Removed: We cannot provide any assurances that we will be able to obtain and maintain third-party coverage or adequate reimbursement for our products and services in whole or in part.
−Removed: For additional information on coverage and reimbursement, see “ Risk Factors—Risks Relating to Government Regulation—Future Medicare payment rates are uncertain .”
+Added: We may therefore be constrained in our pricing strategies in markets outside of the United States.
+Added: For additional information on coverage and reimbursement in the United States, see “ Risk Factors—Risks Relating to Government Regulation—Future Medicare payment rates are uncertain .”
Our Compliance Program
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