What changed in this filing

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Item 1. Business

2025-02-27 compared with 2024-02-28 · 158 added, 213 removed, 518 unchanged (42% of the section changed)

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Test Portfolio and Market Overview

The foundation of our business is our dermatologic cancer franchise.

We currently offer five commercially available proprietary MAAA tests for use in the dermatologic, gastroenterology and ocular fields and a proprietary pharmacogenomic (“PGx”) test to guide optimal drug treatment for patients diagnosed with depression, anxiety and other mental health conditions.

Maintaining commercial success for our existing test portfolio requires generating ongoing evidence, such as clinical use documentation, to support appropriate clinician adoption, reimbursement success and guideline inclusion.

Our portfolio consists of test offerings to aid clinicians in the diagnosis and treatment of cancers or precancerous diagnoses in the fields of dermatology, gastroenterology and ophthalmology and a pharmacogenomic (“PGx”) test to guide optimal drug treatment for patients diagnosed with depression, anxiety and other mental health conditions.

Maintaining commercial success for our existing test portfolio requires generating ongoing evidence, such as clinical performance, clinical use documentation, to support appropriate clinician adoption, reimbursement success and guideline inclusion.

The clinical validity and utility of our test portfolio is supported by peer-reviewed publications and ongoing clinical studies.

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DecisionDx-Melanoma

DecisionDx-Melanoma is our proprietary risk stratification gene expression profile (“GEP”) test that predicts the risk of metastasis, or recurrence, for patients diagnosed with invasive cutaneous melanoma (“CM”), a deadly skin cancer.

DecisionDx-Melanoma is our proprietary risk stratification gene expression profile (“GEP”) test that predicts (i) the likelihood of positive sentinel lymph node and (ii) the risk of metastasis, or recurrence, for patients diagnosed with invasive cutaneous melanoma (“CM”), a deadly skin cancer.

In a typical year, we estimate approximately 130,000 patients are diagnosed with invasive CM in the United States, representing an estimated U.S.

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We estimate that approximately 50% of patients diagnosed with CM are 65 years of age or older.

As of December 31, 2023, 49 peer-reviewed articles, six of which were published in 2023, support the clinical validity, clinical utility and impact on outcomes of our DecisionDx-Melanoma test.

As of December 31, 2024, 53 peer-reviewed articles, one of which was published in 2024, support the clinical validity, clinical utility and impact on outcomes of our DecisionDx-Melanoma test.

Based on our published data, we have shown that DecisionDx-Melanoma can be an accurate, independent predictor of the risk of metastasis or recurrence, including recurrence to the sentinel lymph node.

DecisionDx-SCC

DecisionDx®‑SCC is our proprietary risk stratification GEP test for use in patients with cutaneous squamous cell carcinoma (“SCC”), the second most common form of skin cancer, with one or more risk factors (also referred to as “high-risk” SCC).

We estimate 20% of SCC patients, or 200,000 annually in the United States, are classified as high risk, representing an estimated U.S.

TAM of approximately $820 million.

DecisionDx-SCC is clinically validated to predict metastatic risk for individual SCC patients with one or more risk factors.

Independent validation was established in a prospectively designed, multi-center (33 centers) study with archival tissue, in 420 patients, with known three-year outcomes.

The study population was representative of a high-risk SCC population.

Multivariate analysis shows DecisionDx-SCC provides the strongest independent prognostic information in SCC patients with one or more high-risk factors.

As of December 31, 2023, DecisionDx-SCC was supported by 16 peer-reviewed publications.

MyPath Melanoma

MyPath® Melanoma is our proprietary GEP test offering for patients with difficult-to-diagnose melanocytic lesions.

Of the two million suspicious pigmented lesions biopsied annually in the United States, we estimate approximately 300,000 of those present a difficult-to-diagnose melanocytic lesion, representing an estimated U.S.

DecisionDx‑SCC is our proprietary GEP test for use in patients with cutaneous squamous cell carcinoma (“SCC”), the second most common form of skin cancer, with one or more risk factors (also referred to as “high-risk” SCC).

We estimate 20% of SCC patients, or approximately 200,000 annually in the United States, are classified as high risk, representing an estimated U.S.

TAM of approximately $820 million.

As of December 31, 2023, MyPath Melanoma has been clinically validated through three studies and is supported by 17 peer-reviewed publications.

DecisionDx-SCC is clinically validated to (i) predict responsiveness to adjuvant radiation therapy (“ART”) and (ii) predict metastatic risk in patients with high-risk SCC.

The validity of DecisionDx-SCC for metastasis risk prediction has been shown in a cohort of 897 in a study which was representative of a high-risk SCC population.

Multivariate analysis shows DecisionDx-SCC provides strong prognostic information in patients with high-risk SCC.

More recently, in 2024 two published studies confirmed the ability of DecisionDx-SCC to predict response to ART.

These two propensity matched studies were the largest and second largest studies published to date that focused on the effectiveness of ART in patients diagnosed with high risk SCC.

As of December 31, 2024, DecisionDx-SCC was supported by 22 peer-reviewed publications, four of which were published in 2024.

TissueCypher is our proprietary risk stratification spatial-omics test designed to predict future development of high-grade dysplasia (“HGD”) and/or esophageal cancer in patients with non-dysplastic (“ND”), indefinite dysplasia (“IND”) or low-grade dysplasia (“LGD”) Barrett’s esophagus (“BE”).

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As of December 31, 2024, our TissueCypher test is supported by 16 peer-reviewed clinical validation and utility studies.

MyPath Melanoma

MyPath® Melanoma is our proprietary, diagnostic GEP test offering for use in patients with difficult-to-diagnose melanocytic lesions.

TAM of approximately $600 million.

As of December 31, 2024, our MyPath Melanoma test is supported by 20 peer-reviewed publications, one of which was published in 2024.

DecisionDx-UM

DecisionDx®-UM is our proprietary risk stratification GEP test that helps healthcare providers predict the risk of metastasis for patients with uveal melanoma (“UM”), also referred to as ocular melanoma.

The Medicare eligible population represents close to 45% of the addressable market.

DecisionDx®-UM is our proprietary, risk stratification GEP test that predicts the risk of metastasis for patients with uveal melanoma (“UM”), also referred to as ocular melanoma.

We estimate approximately 2,000 patients in the United States are diagnosed annually with UM, representing an estimated U.S.

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IDgenetix is designed to provide important genetic information to clinicians to help guide personalized treatment plans for their patients, with the potential to help patients achieve a faster therapeutic response and improve their chances of remission by identifying appropriate medications more efficiently than the standard of care trial-and-error approach.

We estimate a U.S.

TAM of approximately $5 billion associated with this test.

We began offering the IDgenetix test following our acquisition of AltheaDx, Inc.

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In addition, the underlying tissue samples and associated clinical outcomes data required to develop and validate these products are difficult to obtain.

In 2021, we announced the launch of our innovative pipeline initiative to develop a genomic test, or series of tests, aimed at predicting response to systemic therapy in patients with moderate to severe atopic dermatitis, psoriasis and related inflammatory skin conditions.

In the United States alone, there are approximately 18 million patients diagnosed with psoriasis and atopic dermatitis.

Approximately 450,000 of these patients annually are eligible for systemic therapies.

If successful, this inflammatory skin disease pipeline test has the potential to add approximately $1.9 billion to our current estimated U.S.

In 2021, we announced the launch of our innovative pipeline initiative to develop a genomic test, or series of tests, aimed at predicting response to systemic therapy in patients with moderate to severe atopic dermatitis (“AD”), psoriasis and related inflammatory skin conditions.

In the same year, we initiated a large, prospective, multi-center clinical study to develop and validate this pipeline test, formed a steering committee comprised of leading experts in the field and received Institutional Revenue Board (“IRB”) approval.

As of December 31, 2023, there were more than 45 active clinical study sites and over 1,000 patients enrolled in the development and validation study.

Based upon current clinical research progress and assuming a positive outcome of our discovery, development and validation efforts, we expect to launch this pipeline test by the end of 2025.

In addition to the U.S.

TAM for each of the tests in our portfolio disclosed above, we estimate that the tests in our pipeline add an additional estimated $5.7 billion to our U.S.

On December 23, 2024, we announced that preliminary data from our ongoing prospective development and validation study for our pipeline test has shown potential to identify a subset of patients with AD who have increased likelihood to achieve a super response to targeted therapies, indicated by a 90% or greater reduction in Eczema Area and Severity Index score at three months.

AD is among the most common inflammatory skin condition, and patient quality of life is severely impacted by this chronic disease.

In the United States alone, there are approximately six million patients diagnosed annually with moderate-to-severe AD and approximately 760,000 of these patients seek systemic treatment.

As of December 31, 2024, there were more than 39 active clinical study sites and over 1,100 patients enrolled in our inflammatory skin development and validation study.

Assuming successful validation, we expect to launch this pipeline test by the end of 2025.

TAM is based on estimated patient population assuming average reimbursement rate among all payors.

We expect to continue to pursue pipeline initiatives for tests that will branch out upstream, downstream and parallel to our existing tests, within or adjacent to our established dermatological call points.

We expect to continue pursuing pipeline initiatives for tests that will complement and expand our test offerings.

From time to time, we may consider engaging in transactions such as acquisitions of businesses, assets, products or technologies, as well as technology licenses or investments in complementary businesses where we believe strategic opportunities exist.

In April 2022, we acquired AltheaDx, a commercial-stage molecular diagnostics company specializing in the field of PGx testing services, for total consideration of $47.6 million, consisting of $30.5 million in cash and $17.1 million in shares of our common stock, adding the IDgenetix test to our portfolio.

In December 2021, we extended our commercial portfolio of proprietary tests into the gastroenterology market through our acquisition of Cernostics, Inc.

(“Cernostics”) and the TissueCypher platform for total consideration of $49.0 million.

In December 2021, we acquired Cernostics, Inc.

(“Cernostics”) and the TissueCypher platform for $30.7 million in cash consideration.

In May 2021, we acquired Myriad myPath, LLC and MyPath Melanoma test from Myriad Genetics, Inc.

for a cash purchase price of $32.5 million.

for $32.5 million in cash consideration.

Test Report Volume and Revenue

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We offered both MyPath Melanoma and DiffDx-Melanoma under our Diagnostic GEP offering until February 2023 when we suspended the clinical offering of DiffDx-Melanoma.

(3) We began offering the TissueCypher on December 3, 2021, following our acquisition of Cernostics.

(3) We began offering the TissueCypher test on December 3, 2021, following our acquisition of Cernostics, Inc.

(“Cernostics”).

Our TissueCypher test report volumes primarily derived from processed backlog orders.

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(4) We began offering the IDgenetix test on April 26, 2022, following our acquisition of AltheaDx.

Includes both single-gene and multi-gene tests.

Our Commercial Channel

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Our sales and marketing efforts are primarily focused on the U.S.

skin cancer, gastroenterology and mental health markets.

We employ a direct sales and marketing strategy to educate clinicians and associated personnel on the clinical and economic benefits of our products.

skin cancer and gastroenterology markets.

We employ our primary direct sales and marketing strategy to educate clinicians and associated personnel on the clinical and economic benefits of our products.

Our sales approach is highly technical, and our team is trained to articulate the scientific and clinical evidence behind our products and how they influence the clinical care pathway and ultimately improve patient outcomes.

We will continue to assess market response in determining further commercial expansions and commercial team structure.

We continuously assess market response in determining further commercial expansions and commercial team structure.

Medical Affairs

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Our medical affairs strategy complements our sales, marketing and clinical research operations efforts.

We will continue to assess the market needs in determining further expansions of our medical affairs team.

We will continue to assess the market needs in determining further expansion of our medical affairs team.

Reimbursement

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We bill third-party payors and patients for the tests we perform.

We have received Medicare coverage for our DecisionDx-Melanoma, DecisionDx-SCC, MyPath Melanoma, DecisionDx-UM, TissueCypher and IDgenetix tests

We have received Medicare coverage for our DecisionDx-Melanoma, DecisionDx-SCC, TissueCypher, MyPath Melanoma, DecisionDx-UM and IDgenetix tests

which meet certain criteria for Medicare and Medicare Advantage beneficiaries.

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Achieving in-network contracts with third-party payors can shorten the time required to receive payments.

Implementing our strategy includes our managed care and medical affairs teams educating third-party payors regarding our strong clinical utility and outcomes data, which we believe validates the value of our products and will persuade more third-party payors to provide value-based reimbursement.

Implementing our strategy includes our managed care, reimbursement and medical affairs teams educating third-party payors regarding our strong clinical utility and outcomes data, which we believe validates the value of our products and will persuade more third-party payors to provide value-based reimbursement.

We have broad positive policy coverage for our DecisionDx-UM test and have executed contracts with certain commercial payors.

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Effective August 6, 2023, Palmetto and Noridian issued LCDs that converted the test-specific MyPath Melanoma LCD to a “foundational” LCD and provided coverage for both MyPath Melanoma and DiffDx-Melanoma.

We estimate that a significant majority of the MyPath Melanoma and DiffDx-Melanoma tests performed for Medicare patients will meet the coverage criteria.

DecisionDx‑SCC

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However, on July 6, 2023, Novitas suspended the final version of the LCD and announced its intent to post a new proposed LCD for comment and presentation at an open meeting.

On July 27, 2023, Novitas posted a nearly identical proposed oncology biomarker LCD that continues to intend to rely upon evidentiary reviews sourced from three databases:

On July 27, 2023, Novitas posted a nearly identical proposed oncology biomarker LCD that continued to intend to rely upon evidentiary reviews sourced from three databases:

ClinGen, OncoKB and NCCN.

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The comment period for the proposed LCD ended on September 9, 2023.

We cannot predict whether this LCD will be finalized as proposed or what the timing of any final LCD might be.

On July 26, 2024, Novitas posted a note that it had been granted an extension by CMS.

On January 9, 2025, Novitas finalized the oncology biomarker LCD with an initial effective date of February 23, 2025.

Several days later, Novitas changed the effective date for this LCD, extending the effective date to April 24, 2025.

Should the LCD become effective as is, then we would anticipate not receiving Medicare reimbursement for DecisionDx-SCC tests performed on or after April 24, 2025.

As previously discussed, the Palmetto MolDX program oversees MAAA tests that are reported from our Phoenix laboratory and Noridian is the MAC responsible for administering claims for test reports issued by our Phoenix laboratory.

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The dossier was accepted as complete in the third quarter of 2020.

On June 8, 2023, both Palmetto and Noridian posted a preliminary draft LCD recommending no coverage for DecisionDx-SCC.

The comment period for the draft LCDs ended on July 22, 2023.

On June 8, 2023, Palmetto and Noridian recommended no coverage for DecisionDx-SCC in a draft LCD.

After the comment period ended on July 22, 2023, the LCD was finalized on July 4, 2024, with an effective date of August 18, 2024.

Advanced Diagnostic Laboratory Tests

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For example, the rate for 2024 was set using median private payor rate data from January 1, 2022 to June 30, 2022.

Our rate for 2022 and 2023 was $7,193 per test and is $7,193 for 2024.

Our rate for 2022, 2023 and 2024 was $7,193 per test.

Our 2025 rate is $7,193 per test.

DecisionDx-UM

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For example, the rate for 2024 was set using median private payor rate data from January 1, 2022 to June 30, 2022.

Our rate for 2022 and 2023 was $7,776 per test and is $7,776 for 2024.

Our rate for 2022, 2023 and 2024 was $7,776 per test.

Our 2025 rate is $7,776 per test.

MyPath Melanoma

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Our rate is set annually based upon the median private payor rate for the first half of the second preceding calendar year.

Our rate for 2022 was $1,950 per test.

Our 2023 rate was set at $1,755 per test, based on data submitted by the predecessor owner of the Myriad MyPath Laboratory relating to the first half of 2021.

Our 2024 rate is set at $1,950 per test.

For example, the rate for 2024 was set using median private payor rate data from January 1, 2022 to June 30, 2022.

Our rates for 2022, 2023, and 2024 were $1,950 per test, $1,755 per test, and $1,950 per test, respectively.

Our 2025 rate is $1,950 per test.

DiffDx-Melanoma

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In 2023, DiffDx-Melanoma went through the CMS gapfill process which concluded in September 2023 with CMS posting a final MAC-specific gapfill rate of $1,950 per test.

Our rate for 2024 is $1,950 per test.

Our rate for 2024 was $1,950 per test and will continue to be $1,950 per test in 2025.

Diagnostic GEP Offering

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We began offering MyPath Melanoma following our acquisition of the Myriad MyPath Laboratory on May 28, 2021.

Our internal data indicates that we have improved the technical performance of MyPath Melanoma such that it is now comparable to the technical performance of DiffDx-Melanoma.

As such, following an internal assessment of the clinical value of offering both tests, we made the decision to suspend the clinical offering of DiffDx-Melanoma in February 2023.

In February 2023, we suspended the clinical offering of DiffDx-Melanoma following an internal assessment of the clinical value of DiffDx-Melanoma and MyPath Melanoma, which determined that the technical performance of both tests is comparable.

We continue to offer our MyPath Melanoma test.

DecisionDx‑SCC

In the first quarter of 2022, we requested that Novitas conduct a medical review of our DecisionDx-SCC test.

That review was completed towards the end of that quarter.

In the second quarter of 2022, following the completion of a requested medical review and pricing of our DecisionDx-SCC test by Novitas, we obtained a PLA code and began receiving reimbursement from Novitas for DecisionDx-SCC at a rate of $3,873 per test.

On June 30, 2023, CMS determined DecisionDx-SCC meets the criteria for “new ADLT” status.

Effective July 1, 2023 and through March 31, 2024, CMS set the initial period rate equal to the list price of $8,500 per test.

Effective April 1, 2024 and through December 31, 2025, the published CLFS rate for DecisionDx-SCC will be based on the median private payor rates received between July 1, 2023 and November 30, 2023.

We submitted the median private payor data to CMS during the data reporting period in December 2023.

Future rates will be set annually based upon the median private payor rate for the first half of the second preceding calendar year.

ADLT status determines the process by which the rate is set and is not an indication of Medicare coverage.

TissueCypher is processed in our Pittsburgh, Pennsylvania laboratory and falls under the Medicare jurisdiction managed by Novitas.

From January 1, 2022 through March 31, 2022, we received payments for claims according to the published CLFS rate at $2,513 per test.

Effective July 1, 2023 and through March 31, 2024, CMS set the initial period rate equal to the list price of $8,500 per test.

Effective April 1, 2024, we continued receiving reimbursement at a rate of $8,500 per test, set by CMS using median private payor rate data for the period July 1, 2023 and November 30, 2023, and this rate will remain effective through December 31, 2025.

TissueCypher is processed in our Pittsburgh, Pennsylvania laboratory under the Medicare jurisdiction managed by Novitas.

From January 1, 2022 through March 31, 2022, we received payments for claims according to the published Clinical Laboratory Fee Schedule (“CLFS”) rate at $2,513 per test.

On March 24, 2022, CMS determined TissueCypher meets the criteria for “new ADLT” status.

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From April 1, 2022 through December 31, 2022, CMS set the initial period rate equal to the original list price of $2,350 per test.

Effective January 1, 2023, the published CLFS rate for TissueCypher was set at $4,950 per test, which will remain effective through December 31, 2024.

Effective January 1, 2023, the published CLFS rate for TissueCypher was set at $4,950 per test and remained effective through December 31, 2024.

This rate is based on the median private payor rates received between April 1, 2022 and August 31, 2022.

Thereafter, the rate will be set annually based upon the median private payor rate for the first half of the second preceding calendar year.

Our 2025 rate will continue to be $4,950 per test based on the median private payor rate data from January 1, 2023 to June 30, 2023.

IDgenetix is currently covered under a Noridian LCD policy and accompanying billing and coding article developed by MolDX.

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schizophrenia, bipolar disorder, anxiety disorders, social phobia, obsessive-compulsive personality disorder, post-traumatic stress disorder and attention deficit hyperactivity disorder.

IDgenetix has historically been billed to Medicare using an unspecified CPT code along with the IDgenetix test-specific MolDX Z-code (the “IDgenetix Z-Code”).

IDgenetix has historically been billed to Medicare using an unspecified Current Procedural Terminology (“CPT”) code along with the IDgenetix test-specific MolDX Z-code (the “IDgenetix Z-Code”).

We acquired AltheaDx and the IDgenetix test in April 2022 and received Medicare reimbursement at a rate of approximately $1,500 per test.

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In November 2023, CMS posted its final CLFS determination which crosswalks our PLA CPT code to an existing PLA code at a rate of $1,336 per test effective January 1, 2024.

In 2024, we were reimbursed at a rate of $1,336 per test and we will continue to be reimbursed at this rate in 2025.

We are focused on improving health through innovative tests that guide patient care.

We believe the principal competitive factors in our target markets include:

• Proprietary, disciplined approach to genomic and proteomic analysis including the use of proprietary deep learning, machine learning, artificial intelligence and other techniques to identify and optimize biomarker selection and algorithmic approaches to answer the clinically important questions with accurate tests.

• Proprietary, disciplined approach to genomic and proteomic analysis including the use of proprietary deep learning, machine learning, artificial intelligence (“AI”) and other techniques to identify and optimize biomarker selection and algorithmic approaches to answer the clinically important questions with accurate tests.

This involves the ability to design and efficiently conduct the right clinical studies at the right time;

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Today, our principal competition for DecisionDx-Melanoma is existing traditional clinical and pathology staging criteria.

While some clinical and pathology criteria have changed over time, this approach has been the standard of care in the United States for many years, and clinicians may be unwilling to accept the validity of the published data and adopt our test until it has become incorporated into national guidelines.

In addition, we currently face, or may

face, competition from a limited number of companies who are working in this disease space, such as SkylineDx/Tempus/Quest, AMLo/Avero and Neracare.

While some clinical and pathology criteria have changed over time, this approach has been the standard of

care in the United States for many years, and clinicians may be unwilling to accept the validity of the published data and adopt our test until it has become incorporated into national guidelines.

In addition, we currently face, or may face, competition from a limited number of companies who are working in this disease space, such as SkylineDx/Tempus/Quest, AMLo/Avero and Neracare.

In the future, we may face additional competitors.

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In the future, we may face additional competitors.

DecisionDx-UM competes with a subsidiary of LabCorp and several academic laboratories, all of which have had tests available for several years.

To date, our data has demonstrated that DecisionDx-UM is clinically and statistically superior to these products.

In the future, we may face additional competitors.

Today, principal competition for the TissueCypher test is existing traditional clinical and pathology assessment.

Today, our principal competition for the TissueCypher test is existing traditional clinical and pathology assessment.

In the future this assessment may include the use of immunohistochemical evaluation of individual protein biomarkers as an aid to pathology.

While some clinical and pathology criteria have changed over time, this approach has been the standard of care in the United States for many years, and physicians may be unwilling to accept the validity of the published data and adopt our test until this has become incorporated into clinical guideline recommendations from gastrointestinal clinical societies, or other national guidelines.

In addition, we currently face, or may face, competition from companies such as Previse, Interpace Diagnostics and other companies.

In addition, we currently face, or may face, competition from companies such as Previse, Interpace Diagnostics, Lucid Diagnostics and other companies.

Other companies actively engaged in GERD screening to diagnose BE may also look to develop prognostic tests for patients diagnosed with BE, and these could compete with TissueCypher in the future.

In the future, we may face additional competitors.

DecisionDx-UM competes with a subsidiary of LabCorp and several academic laboratories, all of which have had tests available for several years.

To date, our data has demonstrated that DecisionDx-UM is clinically and statistically superior to these products.

In the future, we may face additional competitors.

With respect to IDgenetix, our competition arises from other parties using the same or similar methods as well as alternative methods of PGx testing.

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All of our facilities are Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) certified, College of American Pathologists (“CAP”) accredited labs.

Additionally, all of our laboratories passed inspection by New York State Department of Health Clinical Laboratory Evaluation Program (“NYS CLEP”) with each of our proprietary tests approved by the New York State Department of Health (“NYSDOH”).

We manage these laboratories to produce the volume of testing required to cover our portfolio of products while maintaining efficiencies, redundant capabilities, and business continuity.

Our facilities are positioned to operate in all 50 states, including those requiring additional licenses or certifications such as California, Pennsylvania, Rhode Island, Maryland and New York.

In 2022, we folded operations from our San Diego lab into the Phoenix facility and permanently closed our California location.

Raw Materials and Suppliers

We procure certain reagents, equipment, chips/cards and other materials used to perform our tests from sole suppliers such as ThermoFisher Scientific, Inc.

and Qiagen, Inc.

We procure certain reagents, equipment, chips/cards and other materials used to perform our tests from sole suppliers such as ThermoFisher Scientific, Inc., Promega and Qiagen, Inc.

Some of these items are unique to these suppliers and vendors.

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In November 2009, we entered into a license agreement (“the “License Agreement”) with The Washington University in St.

Louis, Missouri (“WUSTL”) to license certain patent rights and technical information from WUSTL for the development of melanoma products (the “Products”), and services (the “Services”).

The rights licensed under this agreement are used in DecisionDx-UM only.

Under the License Agreement, we obtain an exclusive, worldwide, royalty-bearing license to certain patent rights owned by WUSTL (the “Patent Rights”) and a non-exclusive, worldwide license to certain technical information and research property owned by WUSTL, with the right to grant sublicenses under certain conditions, in order to develop the Products and the Services.

WUSTL retains the right to use the Patent Rights for research purposes.

The Patent Rights that we license pursuant to the License Agreement have been generated through the use of U.S.

government funding and are therefore subject to certain federal regulations.

See “Risk Factors—Risks Related to Intellectual Property—Our in-licensed intellectual property has been discovered through government funded programs and thus may be subject to federal regulations such as “march-in” rights, certain reporting requirements

and a preference for U.S.-based companies, and compliance with such regulations may limit our exclusive rights, and limit our ability to contract with non-U.S.

manufacturers.”

Under the License Agreement, we are required to use best efforts to carry out the activities under an agreed-upon development plan (the “Development Plan”) and meet any and all milestones set forth in the Development Plan.

We are required to make milestone payments to WUSTL upon successful completion of development and commercialization milestones as set forth in the Development Plan.

For each Product or Service that receives FDA approval, PMA or premarket notification, we are obligated to make a milestone payment to WUSTL in the mid-four digits.

For the issuance of the first U.S.

patent and the first foreign patent, we are obligated to make aggregate milestone payments to WUSTL in the low-five digits.

Under the License Agreement, we were obligated to pay WUSTL an initial license issue fee in the low-five digits.

We are also obligated to make royalty payments to WUSTL equal to (i) a percentage in the mid-single digits of our and any of our affiliates’ or sub-licensees’ net sales of the Products and (ii) a percentage in the low-single digits of our and any of our affiliates’ or sub-licensees’ revenue from the Services.

We are also obligated to make royalty payments to WUSTL in the low-to-mid single digit percentage of net sales, with minimum royalty payments to WUSTL every six-month period following the first commercial sale.

The term of the License Agreement will continue for ten years following the last-to-expire valid claim relating to the Patent Rights, unless terminated earlier.

WUSTL may terminate the License Agreement upon written notice in the event of (i) our material breach if such breach remains uncured for 90 days, (ii) the exercise of certain rights by us with respect to the Patent Rights and/or the licensed technical information outside the scope of the License Agreement, or (iii) for certain insolvency-related events.

We may terminate the License Agreement without cause upon written notice to WUSTL and payment of any amount due to WUSTL under the License Agreement.

Louis, Missouri (“WUSTL”), granting us exclusive, worldwide rights to certain patent rights and non-exclusive rights to technical information and research property for developing melanoma-related products (“Products”) and services (“Services”).

These rights are utilized exclusively in DecisionDx-UM.

The agreement includes provisions for sublicensing under specific conditions, while WUSTL retains the rights to use the licensed patents for research.

As the licensed patents were developed with U.S.

government funding, they are subject to federal regulations such as “march-in” rights, reporting requirements, and a preference for U.S.-based manufacturers.

Under the License Agreement, we are obligated to make royalty payments, including a mid-single-digit percentage of net sales from the Products and a low-single-digit percentage from Services revenue, with minimum royalties due semi-annually after the first commercial sale.

The agreement remains in effect for ten years after the last patent claim expires unless terminated earlier.

Termination can occur due to material breach, misuse of licensed rights, insolvency events, or at our discretion upon notice and payment of any outstanding amounts.

Intellectual Property

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Using this technology, we are able to provide a more accurate prediction of a patient’s metastatic risk as compared to other methods.

We have secured and continue to pursue intellectual property rights globally, including through patent protection covering analysis of metastasis in cutaneous melanoma, the treatment of cutaneous SCC, BE and gastroenterology, and PGx for mental illness.

We have secured and continue to pursue intellectual property rights globally, including through patent protection covering analysis of metastasis in CM, the treatment of SCC, BE and gastroenterology, and PGx for mental illness.

We also rely on trademarks, trade secrets, know-how, continuing technological innovation and potential in-licensing opportunities to develop and maintain our proprietary position.

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Owned Patent Families

Methods for predicting risk of metastasis in cutaneous melanoma 3 19 22

Methods for predicting risk of metastasis in CM 3 18 21

Methods of diagnosing and treating patients with pigmented skin lesions 1 — 1

Methods of diagnosing and treating patients with cutaneous squamous cell carcinoma 2 19 21

Methods of diagnosing and treating patients with SCC 4 22 26

Determining prognosis and treatment based on clinical-pathologic factors and continuous multigene-expression profile scores 1 — 1

Diagnosing and Treating Atopic Dermatitis and/or Psoriasis 2 — 2

Diagnosing and Treating Uveal Melanoma 1 — 1

Diagnosing and treating AD and/or psoriasis — 1 1

Method and kit for isolating and sequencing nucleic acid from skin samples 1 — 1

Genes and gene signatures for diagnosis and treatment of melanoma 6 29 35

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These agreements may be breached, and we may not have adequate remedies for any breach.

We additionally seek to preserve the

integrity and confidentiality of our data and trade secrets, such as our proprietary algorithms, by maintaining the physical security of our premises and physical and electronic security of our information technology systems.

We additionally seek to preserve the integrity and confidentiality of our data and trade secrets, such as our proprietary algorithms, by maintaining the physical security of our premises and physical and electronic security of our information technology systems.

While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and we may not have adequate remedies for any breach.

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The regulatory and compliance standards applicable to the testing we perform change periodically, and any such changes are published by CAP.

Our SOPs, documents & records are updated accordingly and as needed.

Our standard operating procedures (“SOPs”), documents and records are updated accordingly and as needed.

Any such changes may have a material effect on our business.

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We currently provide laboratory services in all 50 states.

Additionally, we maintain licenses in New York, California, Maryland, Pennsylvania and Rhode Island which require specific licensure for out-of-state laboratories that accept specimens from those states.

Because we receive specimens from the state of New York, our clinical reference laboratory is required to be licensed by New York, have a lab director with a specific certificate of qualification and is subject to biennial New York state inspections to ensure the lab is compliant with New York licensing standards.

New York regulations also mandate proficiency testing for laboratories licensed under New York state law, regardless of whether such laboratories are located in New York.

If a laboratory is out of compliance with New York statutory or regulatory standards, the New York State Department of Health (the “NYSDOH”) may suspend, limit, revoke or annul the laboratory’s New York license, censure the holder of the license, or assess civil money penalties.

We have received formal approval from the NYSDOH to offer the following of our proprietary assays to New York patients:

DecisionDx-Melanoma, DecisionDx-CMSeq, DecisionDx-UM, DecisionDx-PRAME, DecisionDx-UMSeq, DecisionDx-SCC, MyPath Melanoma, and DiffDx-Melanoma.

We have been given conditional approval for IDgenetix from the NYSDOH while we work through the formal review process.

In July 2022, we submitted TissueCypher for review by the NYSDOH.

We had been given clearance to test New York state patients by the New York’s Clinical Laboratory Evaluation Program while our applications were under review.

On September 12, 2023, we received our Clinical Laboratory Permit from NYSDOH for our Pennsylvania laboratory.

Additionally, we maintain licenses in New York, California, Maryland,

Pennsylvania and Rhode Island which require specific licensure for out-of-state laboratories that accept specimens from those states.

Because we may receive specimens from residents of the state of New York, we sought and have received approval from NYSDOH.

All of our laboratories are required to be certified by NYSDOH, have a lab director with a specific certificate of qualification and are subject to biennial New York inspections to ensure the lab is compliant with New York licensing standards.

New York regulations also mandate proficiency testing for laboratories licensed under New York law, regardless of whether such laboratories are located in New York.

If a laboratory is out of compliance with New York statutory or regulatory standards, NYSDOH may suspend, limit, revoke or annul the laboratory’s New York license, censure the holder of the license, or assess civil money penalties.

All of our laboratories are inspected and our proprietary tests are approved via NYSDOH.

Federal Oversight of Laboratory Developed Tests

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Clinical laboratory tests are regulated under CLIA, as administered by CMS, as well as by applicable state laws.

In addition, the Federal Food, Drug and Cosmetic Act (the “FDCA”) defines a medical device to include any instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including a

component part, or accessory, intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals.

In addition, the Federal Food, Drug and Cosmetic Act (the “FD&C Act”) defines a medical device to include any instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including a component part, or accessory, intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals, and which does not achieve its primary intended purposes via chemical action or metabolism.

Our in vitro testing products are considered by the FDA to be subject to regulation as medical devices.

Among other things, pursuant to the FDCA and its implementing regulations, the FDA regulates the research, testing, manufacturing, safety, labeling, storage, recordkeeping, pre-market clearance or approval, marketing and promotion, and sales and distribution of medical devices in the United States to ensure that medical products distributed domestically are safe and effective for their intended uses.

Although the FDA has statutory authority to assure that medical devices are safe and effective for their intended uses, the FDA has generally exercised its enforcement discretion and not enforced applicable regulations with respect to in vitro diagnostics that are designed, manufactured, and used within a single laboratory for use only in that laboratory.

These tests are referred to as Laboratory Developed Tests (“LDTs”).

As a result, we believe our diagnostic services are currently subject to the FDA’s enforcement discretion and are not currently subject to the FDA’s oversight.

However, reagents, instruments, software or components provided by third parties and used to perform LDTs may be subject to regulation.

In recent years, the FDA has stated its intention to modify its enforcement discretion policy with respect to LDTs.

Most recently, on October 3, 2023, the FDA issued proposed regulations under which it would phase out its enforcement discretion approach to LDTs over a period of four years.

Although the proposed regulation is subject to a period of notice and comment, if finalized as proposed, we would be required to obtain 510(k) or PMA for certain of our tests by October 1, 2027.

We would also be subject to device registration and listing requirements, medical device reporting requirements and the requirements of the FDA’s Quality System Regulation.

We may be required to conduct clinical trials prior to continuing to sell our existing products or launching any other products we may develop.

Among other things, pursuant to the FD&C Act and its implementing regulations, the FDA regulates the research, testing, manufacturing, safety, labeling, storage, recordkeeping, pre-market review and marketing authorization, product, marketing and promotion, and sales and distribution of medical devices in the United States to ensure that medical devices distributed domestically are reasonably safe and effective for their intended uses.

Although the FDA believes it has statutory authority to assure that laboratory developed tests are reasonably safe and effective for their intended uses, the FDA has generally exercised its enforcement discretion and not enforced applicable regulations with respect to in vitro diagnostics (“IVDs”) that are intended for clinical use and are designed, manufactured, and used within a single laboratory that is certified under CLIA and meets the regulatory requirements under CLIA to perform high-complexity testing.

These tests are referred to as LDTs.

On May 6, 2024, the FDA published a final rule on the regulation of LDTs which amends the FDA's regulations to make it explicit that LDTs are IVDs and regulated as devices under the FD&C Act.

Under this final rule, the FDA issued a policy to phaseout, over the course of four years, its general enforcement discretion approach to LDTs and also issued targeted enforcement discretion policies for certain categories of LDTs, including LDTs marketed as of the date of publication of the final rule on May 6, 2024, as well as LDTs that have received approval from the New York State Department of Health.

Specifically, the FDA intends to exercise enforcement discretion and not enforce certain medical device requirements (including the requirements for premarket review and marketing authorization and compliance with certain elements of the Quality System Regulation (“QSR”) with respect to LDTs that were marketed as of the date of the final rule’s publication, although such products must still comply with certain other FDA requirements, including registration and listing, portions of the QSR, medical device reporting, labeling, and corrections and removals reporting.

However, where these tests are modified in certain ways from the version of the test marketed as of the final rule’s publication date, this enforcement discretion policy will no longer apply, and the FDA intends to enforce all applicable FDA requirements (including premarket review and marketing authorization requirements) consistent with the phaseout policy.

In addition, for LDTs that receive approval from NYSDOH, FDA intends to not enforce premarket review and marketing authorization requirements when these requirements are phased in more generally at either three and a half years (for high-risk LDTs) or four years (for low-moderate risk LDTs) following the date of publication of the final rule.

Our proprietary tests, outlined above, are all NYSDOH approved.

We believe this final ruling will have no material impact on our existing test offerings given all of our tests were marketed before May 6, 2024.

Separately, Congress has considered a number of proposals in the last several years, which, if enacted, would subject LDTs to certain regulatory requirements.

For example, in recent years, Congress has worked on legislation to create a novel regulatory framework governing a new category of FDA-regulated products, referred to as in vitro clinical tests (“IVCTs”), which would govern LDTs and would be separate and distinct from existing medical device regulatory framework.

For example, in March 2023, the Verifying Accurate Leading-edge IVCT Development Act of 2023 (the “VALID Act”) was introduced.

The bill would establish a risk-based approach to imposing requirements related to premarket review, quality systems, and labeling requirements on all IVCTs, including LDTs, but would

grandfather certain LDTs marketed before the effective date of the bill and exempt them from certain requirements.

Depending on the approach adopted under any potential legislation, certain LDTs (likely those of higher risk) may be required to undergo some form of premarket review of LDTs as IVCTs, potentially with a transition period for compliance and a grandfathering provision.

Medical Device Regulatory Framework

Although we currently market our proprietary testing products as LDTs, which are currently subject to enforcement discretion, we could be subject to more onerous FDA compliance obligations in the future.

Specifically, if the FDA begins to actively regulate LDTs, then, unless an exemption applies, each new or significantly modified medical device we seek to commercially distribute in the United States will require either a premarket notification to the FDA requesting permission for commercial distribution under Section 510(k) of the FDCA, also referred to as a 510(k) clearance, or approval from the FDA of a PMA, application.

Both the 510(k) clearance and PMA processes can be resource intensive, expensive, and lengthy, and require payment of significant user fees.

Although we currently market our proprietary testing products as LDTs, which are currently subject to enforcement discretion, we could be subject to FDA compliance obligations in the future.

Unless an exemption applies under the FDA's targeted enforcement discretion policies for certain categories of LDTs, each new or significantly modified medical device we seek to commercially distribute in the United States will require either a premarket notification to the FDA requesting authorization for commercial distribution under Section 510(k) of the FD&C Act, also referred to as a 510(k) clearance, de novo classification under Section 513(f)(2) of the FD&C Act, or approval of a PMA application under Section 515(c).

These premarket review processes can be resource intensive, expensive, and lengthy, and require payment of significant user fees.

Device Classification

Under the FDCA, medical devices are classified into one of three classes-Class I, Class II or Class III depending on the degree of risk associated with each medical device and the extent of control needed to provide reasonable assurances with respect to safety and effectiveness.

Class I devices are those with the lowest risk to the patient and are those for which safety and effectiveness can be reasonably assured by adherence to a set of FDA regulations, referred to as the General Controls for Medical Devices, which require compliance with the applicable portions of the FDA’s Quality System Regulation, facility registration and product listing, reporting of adverse events and malfunctions, and appropriate, truthful and non-misleading labeling and promotional materials.

Under the FD&C Act, medical devices are classified into one of three classes-Class I, Class II or Class III depending on the degree of risk associated with each medical device and the extent of control needed to provide reasonable assurances with respect to safety and effectiveness.

Class I devices are those with the lowest risk to the patient and are those for which safety and effectiveness can be reasonably assured by adherence to a set of FDA regulations, referred to as the General Controls for Medical Devices, which require compliance with the applicable portions of the QSR, facility registration and product listing, reporting of adverse events and malfunctions, and appropriate, truthful and non-misleading labeling and promotional materials.

Some Class I devices also require premarket clearance by the FDA through the 510(k) premarket notification process described below.

Most Class I products are exempt from the premarket notification requirements.

Class II devices are those that are subject to the General Controls, and Special Controls as deemed necessary by the FDA to ensure the safety and effectiveness of the device.

Class II devices are those that are subject to the General Controls, and Special Controls, as deemed necessary by the FDA, to provide reasonable assurance of the safety and effectiveness of the device.

These Special Controls can include performance standards, patient registries, FDA guidance documents and post-market surveillance.

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Premarket review and clearance by the FDA for Class II devices is accomplished through the 510(k) premarket notification process.

Class III devices include devices deemed by the FDA to pose the greatest risk such as life-supporting or life-sustaining devices, or implantable devices, in addition to those deemed novel and not substantially equivalent following the 510(k) process.

Class III devices include devices deemed by the FDA to pose the greatest risk such as life-supporting or life-sustaining devices, or implantable devices, in addition to those devices of new types that were marketed after May 28, 1976 (the date of the enactment of the Medical Devices Amendments).

The safety and effectiveness of Class III devices cannot be reasonably assured solely by the General Controls and Special Controls described above.

Therefore, these devices are subject to the PMA application process, which is generally more costly and time-consuming than the 510(k) process.

Therefore, these devices are subject to the PMA application process, which is generally more costly and time-consuming than the 510(k) process and de novo classification process.

Through the PMA application process, the applicant must submit data and information demonstrating reasonable assurance of the safety and effectiveness of the device for its intended use to the FDA’s satisfaction.

Accordingly, a PMA typically includes, but is not limited to, extensive technical information regarding device design and development, pre-clinical

and clinical trial data, manufacturing information, labeling and financial disclosure information for the clinical investigators in device studies.

Accordingly, a PMA typically includes, but is not limited to, extensive technical information regarding device design and development, pre-clinical and clinical trial data, manufacturing information, labeling and financial disclosure information for the clinical investigators in device studies.

The PMA application must provide valid scientific evidence that demonstrates to the FDA’s satisfaction a reasonable assurance of the safety and effectiveness of the device for its intended use.

The Investigational Device Process

In the United States, absent certain limited exceptions, human clinical trials intended to support medical device clearance or approval require an investigational device exemption (“IDE”), application.

Some types of studies deemed to present “non-significant risk” are deemed to have an approved IDE once certain requirements are addressed and IRB approval is obtained.

In the United States, all clinical investigations of devices to determine safety and effectiveness must be conducted in accordance with the FDA’s investigational device exemption (“IDE”) regulations.

If the device presents a “significant risk” to human health, as defined by the FDA, the sponsor must submit an IDE application to the FDA and obtain IDE approval prior to commencing the human clinical trials.

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Generally, clinical trials for a significant risk device may begin once the IDE application is approved by the FDA and the study protocol and informed consent are approved by appropriate IRBs at the clinical trial sites.

Submission of an IDE will not necessarily result in the ability to commence clinical trials, and although the FDA’s approval of an IDE allows clinical testing to go forward for a specified number of subjects, it does not bind the FDA to accept the results of the trial as sufficient to prove the product’s safety and efficacy, even if the trial meets its intended success criteria.

All clinical trials must be conducted in accordance with the FDA’s IDE regulations that govern investigational device labeling, prohibit promotion and specify an array of recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators.

Submission of an IDE will not necessarily result in the ability to commence clinical trials, and although the FDA’s approval of an IDE allows clinical testing to go forward for a specified number

of subjects, it does not bind the FDA to accept the results of the trial as sufficient to prove the product’s safety and efficacy, even if the trial meets its intended success criteria.

The IDE regulations that govern investigational device labeling, prohibit promotion and specify an array of recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators.

Clinical trials must further comply with the FDA’s good clinical practice regulations for IRB approval and for informed consent and other human subject protections.

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The results of clinical testing may be unfavorable, or, even if the intended safety and efficacy success criteria are achieved, may not be considered sufficient for the FDA to grant marketing approval or clearance of a product.

The commencement or completion of any clinical trial may be delayed or halted, or be inadequate to support approval of a PMA application, for numerous reasons.

The commencement or completion of any clinical trial may be delayed, halted, or be inadequate to support approval of a PMA application, for any number of reasons.

The 510(k) Clearance Process

Under the 510(k) clearance process, the manufacturer must submit to the FDA a premarket notification, demonstrating that the device is “substantially equivalent” to a legally marketed predicate device.

Under the 510(k) clearance process, the manufacturer must submit to the FDA a premarket notification, demonstrating that the device is “substantially equivalent” to a "predicate” device.

A predicate device is a legally marketed device that is not subject to a PMA, i.e., a device that was legally marketed prior to May 28, 1976 (pre-amendments device) and for which a PMA is not required, a device that has been reclassified from Class III to Class II or I, or a device that was previously found substantially equivalent through the 510(k) process.

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As a practical matter, clearance often takes longer, and clearance is never assured.

Although many 510(k) premarket notifications are cleared without clinical data, the FDA may require further information, including clinical data, to make a determination regarding substantial equivalence, which may significantly prolong the review process.

If the FDA agrees that the device is substantially equivalent, it will grant clearance to commercially market the device.

If the FDA determines that the device is not “substantially equivalent” to a predicate device, or if the device is automatically classified into Class III, the device sponsor must then fulfill the much more rigorous premarketing requirements of the PMA approval process, or seek reclassification of the device through the de novo process.

The de novo classification process is an alternate pathway to classify medical devices that are automatically classified into Class III, but which are low to moderate risk.

A manufacturer can submit a petition for direct de novo review if the manufacturer is unable to identify an appropriate predicate device and the new device or new use of the device presents a moderate or low risk.

De novo classification may also be available after receipt of a “not substantially equivalent” letter following submission of a 510(k) to FDA.

Although many 510(k) submissions are cleared without clinical data, the FDA may require further information, including clinical data, to make a determination regarding substantial equivalence, which may significantly prolong the review process.

If the FDA agrees that the device is substantially equivalent, it will "clear” the device for marketing.

If the FDA determines that the device is not “substantially equivalent” to a predicate device, the device sponsor must then fulfill the much more rigorous premarketing requirements of the PMA approval process.

After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a new or major change in its intended use, will require a new 510(k) clearance or, depending on the modification, could require a PMA application.

The FDA requires each manufacturer to determine whether

the proposed change requires a new submission in the first instance, but the FDA can review any such decision and disagree with a manufacturer’s determination.

The FDA requires each manufacturer to determine whether the proposed change requires a new submission in the first instance, but the FDA can review any such decision and disagree with a manufacturer’s determination.

Many minor modifications are accomplished by a letter-to-file in which the manufacturer documents the change in an internal letter-to-file.

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If the FDA disagrees with a manufacturer’s determination regarding whether a new premarket submission is required for the modification of an existing 510(k)-cleared device, the FDA can require the manufacturer to cease marketing and/or recall the modified device until 510(k) clearance or approval of a PMA application is obtained.

In addition, in these circumstances, the FDA can impose significant regulatory fines or penalties for failure to submit the requisite application(s).

In addition, in these circumstances, the FDA can impose significant regulatory fines or penalties for failure to submit the requisite notification.

The De Novo Classification Process

The de novo classification process is an alternate pathway to classify medical devices of new types marketed after May 28, 1976, that are automatically classified into Class III but that are low to moderate risk.

A manufacturer can submit a request for de novo classification if the manufacturer is unable to identify a predicate device and the new device or new use of the device presents a moderate or low risk.

Under the de novo classification pathway, FDA may reclassify the device from Class III to class II or Class I, as appropriate.

If the manufacturer seeks reclassification to Class II, the reclassification request must include proposed special controls that provide reasonable assurance of safety and effectiveness of the device.

The PMA Approval Process

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If it is not, the agency will refuse to file the PMA.

If it is, the FDA will accept the application for filing and begin the review.

it is, the FDA will accept the application for filing and begin the review.

The FDA has 180 days to review a filed PMA application, however, in practice the application review process often exceeds this deadline.

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The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Prior to approval of a PMA, the FDA may conduct inspections of the clinical trial data and clinical trial sites, as well as inspections of the manufacturing facility and processes.

Prior to approval of a PMA, the FDA typically conducts inspections of the clinical trial data and clinical trial sites, as well as inspections of the manufacturing facility and processes.

Overall, the FDA review of a PMA application generally takes between one and three years but may take significantly longer.

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PMA supplements often require submission of the same type of information as an initial PMA application, except that the supplement is limited to information needed to support any changes from the device covered by the approved PMA application and may or may not require as extensive technical or clinical data or the convening of an advisory panel, depending on the nature of the proposed change.

In approving a PMA application, as a condition of approval, the FDA may also require some form of post-approval study or post-market surveillance, whereby the applicant conducts a follow-up study or follows certain patient groups for a number of years and makes periodic reports to the FDA on the clinical status of those patients when necessary to protect the public health or to provide additional or longer-term safety and effectiveness data for the

The FDA may also approve a PMA application with other post-approval conditions intended to ensure the safety and effectiveness of the device, such as, among other things, restrictions on labeling, promotion, sale, distribution and use.

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business entity to offer or provide, directly or through a third party, including any potential distributors we may rely on in certain markets, anything of value to a foreign government official with corrupt intent to influence an award or continuation of business or to gain an unfair advantage, whether or not such conduct violates local laws.

In addition, it is illegal for a company that reports to the SEC to have false or inaccurate books or records or to fail to maintain a system of internal accounting controls.

In addition, it is illegal for a company that reports to the Securities and Exchange Commission (the “SEC”) to have false or inaccurate books or records or to fail to maintain a system of internal accounting controls.

We will also be required to maintain accurate information and control over sales and distributors’ activities that may fall within the purview of the FCPA, its books and records provisions and its anti-bribery provisions.

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Under HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”) HHS has issued regulations to protect the privacy and provide for the security of protected health information (“PHI”) used or disclosed by certain entities including healthcare providers, such as us.

HIPAA also regulates

standardization of data content, codes and formats used in certain healthcare transactions and standardization of identifiers for health plans and providers.

HIPAA also regulates standardization of data content, codes and formats used in certain healthcare transactions and standardization of identifiers for health plans and providers.

Penalties for violations of HIPAA and HITECH laws and regulations include significant civil and criminal penalties.

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The HIPAA privacy regulations cover the use and disclosure of PHI by covered entities and business associates, which are defined to include subcontractors that create, receive, maintain, or transmit PHI on behalf of a covered entity, as well as their covered subcontractors.

They also set forth certain rights that an individual has with respect to his or her PHI maintained by a covered entity, including the right to access or amend certain records containing PHI, or to request restrictions on the use or disclosure of PHI.

They also set forth certain rights that an individual has with respect to

his or her PHI maintained by a covered entity, including the right to access or amend certain records containing PHI, or to request restrictions on the use or disclosure of PHI.

The HIPAA security regulations establish requirements for safeguarding the confidentiality, integrity, and availability of PHI that is electronically transmitted or electronically stored.

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Further, various states, such as California and Massachusetts, have implemented similar privacy laws and regulations that impose restrictive requirements regulating the use and disclosure of health information and other personally identifiable information (“PII”).

Numerous other federal, state and foreign laws, including consumer protection laws and regulations, govern the collection, dissemination, use, access to, confidentiality and security of patient health information.

We intend to continue to comprehensively protect all personal information and to comply with all applicable laws regarding the protection of such information.

Reimbursement for Clinical Laboratory Services

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In April 2014, Congress passed the Protecting Access to Medicare Act (“PAMA”), which included substantial changes to the way in which clinical laboratory services will be paid under Medicare.

Under PAMA, certain laboratories were required to report to CMS private payor payment rates and volumes for their tests.

Under PAMA, certain laboratories were required to report to CMS private payor payment rates and volumes for their

CMS uses this data to calculate a weighted median payment rate for each test, which will be used to establish revised Medicare CLFS reimbursement rates for the test.

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Our DecisionDx-SCC and DiffDx-Melanoma tests were granted PLA CPT codes effective April 1, 2022.

In 2023, IDgenetix test was granted a new PLA CPT code which became effective October 1, 2023.

Our IDgenetix test was granted a new PLA CPT code and was effective October 1, 2023.

Healthcare Reform

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This law substantially changed the way healthcare is financed by both government and commercial third-party payors, and significantly impacted our industry.

Among other things, the ACA required medical device manufacturers to pay a sales tax equal to 2.3% of the price for which such manufacturer sells its medical devices, and began to apply to sales of taxable medical devices after December 31, 2012, but was suspended in 2016.

Further, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the medical device tax and “Cadillac” tax on high-cost employer-sponsored health coverage and, effective January 1, 2021, also eliminated the health insurer tax.

Since 2016, there have been efforts to repeal all or part of the ACA, and the previous administration and the U.S.

Congress have taken action to roll back certain provisions of the ACA.

For example, on June 17, 2021, the U.S.

Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.

Further, there have been a number of health reform measures by the Biden administration that have impacted the ACA.

For example, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”), into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.

Since 2016, there have been efforts to repeal, replace, or amend all or part of the ACA.

Further, there have been a number of health reform measures by the previous administration that have impacted the ACA.

For example, on August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.

It is possible that the ACA will be subject to judicial or Congressional challenges in the future.

It is unclear how any additional healthcare reform measures of the Biden administration will impact the ACA and our business.

It is unclear how any forthcoming healthcare reform measures of the Trump administration will impact the ACA and our business.

On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, reduced Medicare payments to providers by 2% per fiscal year, effective on April 1, 2013 and, due to subsequent legislative amendments to the statute including the Infrastructure Investment and Jobs Act, will remain in effect through 2032, unless additional Congressional action is taken.

We anticipate there will continue to be proposals by legislators at both the federal and state levels, regulators and commercial third-party payors to reduce costs while expanding individual healthcare benefits.

Certain of these changes could impose additional limitations on the prices we will be able to charge for our products, the coverage of or the amounts of reimbursement available for our products from third-party payors, including government and commercial payors.

Certain of these changes or delays in implementation of certain measures due to changes in administrations could impose additional limitations on the prices we will be able to charge for our products, the coverage of or the amounts of reimbursement available for our products from third-party payors, including government and commercial payors.

Human Capital Resources

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We consider our relationship with our employees to be good.

Diversity, Equity and Inclusion

We are committed to fostering, cultivating and preserving a culture of diversity, equity and inclusion (“DEI”).

We are a company whose mission is improving health through innovative tests that guide patient care.

Keeping people first—patients, clinicians, employees and investors—highlights a critical part of the patient-centric work we do.

Our DEI initiatives are applicable—but not limited—to our practices and policies on recruitment and selection;

compensation and benefits;

professional development and training;

social and recreational programs;

terminations;

and the ongoing cultivation of a work environment built on the premise of equity and belonging for employees of all backgrounds.

We are committed to maintaining:

• Respectful communication and cooperation between all employees

• Teamwork and employee participation that enables the representation of all groups and employee perspectives

• Employer and employee contributions to the communities we serve to promote a greater understanding and respect for diversity

• Equitable policies, processes and practices

All of our employees have a responsibility to treat others with dignity and respect at all times.

All employees are expected to exhibit conduct that promotes inclusion and belonging in the workplace, at work functions on or off the work site, and at all other company-sponsored events.

Our DEI strategy and programs hinge upon three core pillars:

Recruiting a diverse workforce

Building a culture of inclusion

Promoting transparency

To ensure we are cultivating an authentic company culture, we will take the following actions:

• Conduct annual diversity awareness/unconscious bias training

• Monitor diversity data, including compensation data

• Offer mentorship programs or networking groups

• Support employee resource groups

As of December 31, 2023, our employees were 64% female and 36% male.

Our overall employee population as of December 31, 2023 was 65% White, 21% Hispanic or Latino, 6% Asian, 3% Black or African-American and 5% two or more races (not Hispanic or Latino) and other.

In executive positions, which we define as Executive Director or Regional Business Director level and above, our employee population as of December 31, 2023 was 72% White, 16% Hispanic or Latino and 12% other (not Hispanic or Latino).

Females represented 39% of employees in executive positions.

Affirmative Action

Our DEI practices reaffirm our belief in and commitment to equal employment opportunity (“EEO”) for all employees and applicants in all aspects of employment.

We have developed and maintained a written Affirmative Action Program (“AAP”).

Our President and Chief Executive Officer supports the AAP and urges each employee to commit to carrying out the intent of the AAP and this statement.

We maintain an audit and reporting system to determine overall compliance with its EEO mandates.

The EEO Administrator oversees the AAP development, modification, implementation, effectiveness and reporting requirements, and conducts management updates.

We strive to ensure all aspects of employment, including recruitment, selection, job assignment, training, compensation, benefits, discipline, promotion, transfer, layoff and termination processes remain free of illegal or unethical discrimination based upon race, color, religion, sex (including pregnancy, sexual orientation, gender identity or transgender status), age, national origin, genetic information, marital status, political affiliation, disability, status as a parent, protected veteran status, or a person’s relationship or association with a protected veteran.

Regular review helps ensure compliance with this policy.

Employee Engagement

We value the unique perspective our employees bring to the organization and encourage open channels of communication.

In June 2023, we conducted our third annual employee engagement survey to understand what was working well at Castle and what opportunities we had for improvement.

In June 2024, we conducted our fourth annual employee engagement survey to understand what was working well at Castle and what opportunities we had for improvement.

We received feedback from over 95% of our employees and achieved an engagement score of 85%, meaning that 85% of our employees are engaged or enthusiastically engaged in the culture at Castle.

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We provide performance reviews at least once per year, with pay raises commensurate with market and performance indicators.

Our turnover remains low for the year ended December 31, 2023.

Our regrettable turnover remains low at 1.7% for the year ended December 31, 2024.

We prioritize and encourage internal growth and professional development of our employees.

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Friendswood Drive, Suite 401, Friendswood, Texas 77456 and our telephone number is (866) 788-9007.

Our corporate website address is www.CastleBiosciences.com.

corporate website address is www.CastleBiosciences.com.

Information contained on, or accessible through, our website is not considered part of this Annual Report on Form 10-K or our other filings with the SEC.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to such reports filed or furnished pursuant to Section 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are available free of charge on our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

We may use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation Fair Disclosure promulgated by the U.S.

Securities and Exchange Commission.

These disclosures will be included on our website under the “Company—Investors” section.

This Annual Report on Form 10-K contains references to our trademarks and to trademarks belonging to other entities.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business