Company Overview
−Removed: Exagen is dedicated to transforming the care continuum for patients suffering from debilitating and chronic autoimmune diseases by enabling timely differential diagnosis and optimizing therapeutic intervention.
−Removed: We have developed and are commercializing a portfolio of innovative testing products under our AVISE ® brand, several of which incorporate Cell-Bound Complement Activation Products (CB-CAPs) technology.
−Removed: CB-CAPs assess the activation of the complement system, a biological pathway that is widely implicated across many autoimmune and autoimmune-related diseases, including systemic lupus erythematosus (SLE).
−Removed: Our goal is to enable healthcare providers to improve care for patients through the differential diagnosis, prognosis and monitoring of complex autoimmune and autoimmune-related diseases, including SLE and rheumatoid arthritis (RA).
−Removed: We market testing products under our AVISE ® brand that allow for the differential diagnosis, prognosis and monitoring of complex autoimmune and autoimmune-related diseases.
−Removed: Our lead testing product, AVISE ® CTD, enables differential diagnosis for patients presenting with symptoms indicative of a wide variety of connective tissue diseases (CTDs) and other related diseases with overlapping symptoms.
+Added: Exagen exists to provide clarity in autoimmune disease decision making with the goal of improving patients' clinical outcomes.
+Added: We have developed and are commercializing a portfolio of innovative testing products, under our AVISE ® brand, which allow for the differential diagnosis, prognosis and monitoring of complex autoimmune and autoimmune-related diseases.
+Added: We believe our strong focus and extensive background in the field of rheumatology, combined with our commitment to exceptional customer service and support, position us well to respond to the needs of rheumatologists and the patients they serve.
+Added: We commercially launched our lead testing product, AVISE ® CTD, in 2012.
+Added: AVISE ® CTD enables differential diagnosis for patients presenting with symptoms indicative of a wide variety of connective tissue diseases (CTDs) and other related diseases with overlapping symptoms.
The comprehensive nature of AVISE ® CTD allows for the testing of a number of relevant biomarkers in one convenient blood draw (as opposed to testing serially for individual biomarkers, which adds time and cost to the diagnostic process).
−Removed: We believe AVISE ® CTD may provide clinical utility for over 24 million patients in the United States suffering from these diseases, which include SLE, RA, Sjögren’s syndrome, antiphospholipid syndrome (APS), other autoimmune-related diseases such as autoimmune thyroid, and other disorders that mimic these diseases, such as fibromyalgia.
−Removed: There is an unmet need for rheumatologists to add clarity in their CTD clinical evaluation, and we believe there is a significant opportunity for our tests that enable the differential diagnosis of these diseases, particularly for potentially life-threatening diseases such as SLE.
−Removed: AVISE ® CTD leverages CB-CAPs technology to enable the differential diagnosis of SLE.
−Removed: AVISE ® CTD provides rheumatologists and their patients with sensitive and specific results that allow for potentially faster and more accurate differential diagnosis of SLE as compared to other currently-marketed testing methods.
−Removed: Beyond SLE, AVISE ® CTD allows rheumatologists to accurately diagnose other overlapping autoimmune and autoimmune-related diseases, including RA, with the same blood sample.
−Removed: Our AVISE ® SLE Monitor testing product also leverages CB-CAPs technology by measuring two CB-CAPs biomarkers that offer insight into a patient’s disease activity.
+Added: We believe AVISE ® CTD may provide clinical utility for more than 41 million individuals in the United States, encompassing patients with conditions like systemic lupus erythematosus (SLE);
+Added: rheumatoid arthritis (RA);
+Added: Sjögren’s syndrome, antiphospholipid syndrome (APS);
+Added: other autoimmune-related diseases, such as autoimmune thyroid;
+Added: and disorders that mimic these diseases, such as fibromyalgia.
+Added: There is an unmet need to add clarity for rheumatologists in their CTD clinical evaluations.
+Added: As a result, we believe there is a significant market opportunity for our tests, which enable the differential diagnosis of these diseases, particularly, for potentially life-threatening diseases such as SLE.
+Added: Included in AVISE ® CTD is our proprietary AVISE ® Lupus test, which enables the diagnosis of SLE based on levels of erythrocyte bound C4d (EC4d) and B cell C4d (BC4d);
+Added: along with anti-nuclear antibodies (ANA) and double-stranded DNA antibodies (ds-DNA).
+Added: AVISE ® Lupus provides rheumatologists and their patients with sensitive and specific results that allow for more accurate and potentially faster differential diagnosis of SLE, as compared to other currently-marketed testing methods.
+Added: Beyond SLE, AVISE ® CTD also allows rheumatologists to accurately diagnose other overlapping autoimmune and autoimmune-related diseases (including RA), with the same blood sample.
+Added: Our AVISE ® SLE Monitor test leverages CB-CAPs technology to measure biomarkers that offer insight into a patient’s disease activity.
This test is designed to enable rheumatologists to effectively assess and optimize therapeutic intervention in patients diagnosed with SLE.
Depending on disease severity, AVISE ® SLE Monitor may be utilized by patients multiple times a year throughout their lives.
−Removed: Our RA-focused testing products include AVISE ® MTX and AVISE ® Anti-CarP.
+Added: Our RA testing products include AVISE ® MTX and AVISE ® Anti-CarP.
AVISE ® MTX is a drug monitoring test designed to aid in the optimization of methotrexate therapy, the standard of care and first-line therapy for patients with RA.
−Removed: AVISE ® MTX is based on our proprietary methotrexate polyglutamate (MTXPG) technology that measures blood levels of MTXPGs, the active metabolite of methotrexate linked to disease control in RA patients.
+Added: AVISE ® MTX is based on our methotrexate polyglutamate (MTXPG) technology that measures blood levels of MTXPGs, the active metabolite of methotrexate linked to disease control in RA patients.
Measuring MTXPGs allows rheumatologists to identify patients presenting with inadequate exposure to methotrexate, enabling them to optimize dosing and achieve therapeutic levels commensurate with adequate disease control.
−Removed: AVISE ® Touch, the low-volume test sample collection method, is no longer offered for any of our testing products.
−Removed: AVISE ® Anti-CarP, which measures anti-carbamylated protein antibody (anti-CarP), was developed by the Leiden University Medical Center, and we introduced it as a biomarker-driven RA prognostic test through a distribution agreement with Werfen USA, LLC with the goal of identifying patients prone to more severe disease.
+Added: AVISE ® Anti-CarP was developed by the Leiden University Medical Center and measures anti-carbamylated protein antibody (anti-CarP).
+Added: We introduced it as a biomarker-driven RA prognostic test, through a distribution agreement with Werfen USA, LLC, with the goal of identifying patients prone to more severe disease.
We market our AVISE ® testing products using our specialized sales force.
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For the year ended December 31, 2023, 137,650 AVISE ® CTD tests were delivered, representing an approximate 2% increase over 2022.
−Removed: In the fourth quarter of 2022, the number of ordering healthcare providers reached a record 2,419 compared to 2,126 in the same period in 2021.
+Added: In the fourth quarter of 2023, the number of ordering healthcare providers reached 2,383 compared to 2,419 in the same period in 2022.
In addition, we continue to populate a growing proprietary database of de-identified patient test results from our clinical studies and our clinical laboratory.
−Removed: We believe the insight emerging from these results has the potential to unlock value for pharmaceutical and biotechnology companies in the development and commercialization of therapeutics.
+Added: We believe the insights from these results have the potential to unlock value for pharmaceutical and biotechnology companies in the development and commercialization of therapeutics.
We believe we also have the ability to further leverage our database to optimize patient selection in clinical trials for companies developing therapeutics for autoimmune and autoimmune-related diseases.
−Removed: We plan to collaborate with our existing and future pharmaceutical and biotechnology partners to help maximize the full value of our in-house database.
−Removed: We address the unmet needs of those suffering from debilitating and chronic autoimmune disorders through aiding in the differential diagnosis, prognosis, monitoring and therapeutic selection, to ultimately improve the continuum of care for patients.
+Added: We address the unmet needs of those suffering from debilitating and chronic autoimmune disorders through aiding in differential diagnosis, prognosis, monitoring and therapeutic selection, to ultimately improve clinical outcomes for patients.
The key tenets of our business strategy include:
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We undertake research projects that have the potential for impactful results and address the top consumer needs in the rheumatology space.
−Removed: The research projects we support will be those that we believe will have a competitive advantage (such as using proprietary technology), a pathway for reimbursement and an established evidence development plan with sufficient market size.
+Added: The research projects we support are those that we believe will have a competitive advantage (such as using proprietary technology), a pathway for reimbursement and an established evidence development plan with sufficient market size.
Criteria for developed products that we ultimately commercialize include Medicare coverage (specific to patient population), proprietary value-based pricing, published clinical utility and a strategy for medical guideline inclusion.
▪ Maintain meaningful margin.
−Removed: We seek to maintain meaningful margin by continuing to focus on increasing operating leverage through the implementation of internal initiatives, such as leveraging validation and reimbursement-oriented clinical studies to facilitate payor coverage of our testing products.
−Removed: We plan to increase our focus on long-term reimbursement and average sales price (ASP) growth, by optimizing revenue cycle practices, focusing managed care efforts on medical policy expansion and continuing to educate insurance payors on the published, real-world evidence of the clinical utility of our testing products, showing healthcare cost savings and reductions in time to diagnosis.
−Removed: We also seek to improve our per-test costs by focusing on profitable, core test offerings, reducing fixed costs and overhead, and focusing our laboratory resources on AVISE ® CTD optimization.
+Added: We seek to maintain meaningful margin by continuing to focus on increasing operating leverage through the implementation of certain internal initiatives, such as leveraging validation, utility and reimbursement-oriented clinical studies to facilitate payor coverage of our testing products.
+Added: We center our efforts on long-term reimbursement and average sales price (ASP) growth.
+Added: This strategy includes optimizing revenue cycle practices, focusing managed care efforts on medical policy expansion and continuing to educate insurance payors on the published, real-world evidence of the clinical utility of our testing products, demonstrating healthcare cost savings and reductions in time to diagnosis.
+Added: We also seek to improve our per-test costs by focusing on profitable, core test offerings, minimizing fixed costs and overhead, and focusing our laboratory resources on AVISE ® CTD optimization.
Additionally, we employ a streamlined salesforce covering territories which are designed to achieve the most efficient and effective reach and frequency for the promotion of AVISE ® CTD.
−Removed: We are currently aligning the organization with this new focus to best accomplish our goals.
−Removed: Autoimmune and Connective Tissue Diseases
+Added: Autoimmune and Connective Tissue Diseases (CTDs)
Autoimmune diseases encompass a broad range of serious, chronic and debilitating conditions in which a person’s immune system creates antibodies that mistakenly react against normal healthy tissues, causing inflammation and irreversible tissue damage.
These antibodies are called autoantibodies and their detection through blood tests can help diagnose, prognose and monitor the course of autoimmune diseases.
−Removed: However, knowing when and which autoantibody to test for is challenging due to the vagueness of symptoms, the unexplained flaring and remission of symptoms, and the many conditions which can mimic autoimmune disease.
+Added: However, knowing when to test and which autoantibody to test for is challenging due to the vagueness of symptoms, the unexplained flaring and remission of symptoms, and the many conditions which can mimic autoimmune disease.
Early and accurate diagnosis of the conditions causing these overlapping symptoms is critical, as an incorrect diagnosis can lead to toxicity from inappropriate medications, irreversible tissue damage and other comorbidities associated with uncontrolled disease.
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Persons with CTDs often present to their rheumatologist with complaints of joint pain, fatigue, unexplained fever, inflammation, rash, stiffness and muscle aches.
−Removed: These symptoms overlap among numerous CTDs, including SLE, one of the most severe CTDs and historically difficult to rule out, as well as other autoimmune-related diseases and other disorders that mimic these diseases, such as fibromyalgia.
+Added: These symptoms overlap among numerous CTDs, including SLE, one of the most severe CTDs, which historically has been difficult to rule out, as well as other autoimmune-related diseases and other disorders that mimic these diseases, such as fibromyalgia.
The National Institute of Environmental Health Sciences estimates that there are approximately 41 million patients in the United States with existing cases of autoimmune diseases.
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SLE is characterized by a rise in symptoms and/or abnormal laboratory test results.
−Removed: SLE varies in severity, from mild cases to those in which significant and potentially fatal damage occurs to vital organs such as the brain, heart, kidneys and lungs.
+Added: varies in severity, from mild cases to those in which significant and potentially fatal damage occurs to vital organs such as the brain, heart, kidneys and lungs.
Detection of these autoantibodies can assist rheumatologists in the diagnosis of SLE.
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Current treatment for SLE involves the use of antimalarials, corticosteroids, immunosuppressants and biologic agents to prevent or suppress active disease or flares.
−Removed: Standard laboratory tests for diagnosing SLE include measuring immunological biomarkers, such as antinuclear antibodies (ANA), anti-double stranded DNA (anti-dsDNA) and other autoantibody tests.
+Added: Standard laboratory tests for diagnosing SLE include measuring immunological biomarkers, such as ANA, anti-double stranded DNA (anti-dsDNA) and other autoantibody tests.
ANA are a group of autoantibodies produced by a person’s immune system when it fails to adequately distinguish between self and non-self.
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However, the high sensitivity of ANA for SLE is counterbalanced by somewhat poor specificity.
−Removed: Sensitivity measures the proportion of patients who are correctly identified as having a particular condition, while specificity measures the proportion of patients who are correctly identified as not having a particular condition.
−Removed: Therefore, the majority of individuals who test positive for ANA do not have SLE.
−Removed: Approximately 11-13% of individuals with a positive ANA test have SLE.
+Added: According to Dinse et al.
+Added: (2022), who investigated the increasing prevalence of ANA in the United States using data from the National Health and Nutrition Examination Survey, approximately 0.7%–2.4% of individuals with a positive ANA test have SLE.
This lack of specificity leads to many inappropriate non-autoimmune referrals to the rheumatologist from primary care physicians.
For example, it has been reported that 30% of fibromyalgia patients may test positive for ANA, potentially generating as many as four million inappropriate rheumatology referrals.
−Removed: In addition, a study published in 2012 reported the estimated prevalence of a positive ANA test in the normal, healthy, U.S.
−Removed: population to be 13.8% (32 million people), indicating a significant need for a highly-specific test for this disease.
+Added: In addition, the Dinse et al.
+Added: study reported the estimated prevalence of a positive ANA test in the normal, healthy, U.S.
+Added: population to be 16.1% (approximately 41.5 million people), indicating a significant need for a highly specific test for this disease.
Anti-dsDNA are autoantibodies that target a person’s double-stranded DNA.
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In March 2011, the first new biologic targeting treatment of SLE in over 50 years, GSK’s Benlysta ® , was approved by the U.S.
−Removed: Food and Drug Administration (the FDA), and in December 2020, the FDA approved this biologic drug for the treatment of adult patients with active lupus nephritis who are receiving standard therapy.
+Added: Food and Drug Administration (the FDA).
+Added: In December 2020, the FDA approved this biologic drug for the treatment of adult patients with active lupus nephritis who are receiving standard therapy.
Since Benlysta ® 's approval, there have been a number of drug development programs that have failed in SLE, which may suggest that guidelines for classifying SLE patients and the endpoints used to determine clinical effectiveness have not adequately addressed the complexity of the disease process and its heterogeneous population.
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Patients suffering from RA develop joint damage that is associated with painful inflammation and often progresses to irreversible damage of cartilage and bone, leading to significant disability and a reduction in quality of life and the ability to work.
−Removed: Early diagnosis and effective treatment of RA is critically
−Removed: important to prevent erosive bone or joint damage and disability.
+Added: Early diagnosis and effective treatment of RA is critically important to prevent erosive bone or joint damage and disability.
Rheumatologists are compelled to reach a definitive diagnosis quickly and administer effective treatment.
Diagnosis of RA involves performing a complete medical history with physical and/or radiographic examination of the number and distribution of swollen, tender and painful joints that have persisted for more than six weeks.
−Removed: Laboratory testing for rheumatoid factor (RF), anti-cyclic citrullinated peptide (CCP) antibodies and testing for general, nonspecific inflammation with erythrocyte sedimentation rate (the ESR) and C-reactive protein tests are used to assist in the diagnosis.
−Removed: The standard of care for the treatment for RA involves the use of Disease Modifying Anti-Rheumatic Drugs (DMARDs) which have shown, in clinical studies, the ability to slow or stop disease progression.
−Removed: Methotrexate remains the most commonly used DMARD, due to its low cost, effectiveness, and the extensive clinical experience with its use.
+Added: Laboratory testing for rheumatoid factor (RF), anti-cyclic citrullinated peptide (CCP) antibodies and testing for
+Added: general, nonspecific inflammation with erythrocyte sedimentation rate (the ESR) and C-reactive protein tests are used to assist in the diagnosis.
+Added: The standard of care for the treatment of RA involves the use of Disease Modifying Anti-Rheumatic Drugs (DMARDs) which have shown, in clinical studies, the ability to slow or stop disease progression.
+Added: Methotrexate remains the most commonly used DMARD, due to its low cost and effectiveness, as well as the extensive clinical experience with its use.
It is estimated that approximately 90% of RA patients in the United States, or 1.3 million patients, are treated with methotrexate, either as a monotherapy or in combination with another DMARD.
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We market testing products under our AVISE ® brand that allow for the differential diagnosis, prognosis and monitoring of complex autoimmune and autoimmune-related diseases, including SLE and RA.
−Removed: Our product portfolio integrates CB-CAPs technology, which is a stable and reliable method for differentially diagnosing SLE.
−Removed: We are focused on leveraging our sales channel targeting the approximately 4,500 rheumatologists across the United States.
+Added: We are focused on leveraging our sales channel targeting the approximately 4,500 rheumatologists across the United States to promote use of our product portfolio.
Our Proprietary Technologies
−Removed: We have two core proprietary technologies, CB-CAPs and MTXPGs, which form the backbone of several of our testing products.
−Removed: Our proprietary CB-CAPs technology determines the blood levels of complement activation proteins permanently deposited on hematopoietic cells.
+Added: We believe the competitive advantage for our testing products is supported by core proprietary technology, namely our AVISE ® Lupus test.
+Added: AVISE ® Lupus Test
+Added: Our AVISE ® Lupus test, which we offer as a stand-alone test and as part of our AVISE ® CTD test panel, is a proprietary, clinically validated method to aid in the diagnosis of SLE that provides a significant improvement in sensitivity, relative to the current standard of care.
+Added: The AVISE ® Lupus test leverages CB-CAPs technology, which determines the blood levels of complement activation proteins permanently deposited on hematopoietic cells.
The determination of complement proteins in a patient’s blood is a mainstay in clinical laboratory science, and state-of-the-art methods traditionally rely on measurement of serum or plasma levels of soluble complements.
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While the limitations and drawbacks of measuring standard components of the complement system, such as C3 and C4, are well recognized by the medical community, these laboratory biomarkers are part of international guidelines for the classification of SLE.
−Removed: We believe the availability of novel complement biomarkers supporting or replacing standard C3 and C4 measures will be of great value for rheumatologists and ultimately their patients.
−Removed: Our CB-CAPs technology directly measures protein products of complement activation, such as C4d, the product of C4 activation.
+Added: We believe the availability of novel complement biomarkers combined with algorithmic interpretations, as a support or replacement of standard C3 and C4 measures, is of great value for rheumatologists and their patients.
+Added: CB-CAPs technology directly measures protein products of complement activation, such as C4d, the product of C4 activation.
These complement activation products become stably attached to surfaces of circulating blood cells to become CB-CAPs.
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These include the stable, accurate and unequivocal information of complement activation that enable consistent measurement and an improved ability to assess and monitor changes in biological activity related to activation of the complement system.
−Removed: In a head-to-head study published in 2014, CB-CAPs (EC4d or BC4d) showed 22% higher sensitivity (66%) than C3 and C4 (44%) in diagnosing SLE, with specificity fixed at 91%.
−Removed: Methotrexate is the standard of care and first-line treatment of many autoimmune diseases including RA and psoriatic arthritis.
−Removed: Our proprietary technology measures blood levels of MTXPGs, which are the active metabolite of methotrexate.
−Removed: The technology uses a dried capillary blood-based collection method coupled with liquid chromatographic tandem mass spectrometry and quantifies nanomolar concentrations of MTXPG using at least two
−Removed: orders of magnitude lower blood volume than venipuncture.
−Removed: MTXPG blood levels are actionable clinical utility checkpoints and can help clinicians identify causes for a lack of response to methotrexate, such as poor activation to active metabolites, underexposure secondary to poor absorption or poor compliance, all of which are limiting factors to the achievement of a robust clinical response with this first-line treatment.
−Removed: We believe we can leverage this technology to optimize anti-TNF treatment by reducing the formation of anti-drug antibodies that are known to impact the clinical efficacy of these drugs.
+Added: In a clinical validation study published in 2014 by Chaim Putterman, et al.
+Added: (the 2014 Study), EC4d and BC4d showed 22% higher sensitivity (66%) than C3 and C4 (44%) in diagnosing SLE, with specificity fixed at 91%.
+Added: Our proprietary AVISE ® Lupus test integrates EC4d and BC4d with 8 autoantibodies to yield a quantitative and qualitative assessment of SLE risk.
+Added: The AVISE ® Lupus test was designed to improve upon the diagnostic sensitivity of conventional biomarkers used to diagnose SLE while maintaining a high degree of specificity.
+Added: In the aforementioned 2014 Study, the AVISE ® Lupus test demonstrated 80% sensitivity for SLE (meaning 8 out of 10 diagnosed SLE patients tested positive) and 86% specificity for SLE (meaning 86% of non-SLE control subjects with other rheumatic conditions tested negative).
+Added: A later study published in 2022 by Tyler O’Malley, et al., compared the clinical utility of the AVISE ® Lupus test to the conventional biomarker strategy in the diagnosis of SLE, demonstrating 6-fold increased odds of SLE diagnosis and 3-fold increased odds of treatment initiation with a
+Added: positive AVISE ® Lupus result.
+Added: We believe this patent-protected test gives us a significant advantage over our competitors.
Testing Products
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Our lead testing product, AVISE ® CTD, is a comprehensive test that aids in the differential diagnosis of SLE versus other common CTDs.
−Removed: The SLE portion of the test employs CB-CAPs technology and specifically measures activation of the complement system by quantifying the level of two CB-CAPs biomarkers in the patient’s blood, B-cell C4d (BC4d), and erythrocyte bound C4d (EC4d), which are higher in patients with SLE compared to patients with other CTDs.
−Removed: In addition, the comprehensive nature of AVISE ® CTD enables testing for a series of biomarkers in one convenient blood draw to further aid in the differential diagnosis of a wide variety of CTDs and other diseases which can be challenging to diagnose as a result of overlapping symptoms.
−Removed: These diseases include SLE, RA, Sjögren’s syndrome, APS, other autoimmune-related diseases such as autoimmune thyroid, and other disorders that mimic these diseases, such as fibromyalgia.
−Removed: Our test’s ability to allow rheumatologists to effectively rule out SLE and differentially diagnose other CTDs such as RA adds clarity to the rheumatologist’s assessment, thereby making the larger diagnostic process more efficient and accurate.
−Removed: The clinical performance of our proprietary biomarkers and the convenience of a single blood draw make AVISE ® CTD an attractive choice among rheumatologists.
+Added: AVISE ® CTD includes our proprietary AVISE ® Lupus test, which leverages CB-CAPs technology to specifically measure activation of the complement system.
+Added: In addition to testing for SLE, AVISE ® CTD tests for a series of biomarkers in one convenient blood draw to aid in the differential diagnosis of a wide variety of CTDs and other diseases which can be challenging to diagnose as a result of overlapping symptoms.
+Added: These diseases include SLE;
+Added: Sjögren’s syndrome;
+Added: other autoimmune-related diseases, such as autoimmune thyroid;
+Added: and other disorders that mimic these diseases, such as fibromyalgia.
+Added: Use of our test significantly enhances the rheumatologist's ability to exclude SLE and differentiate other CTDs, resulting in a clearer assessment and ultimately increasing the efficiency and accuracy of the broader diagnostic process.
+Added: The clinical performance of our proprietary AVISE ® Lupus test, combined with the convenience of a single blood draw, make AVISE ® CTD an attractive choice among rheumatologists.
AVISE ® Lupus
−Removed: The AVISE ® Lupus test employs CB-CAPs technology and is the cornerstone of the SLE assessment within our more comprehensive AVISE ® CTD testing product.
−Removed: AVISE ® Lupus measures activation of the complement system by quantifying the level of BC4d and EC4d in the patient’s blood.
+Added: Our proprietary AVISE ® Lupus test is the cornerstone of the SLE assessment within our more comprehensive AVISE ® CTD testing product.
+Added: AVISE ® Lupus begins by quantifying the level of CB-CAPs biomarkers (EC4d and BC4d) in the patient’s blood.
+Added: These biomarkers are elevated in patients with SLE compared to patients with other CTDs.
+Added: Next, the AVISE ® Lupus test integrates these cell-bound complement products with 8 autoantibodies to yield a quantitative and qualitative assessment of SLE risk.
Rheumatologists choose to order the comprehensive AVISE ® CTD test or the more focused AVISE ® Lupus test based on medical necessity, which is determined by each patient’s symptoms and medical history.
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AVISE ® Vasculitis AAV
−Removed: In September 2020, we launched AVISE ® Vasculitis AAV which utilizes a testing panel of individual analytes designed to provide physicians with rapid and reliable results in the assessment and monitoring of anti-neutrophil cytoplasmic antibody (ANCA) associated vasculitis (AAV).
+Added: AVISE ® Vasculitis AAV utilizes a testing panel of individual analytes designed to provide physicians with rapid and reliable results in the assessment and monitoring of anti-neutrophil cytoplasmic antibody (ANCA) associated vasculitis (AAV).
AAV is a group of autoimmune diseases characterized by vascular inflammation and damage.
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AVISE ® Anti-CarP
−Removed: AVISE ® Anti-CarP, which measures anti-CarP, was developed by the Leiden University Medical Center, and we introduced it as a biomarker-driven RA prognostic test through a distribution agreement with Werfen USA, LLC.
−Removed: with the goal of identifying patients prone to more severe disease.
−Removed: We were the first commercial laboratory to make testing for anti-CarP available in the United States with the introduction of AVISE ® Anti-CarP in 2018.
+Added: AVISE ® Anti-CarP, developed by the Leiden University Medical Center, measures anti-CarP.
+Added: We introduced it as a biomarker-driven RA prognostic test, through a distribution agreement with Werfen USA, LLC, with the goal of identifying patients prone to more severe disease.
+Added: With the introduction of AVISE ® Anti-CarP in 2018, we became the first commercial laboratory to make testing for anti-CarP available in the United States.
This test uniquely addresses two major challenges facing rheumatologists today – (1) patients presenting with RA symptoms but lacking the common confirmatory blood tests for anti-RF or anti-CCP, known as sero-negative patients, and (2) the lack of a serologic indicator, which indicates a poor prognosis and helps guide treatment decisions.
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Furthermore, RA patients positive for Anti-CarP have an increased risk for more severe RA disease, including permanent joint damage .
−Removed: AVISE ® PC4d, introduced in 2018, reflects over 10 years of research efforts and employs CB-CAPs technology.
−Removed: This CB-CAP biomarker measures platelet-bound C4d (PC4d), and has been shown in clinical studies to have significant association with thrombosis and ischemic stroke in SLE.
−Removed: These thrombotic events can be among the most damaging and deadly forms of lupus flares and often strike without warning.
−Removed: Because of its strong association with thrombosis, we believe AVISE ® PC4d promises to be a valuable tool for SLE disease monitoring.
AVISE ® SLE Monitor
AVISE ® SLE Monitor is a blood test that employs CB-CAPs technology and is intended to assess the condition of a patient that has been diagnosed with SLE.
−Removed: It offers a unique combination of biomarkers that measure for EC4d, which has shown greater accuracy in tracking disease activity than C3 and C4, and PC4d, which is associated with thrombosis risk in SLE.
+Added: It offers a unique combination of biomarkers that measure for EC4d, which has shown greater accuracy in tracking disease activity than C3 and C4, which is associated with thrombosis risk in SLE.
AVISE ® SLE Monitor offers additional insight into a patient’s disease activity as well as possible adverse events.
Rheumatologists have limited methods for evaluating the extent of disease activity taking place inside the body of an SLE patient.
−Removed: They rely on imperfect biomarkers, overt symptoms or flares and patient reported history, all of which leave the rheumatologists looking for greater insights.
−Removed: In surveys conducted with SLE patients, it has been reported that patients tend to under report their symptoms and many healthcare providers are unaware of this bias.
+Added: They rely on imperfect biomarkers, overt symptoms or flares and patient reported history.
+Added: All of these leave the rheumatologists looking for greater insights, especially in cases where patients under report their symptoms, a bias which healthcare providers may not fully appreciate.
AVISE ® SLE Monitor demonstrates correlation to SLE disease activity and is therefore designed to enable rheumatologists to effectively assess and optimize therapeutic intervention in patients diagnosed with SLE.
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AVISE ® MTX provides crucial information as to whether a patient has achieved MTXPG blood levels consistent with an appropriate response to methotrexate, also known as the therapeutic level, or if the MTXPG blood levels are too low to produce adequate effects.
+Added: MTXPG blood levels are actionable clinical utility checkpoints and can help clinicians identify causes for a lack of response to methotrexate, such as poor activation to active metabolites, underexposure secondary to poor absorption or poor compliance, all of which are limiting factors to the achievement of a robust clinical response with this first-line treatment.
AVISE ® MTX can allow rheumatologists to make more informed therapeutic decisions in their efforts to optimize methotrexate therapy and give patients their best chance at achieving an optimal response.
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However, there is large variability in the response to HCQ therapy, the drug can sometimes take weeks or months to have a therapeutic effect and compliance has been documented to be an issue in CTD patients.
−Removed: We believe measuring HCQ makes the patient accountable, and also
−Removed: helps to determine whether HCQ blood levels are adequate and consistent with clinical efficacy.
+Added: We believe measuring HCQ makes the patient accountable, and also helps to determine whether HCQ blood levels are adequate and consistent with clinical efficacy.
The addition of new and costly biologic therapies approved for the treatment of SLE may drive interest by all healthcare stakeholders, especially payors, to adopt an approach that optimizes a generic drug before advancing to a costlier alternative.
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Our Pipeline and Growth Opportunities
−Removed: We regularly confer with national experts in the clinical management of rheumatic autoimmune diseases, including RA and lupus, to help guide the organization’s leadership team on the design and execution of research projects, as well as weigh-in on known and anticipated advances in technologies affecting clinical management of autoimmune diseases.
+Added: We regularly confer with national experts in the clinical management of rheumatic autoimmune diseases to help guide the organization’s leadership team on the design and execution of research projects, as well as weigh-in on known and anticipated advances in technologies affecting clinical management of autoimmune diseases.
We believe there is significant potential to capitalize on our proprietary technologies by integrating with commercially validated biomarkers to develop testing products with superior clinical utility.
The complement pathway is widely implicated in the pathogenesis of a variety of conditions, including autoimmune diseases and organ transplant rejection.
−Removed: We believe that CB-CAPs technology, owing to its stability and reliability, will allow us to produce meaningful and differentiated proprietary solutions for rheumatologists.
−Removed: For example, we are developing assays that we believe may have high diagnostic, prognostic, monitoring and/or therapeutic response value in patients with Lupus, RA and additional autoimmune indications.
−Removed: AVISE ® RADR Platform
−Removed: RA is estimated to affect approximately 1.5 million patients in the United States and can be difficult to manage due to a well-defined treatment response ceiling for the spectrum of FDA-approved biological treatments for RA.
−Removed: Personalized therapeutic agent selection for RA patients remains a significant unmet need.
−Removed: RA patients often try multiple therapies empirically before they find one that lowers their disease activity.
−Removed: The placement of an RA patient on an ineffective therapy risks progression and worsening of the disease, further damage to the joints, and significant wasted spend on expensive therapeutic agents.
−Removed: There are currently no reliable assays for predicting positive patient response prior to the selection of commonly prescribed biological therapeutic agents.
−Removed: In collaboration with Queen Mary University of London (QMUL), we are aiming to develop a family of patented assays pertaining to RNA expression patterns used in the prediction of patient response to biological therapeutics for RA.
−Removed: The assays utilize minimally invasive synovial tissue biopsies as input, which are then processed for total RNA expression data.
−Removed: The resulting data is then run through proprietary artificial intelligence (AI) developed algorithms that provide actionable insights on predicted biological therapeutic response for RA patients based on an individual patient's RNA expression patterns.
−Removed: AVISE ® SLE Monitor (2.0)
−Removed: SLE is characterized by a chronic, systemic inflammatory burden, and disease progression is defined by the accumulation of irreversible organ damage typically resulting from chronic inflammation and/or chronic corticosteroid use.
−Removed: Among the challenges for rheumatologists responsible for the care of lupus patients is the unpredictability of the disease course defined by periods of waxing and waning episodes of inflammation.
−Removed: The unpredictable nature of SLE and the lack of reliable conventional biomarkers indicative of present and near-term disease activity results in a significant unmet need for a surrogate method to monitor disease activity.
−Removed: Our goal is to leverage clinical and laboratory data collected across multiple longitudinal SLE cohorts to identify a set of biomarkers that can inform an AI-developed algorithm aimed at guiding ongoing treatment decisions throughout the course of a lupus patient’s journey.
−Removed: AVISE ® Lupus Nephritis
+Added: We believe the stability and reliability of CB-CAPs technology, in combination with increased specificity provided by our patent-protected AVISE ® Lupus test, will allow us to produce meaningful and differentiated proprietary solutions for rheumatologists.
+Added: TC4d, TIgG and TIgM Biomarkers
+Added: Our collaborative efforts with the Allegheny Health Network Research Institute (AHN) have resulted in further development of three innovative biomarkers (TC4d, TIgG, and TIgM), for which we obtained an exclusive, worldwide license from AHN in May 2021.
+Added: These markers exhibit a high degree of specificity for lupus and are more sensitive for lupus compared to conventional biomarkers.
+Added: The objective is to incorporate these three biomarkers into the AVISE ® Lupus test in order to enhance the diagnostic sensitivity for lupus beyond its current 80% level.
+Added: Additionally, TC4d represents a proprietary expansion of our existing CB-CAPs portfolio, involving a similar biochemical process wherein complement activation products are measured on T-cells.
+Added: We believe the inclusion of these markers in our AVISE ® Lupus test could further amplify its sensitivity, thus facilitating earlier detection of disease, and further differentiating our test in the market.
+Added: CTD RA Sub-Profile
+Added: Approximately 70-80% of RA patients show serological evidence of RA, identified by key biomarkers:
+Added: anti-CCP and Rheumatoid Factor.
+Added: The remaining 20-30% of patients, despite lacking these serological markers, are clinically diagnosed with RA;
+Added: this subgroup is referred to as “seronegative RA.” These patients often face delays in diagnosis due to the absence of serological evidence.
+Added: In cases of early inflammatory arthritis, differential diagnosis is broad, including conditions like reactive arthritis, crystal arthropathy, spondyloarthropathy, and other systemic rheumatic diseases such as SLE and Sjogren’s syndrome, alongside seronegative RA.
+Added: Accordingly, identifying unique biomarkers specific to seronegative RA may bridge this diagnostic gap, enabling more timely and targeted treatment plans for these patients.
+Added: Lupus Nephritis Biomarkers
Lupus nephritis (LN) is an autoimmune disease and a frequent complication in people who have SLE.
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Although early onset of LN is not typically noticeable by patients, nearly 40% of SLE patients go on to develop LN.
−Removed: Currently, urinary protein to creatine ratio measurement is the standard means of assessing kidney damage;
+Added: Currently, urinary protein to creatine ratio measurement is the standard means of assessing kidney involvement;
however, it is not necessarily indicative of kidney prognosis or treatment response.
−Removed: We aim to develop a test for detecting protein analytes in urine that can aid rheumatologists in the ongoing management and risk stratification of patients suffering from lupus nephritis.
+Added: We aim to leverage intellectual property licensed from Johns Hopkins University (JHU) to develop a test for detecting protein analytes in urine that can aid rheumatologists in the ongoing management and risk stratification of patients suffering from LN.
+Added: AVISE ® SLE Monitor (2.0)
+Added: SLE is characterized by a chronic, systemic inflammatory burden, and disease progression is defined by the accumulation of irreversible organ damage typically resulting from chronic inflammation and/or chronic corticosteroid use.
+Added: Among the challenges for rheumatologists responsible for the care of lupus patients is the unpredictability of the disease course defined by periods of waxing and waning episodes of inflammation.
+Added: The unpredictable nature of SLE and the lack of reliable conventional biomarkers indicative of present and near-term disease activity results in a significant unmet need for a surrogate method to monitor disease activity.
+Added: Our goal is to leverage clinical and laboratory data collected across multiple longitudinal SLE cohorts to identify a set of biomarkers that can inform an AI-developed algorithm aimed at guiding ongoing treatment decisions throughout the course of a lupus patient’s journey.
Sales and Marketing
−Removed: Our specialized sales force is focused on targeting the approximately 4,500 rheumatologists across the United States.
−Removed: Our sales representatives generally have extensive experience in healthcare sales with backgrounds in rheumatology, diagnostics and/or pharmaceutical sales.
+Added: We employ a specialized sales force focused on targeting the approximately 4,500 rheumatologists across the United States.
+Added: Our sales representatives generally have extensive experience in healthcare sales with backgrounds
+Added: in rheumatology, diagnostics and/or pharmaceutical sales.
In addition, our sales representatives complete a comprehensive disease-level sales training program and are required to participate in regular, ongoing training activities and certifications.
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West, Central, Northeast and Southeast.
−Removed: Our inside sales force helps further our brand awareness with, and access to, rheumatologists located in rural and outlying areas of the United States.
−Removed: We intend to continue to evaluate our sales force's reach and frequency of interactions with rheumatologists, including as we launch our pipeline products.
−Removed: To further support our promotional efforts, we have a centralized, dedicated client services department with a high level of technical training that augments our specialized sales force and marketing activities.
−Removed: This group enhances sales efficiency and customer satisfaction by providing personalized customer support.
+Added: We also maintain an inside sales force that helps further our access to rheumatologists located in rural and outlying areas of the United States and works to increase our brand awareness with healthcare providers in these areas.
+Added: We continually evaluate our sales force's reach and frequency of interactions with rheumatologists, including as we launch our pipeline products.
+Added: Our specialized sales force and marketing activities are further augmented by our centralized, dedicated client services department.
+Added: Our client services department uses its high level of technical training to enhance sales efficiency and customer satisfaction by providing personalized customer support.
Adoption and Growth through Quality Testing and Service
−Removed: Our focus on quality allows for a dedicated sales approach which entails a commitment to understanding the needs of both provider and patient.
−Removed: Through raising awareness of the benefits AVISE ® testing provides, our sales team is able to deliver quality testing and support services to providers, and ultimately, their patients.
+Added: Our focus on quality allows for a dedicated sales approach based on a commitment to understanding the needs of both provider and patient.
+Added: By raising awareness of the benefits AVISE ® testing provides, our sales team is able to deliver quality testing and support services to providers, and ultimately, their patients.
To ensure our marketing and sales efforts are reaching those that we believe could benefit most from AVISE ® , we emphasize execution in three core areas:
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Third-party payors include government payors (such as Medicare and Medicaid) and commercial payors (such as insurance companies).
−Removed: Achieving and maintaining broad coverage and reimbursement of our current products by third-party payors, including Medicare, are key components that contribute to our revenue and financial results.
−Removed: Expanding coverage by government and commercial payors for our commercialized and pipeline tests is and will be important for our future growth.
−Removed: We are actively engaged in efforts to achieve broad commercial coverage and reimbursement for our current and future products, followed by contracting with commercial payors.
+Added: Achieving and maintaining broad coverage and reimbursement from third-party payors, including Medicare, for our commercialized and pipeline products is a key determinant of our revenue, financial results and future growth.
+Added: We are actively engaged in efforts to achieve broad commercial coverage and reimbursement for our current and future products, including contracting with commercial payors.
Achieving positive coverage reduces the need for appeals and reduces failures to collect from the patient’s insurance.
Additionally, achieving in-network contracts with commercial payors can shorten the time required to receive payments.
−Removed: Our approach to commercial payment is centered on impacting our standing in clinical guidelines and individual payor medical policies.
+Added: Our approach to commercial payment is centered on working toward inclusion in clinical guidelines and individual payor medical policies.
We seek to accomplish this through continued evidence development and publication, medical director engagement and individual claim-based appeal efforts, detailed as follows:
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We employ a team of in-house claims processing and reimbursement specialists who work with patients and payors to obtain maximum reimbursement.
−Removed: In parallel, a managed care team collaborates with our reimbursement specialists to ensure our payor outreach strategy reacts to and anticipates the changing
−Removed: needs of our customer base.
+Added: In parallel, a managed care team collaborates with our reimbursement specialists to ensure our payor outreach strategy reacts to and anticipates the changing needs of our customer base.
Overall, we work to address payors at the national level in addition to high-claim-volume regional payors we have identified based on our current territory coverage.
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When we contract to serve as a participating provider, reimbursements are made pursuant to a percentage of our charges or a negotiated fee schedule amount.
−Removed: Where we are not reimbursed in full, or receive a claim denial, for in-network and out-of-network claims, we may elect to appeal the insurer’s underpayment or denial of payment or seek payment from the patient.
+Added: For in-network and out-of-network claims for which we are not reimbursed in full (or receive a claim denial), we may elect to appeal the insurer’s underpayment (or denial of payment) or seek payment from the patient.
Clinical Validation
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The primary endpoint of the study was the specificity and sensitivity of AVISE ® Lupus compared to common autoantibodies used to diagnose SLE and other CTDs, such as ANA and anti-dsDNA.
−Removed: The final results of this study showed that AVISE ® Lupus demonstrated 86% specificity and 80% sensitivity in distinguishing SLE from other CTDs and fibromyalgia, was 33% more specific than ANA (53% specificity/89% sensitivity) and was 48% more sensitive than anti-dsDNA (32% sensitivity/97% specificity).
+Added: The final results of this study showed that AVISE ® Lupus demonstrated 86% specificity and 80% sensitivity in distinguishing SLE from other CTDs and fibromyalgia.
+Added: Additionally, the results showed that AVISE ® Lupus was 33% more specific than ANA (53% specificity/89% sensitivity) and 48% more sensitive than anti-dsDNA (32% sensitivity/97% specificity).
We further demonstrated the clinical validity of AVISE ® Lupus for detection of probable SLE (pSLE) in a 246 subject, multi-center, prospective, cross-sectional study, first published in the Arthritis & Rheumatology Journal in September 2019.
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The CARE study was published in September 2019 in Lupus Science & Medicine.
−Removed: Results showed among patients who tested positive for AVISE ® Lupus (n=9), 44% in the AVISE ® Lupus group had a higher likelihood of SLE, compared with 9% in the SDLT group (p=0.127), whereas among patients who tested negative for AVISE ® Lupus (n=63), 60% in the AVISE ® Lupus group had a lower likelihood of SLE, compared with 37% in the SDLT group (p=0.012).
+Added: Results among patients who tested positive for AVISE ® Lupus (n=9) showed 44% in the AVISE ® Lupus group had a higher likelihood of SLE, compared with 9% in the SDLT group (p=0.127).
+Added: Among patients who tested negative for AVISE ® Lupus (n=63), 60% in the AVISE ® Lupus group had a lower likelihood of SLE, compared with 37% in the SDLT group (p=0.012).
In the group of patients randomized to the AVISE ® Lupus group, positive test results associated significantly with initiation of prednisone (p=0.03) and a similar trend was observed with HCQ therapy (p=0.11).
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In July 2021, a real-world retrospective analysis of patients tested with the AVISE ® Lupus test was published in the journal Lupus Science & Medicine, titled "A multianalyte assay panel with cell-bound complement activation products demonstrates clinical utility in systemic lupus erythematosus clinical utility study summary." A cohort of 161 AVISE ® Lupus tested patients from 12 rheumatology centers across the United States provided clinical outcome data on diagnosis and treatment decisions following AVISE ® Lupus testing.
−Removed: The study findings revealed a 7 to 15-
−Removed: fold increased risk of Lupus diagnosis in AVISE ® Lupus Positive and anti-dsDNA negative patients relative to patients negative for both tests.
+Added: The study findings revealed a 7 to 15-fold increased risk of Lupus diagnosis in AVISE ® Lupus Positive and anti-dsDNA negative patients relative to patients negative for both tests.
In addition, AVISE ® Lupus positive and anti-dsDNA negative patients were at 3 to 4-fold increased odds, relative to patients testing negative for both tests, of starting a new hydroxychloroquine (cornerstone therapy for Lupus) prescription following AVISE ® Lupus testing.
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Healthcare Economics
−Removed: In October 2020, a study in collaboration with leading health economic experts was published in the journal ACR Open Rheumatology, titled "Evaluation of the Economic Benefit of Earlier Systemic Lupus Erythematosus (SLE) Diagnosis using a Multivariate Assay Panel (MAP)." This was the first ever evaluation of the economics of diagnosing SLE with AVISE ® Lupus (MAP) compared to standard diagnostic laboratory tests in a hypothetical cohort of 1,000 suspected SLE patients.
+Added: In October 2020, a study in collaboration with leading health economic experts was published in the journal ACR Open Rheumatology, titled "Evaluation of the Economic Benefit of Earlier SLE Diagnosis using a Multivariate Assay Panel (MAP)." This was the first ever evaluation of the economics of diagnosing SLE with AVISE ® Lupus (MAP) compared to standard diagnostic laboratory tests in a hypothetical cohort of 1,000 suspected SLE patients.
Over the four-year time horizon, AVISE ® Lupus demonstrated an estimated total direct cost savings of approximately $2.0 million ($1,991 per patient).
−Removed: In addition, the year one savings was $0.7 million ($655 per eligible patient), with the use of AVISE ® Lupus, which aligns with early benefit to health plans looking for savings in the first year.
+Added: In addition, the study findings from the economic model estimated a $0.7 million dollar savings in total cost of care with AVISE ® Lupus versus a conventional SLE biomarker testing approach, as a result of the increased diagnostic sensitivity of the AVISE ® Lupus test leading to fewer in-patient hospitalization costs.
+Added: On a per tested basis, the AVISE ® Lupus test is estimated to reduce total cost of care by $655 per eligible patient in the first year.
Laboratory Operations
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Our quality assurance function oversees the quality of our laboratory operations.
−Removed: We have established oversight for systems implementation and maintenance procedures, document control processes, supplier qualification, preventive or corrective actions and employee training processes that we believe achieves excellence in operations.
+Added: We have established oversight for systems implementation and maintenance procedures, document control processes, supplier qualification,
+Added: preventive or corrective actions and employee training processes that we believe achieves excellence in operations.
We continuously monitor and improve our processes and procedures and believe this high-quality service leads to customer satisfaction and retention.
−Removed: Our principal competition for our AVISE ® testing products is traditional methods used by healthcare providers to test patients with CTD-like symptoms.
−Removed: Such traditional methods include testing for a broad range of diagnostic,
−Removed: immunology and chemistry biomarkers, such as ANA and anti-dsDNA, and serum complement biomarkers, such as C3 and C4.
+Added: The traditional methods used by healthcare providers to test patients with CTD-like symptoms are the main competitors of our AVISE ® testing products.
+Added: Such traditional methods include testing for a broad range of diagnostic, immunology and chemistry biomarkers, such as ANA and anti-dsDNA, and serum complement biomarkers, such as C3 and C4.
We also face competition from commercial laboratories, such as Laboratory Corporation of America Holdings, Quest Diagnostics Incorporated, ARUP Laboratories, Inc.
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(acquired by Laboratory Corporation of America in June 2020).
−Removed: Other potential competitors include companies that might develop diagnostic or disease or drug monitoring products, such as Progentec Diagnostics Inc., Scipher Medicine Corporation, Genalyte Inc., Oncimmune plc, DxTerity Diagnostics Inc., AMPEL BioSolutions, and Immunovia AB.
+Added: Other potential competitors include companies that might develop diagnostic, disease or drug monitoring products, such as Progentec Diagnostics Inc., Scipher Medicine Corporation, Genalyte Inc., Oncimmune plc, DxTerity Diagnostics Inc., AMPEL BioSolutions, and Immunovia AB.
In the future, we may also face competition from companies developing new products or technologies.
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If we are unable to change clinical practice in a meaningful way or compete successfully against current and future competitors, we may be unable to increase market acceptance and sales of our products, which could prevent us from increasing our revenue or achieving profitability.
−Removed: Agreements with Pharmaceutical Companies
−Removed: Collaboration Agreement with GSK
−Removed: In January 2018, we entered into a collaboration agreement with GSK, pursuant to which we provided GSK with our test result data to provide market insight into and help increase awareness on the benefits of an early and accurate diagnosis of SLE.
−Removed: The agreement was amended in November 2018 to, among other things, include data from our AVISE ® Prognostic and AVISE ® HCQ testing products and extend the term of the agreement through December 31, 2019.
−Removed: The agreement was further amended in November 2019, November 2020, December 2021 and February 2022.
−Removed: Under the agreement, we were required to deliver weekly de-identified data files to GSK covering all data obtained from the performance of certain AVISE ® testing products, subject to applicable requirements under the Federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) internal policy requirements and other applicable laws.
−Removed: During the term of the agreement and amendments through December 31, 2021, the data we provided to GSK could not be provided, directly or through a third party, to any other pharmaceutical company that was marketing or developing a product for the treatment of SLE, however, the February 2022 amendment eliminated that limitation.
−Removed: GSK made a single upfront payment in exchange for the right to receive the applicable data files.
−Removed: In addition, GSK agreed to create a joint steering committee to cooperate with us in order to raise awareness and physician support for our AVISE ® testing products, including through the development and delivery of approved promotional materials and the implementation of a related training plan for each party’s sales personnel.
−Removed: This agreement was terminated, effective January 1, 2023.
Intellectual Property Overview
−Removed: We strive to protect and enhance the proprietary technologies that we believe are important to our business and seek to obtain and maintain patents for any patentable aspects of our testing products and services and any other inventions that are important to the development of our business.
−Removed: Our success will depend on our ability to obtain and maintain patent and other proprietary protection for commercially important technology, inventions and know-how related to our business, to defend and enforce our patents, to maintain our licenses to use intellectual property owned by third parties, to preserve the confidentiality of our trade secrets and to operate without infringing the valid and enforceable patents and other proprietary rights of third parties.
−Removed: We also rely on continuing technological
−Removed: innovation and in-licensing opportunities to develop, strengthen, and maintain our proprietary position in the fields targeted by our testing products and services.
+Added: We strive to protect and enhance the proprietary technologies that we believe are important to our business and seek to obtain and maintain patents for any patentable aspects of our testing products or other inventions that are important to the development of our business.
+Added: Our success will depend on our ability to obtain and maintain patent and other proprietary protection for commercially important technology, inventions and know-how related to our business.
+Added: It will also depend on our ability to defend and enforce our patents, maintain our licenses to use intellectual property owned by third parties, preserve the confidentiality of our trade secrets and operate without infringing the valid and enforceable patents and other proprietary rights of third parties.
+Added: We also rely on continuing technological innovation and in-licensing opportunities to develop, strengthen, and maintain our proprietary position in the fields targeted by our testing products and services.
We are the owner or licensee of a portfolio of patents and patent applications and possess substantial know-how and trade secrets which protect various aspects of our business.
−Removed: The patent families comprising our patent portfolio are primarily focused on our AVISE ® testing products for the diagnosis, prognosis and monitoring of autoimmune and autoimmune-related diseases, and are generally directed to CB-CAPs, red blood cell MTXPG exposure assessments and anti-MCV antibodies.
+Added: The patent families comprising our patent portfolio are primarily focused on our AVISE ® testing products for the diagnosis, prognosis and monitoring of autoimmune and autoimmune-related diseases, and red blood cell MTXPG exposure assessments.
We intend to leverage the intellectual property surrounding our AVISE ® testing products as an important component of our business strategy.
Patent Protection for our AVISE ® Testing Products
−Removed: Our portfolio of patents and patent applications related to our AVISE ® testing products generally relates to three aspects:
−Removed: CB-CAPs, red blood cell MTXPG exposure assessments and anti-MCV antibodies.
−Removed: The patent families which we believe are important for the protection of AVISE ® are summarized below in the section entitled “License Agreements.” As of February 22, 2023, our portfolio primarily consisted of the following:
−Removed: We are the exclusive licensee of five patent families related to CB-CAPs technology from the University of Pittsburgh (UPitt).
−Removed: We expect that these patent families (U.S.
−Removed: 7,361,517, 7,390,631, 7,585,640, 7,588,905, 8,080,382, and 8,126,654) will expire in 2024 or 2025.
−Removed: A foreign patent corresponding to U.S.
−Removed: 7,361,517 has issued in Europe (EP 1,756,571).
−Removed: Foreign patents corresponding to U.S.
−Removed: 7,585,640 have issued in Australia (AU 2005242719) and Canada (CA 2,564,492).
−Removed: A foreign patent corresponding to U.S.
−Removed: 7,588,905 and 8,126,654 has issued in Japan (JP 4550051).
−Removed: We own three issued patents (US 10,132,813, US 11,260,099, and 11,531,033), three pending U.S.
−Removed: nonprovisional patent applications, and seven pending foreign applications that relate to our AVISE ® Lupus products.
−Removed: Foreign patents corresponding to our issued U.S.
−Removed: patent and pending U.S.
−Removed: nonprovisional patent applications have issued in Europe (EP 2,673,644 and EP2972365), China (CN105229470), Japan (JP 5,990,542 and JP6453299) and Hong Kong (HK1192316).
+Added: Our portfolio of patents and patent applications related to our AVISE ® testing products generally relates to two aspects:
+Added: the AVISE ® Lupus test and the AVISE ® MTX test.
+Added: As of February 21, 2024, our portfolio primarily consisted of the following:
+Added: AVISE ® Lupus Test
+Added: We own five issued patents (US 10,132,813, US 11,360,099, US 11,531,033, US 11,761,965, and US 11,885,812), six U.S.
+Added: nonprovisional patent applications, one US provisional patent application, and ten foreign patents that relate to our AVISE® Lupus products.
+Added: The foreign patents have issued in Europe (EP 2,673,644 and EP2972365), China (CN105229470), Japan (JP6453299) and Hong Kong (HK1192316).
+Added: These patents cover the AVISE ® Lupus algorithm.
+Added: The patent applications expire between 2032 and 2040.
+Added: Any patent claiming priority to the U.S.
+Added: provisional patent application will expire in 2044.
MTX Exposure Assessment Products and Services
−Removed: We own four patents that relate to our AVISE ® MTX product and methods for monitoring methotrexate therapy using red blood cell MTXPG exposure assessments.
+Added: We own two patents that relate to our AVISE ® MTX product and methods for monitoring methotrexate therapy using red blood cell MTXPG exposure assessments.
These patents include U.S.
7,582,282 and 7,695,908, which are expected to expire between 2026 and 2027.
+Added: We previously held licenses to five patent families related to CB-CAPs technology from the University of Pittsburgh (UPitt).
+Added: We have terminated these license agreements (related to U.S.
+Added: 7,361,517, 7,390,631, 7,585,640, 7,588,905, 8,080,382, 8,126,654, and foreign equivalents thereof), effective March 22, 2024.
+Added: Our royalty obligations continue on cash collected in future periods for testing services provided prior to the royalty expiration date of March 23, 2024.
Proprietary Rights and Processes
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(Cypress) in 2010 (the Cypress Purchase) and to obtain an exclusive license to UPitt’s patent rights in certain inventions (the UPitt Patent Rights) related to the use of CB-CAPs technology in the diagnosis, prognosis and monitoring of diseases, including certain patents related to our AVISE ® testing products.
−Removed: The agreement was amended three times, once in May 2012 to, among other things, limit the territory of the license to the United States and exclude certain foreign patents and applications from the agreement, once in September 2013 to add (1) an
−Removed: additional U.S.
−Removed: patent to the UPitt Patent Rights licensed under the agreement and (2) the field of monitoring of organ transplantation and organ rejection to the scope of the license, and once in June 2016 to, among other things, clarify the definition of combination products for determining royalties due under the license.
Under the agreement, we are permitted to make, use and sell products and services utilizing the UPitt Patent Rights in the field of SLE and the field of monitoring of organ transplantation and organ rejection and to sublicense such rights.
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We also made a $0.2 million milestone payment to UPitt with the achievement of certain levels of net sales which we met in 2014.
−Removed: Our royalty obligations continue for each licensed product or service on a country-by-country basis until the expiration of the last licensed patent covering the applicable licensed product or service in such country.
−Removed: In the event we sublicense any of the UPitt Patent Rights, we are obligated to pay UPitt a low single-digit percentage sublicense royalty on net sales of products or services sold by our sublicensees that utilize the sublicensed UPitt Patent Rights and a low double-digit percentage of all non-royalty sublicensing income received by us.
−Removed: The agreement requires that we diligently develop and commercialize products that are covered by the UPitt Patent Rights, and we have agreed to meet certain development and commercial milestones.
−Removed: UPitt may terminate the agreement if we fail to meet such milestones.
−Removed: In addition, if we fail to meet a milestone relating to development of the UPitt Patent Rights in the monitoring of organ transplantation and organ rejection field, UPitt may remove that field from our licensed rights.
−Removed: We are currently in compliance with these milestone requirements.
−Removed: We may terminate the agreement upon six months’ written notice to UPitt.
−Removed: UPitt may terminate the agreement in the event of our nonperformance of any of our obligations under the agreement if such nonperformance remains uncured for a certain period of time following our receipt of written notice of such nonperformance or in the event of our insolvency.
−Removed: Absent early termination, the agreement will continue until the expiration date of the longest-lived patent right included in the UPitt Patent Rights.
−Removed: Exclusive License Agreement with the University of Pittsburgh
−Removed: We made an economic decision to cease the maintenance and licensing of UPitt Patent Rights outside the United States, which led to such rights returning to UPitt.
−Removed: We subsequently made the determination to re-license these foreign patent rights from UPitt, but at the time of re-licensing these patent rights, a number of the foreign patent rights had permanently lapsed.
−Removed: Accordingly, in September 2013, we entered into an exclusive license agreement with UPitt to obtain an exclusive license to UPitt’s remaining ex-U.S.
−Removed: patent rights in certain inventions (the ex-U.S.
−Removed: UPitt Patent Rights) related to the use of CB-CAPs technology in the diagnosis, prognosis and monitoring of diseases, including certain patents related to our AVISE ® testing products.
−Removed: Under the agreement, we are permitted to make, use and sell products and services utilizing the ex-U.S.
−Removed: UPitt Patent Rights in the field of SLE and the field of monitoring of organ transplantation and organ rejection outside of the United States, and to sublicense such rights.
−Removed: UPitt retained the right to practice under the ex-U.S.
−Removed: UPitt Patent Rights and to use such rights for non-commercial education and research purposes.
−Removed: In addition, this agreement is subject to the rights of the U.S.
−Removed: government, if any, as set forth in 35 U.S.C.
−Removed: §200, et seq.
−Removed: In consideration for the rights granted to us under the agreement, we paid an initial license fee to UPitt.
−Removed: We are also required to pay UPitt a low single-digit royalty on net sales of products or services utilizing the ex-U.S.
−Removed: UPitt Patent Rights sold by us or our affiliates, subject to adjustment in certain circumstances.
−Removed: Our royalty obligations continue for each licensed product or service on a country-by-country basis until the expiration of the last licensed patent covering the applicable licensed product or service in such country.
−Removed: In the event we sublicense any of the ex-U.S.
−Removed: UPitt Patent Rights, we are obligated to pay UPitt a low single-digit percentage sublicense royalty on net sales of products or services sold by our sublicensees that utilize the
−Removed: sublicensed ex-U.S.
−Removed: UPitt Patent Rights and a low double-digit percentage of all non-royalty sublicensing income received by us.
−Removed: The agreement requires that we diligently develop and commercialize products that are covered by the ex-U.S.
−Removed: UPitt Patent Rights, and we have agreed to meet certain commercial milestones.
−Removed: UPitt may terminate the agreement if we fail to meet such milestones.
−Removed: We are currently in compliance with these milestone requirements.
−Removed: We may terminate the agreement upon six months’ written notice to UPitt.
−Removed: UPitt may terminate the agreement in the event of our nonperformance of any of our obligations under the agreement if such nonperformance remains uncured for a certain period of time following our receipt of written notice of such nonperformance or in the event of our insolvency.
−Removed: Absent early termination, the agreement will continue until the expiration date of the longest-lived patent right included in the UPitt Patent Rights.
−Removed: Asset Purchase Agreement with Cypress (Royalty Pharma) and Proprius Pharmaceuticals, Inc.
−Removed: In October 2010, we completed the Cypress Purchase pursuant to an asset purchase agreement with Cypress and its wholly-owned subsidiary, Proprius Pharmaceuticals, Inc., under which we obtained certain assets related to our AVISE ® testing products and services.
−Removed: In 2011, Royalty Pharma Collection Trust (Royalty Pharma), acquired Cypress and became its successor-in-interest under the agreement.
−Removed: In consideration for the acquisition, we made certain initial cash payments to Cypress and we are currently making payments to Royalty Pharma, as a successor-in-interest to Cypress, pursuant to the August 2012 amendment, which payments are subject to acceleration in certain circumstances.
−Removed: Under our agreements with Royalty Pharma, we are required to pay Royalty Pharma a low double-digit royalty on the world-wide net sales of CB-CAPs products and a low double-digit royalty on the net sales of certain new products in each case, for a period of eight years, which eight-year period expired in January 2020.
−Removed: In addition, we are required to make certain one-time contingent milestone payments for two third-party commercial programs, for the launch of a CB-CAPs monitoring assay, and for the achievement of an annual, worldwide net sales level for CB-CAPs products.
−Removed: Our agreement with Royalty Pharma requires that we use commercially reasonable efforts to cause each of the milestones to be achieved.
−Removed: In December 2015, we achieved the specified annual world-wide net sales of CB-CAPs products which required us to make a $2.0 million milestone payment to Royalty Pharma.
−Removed: We paid the applicable $2.0 million milestone payment in 2016.
−Removed: In February 2017, we amended our agreements with Royalty Pharma relating to the launch of a monitoring product using CB-CAPs technology.
−Removed: As a result of this amendment, a prior obligation to make a one-time payment of $1.0 million upon the launch of a monitoring product incorporating CB-CAPs technology was replaced with an agreement to pay Royalty Pharma a one-time payment of $100,000 upon the launch of such a product, plus a 2.5% royalty based on future cash collections from sales of that product which incorporate the licensed technology.
−Removed: Future royalties under this arrangement are limited to the lesser of $1,200,000 (including the upfront payment of $100,000) or the total royalty earned through January 1, 2024.
+Added: Our royalty obligations continue for each licensed product or service on a country-by-country basis only until
+Added: March 23, 2024, which is the date of the expiration of the last licensed patent covering the applicable licensed product or service.
Exclusive License Agreement and Master Research Collaboration Agreement with Allegheny Health Network Research Institute
−Removed: In May 2021, we entered into an exclusive license agreement with Allegheny Health Network Research Institute (AHN), under which we obtained an exclusive, worldwide license to AHN's patent rights in certain inventions (the AHN Patent Rights) related to diagnostics for autoimmune rheumatic diseases.
+Added: In May 2021, we entered into an exclusive license agreement with AHN, under which we obtained an exclusive, worldwide license to AHN's patent rights in certain inventions (the AHN Patent Rights) related to diagnostics for autoimmune rheumatic diseases.
Under the agreement, we are permitted to make, use and sell products and services utilizing the AHN Patent Rights and to sublicense such rights;
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We are also required to pay AHN a low single-digit royalty on net sales of products utilizing the AHN Patent Rights through the first quarter of 2024 sold by us or our affiliates, subject to adjustment in certain circumstances.
−Removed: Beginning in the second quarter of 2024, we are required to pay AHN an increased low single-digit royalty or a flat annual minimum royalty amount, which royalty obligations continue for each licensed product on a country-by-country basis until the expiration of the last licensed patent covering the applicable licensed product in such country, pending approvals and
−Removed: commercialization, or the earlier termination of the agreement (excluding payment obligations accruing prior to such termination).
+Added: Beginning in the second quarter of 2024, we are required to pay AHN an increased low single-digit royalty or a flat annual minimum royalty amount, which royalty obligations continue for each licensed product on a country-by-country basis until the expiration of the last licensed patent covering the applicable licensed product in such country, pending approvals and commercialization, or the earlier termination of the agreement (excluding payment obligations accruing prior to such termination).
In the event we sublicense any of the AHN Patent Rights, we are obligated to pay AHN a mid-double-digit percentage of any sublicense income, whether in the form of royalties or sub-license fees.
The agreement requires that we diligently develop and commercialize products that are covered by the AHN Patent Rights.
−Removed: If, no earlier than May 2023, we elect not to pursue intellectual property rights or expand commercialization to certain territories within a commercially reasonable period, AHN may pursue other licenses and terminate our exclusive license with respect to such territories upon 30 days prior written notice.
+Added: If we elect not to pursue intellectual property rights or expand commercialization to certain territories within a commercially reasonable period, AHN may pursue other licenses and terminate our exclusive license with respect to such territories upon 30 days prior written notice.
We may terminate the agreement upon 60-day written notice to AHN provided we pay a specified termination fee.
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Exclusive License Agreement and Collaboration Agreement with Queen Mary University of London
−Removed: In November 2021, we entered into an exclusive license agreement with QMUL, under which we obtained an exclusive license to QMUL's patent-pending inventions (the QMUL Patent Rights), related to diagnosis and/or development of diagnostic or companion diagnostics for rheumatoid arthritis.
+Added: In November 2021, we entered into an exclusive license agreement with Queen Mary University of London (QMUL), under which we obtained an exclusive license to QMUL's patent-pending inventions (the QMUL Patent Rights), related to diagnosis and/or development of diagnostic or companion diagnostics for RA.
Under the agreement, we are permitted to make, use and sell products and services utilizing the QMUL Patent Rights and to sublicense such rights;
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QMUL may terminate the agreement if we fail to develop the QMUL Patent Rights in the field of diagnosis and/or development of diagnostic or companion diagnostics for rheumatoid arthritis, QMUL may convert our license to non-exclusive.
−Removed: We may terminate the agreement upon six month written notice to QMUL.
+Added: In April 2023, we discontinued development of our AVISE ® RADR platform, which was being developed using the QMUL Patent Rights.
+Added: We also discontinued the associated clinical trials.
+Added: We are permitted to terminate the license agreement upon six month written notice to QMUL.
QMUL may terminate the agreement in the event of our nonperformance of any of our material obligations under the agreement if such nonperformance remains uncured for a certain period of time following our receipt of written notice of such nonperformance or in the event of insolvency.
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In addition, we entered into a collaboration agreement with QMUL for a three-year term, expiring November 2024.
−Removed: The collaboration will focus on development and optimization of patent-pending precision medicine approaches, based on RNA expression signatures, to personalize therapeutic agent selection for RA patients.
We or QMUL may terminate the master research collaboration agreement upon 30-day written notice.
+Added: Exclusive License Agreement Johns Hopkins University
+Added: In November 2023, we entered into an exclusive license agreement with Johns Hopkins University, under which we obtained an exclusive, worldwide license to JHU’s patent rights in certain inventions (the JHU Patent Rights) related to methods of using urinary protein biomarkers as a means of risk stratifying lupus nephritis patients and predicting treatment response.
+Added: Under the agreement, we are permitted to make, use, import, export, offer and sell products and services utilizing the JHU Patent Rights and to sublicense such rights, subject to certain limitations.
+Added: JHU retained the right to practice under the JHU Patent Rights and to use such rights for teaching, research, education, public service, clinical and other research related purposes;
+Added: in addition to make, use and sell products and services to a qualified humanitarian organization for humanitarian purposes in so-called “least developed countries,” as defined by the United Nations Country Classification.
+Added: In consideration for the rights granted to us under the agreement, we paid an initial license fee and past patent expenses and agreed to pay future direct patent costs related to the JHU Patent Rights.
+Added: Under the terms of the exclusive license agreement, we are required to pay royalties in the low single-digits on net sales of products using the assigned patents, subject to annual minimums, as well as certain milestone payments.
+Added: In the event we sublicense any of the JHU Patent Rights, we are obligated to pay JHU a double-digit percentage of sublicensing income;
+Added: however, royalties we receive on sales made by sublicensees will be treated as if we made the sale.
+Added: The agreement requires that we diligently develop and commercialize products that are covered by the JHU Patent Rights, and we have agreed to meet certain development and commercial milestones.
+Added: JHU may terminate the agreement if we fail to develop, commercialize and sell the licensed products.
+Added: Additionally, JHU may terminate the agreement for cause upon 60-day written notice in the event of our nonperformance of any of our material obligations under the agreement if such nonperformance remains uncured for a certain period of time following our receipt of written notice of such nonperformance or in the event of insolvency.
+Added: JHU may terminate the agreement immediately upon written notice to Exagen in the event of a material breach that is incapable of cure.
+Added: Absent early termination, the agreement will continue for the longer of (i) expiration of the last to expire patent included in the license agreement, (ii) 10 years after the first commercial sale of any licensed product utilizing the JHU Patent Rights, or (iii) if no patents issue, 20 years from the effective date of the agreement (November 8, 2023).
+Added: We may terminate the agreement upon ninety days’ advance written notice to JHU.
Clinical Laboratory Improvement Amendments of 1988
As a clinical laboratory, we are required to hold certain federal, state and local licenses, certifications and permits to conduct our business.
−Removed: Under CLIA, we are required to hold a certificate applicable to the type of laboratory tests we perform and to comply with standards applicable to our operations, including test processes, personnel, facilities administration, equipment maintenance, recordkeeping, quality systems and proficiency testing.
+Added: Under CLIA, we are required to hold a certificate applicable to the categories of laboratory tests we perform and to comply with standards applicable to our operations, including test processes, personnel, facilities administration, equipment maintenance, recordkeeping, quality systems and proficiency testing.
We must maintain CLIA certification to be eligible to bill for diagnostic services provided to Medicare beneficiaries.
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In addition, California laws and regulations also mandate proficiency testing, which involves testing of specimens that have been specifically prepared for the laboratory for quality control purposes.
−Removed: Because we receive specimens from New York, our Vista facility is also required to be licensed by the NYDOH New York laws and regulations establish standards in a variety of operational areas, including:
−Removed: ▪ day-to-day operation of the laboratory, including training and skill levels required of laboratory personnel;
+Added: Because we receive specimens from New York, our Vista facility is also required to be licensed by the NYSDOH New York laws and regulations establish standards in a variety of operational areas, including:
+Added: ▪ day-to-day operation of the laboratory, including training, supervision and skill levels required of laboratory personnel;
▪ physical requirements of a facility;
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New York law also mandates proficiency testing for laboratories licensed under New York state law, regardless of whether such laboratories are located in or outside of New York.
−Removed: If a laboratory is out of compliance with New York's statutory or regulatory standards, the NYDOH, may suspend, limit, revoke or annul the laboratory’s New York license, censure the holder of the license or assess civil money penalties.
+Added: If a laboratory is out of compliance with New York's statutory or regulatory standards, 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.
Statutory or regulatory noncompliance may result in a laboratory’s operator being found guilty of a misdemeanor under New York law.
New York's law and regulations are more stringent than CLIA in certain respects.
−Removed: For example, NYDOH must approve a laboratory developed test (LDT) before it is offered in New York.
−Removed: We have received written approval from NYDOH to offer our products in New York.
+Added: For example, NYSDOH must approve a laboratory developed test (LDT) before it is offered in New York.
+Added: We have received written approval from NYSDOH to offer our products in New York.
In addition to New York and California, other states, including Maryland, Pennsylvania and Rhode Island, require licensing of out-of-state laboratories under certain circumstances.
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The laws and regulations governing the marketing of diagnostic products are evolving, extremely complex, and in many instances, there are no significant regulatory or judicial interpretations of these laws and regulations.
−Removed: We perform our tests like AVISE ® CTD, AVISE ® SLE Prognostic and AVISE ® MTX assays in our Vista, California clinical laboratory, and they are primarily regulated under CLIA, as administered by CMS, as well as by applicable state laws, as described above.
+Added: We perform our tests like AVISE ® CTD, AVISE ® SLE Prognostic and AVISE ® MTX assays in our Vista, California clinical laboratory, and they are currently primarily regulated under CLIA, as administered by CMS, as well as by applicable state laws, as described above.
The FDA regulates any diagnostic tests that meet the definition of a medical device, except under specific, narrow circumstances.
The Federal Food, Drug and Cosmetic Act (FDCA) defines a medical device as "an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including a component part, or accessory, which is, among other things:
−Removed: intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or
−Removed: other animals and which does not achieve its primary intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of any of its primary intended purposes." By this definition, in vitro reagents and diagnostic tests are considered medical devices.
+Added: intended for use in the
+Added: 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 through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of any of its primary intended purposes." By this definition, in vitro reagents and diagnostic tests are considered medical devices.
Specifically, the FDA defines an in vitro diagnostic test (IVD) as "reagents, instruments, and systems intended for use in the diagnosis of disease or other conditions, including a determination of the state of health, in order to cure, mitigate, treat, or prevent disease or its sequelae." Therefore, the FDA generally considers diagnostic testing products like ours to be IVDs subject to the agency's regulatory requirements.
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In addition, the FDA regulates the export of medical devices manufactured in the United States to international markets.
+Added: Many of the instruments, reagents, kits or other consumable products used within our laboratories are regulated as medical devices and therefore must comply with FDA quality system regulations and certain other device requirements.
+Added: We have policies and procedures in place to ensure that we source such materials from suppliers that are in compliance with any applicable medical device regulatory requirements.
The FDCA classifies medical devices into one of three categories based on the risks associated with the device and the level of control necessary to provide reasonable assurance of safety and effectiveness.
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Some low-risk Class II devices are exempted from this requirement.
−Removed: When a 510(k) premarket notification submission is required, the manufacturer must submit to the FDA a premarket notification submission demonstrating that the device is "substantially equivalent" to:
+Added: When a 510(k) premarket notification submission is required, the manufacturer must submit to the FDA a premarket notification submission demonstrating that the device is "substantially equivalent" to a predicate device, which is:
(i) a device that was legally marketed prior to May 28, 1976, for which PMA approval is not required, (ii) a legally marketed device that has been reclassified from Class III to Class II or Class I, or (iii) another legally marketed, similar device that has been cleared through the 510(k) clearance process.
Class II devices may also be subject to special controls such as performance standards, post-market surveillance, FDA guidelines, or particularized labeling.
−Removed: Most Class I devices are exempt from 510(k) premarket notification requirements, but like Class II and III devices, are subject to general controls, such as registration and listing, quality system, labeling, and reporting requirements.
+Added: Most Class I devices are exempt from 510(k) premarket notification requirements, but like Class II and Class III devices, are subject to general controls, such as registration and listing, quality system, labeling, and reporting requirements.
After the FDA permits a device to enter commercial distribution, numerous regulatory requirements apply.
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We believe that all of our AVISE ® test products are LDTs, as are our near-term pipeline candidate tests.
−Removed: As a result, we believe our diagnostic services are currently subject to the FDA’s enforcement discretion and are not subject to the agency's direct oversight or enforcement of device regulations.
−Removed: However, reagents, instruments, software or components provided by third parties and used to perform LDTs may be subject to regulation.
−Removed: Even though we commercialize our tests as LDTs, our tests may in the future become subject to more onerous regulation by the FDA.
+Added: However, in October 2023, the FDA issued a proposed rule aimed at regulating LDTs under the current medical device framework and proposing to phase out its existing enforcement discretion policy for this category of diagnostic tests;
+Added: the public comment period ended in early December 2023.
+Added: The proposal envisions that the LDT enforcement policy phase-out process would occur in gradual stages over a total period of four years, with pre-market approval applications for high-risk tests to be submitted by the 3.5-year mark, although more details are expected to be provided with the upcoming final rule.
+Added: The likelihood of the FDA finalizing the proposed rule in April 2024 (as is currently projected), as well as potential litigation challenging the agency’s authority to take such action, is uncertain at this time.
+Added: Affected stakeholders continue to press for a comprehensive legislative solution to create a harmonized paradigm for oversight of LDTs by
+Added: both the FDA and CMS, instead of implementation of the proposed FDA administrative action, which may be disruptive to the industry and to patient access to certain diagnostic tests.
+Added: Even though we presently commercialize our tests as LDTs, the FDA may disagree that our marketed tests are within the scope of its current enforcement discretion criteria for LDTs, our tests may in the future become subject to more onerous regulation by the FDA.
For several years, members of Congress have been working with stakeholders on a possible bill to regulate in vitro clinical tests including LDTs.
−Removed: Most recently, legislation called the Verifying Accurate, Leading-edge IVCT Development (VALID Act), has been garnering bipartisan and bicameral support.
+Added: For example, as drafted and re-introduced for consideration by the current Congress, legislation called the Verifying Accurate, Leading-edge IVCT Development (VALID Act), has been garnering bipartisan and bicameral support.
The VALID Act would codify into law the term "in vitro clinical test" (IVCT) to create a new medical product category separate from medical devices that includes products currently regulated as IVDs as well as LDTs.
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It is unclear whether the VALID Act would be passed by Congress in its current form or signed into law by the President.
−Removed: If the FDA finalizes its position on regulation of LDTs through formal notice-and-comment rulemaking, or the VALID Act or other federal legislation is passed reforming the government’s regulation of LDTs, or alternatively, if the FDA disagrees with our assessment that our tests fall within the definition of an LDT, we could be subject to enforcement of regulatory requirements such as registration and listing requirements, medical device reporting requirements and quality control requirements.
−Removed: Any new legislation or formal FDA regulations affecting LDTs may result in increased regulatory burdens on our ability to continue marketing our tests and to develop and introduce new tests in the future.
−Removed: Additionally, if and when the FDA begins to actively enforce its premarket submission regulations with respect to LDTs generally or our tests in particular, whether as a result of new legislative authority or following formal notice-and-comment rulemaking, we may be required to obtain premarket clearance for our tests under Section 510(k) of the FDCA or approval of a PMA.
+Added: If the FDA finalizes its position on regulation of LDTs through the ongoing notice-and-comment rulemaking process, or the VALID Act or other federal legislation is passed reforming the government’s regulation of LDTs, or alternatively, if the FDA disagrees with our assessment that our tests fall within the definition of an LDT, we could, for the first time, be subject to enforcement of regulatory requirements such as registration and listing requirements, medical device reporting requirements and quality control requirements.
+Added: Any new legislation or FDA regulations affecting LDTs may result in increased regulatory burdens on our ability to continue marketing our tests and to develop and introduce new tests in the future.
+Added: Additionally, if and when the FDA begins to actively enforce its premarket submission regulations with respect to LDTs generally or our tests in particular, whether as a result of new legislative authority or culmination of the current notice-and-comment rulemaking process, we may be required to obtain premarket clearance for our tests under Section 510(k) of the FDCA or approval of a PMA.
The process for submitting a 510(k) premarket notification and receiving FDA clearance usually takes from three to 12 months, but it can take significantly longer and clearance is never guaranteed.
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The sponsoring company or the IRB may suspend or terminate a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk.
−Removed: In addition, studies involving human subjects often require significant time and cash resources to complete and are subject to a high degree of risk, including risks of experiencing delays, failing to complete the trial or obtaining unexpected or negative results.
+Added: In addition, trials involving human subjects often require significant time and cash resources to complete and are subject to a high degree of risk, including risks of experiencing delays, failing to complete the trial or obtaining unexpected or negative results.
Advertising of Laboratory Services or LDTs
−Removed: Whether regulated by FDA as Class I or Class II devices or not directly subject to FDA’s device requirements as LDTs, advertising for our laboratory services and diagnostic testing products is subject to federal truth-in-advertising laws enforced by the Federal Trade Commission (FTC), as well as comparable state consumer protection laws.
+Added: Advertising for laboratory services and diagnostic testing products is subject to federal truth-in-advertising laws enforced by the Federal Trade Commission (FTC), as well as comparable state consumer protection laws, whether or not such services are regulated by the FDA as Class I or Class II devices or not directly subject to enforcement
+Added: discretion with respect to the FDA’s device requirements as LDTs.
Under the Federal Trade Commission Act (FTC Act), the FTC is empowered, among other things, to (a) prevent unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce;
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We are subject to the federal physician self-referral prohibitions, commonly known as the Stark Law, and to similar state law restrictions, such as California’s Physician Ownership and Referral Act of 1933 (PORA), and other comparable state laws.
−Removed: The Stark Law generally prohibits us from billing Medicare or Medicaid for certain designated health services, including clinical laboratory services, when the physician ordering the service, or any
−Removed: member of such physician’s immediate family, has a financial relationship with us, unless the arrangement meets an exception to the prohibition.
+Added: The Stark Law generally prohibits us from billing Medicare or Medicaid for certain designated health services, including clinical laboratory services, when the physician ordering the service, or any member of such physician’s immediate family, has a financial relationship with us, unless the arrangement meets an exception to the prohibition.
A financial relationship can be a compensation arrangement or an ownership or investment interest.
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A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
−Removed: Courts have broadly interpreted of the scope of the Anti-Kickback Statute and generally have held that the statute may be violated if merely one purpose of a payment arrangement is to induce referrals.
+Added: Courts have broadly interpreted the scope of the Anti-Kickback Statute and generally have held that the statute may be violated if merely one purpose of a payment arrangement is to induce referrals.
In addition to statutory exceptions to the Anti-Kickback Statute, regulations provide for a number of safe harbors.
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An arrangement must fully comply with each element of an applicable safe harbor in order to qualify for protection.
−Removed: Failure to meet the requirements of an exception or the safe harbor does not render an arrangement illegal.
+Added: Failure to meet the requirements of an exception or a safe harbor does not render an arrangement illegal.
Rather, the government may evaluate such arrangements on a case-by-case basis, taking into account all facts and circumstances.
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In addition to the requirements discussed above, several other healthcare fraud and abuse laws could have an effect on our business.
−Removed: For example, federal law permits the Office of Inspector General for the Department of Health and Human Services to exclude an individual or entity from Medicare or Medicaid for charging federal healthcare programs, including Medicare or Medicaid, substantially in excess of its usual charges for its items or services absent a finding of good cause.
−Removed: The terms “usual charge” and “substantially in excess” are subject to varying interpretations.
+Added: For example, federal law permits the U.S.
+Added: Department of Health and Human Services (HHS) Office of Inspector General (OIG), to exclude an individual or entity from Medicare or Medicaid for charging federal healthcare programs, including Medicare or Medicaid, substantially in excess of its usual charges for its items or services absent a finding of good cause.
+Added: The terms “usual charge” and “substantially in excess” are subject to varying interpretations, and the HHS OIG has withdrawn multiple versions of a proposed rule intended to implement the statute.
The federal False Claims Act prohibits, among other things, a person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment to the federal government.
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In addition, providers and suppliers must report and return any overpayments received from the Medicare and Medicaid programs within 60 days of identification, and failure to identify and return such overpayments exposes the provider or supplier to federal False Claims Act liability.
−Removed: Violation of the federal False Claims Act may result payment of up to three times the actual damages sustained by the government, plus significant per-claim civil penalties.
+Added: Violation of the federal False Claims Act may result payment of up to three times the actual damages sustained by the government, plus significant per-claim civil penalties, as well as mandatory exclusion from government healthcare programs.
Several states, including California, have enacted comparable false claims laws that may apply regardless of payor.
−Removed: The federal civil monetary penalties law (the CMP Law) prohibits, among other things, (1) the offering or transfer of remuneration (including a waiver of copayments and deductible amounts) to a Medicare or Medicaid beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state healthcare program, unless an exception applies;
+Added: The federal civil monetary penalties law (the CMP Law) prohibits, among other things, (1) the offering or transfer of remuneration (including a waiver of copayments and deductible amounts) to a Medicare or Medicaid beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or Medicaid, unless an exception applies;
(2) employing or contracting with an individual or entity that the provider knows or should know is excluded from participation in a federal healthcare program;
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(4) billing for medically unnecessary services;
−Removed: and (5) presenting or causing to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.
+Added: and (5) presenting or causing to be presented a claim to a federal healthcare program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.
The penalties for violating the CMP Law may include exclusion, substantial fines, and payment of up to three times the amount billed, depending on the nature of the offense.
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One of the exceptions to the prohibition under the CMP Law covers non-routine, unadvertised waivers of copayments or deductible amounts based on individualized determinations of financial need or exhaustion of reasonable collection efforts, and the Anti-Kickback Statute has a safe harbor.
−Removed: Department of Health and Human Services (HHS) Office of Inspector General (OIG), has emphasized in guidance documents that this exception should only be used occasionally to address special financial needs of a particular patient.
+Added: The HHS OIG, has emphasized in guidance documents that this exception should only be used on a case-by-case basis to address the financial needs of each particular patient.
Although this prohibition applies only to federal healthcare program beneficiaries, applicable state laws related to, among other things, unlawful schemes to defraud, excessive fees for services, tortious interference with patient contracts and statutory or common law fraud, may also be implicated for similar practices offered to patients covered by commercial payors.
−Removed: Federal criminal statutes prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including those administered by commercial payors, and
−Removed: knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
+Added: Federal criminal statutes prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including those administered by commercial payors, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
Like the Anti-Kickback Statute, this federal criminal statute requires a showing of intent, but a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
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Any failure to comply with these reporting requirements could result in significant fines and penalties.
−Removed: Because we manufacture our own LDTs solely for use by or within our own laboratory, we believe that we are exempt from these reporting requirements.
−Removed: We cannot assure you, however, that the government will agree with our determination, and a determination that we have violated these laws and regulations, or a public announcement that we are being investigated for possible violations, could adversely affect our business, prospects, results of operations or financial condition.
+Added: Because we manufacture our own in vitro diagnostic tests solely for use by or within our own laboratory, we believe that we are exempt from these reporting requirements.
+Added: We may become subject to such reporting requirements under the terms of current CMS regulations, however, if enacted federal legislation renders our tests regulated by FDA, or if FDA finalizes its recently initiated notice-and-comment rulemaking to exercise authority over LDTs as medical devices or otherwise requires us to obtain premarket clearance or approval for one or more of our tests.
+Added: A determination that we have violated these laws and regulations, or a public announcement that we are being investigated for possible violations, could adversely affect our business, prospects, results of operations or financial condition.
We are also subject to applicable state restrictions on laboratory billing.
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Many countries in which we may offer any of our testing products in the future have anti-kickback regulations prohibiting providers from offering, paying, soliciting or receiving remuneration, directly or indirectly, in order to induce business that is reimbursable under any national healthcare program.
−Removed: In situations involving physicians employed by state-funded institutions or national healthcare agencies, violation of the local anti-kickback law may also constitute a violation of the U.S.
+Added: In situations involving physicians employed by state-funded institutions or national healthcare agencies, violation of the local anti-kickback law may
+Added: also constitute a violation of the U.S.
Foreign Corrupt Practices Act (FCPA), and/or other applicable anti-corruption laws.
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The HIPAA security standards require the adoption of administrative, physical and technical safeguards and the adoption of written security policies and procedures to maintain the security of protected health information.
+Added: Also, federal agencies are increasing their focus on the importance of cybersecurity in protecting health information.
+Added: For example, HHS outlined its cybersecurity strategy for the health care sector on December 6, 2023, which builds on a national strategy published by the White House on March 1, 2023, and on February 16, 2024, the HHS Office for Civil Rights (OCR) and the National Institute of Standards and Technology (NIST) announced the publication of a cybersecurity resource guide for implementing HIPAA.
The HIPAA privacy regulations address the privacy of PHI by limiting the use and release of such information.
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Breaches must be reported as soon as reasonably practicable, but no later than sixty days following discovery of the breach.
−Removed: Reports must be made to affected individuals, the HHS Secretary, and depending on the size of the breach, the local and national media.
−Removed: Covered Entities like us are also subject to the HHS HIPAA audit program and may be investigated in connection with a privacy or data security complaint.
−Removed: Significant civil and criminal fines and other penalties may be imposed for violating HIPAA directly, and in connection with acts or omissions of any agents, including a downstream business associates, as determined according to the federal common law of agency.
+Added: Reports must be made to affected individuals, the Secretary, and depending on the size of the breach, the local and national media.
+Added: Covered Entities like us are also
+Added: subject to the HHS HIPAA audit program and may be investigated in connection with a privacy or data security complaint.
+Added: Significant civil and criminal fines and other penalties may be imposed for violating HIPAA directly, and in connection with acts or omissions of any agents, including downstream business associates, as determined according to the federal common law of agency.
Civil penalties are adjusted for inflation on an annual basis and can exceed one million dollars per year for failure to comply with a HIPAA requirement.
A single breach incident can violate multiple requirements.
−Removed: Additionally, a person who knowingly obtains or discloses PHI in violation of HIPAA may face a criminal penalties (including fines and imprisonment), which increase if the wrongful conduct involves false pretenses or the intent to sell, transfer or use PHI for commercial advantage, personal gain or malicious harm.
+Added: Additionally, a person who knowingly obtains or discloses PHI in violation of HIPAA may face criminal penalties (including fines and imprisonment), which increase if the wrongful conduct involves false pretenses or the intent to sell, transfer or use PHI for commercial advantage, personal gain or malicious harm.
Covered Entities are also subject to enforcement by state Attorneys General who were given authority to enforce HIPAA.
3 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: Individually identifiable health information is
−Removed: considered sensitive data that merits stronger safeguards.
+Added: Individually identifiable health information is considered sensitive data that merits stronger safeguards.
The FTC and states' Attorneys General have also brought enforcement actions and prosecuted some data breach cases as unfair and/or deceptive acts or practices under the FTC Act and comparable state laws.
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Although the law includes limited exceptions, including for PHI maintained by a Covered Entity or Business Associate under HIPAA and medical information maintained by healthcare providers under the CMIA, it may regulate or impact our processing of personal information depending on the context.
−Removed: Further, the California Privacy Rights Act (CPRA) went into effect January 1, 2023 amending the CCPA.
+Added: Further, the California Privacy Rights Act (CPRA) went into effect January 1, 2023 strengthening the CCPA.
The CPRA imposes additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data and expands the application of the CCPA to all human resources personal information of our California-based employees.
It also created a new California data protection agency authorized to issue substantive regulations and is expected to result in increased privacy and information security enforcement.
−Removed: In addition to the CCPA, Virginia, Colorado, Connecticut, and Utah all enacted similar omnibus privacy laws that will also take effect in 2023, increasing the complexity of compliance and the risk of failures to comply.
+Added: Various states such as Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Montana, Oregon, Tennessee, Texas, Utah and Virginia have enacted their own privacy laws similar to the CCPA, and other states are considering proposals for such laws, all of which increases the complexity of compliance and the risk of failures to comply.
Numerous other federal and state laws, including consumer protection laws and regulations, govern the collection, dissemination, use, access to, confidentiality and security of patient health information.
In addition, Congress and some states are considering new laws and regulations that further protect the privacy and security of medical records or medical information.
−Removed: With the recent increase in publicity regarding data breaches resulting in improper dissemination of consumer information, all 50 states have passed laws regulating the actions that a business must take if it experiences a data breach, as defined by state law, including prompt disclosure within a specified amount of time to affected individuals.
+Added: With the recent increase in publicity regarding data breaches resulting in improper dissemination of consumer information, all 50 states have passed laws regulating the actions that a business must take if it experiences a data breach, as defined by state law, including prompt disclosure within a specified amount
+Added: of time to affected individuals.
In addition to data breach notification laws, some states have enacted statutes and rules requiring businesses to reasonably protect certain types of personal information they hold or to otherwise comply with certain specified data security requirements for personal information.
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It is currently unclear how the ONC will approach delays in providing patient access in these situations.
−Removed: Healthcare providers including laboratories will be subject to
−Removed: civil monetary penalties for violations of the Information Blocking Rule once the penalty regulations are finalized.
−Removed: The amount of such penalties is unknown, but the regulations for health industry numbers (HINs), health information exchanges (HIEs), and certified developers of health information technology allow for up to $1.0 million in penalties per violation.
+Added: Healthcare providers including laboratories will be subject to civil monetary penalties for violations of the Information Blocking Rule once the penalty regulations are finalized.
+Added: The amount of such penalties for laboratories is unknown, but the regulations for health industry networks (HINs), health information exchanges (HIEs), and certified developers of health information technology allow for up to $1.0 million in penalties per violation.
GDPR and Foreign Laws
5 unchanged sentences
Among other requirements, the GDPR also regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States, and the efficacy and longevity of current transfer mechanisms between the EU and the United States remains uncertain.
−Removed: For example, in 2016, the EU and the United States agreed to a transfer framework for data transferred from the EU to the United States, called the Privacy Shield, but the Privacy Shield was invalidated in July 2020 by the Court of Justice of the EU.
−Removed: Further, from January 1, 2021, companies have to comply with the GDPR and also the United Kingdom GDPR (U.K.
−Removed: GDPR) which, together with the amended U.K.
+Added: For example, in 2016, the EU and the United States agreed to a transfer framework for data transferred from the EU to the United States, called the Privacy Shield, but the Court of Justice of the EU invalidated the Privacy Shield when it decided the case Maximilian Schrems vs.
+Added: Facebook (Case C-311-18), known as Schrems II .
+Added: However, on July 10, 2023, the European Commission adopted an adequacy decision for a new mechanism for transferring data from the EU to the United States – the EU-US Data Privacy Framework, which provides EU individuals with several new rights, including the right to obtain access to their data, or obtain correction or deletion of incorrect or unlawfully handled data.
+Added: The adequacy decision followed the signing of an executive order introducing new binding safeguards to address the points raised in the Schrems II decision.
+Added: Notably, the new obligations were geared to ensure that data can be accessed by U.S.
+Added: intelligence agencies only to the extent necessary and proportionate and to establish an independent and impartial redress mechanism to handle complaints from Europeans concerning the collection of their data for national security purposes.
+Added: The European Commission will continually review developments in the United States along with its adequacy decision.
+Added: Adequacy decisions can be adapted or even withdrawn in the event of developments affecting the level of protection in the
+Added: applicable jurisdiction.
+Added: Future actions of EU data protection authorities are difficult to predict.
+Added: Some customers or other service providers may respond to these evolving laws and regulations by asking us to make certain privacy or data-related contractual commitments that we are unable or unwilling to make.
+Added: This could lead to the loss of current or prospective customers or other business relationships.
+Added: Relatedly, following the United Kingdom’s withdrawal from the EU, the GDPR was implemented in the United Kingdom as the U.K.
+Added: GDPR with the U.K.
+Added: GDPR sits alongside the amended U.K.
Data Protection Act 2018, retains the GDPR in U.K.
national law.
−Removed: GDPR mirrors the fines under the GDPR, e.g.
−Removed: fines up to the greater of €20 million (£17.5 million) or 4% of global turnover.
−Removed: The relationship between the United Kingdom and the EU in relation to certain aspects of data protection law remains unclear, and it is unclear how U.K.
−Removed: data protection laws and regulations will develop in the medium to longer term, and how data transfers to and from the United Kingdom will be regulated in the long term.
−Removed: In June of 2021, the European Commission granted the United Kingdom an adequacy decision with respect to data transfers under the GDPR.
−Removed: This adequacy decision is expected to last until June 27, 2025.
+Added: Under the U.K.
+Added: GDPR, companies not established in the United Kingdom but who process personal data in relation to the offering of goods or services to individuals in the United Kingdom, or to monitor their behavior will be subject to the U.K.
+Added: GDPR – the requirements of which are (at this time) largely aligned with those under the EU GDPR and as such, may lead to similar compliance and operational costs with potential fines of up to £17.5 million or 4% of global turnover In June of 2021, the European Commission issued a decision, which will sunset on June 27, 2025 without further action, that the United Kingdom ensures an adequate level of protection for personal data transferred under the EU GDPR from the EU to the United Kingdom.
+Added: The Parliament of the United Kingdom is currently considering the Data Protection and Digital Information Bill to harmonize the 2018 Data Protection Act, U.K.
+Added: GDPR, and the Privacy and Electronic Communications Regulations under one legislative framework.
Billing and Government Reimbursement for Clinical Laboratory Services
4 unchanged sentences
In April 2014, Congress passed the Protecting Access to Medicare Act (PAMA), which substantially changed the way in which Medicare sets the payment amounts for clinical laboratory services.
−Removed: Under PAMA, laboratories that receive the majority of their Medicare revenue from payments made under the CLFS or the Physician Fee Schedule (PFS) are required to report to CMS, beginning in 2017 and every three years thereafter (or annually for "advanced diagnostic laboratory tests"), private payor payment rates and volumes for their tests.
+Added: Under PAMA, laboratories that receive the majority of their Medicare revenue from payments made under the CLFS or the Physician Fee Schedule (PFS) are required to report to CMS, beginning in 2017 and every three years thereafter (or annually for "advanced diagnostic laboratory tests" (ADLTs)), private payor payment rates and volumes for their tests.
Laboratories that fail to report the required payment information may be subject to substantial civil monetary penalties.
2 unchanged sentences
For tests furnished on or after January 1, 2018, Medicare payments for clinical diagnostic laboratory tests (CDLTs) are based upon these reported private payor rates.
−Removed: For CDLTs, for which there is no comparable existing CDLT, that are assigned a new or substantially revised Current Procedural Terminology (CPT) code, CMS will set the initial payment rates using the gap-fill methodology, as under prior law.
−Removed: Initial payment rates for new advanced
−Removed: diagnostic laboratory tests (ADLTs) will be based on the actual list charge.
+Added: For CDLTs assigned a new or substantially revised Current Procedural Terminology (CPT), because there is no comparable existing CDLT, CMS will set the initial payment rates using the gap-fill methodology, as under prior law.
+Added: Initial payment rates for new ADLTs will be based on the actual list charge.
Any reductions to payment rates resulting from the new methodology are limited to up to 10% per test per year in each of the years 2018 through 2020.
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Additionally, PAMA and changes to the PFS will not have a significant impact to Medicare reimbursement for AVISE ® CTD in 2024 compared to levels experienced in 2023.
−Removed: On December 20, 2019, the Further Consolidated Appropriations Act, which included the Laboratory Access for Beneficiaries Act (LAB Act) took effect.
−Removed: The LAB Act delayed by one year the reporting of payment data under PAMA for CDLTs that are not ADLTs until the first quarter of 2021.
−Removed: The CARES Act, which was signed into law on March 27, 2020, delayed the reporting period by an additional year, until the first quarter of 2022.
−Removed: Then, on December 10, 2021, Congress passed the Protecting Medicare and American Farmers from Sequester Cuts Act, which included a provision that further delayed the next PAMA reporting period for CDLTs that are not ADLTs to January 1, 2023 through March 31, 2023.
−Removed: The Consolidated Appropriations Act, 2023, enacted on December 29, 2022, delayed the next PAMA reporting period to January 1, 2024 through March 31, 2024, which will cover the original data collection period of January 1, 2019 through June 30, 2019.
−Removed: New CLFS rates for CDLTs will be established based on that data beginning in 2025, subject to phase-in limits.
−Removed: As a result, Medicare payment rates determined by data reported in 2017 will continue through December 31, 2024.
−Removed: In addition, under PAMA, as amended, the payment reduction cap will be 15% per test per year in each of the years 2024 through 2026.
+Added: Since December 2019, Congress has passed a series of laws to modify PAMA’s statutory requirements related to the data reporting period and phase-in of payment reductions under the CLFS or CDLTs that are not ADLTs Most recently, the Further Continuing Appropriations and Other Extensions Act of 2024 (Pub.L.
+Added: 118-22, enacted on November 16, 2023) further delayed the reporting requirement as well as the application of the 15% phase-in reduction.
+Added: Under these statutory provisions, the next data reporting period for CDLTs that are not ADLTs will be January 1, 2025 through March 31, 2025, and will be based on the most recent data collection period of January 1, 2019 through June 30, 2019.
+Added: After this data reporting period, the three-year data reporting cycle for these tests will resume (e.g., 2028, 2031, etc.).
+Added: The same series of laws modified the phase-in of payment reductions resulting from private payor rate implementation so that a 0.0% reduction limit was applied for calendar years (CYs) 2021 through 2023, as compared to the payment amounts for a test the preceding year.
+Added: The Further Continuing Appropriations and Other Extensions Act of 2024 further applied a 0.0% reduction limit for CY 2024.
+Added: Consequently, payment may not be reduced by more than 15% per year for CYs 2025 through 2027 as compared to the payment amounts established for a test the prior year.
PAMA also authorized the adoption of new, temporary billing codes and unique test identifiers for FDA-cleared or approved tests, as well as ADLTs.
8 unchanged sentences
Missing or incorrect information on test requisitions adds complexity to and slows the billing process, creates backlogs of unbilled tests, and generally increases the aging of accounts receivable and bad debt expense.
−Removed: Failure to timely or correctly bill may lead to our not being reimbursed for our services or an increase in the aging of our accounts receivable, which could adversely affect our results of operations and cash flows.
+Added: Failing to bill timely or correctly may have negative consequences for us, such as not being reimbursed for our services or experiencing an increase in the aging of our accounts receivable, which could adversely impact our results of operations and cash flows.
Failure to comply with applicable laws relating to billing federal healthcare programs could also lead to various penalties, including:
6 unchanged sentences
Healthcare Reform
−Removed: In March 2010, the Affordable Care Act (ACA) was enacted in the United States.
−Removed: The ACA made a number of substantial changes to the way healthcare is financed both by governmental and private payors.
+Added: In March 2010, the Affordable Care Act (ACA) was enacted in the United States and made a number of substantial changes to the way healthcare is financed both by governmental and private payors.
Although the ACA included a medical device tax, the tax never went into effect and was fully repealed by Congress with enactment of the 2019 federal spending package signed into law on December 20, 2019.
2 unchanged sentences
Supreme Court (the Supreme Court) upheld the ACA when it dismissed a legal challenge to the ACA’s constitutionality.
−Removed: Further legislative and regulatory
−Removed: changes under the ACA remain possible, although the new Democrat-led presidential administration has been taking steps to strengthen the ACA.
+Added: Further legislative and regulatory changes under the ACA remain possible, although the current Democrat-led presidential administration has been taking steps to strengthen the ACA.
Future changes or additions to the ACA, the Medicare and Medicaid programs and changes stemming from other healthcare reform measures, especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the healthcare industry in the United States.
The uncertainty around the future of the ACA, and in particular the impact to reimbursement levels and the number of insured individuals, may lead to delay in the purchasing decisions of our customers.
−Removed: Other legislative changes have been proposed and adopted since the ACA was enacted.
−Removed: These changes include aggregate reductions to Medicare payments to providers of 2% per fiscal year pursuant to the Budget Control Act of 2011, which went into effect on April 1, 2013, and due to subsequent legislative amendments, and the passage of the Consolidated Appropriations Act for 2023, will remain in effect through 2032, unless additional Congressional action is taken.
−Removed: In addition, the American Taxpayer Relief Act of 2012, among other things, further reduced Medicare payments to certain providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
−Removed: Additional state and federal healthcare reform measures may also be adopted in the future, any of which could have a material adverse effect on the clinical laboratory industry.
+Added: In addition to the ACA, there will likely continue to be proposals by legislators at both the federal and state levels, regulators and private third-party payors to reduce costs while expanding individual healthcare benefits.
Environmental and Other Regulatory Requirements
−Removed: Our laboratory is subject on an ongoing basis to federal, state and local laws and regulations governing the use, storage, handling and disposal of regulated medical waste, hazardous waste and biohazardous waste, including chemicals, biological agents and compounds and blood and other tissue specimens.
+Added: Our laboratory is subject on an ongoing basis to federal, state and local laws and regulations governing the use, storage, handling and disposal of regulated medical waste, hazardous waste and biohazardous waste, including
+Added: chemicals, biological agents and compounds and blood and other tissue specimens.
Typically, we use licensed or otherwise qualified outside vendors to dispose of this waste.
2 unchanged sentences
Our costs for complying with these laws and regulations cannot be estimated or predicted and depends on a number of factors, including the amount and nature of waste we produce (which depends in part on the number of tests we perform) and the terms we negotiate with our waste disposal vendors.
−Removed: In 2022, we disposed of all hazardous and/or medical waste that we produced across our entire business through environmentally sound methods.
+Added: Since inception, we have disposed of all hazardous and/or medical waste that we produced across our entire business through environmentally sound methods.
Our operations are also subject to extensive requirements established by the U.S.
15 unchanged sentences
We are committed to providing a competitive and comprehensive benefits package to our employees.
−Removed: Our benefits package
−Removed: provides a balance of protection along with the flexibility to meet the individual health and wellness needs of our employees.
+Added: Our benefits package provides a balance of protection along with the flexibility to meet the individual health and wellness needs of our employees.
We plan to continue to refine our efforts related to optimizing our use of human capital as we grow, including improvements in the way we hire, develop, motivate and retain employees.
7 unchanged sentences
Kamal Adawi Chief Financial Officer and Corporate Secretary
−Removed: Mark Hazeltine Chief Business Officer
Tina Nova, Ph.D.
−Removed: President, CLIA US, Veracyte, Inc.
+Added: Executive Chairman of the Board of Directors
Brian Birk Managing Partner, Co-Founder, Sun Mountain Capital
1 unchanged sentence
Wendy Johnson Chief Business Officer, Reneo Pharmaceuticals, Inc.
+Added: Paul Kim Chief Financial Officer, Fulgent Genetics, Inc.
Ebetual Pallares, Ph.D.
3 unchanged sentences
Frank Stokes Chief Financial Officer, Castle Biosciences, Inc.
−Removed: Tullis Chairman and Founder, Tullis Health Investors
Diversity and Inclusion
8 unchanged sentences
In 2022, we created an Environmental, Social and Governance Committee (ESG Committee) with the purpose, duties and responsibility of reviewing and recommending our programs, policies and practices relating to ESG issues.
−Removed: The ESG Committee meets formally at least annually and plans to make recommendations to our President and Chief Executive Officer to be presented to the Audit Committee of our Board of Directors.
+Added: The ESG Committee meets formally at least annually and plans to make recommendations to our President and Chief Executive Officer to be presented to the audit committee of our board of directors (the Audit Committee) when warranted.
For more information regarding our ESG initiatives, please refer to www.exagen.com/investors.
12 unchanged sentences
Our website address is www.exagen.com.
−Removed: The information contained in, or accessible through, our website is not part of, and is not incorporated by reference into, this Annual Report.
+Added: The information
+Added: contained in, or accessible through, our website is not part of, and is not incorporated by reference into, this Annual Report.
Investors should not rely on any such information in deciding whether to purchase our common stock.
Available Information
−Removed: We file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other information with the Securities and Exchange Commission (SEC).
−Removed: Our filings with the SEC are available free of charge on the SEC’s website at www.sec.gov and on the "Investors" section of our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
+Added: We file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy and information statements and other information with the Securities and Exchange Commission (SEC).
+Added: Our filings with the SEC are available free of charge on the SEC’s website and on the "Investors" section of our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
+Added: The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.
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.