What changed in this filing

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Item 1. Business

2026-03-10 compared with 2025-03-11 · 183 added, 175 removed, 676 unchanged (35% of the section changed)

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Since launching AVISE® CTD, we have produced an extensive body of peer-reviewed literature supporting the test’s clinical validity and utility, demonstrating the importance of AVISE® CTD in patient care.

Beginning in late 2022, w e revitalized our organization with the addition of key members to our senior leadership team, including our Chief Executive Officer, Chief Financial Officer, Vice President of Sales, Chief Medical Officer, and Medical and Laboratory Director.

In 2025, we added eight new biomarkers to our AVISE CTD panel enhancing the clinical utility of our tests in the diagnoses of SLE and RA.

Revenue from this product comprised 91% of our revenue for each of the years ended December 31, 2025 and 2024.

Beginning in late 2022, w e revitalized our organization with the addition of key members to our senior leadership team each with successful industry track records in diagnostics, medical device and medical technology, including our Chief Executive Officer, Chief Financial Officer, Chief Scientific Officer, Vice President of Sales, Vice President of Commercial Strategy and Medical and Laboratory Director.

By leveraging our team’s extensive experience to create clinically distinct solutions that improve patient lives, we have created a strong foundation for growth and believe that we are well-positioned to positively impact patient care and address unmet clinical needs in autoimmune disease .

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Under the leadership of our Chief Executive Officer, John Aballi, who joined Exagen in October 2022, we have been executing an operational turnaround of the business, which has resulted in a return to revenue growth and gross margin expansion while significantly reducing operating expenses and cash burn.

Comparing our financial results in fiscal 2024 to fiscal 2022, we have grown revenue by over 20%, expanded our AVISE ® CTD trailing twelve-month average selling price by over 40%, improved gross margin by over 1,200 basis points, reduced operating expenses by over 30% and reduced net loss by nearly 70%.

At the same time, we have nearly doubled our salesforce productivity and brought an intense focus to our Research and Development (R&D) investments - resulting in a 45% reduction in related expenses and prioritization of near-term pipeline opportunities.

We believe we are well positioned to deliver revenue growth and positive Adjusted EBITDA in the near term.

Recent Developments

In December 2024, we announced the completion of our 1,000,000 th AVISE ® CTD test, marking a significant milestone that underscores our dedication to supporting patients and clinicians managing CTDs and other rheumatic and autoimmune conditions.

In January 2025, we announced conditional approval by the New York State Department of Health (NYSDOH), and commercial launch, of our new SLE and RA biomarker assays on the AVISE ® CTD platform.

Collectively, we believe these new biomarkers will further improve the clinical utility of AVISE ® CTD and provide clinicians with the information they need to definitively diagnose patients and shorten their autoimmune diagnostic journeys.

We expect that the addition of these new biomarkers will lead to improvements in our AVISE ® CTD average selling price, gross margin expansion and increased demand while positioning us for profitability.

Comparing our financial results in fiscal 2025 to fiscal 2022, we have grown annual revenue by over 45%, expanded our AVISE® CTD trailing twelve-month average selling price by over 50%, improved gross margin by over 1,100 basis points, reduced operating expenses by over 20% and reduced net loss by nearly 60%.

At the same time, we have nearly doubled our salesforce productivity and brought an intense focus to our Research and Development (R&D) investments - resulting in more than 35% reduction in related expenses and prioritization of near-term pipeline opportunities.

Revenue was a record $66.6 million for the year ended December 31, 2025, an increase of approximately 19.7% compared to the year ended December 31, 2024.

This increase was driven by an approximate 11% increase in testing volume and an approximate 7% increase in average selling price (ASP) each as compared to the year ended December 31, 2024.

These trends are consistent with the growth strategy we initiated in 2022.

We believe these results highlight the power of combining volume with reimbursement growth and the resulting top line impact when both are moving in the same direction.

Our execution across commercial, scientific, and operations underpinned this outcome — notably Q3 and Q4 volumes were our highest ever for those periods, without the typical second half seasonality we have experienced in the past.

Our AVISE CTD trailing twelve-month ASP for 2025 was $441, up roughly 7%, or $30 per test, over 2024.

The consistent ASP expansion reflects disciplined payer engagement, appeals and revenue cycle optimization, and the accretive impact of new biomarkers;

however, our new biomarker reimbursement ramped more gradually than expected, and we experienced some payer headwinds in the second half of the year.

We believe we are well positioned to deliver continued revenue growth and positive Adjusted EBITDA in the next 12-18 months.

Research and Development

We continue our thoughtful approach to research and development.

We believe there is significant potential to enhance existing or develop new testing products with superior clinical utility, on our own or through collaboration with partners.

▪ Lupus Nephritis (LN) Biomarkers .

Early detection of lupus nephritis (LN) is critical to preventing irreversible kidney injury, yet current clinical practice continues to rely heavily on the urine protein-to-creatinine ratio (UPCR) as the primary screening tool.

Although UPCR ≥0.5 g/g is recommended as the threshold for kidney biopsy, growing evidence indicates that UPCR lacks sensitivity for early or subclinical proliferative LN, with up to one ‑ third of patients exhibiting biopsy ‑ proven Class III/IV disease even when UPCR remains between 0.25–0.5 g/g.

This diagnostic blind spot delays recognition of intrarenal inflammation, allowing ongoing immunologic injury that accelerates kidney damage, loss of renal reserve, and progression to end-stage kidney disease.

Based on such unmet needs, recent studies have focused on emerging urinary biomarkers that reflect kidney-specific immunologic activity, offering a non-invasive and biologically grounded means of detecting LN earlier in its course.

In collaboration with John’s Hopkins University (JHU), we presented novel data on the use of urinary biomarkers (Especially Tenascin ‑ C ) for the prediction of kidney function loss during the 2025 American College of Rheumatology (ACR) annual meeting (ACR 2025).

Although standard-of-care regimens—such as glucocorticoids combined with mycophenolate mofetil or cyclophosphamide—remain foundational, emerging treatment options including B ‑ cell–targeted agents, B-cell Activating Factor inhibitors, complement pathway inhibitors, and cellular therapies (e.g., CAR ‑ T approaches) are reshaping the treatment landscape.

These modalities are most effective when initiated prior to irreversible structural damage, further emphasizing the value of sensitive early detection tools.

Novel biomarkers matched with specific therapies shift LN management toward earlier intervention, renal preservation, and better long ‑ term outcomes for SLE patients.

During the first half of 2026, we expect further adoption by our existing and new pharma partnerships of our panel as part of exploratory trials.

In addition, we continue our efforts to releasing our LN offering commercially through our clinical lab.

▪ SLE Disease Activity .

We continue to leverage clinical and laboratory data collected across multiple longitudinal SLE cohorts to identify a set of biomarkers that can inform an artificial intelligence (AI) developed algorithm aimed at guiding ongoing treatment decisions throughout the course of a lupus patient’s journey.

Our candidate assay for SLE Disease Activity is currently being clinically validated with patient recruitment ongoing.

▪ RA Disease Activity .

We are also continuing to leverage our extensive biorepository containing clinically annotated serum collected from RA patients to screen for a host of protein antibody markers in an effort to develop an algorithmic solution that accurately predicts RA disease activity in a manner that outperforms conventional RA biomarkers.

Our candidate assay for RA disease activity is in development, with the validation cohort procured for analysis.

▪ Kidney Damage Biomarkers.

We have a multi‑analyte blood‑based panel under development, which sensitively detects kidney damage in early renal disease, outperforming creatinine and estimated glomerular filtration rate (eGFR).

provisional patent applications were filed in May 2025 for methods of detecting kidney damage using the blood-based panel.

In addition, two abstracts were presented at ACR 2025 on our biomarker panel for early kidney damage comprising uromodulin, myo‑inositol oxygenase, heparanase, and apoptosis‑resistant E3 ubiquitin ligase 1.

The index showed promising data with high sensitivity and specificity for early organ damage in diabetic kidney disease and LN.

These kidney‑specific proteins capture distinct pathophysiologic axes of renal damage, supporting their use as early, disease‑specific indicators of nephropathy in diabetes and lupus.

Such a multi‑marker approach could improve timely diagnosis and monitoring of renal involvement beyond conventional tests.

Further investment is needed to make this offering commercially viable, and it has been deprioritized at this time, in light of other high‑potential programs within our pipeline.

▪ Myositis Biomarkers .

Myositis specific antibodies (MSA) are a well-defined group of important biomarkers for the diagnosis of idiopathic inflammatory myopathies (IIM), and the stratification of patients into clinical phenotypes, according to treatment responses, and disease outcomes.

Despite the advanced research on these markers, significant challenges persist with standardization and availability of validated methods with fast turnaround time.

Our research studies use different technologies for the detection of MSA.

When compared, we gain a unique understanding about potential avenues for product development in the area of myositis.

Our Current Market

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The National Institute of Environmental Health Sciences estimates that there are over 15 million patients in the United States with suspected cases of autoimmune diseases.

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.

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.

Detection of these antibodies through blood tests can help diagnose, prognose and monitor the course of autoimmune diseases.

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There is no known cause or cure for these chronic conditions and current treatment interventions are targeted at managing symptoms and limiting disease progression.

Our flagship product, AVISE ® CTD, enables clinicians to more effectively diagnose complex autoimmune conditions such as lupus, rheumatoid arthritis, and Sjögren’s syndrome earlier and with greater accuracy, as compared to the current standard of care.

Our flagship product, AVISE ® CTD, enables clinicians to more effectively diagnose complex autoimmune conditions such as lupus, rheumatoid arthritis, and Sjögren’s disease earlier and with greater accuracy, as compared to the current standard of care.

Our laboratory specializes in the testing of rheumatic diseases, delivering precise and timely results through our full suite of AVISE ® -branded tests for disease diagnosis, prognosis, and monitoring.

With a focus on research, innovation, education, and patient-centered care, we are dedicated to addressing the ongoing challenges of autoimmune disease management.

We estimate that this addressable market is greater than 2 million patients per year in the United States.

Connective Tissue Diseases

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According to a study published in 2022 by Dinse et al., which 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.

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.

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We seek to establish a solid foundation for growth and path to sustained profitability through continued gross margin expansion and improved operating expense efficiencies 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.

We center our efforts on long-term reimbursement and average sales price (ASP) growth.

We center our efforts on long-term reimbursement and ASP growth.

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.

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Our AVISE ® Lupus platform, which we offer as a stand-alone test and as part of our AVISE ® CTD test platform, is a proprietary, patent-protected and clinically validated method to aid in the diagnosis of SLE that provides a significant improvement in sensitivity, relative to the current standard of care.

The AVISE ® Lupus platform leverages CB-CAPs

technology, which determines the blood levels of complement activated proteins permanently deposited on hematopoietic cells.

The AVISE ® Lupus platform leverages CB-CAPs technology, which determines the blood levels of complement activated proteins permanently deposited on hematopoietic cells.

Rheumatologists measure components of the complement system, including serum levels of C3 and C4, to help diagnose SLE and monitor SLE disease activity.

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We believe this patent-protected platform gives us a significant advantage over our competitors.

Our CB-CAPs technology for diagnosing SLE has patent protection through March 2034.

Our AVISE ® technology for diagnosing SLE has patent protection through March 2034.

T-Cell Biomarkers

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Our flagship testing product, AVISE ® CTD, is a comprehensive test that aids in distinguishing overlapping symptoms and the differential diagnosis of a wide variety of CTDs and other diseases in one convenient blood draw.

These diseases include SLE, RA, Sjögren’s syndrome, APS, other autoimmune-related diseases and other disorders that mimic these diseases, such as fibromyalgia.

These diseases include SLE, RA, Sjögren’s syndrome, Antiphospholipid syndrome (APS), other autoimmune-related diseases and other disorders that mimic these diseases, such as fibromyalgia.

These conditions are often challenging to diagnose as a result of overlapping symptoms.

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These biomarkers are elevated in patients with SLE compared to patients with other CTDs.

Next, the AVISE ® Lupus

platform integrates these cell-bound complement products with 8 autoantibodies to yield a quantitative and qualitative assessment of SLE risk.

In January 2025, we added three new unique T-Cell Biomarkers which provide enhanced sensitivity for SLE as compared to conventional SLE biomarkers and serve as a complement to the AVISE ® Lupus profile.

In a recent scientific abstract presented at the 2024 American College of Rheumatology (ACR) annual meeting, the combined T-Cell Biomarker panel was shown to capture a unique subset of SLE subjects otherwise testing negative for all conventional SLE biomarkers and the CB-CAPs biomarkers (EC4d and BC4d) already included in the AVISE ® CTD test.

Next, the AVISE ® Lupus platform integrates these cell-bound complement products with 8 autoantibodies to yield a quantitative and qualitative assessment of SLE risk.

In 2025, we added three new unique T-Cell Biomarkers which provide enhanced sensitivity for SLE as compared to conventional SLE biomarkers and serve as a complement to the AVISE ® Lupus profile.

In a scientific abstract presented at the 2024 ACR annual meeting (2024 ACR), the combined T-Cell Biomarker panel was shown to capture a unique subset of SLE subjects otherwise testing negative for all conventional SLE biomarkers and the CB-CAPs biomarkers (EC4d and BC4d) already included in the AVISE ® CTD test.

The data, which showed that up to 50% of SLE subjects testing negative by conventional SLE biomarkers are identified as positive by one or more T-Cell Biomarker, has subsequently been published Frontiers in Immunology (February 26, 2025).

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this subgroup is referred to as “seronegative RA.” These seronegative RA patients often face delays in diagnosis due to the absence of serological evidence.

In January 2025, we added three unique biomarkers specific to seronegative RA—Anti-RA33 IgA, Anti-RA33 IgG and Anti-RA33 IgM (the RA Sub-Profile Biomarkers)—that help bridge this diagnostic gap and enable AVISE ® CTD to correctly identify a greater proportion of the traditional Seronegative RA Subgroup, allowing for more timely and targeted treatment plans for these patients.

In 2025, we added five unique biomarkers specific to seronegative RA—Anti-RA33 IgA, Anti-RA33 IgG, Anti-RA33 IgM, Anti-PAD4 IgA and Anti-PAD4 IgG (the RA Sub-Profile Biomarkers)—that help bridge this diagnostic gap and enable AVISE ® CTD to correctly identify a greater proportion of the traditional Seronegative RA Subgroup, allowing for more timely and targeted treatment plans for these patients.

Data presented at ACR 2024 showed that the combination of anti-RA33 and anti- Peptidyl arginine deiminase 4 (PAD4) autoantibodies captures a unique subset of seronegative RA patients otherwise testing negative for canonical RA biomarkers—anti-CCP and rheumatoid factors (RFs).

An upwards of 40% of seronegative RA patients tested positive for one or more these biomarkers while maintaining a relatively high degree of specificity for RA.

Additional data presented at the ACR 2025 revealed the addition of anti-RA33 and anti-PAD4 in a machine learning approach could further bolster diagnostic performance for detection of RA when put in combination with anti-CCP and RFs.

Beyond the diagnostic application, anti-RA33 autoantibodies have been shown to associate with improved response to conventional synthetic disease modifying anti-rheumatic drugs, such as methotrexate.

On the other hand, Anti-PAD4 autoantibodies have been shown to associate with increased risk for joint erosions and comorbidities, such as interstitial lung disease.

Taken together, the collective data demonstrates our panel of seronegative autoantibodies provide meaningful diagnostic and prognostic insights for a critical segment of RA patients.

Other AVISE ® Tests

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HCQ is typically prescribed to patients to control SLE disease activity and prevent flares.

The AVISE ® portfolio of testing products deliver meaningful insights to healthcare providers around the diagnosis, prognosis, and monitoring of CTDs.

The AVISE ® portfolio of testing products delivers meaningful insights to healthcare providers around the diagnosis, prognosis, and monitoring of CTDs.

Our flagship product, AVISE ® CTD, delivers a comprehensive assessment of CTDs via some of the most specific and sensitive biomarkers in the industry.

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As shown below, AVISE ® CTD displays a graphical representation of the AVISE ® Lupus index results, along with an accompanying interpretation describing the likelihood of the presence of lupus.

Subsequent pages contain results for other biomarkers spanning across a broad number of disease states, conveniently grouped to assist providers in making confident, accurate and timely treatment decisions.

Subsequent pages contain results for other biomarkers spanning across a broad number of disease states, conveniently grouped to assist providers in

making confident, accurate and timely treatment decisions.

The AVISE ® CTD test report facilitates discussion of results with patients due to its intuitive structure and content.

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We have prioritized the following pipeline opportunities:

PAD4 Biomarkers

Citrullination is a post-translation modification in which the amino acid arginine is converted to citrulline, altering protein structure and increasing the potential for autoimmunity.

This process is central to the pathogenesis of RA, where an aberrant immune response against citrullinated proteins contributes to chronic inflammation and joint damage.

Peptidyl arginine deiminase 4 (PAD4) is a key enzyme in this process, and autoantibodies targeting PAD4 (anti-PAD4 IgG and IgA) have been increasingly recognized for their potential clinical relevance in RA.

While anti-citrullinated protein antibodies (ACPA) and RF are the primary serologic markers for RA, a subset of patients classified as seronegative RA lack these conventional biomarkers, reflecting an unmet need for a test that captures the Seronegative RA Subgroup.

Emerging evidence suggests that anti-PAD4 antibodies may serve as novel diagnostic biomarkers for RA, particularly in these unique seronegative cases.

Beyond the potential diagnostic utility, anti-PAD4 autoantibodies have been associated with more severe disease phenotypes, including greater joint erosion and extra-articular involvement, further underscoring their relevance in RA pathogenesis.

Ongoing research aims to better define their role in early detection, disease activity stratification, and prognosis, particularly in distinguishing RA from other autoimmune and inflammatory arthritides.

Myositis Panel Expansion

MSA are a well-defined group of important biomarkers for the diagnosis of IIM and the stratification of patients into clinical phenotypes, according to treatment responses, and disease outcomes.

Despite the advanced research on these markers, significant challenges persist with standardization and availability of validated methods with fast turnaround time.

More specifically, most offerings for myositis in the United States either lack clinical accuracy or are associated with long turnaround times.

Our mission is to design a myositis panel with high clinical utility and short turn-around time leveraging partnerships and in-house development efforts.

SLE Disease Activity

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Accordingly, there is an unmet need for an objective surrogate of on-target RA disease activity that can be used to inform clinical decision-making in the form of treatment escalation or escalation based on risk of disease activity assessed at regular intervals.

Lupus Nephritis Biomarkers

We are leveraging our 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 Lupus Nephritis (LN).

Lupus Nephritis Urinary Biomarkers

We are leveraging our intellectual property licensed from 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.

LN is an autoimmune disease and a frequent complication in people who have SLE.

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However, it is not necessarily indicative of kidney prognosis or treatment response.

At the 2024 ACR annual meeting, data was presented by our academic collaborators at JHU demonstrating meaningful progress towards the development of a non-invasive urinary protein biomarker panel.

In advance of the 2024 ACR annual meeting a provisional patent application was filed to patent methods of using a multitude of urinary protein biomarkers to predict LN treatment response at 12 months post-treatment, inflammatory kidney activity, kidney damage, and long-term kidney function.

At ACR 2024, data was presented by our academic collaborators at JHU demonstrating meaningful progress towards the development of a non-invasive urinary protein biomarker panel.

More recently, novel and intriguing data were presented at ACR 2025 demonstrating the ability to predict kidney function loss using urinary biomarkers.

In November 2025, a U.S.

non-provisional patent application was filed to patent methods of using a multitude of urinary protein biomarkers to predict LN treatment response at 12 months post-treatment, inflammatory kidney activity, kidney damage, and long-term kidney function.

Kidney Damage Biomarkers

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Nephritis is a major contributor to SLE morbidity and prevention and minimization of kidney damage is one of the most important goals of early anti-inflammatory therapy in these patients.

Current methods for assessment of kidney involvement/damage are limited to serum creatinine, its derivative, estimated GRF (eGFR), measurement of the protein to creatinine ratio in urine (UPCR) and histologic examination of kidney biopsies.

Current methods for assessment of kidney involvement/damage are limited to serum creatinine, its derivative, eGFR, measurement of UPCR and histologic examination of kidney biopsies.

eGFR is insensitive for early-stage disease, UPCR lacks specificity and biopsies are regionally variable and highly invasive with attendant risks.

We have developed a four-protein blood-based panel, which sensitively detects kidney damage in early LN and diabetic nephropathy which significantly outperforms creatinine and eGFR.

A provisional patent application was filed in November 2024 for methods of detecting kidney damage using the blood-based panel.

We expect to make this panel available through Pharma collaborations in early 2025 prior to releasing commercially through our clinical lab.

provisional patent application were filed in May 2025 for methods of detecting kidney damage using the blood-based panel.

We expect to make this panel available initially through pharma collaborations for research use prior to releasing commercially through our clinical lab.

Sales and Marketing

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West, Central, Northeast, Southeast and Mid-Atlantic.

We anticipate adding new territories during 2025, in a measured fashion.

We anticipate further expanding our sales territories in a measured fashion, where we have access to talent and physician demand, and where we believe there is a high likelihood of near-term profitable revenue growth.

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.

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Our AVISE ® MTX testing product has been included in the clinical guidelines for two of these groups.

We believe our experience with advancing a testing product from initial development through clinical adoption differentiates us and uniquely positions us to replicate success with our other testing products.

We believe our experience with advancing a testing product from initial development through clinical adoption differentiates us and uniquely positions us to replicate success with our other testing

Beyond working with these Super Groups, we intend to continue to augment field selling activity with a balanced marketing mix, including print and digital advertising, direct marketing, continuing medical education programs and working with key opinion leaders to support peer-to-peer educational events.

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The final results of this study showed that AVISE ® Lupus demonstrated 86% specificity and 80% sensitivity in distinguishing SLE from other CTDs and fibromyalgia.

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).

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.

The objective of this study was to evaluate the frequency of AVISE ® Lupus and CB-CAPs as a marker of complement activation in patients with pSLE and the usefulness of the AVISE ® Lupus platform as a predictor of the evolution of pSLE into classified SLE by the ACR criteria.

evolution of pSLE into classified SLE by the ACR criteria.

Of the 92 pSLE patients, more pSLE were positive for CB-CAPs (28%) or AVISE ® Lupus (40%) than for low complement (9%) at the enrollment visit (p=0.0001, for each) and an AVISE ® Lupus index score >0.08 prospectively associated with the development from pSLE to SLE by ACR classification criteria within 18 months (hazard ratio = 3.11, p<0.01).

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These findings support the added clinical value of T Cell biomarkers in enhancing the sensitivity of the AVISE ® CTD panel for SLE.

The addition of anti-RA33 autoantibodies to the AVISE ® CTD panel was supported by clinical validation data demonstrating their added sensitivity in seronegative rheumatoid arthritis (RA)—patients clinically diagnosed with RA but testing negative for anti-CCP and Rheumatoid Factor (IgA/IgM).

The addition of anti-RA33 autoantibodies to the AVISE ® CTD panel was supported by clinical validation data demonstrating their added sensitivity in seronegative RA patients clinically diagnosed with RA but testing negative for anti-CCP and Rheumatoid Factor (IgA/IgM).

A study involving 651 clinically characterized subjects (290 RA patients, 261 ARD controls, and 100 healthy subjects) with diagnostic cutoffs established at 98% specificity for RA vs.

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Collectively, these findings support the inclusion of anti-RA33 autoantibodies in the RA sub-panel of the AVISE ® CTD comprehensive report.

Our latest addition of anti-PAD4 IgG and IgA antibodies provided further value in the management of RA patients.

More specifically, anti-PAD4 autoantibodies have been linked to more erosive disease which in the case of RA is partly defined by the degree of irreversible changes occurring in affected joints.

Additionally, anti-PAD4 autoantibodies have shown an association with interstitial lung disease, a potentially devastating comorbidity found in RA resulting in potential functional loss of the lungs and ultimately mortality.

The addition of anti-PAD4 autoantibodies can aid in the prognosis or risk stratification for poor outcomes in RA and allow for more proactive disease management.

Clinical Utility

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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).

Finally, in the group of patients randomized to the AVISE ® Lupus group, a positive test result associated with an increase in patient-reported outcomes measuring health-related quality of life using five-level EQ-5D (EQ5D-5L index score) from enrollment to visit two (p=0.028), and greater improvements were detectable when compared to the group of patients positive for AVISE ® Lupus and randomized to the SDLT arm (p=0.049).

index score) from enrollment to visit two (p=0.028), and greater improvements were detectable when compared to the group of patients positive for AVISE ® Lupus and randomized to the SDLT arm (p=0.049).

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.

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Our laboratory is certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) and accredited by the College of American Pathologists (CAP).

Our laboratory is certified for performance of high-complexity testing by the Centers for Medicare & Medicaid Services (CMS) in accordance with CLIA and is licensed by California and all states requiring out-of-state licensure, including the NYSDOH.

Our clinical laboratory typically reports AVISE ® testing results within five business days.

We believe that our existing laboratory facility is adequate to meet our business needs for at least the next 12 months and that additional laboratory space will be available on commercially reasonable terms, if required.

We believe that our existing laboratory facility is adequate to meet our expected business needs for at least the next 12 months and that additional laboratory space will be available on commercially reasonable terms, if required.

Quality Assurance

Our quality assurance function oversees the quality of our laboratory operations.

We have established oversight for systems implementation and maintenance procedures, document control processes, supplier qualification,

preventive and/or corrective actions and employee training processes that we believe achieve excellence in operations.

We have established oversight for systems implementation and maintenance procedures, document control processes, supplier qualification, preventive and/or corrective actions and employee training processes that we believe achieve excellence in operations.

We continuously monitor and improve our processes and procedures and believe this high-quality service leads to customer satisfaction and retention.

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In the future, we may also face competition from companies developing new products or technologies.

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

quality and strength of clinical and analytical validation data;

We believe the principal competitive factors in our target market include quality and strength of clinical and analytical validation data;

confidence in diagnostic results;

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interruptions to this capability could dramatically impact patient access to our tests.

Many of our potential competitors have widespread brand recognition and substantially greater financial, technical and research and development resources;

in addition to greater selling and marketing capabilities.

Many of our potential competitors have widespread brand recognition and substantially greater financial, technical and research and development resources, in addition to greater selling and marketing capabilities.

Others may develop products with prices lower than ours or have preferred network status that could be viewed by rheumatologists and payors as functionally equivalent to our solution or offer solutions at prices designed to promote market penetration.

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Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, motivating and integrating our existing and future employees.

The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees and directors through grants of stock-based compensation awards and payments of cash-based performance bonus awards, in order to increase stockholder value and the success of our company by motivating our employees to perform to the best of their abilities and achieve our objectives.

company by motivating our employees to perform to the best of their abilities and achieve our objectives.

We are committed to providing a competitive and comprehensive benefits package to our employees.

Our benefits package provides a balance of protection along with the flexibility to meet the individual health and wellness needs of our

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.

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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.

We intend to seek patent protection for our research and development initiatives when and as appropriate.

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.

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AVISE ® Lupus Platform

We own five issued U.S.

patents (US 10,132,813, US 11,360,099, US 11,531,033, US 11,761,965, and US 11,885,812), three U.S.

nonprovisional patent applications, and six foreign patents that relate to our AVISE ® Lupus platform.

The foreign patents have issued in Europe (EP2972365), China (CN105229470), and Japan (JP6453299).

We own seven issued U.S.

patents (US 10,132,813, US 11,360,099, US 11,531,033, US 11,761,965, US 11,885,812, US 12,372,535 and US 12,449,427) and two U.S.

nonprovisional patent applications that relate to our AVISE ® Lupus platform.

These patents cover the AVISE ® Lupus algorithm.

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We licensed one issued patent (US 9,709,564) that relates to our AVISE ® CTD product.

A foreign patent application has been filed in Brazil (BR112017002575 2).

A foreign patent was granted in Brazil (BR112017002575 2).

These patents cover a method of specifically diagnosing SLE through the combined use of a CB-CAP bound to a t-cell along with t-cell autoantibodies.

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In addition, our proprietary technology and processes may otherwise become known or be independently discovered by competitors.

To the extent that our employees, consultants, scientific advisors, contractors or any future collaborators use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

To the extent that our employees, consultants, scientific advisors, contractors or any future collaborators use intellectual property owned by others in their work for

us, disputes may arise as to the rights in related or resulting know-how and inventions.

For this and more comprehensive risks related to our proprietary technology and processes, please see “Risk Factors—Risks Related to our Intellectual Property.”

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Exclusive License Agreement Johns Hopkins University

of using urinary protein biomarkers as a means of risk stratifying lupus nephritis patients and predicting treatment response.

In November 2023, we entered into an exclusive license agreement with JHU, 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.

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.

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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.

JHU may terminate the agreement immediately upon written notice to Exagen in the event of a material breach that is incapable of cure.

JHU may terminate the agreement immediately upon written notice to us in the event of a material breach that is incapable of cure.

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).

We may terminate the agreement upon 90 days’ advance written notice to JHU.

Exclusive License Agreement and Collaboration Agreement with Queen Mary University of London

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.

We terminated this agreement with QMUL in September 2024.

Clinical Laboratory Improvement Amendments of 1988

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Our Vista facility also holds a state license issued by the California Department of Public Health (DPH).

California law and regulations establish standards for the day-to-day operation of a clinical laboratory, including the training and skills required of laboratory personnel and quality control.

California law and regulations establish standards for the day-to-day operation of a clinical laboratory, including the training

and skills required of laboratory personnel and quality control.

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.

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▪ validation and quality control.

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.

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.

New York law also mandates proficiency testing for licensed laboratories, regardless of whether such laboratories are located in or outside of New York.

New York's laws and regulations are more stringent than CLIA in certain respects.

For example, NYSDOH must approve a laboratory developed test (LDT) before it is offered in New York.

We have received written approval from NYSDOH to offer our products in New York.

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.

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.

We perform our tests like AVISE ® CTD, AVISE ® SLE Prognostic and AVISE ® MTX assays in our Vista, California clinical laboratory, and although the performance of such tests is primarily regulated under CLIA, as administered by CMS, as well as by applicable state laws, as described above, the FDA has in recently promulgated regulations asserted its authority over the safety and efficacy of such laboratory developed tests (LDTs), including through pre-market review, and the controls necessary to maintain assay quality.

Food and Drug Administration (FDA) regulates any diagnostic tests that meet the definition of a medical device, except under specific, narrow circumstances.

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:

intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals and which does not achieve its primary intended purposes 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.

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

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

In addition, the FDA regulates the export of medical devices manufactured in the United States to international markets.

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.

Many of the instruments, reagents, kits or other consumable products used within our laboratories are regulated as medical devices, and therefore, our vendors that supply such regulated products must comply with FDA quality system regulations and certain other device requirements.

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.

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Some low-risk Class II devices are exempted from this requirement.

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:

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.

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These include:

the Quality System Regulation, which requires manufacturers to follow elaborate design, testing, control, documentation and other quality assurance procedures during the manufacturing process;

• the Quality Management System Regulation (QMSR), which requires manufacturers to follow elaborate design, testing, control, documentation and other quality assurance procedures during the manufacturing process;

labeling regulations;

the FDA’s general prohibition against promoting products for unapproved or "off-label" uses;

and the medical device reporting regulation, which requires that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur.

• labeling and advertising regulations, which prohibit the promotion of FDA-regulated products for uncleared or unapproved, or "off-label," uses;

• the medical device reporting regulation, which requires that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur.

The QMSR became effective as of February 2, 2026 and replaced the former Quality System Regulation (QSR).

The agency promulgated the QMSR to harmonize its medical device current good manufacturing practice regulations with the International Organization for Standardization standard for device quality management systems (ISO 13485:2016).

The FDA has broad post-market and regulatory and enforcement powers, including facility inspections and market surveillance.

Failure to comply with the applicable U.S.

Any failure by a medical device manufacturer to comply with the applicable U.S.

medical device regulatory requirements could result in, among other things, warning letters, fines, injunctions, consent decrees, civil penalties, repairs, replacements, refunds, recalls or seizures of products, total or partial suspension of production, the FDA’s refusal to grant future premarket clearances or approvals, withdrawals or suspensions of current product applications, and criminal prosecution.

Although the FDA had historically statutory authority to assure that medical devices, including IVDs, are safe and effective for their intended uses, the FDA has generally exercised its enforcement discretion and not enforced applicable device regulations with respect to LDTs, which are IVDs that are designed, manufactured and used within a single high-complexity CLIA-certified laboratory.

We believe that all of our AVISE ® test products are LDTs, as are our near-term pipeline candidate tests.

However, in May 2024, the FDA issued a final rule aimed at regulating LDTs under the current medical device framework and phasing out its existing enforcement discretion policy for this category of diagnostic tests;

the final rule became effective on July 5, 2024.

The LDT enforcement policy phase-out process will 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.

Moderate-risk and low-risk tests are expected to be in compliance at the 4-year mark, although FDA has stated it will continue to exercise enforcement discretion with respect to tests that are the subject of pre-market submissions that are pending review.

The FDA’s final rule and proposed phase-out process is complex and, concurrently, the agency announced several exceptions from the requirement to comply with full medical device regulatory controls, depending upon the specific nature of the LDT and the clinical laboratory that is offering such LDT for use by healthcare providers.

We have begun the process of evaluating the final rule’s potential impact on our AVISE ® test products, our operations, and our business more generally.

Publication of the LDT final rule prompted the American Clinical Laboratory Association (ACLA) and one of its members, on May 29, 2024, as well as the Association for Molecular Pathology (AMP) and one of its members, on August 19, 2024, to file complaints against the FDA in the Eastern District of Texas and the Southern District of Texas, respectively.

Both complaints allege that the agency does not have authority to promulgate the LDT final rule and seek to vacate the FDA’s action;

the two cases were subsequently consolidated into a single action pending in the Eastern District of Texas.

Briefing is ongoing in the consolidated case and the outcome is uncertain.

The ongoing litigation could potentially affect the FDA’s plans to implement these new LDT requirements, making the implementation timeline somewhat uncertain although no preliminary injunction has been issued to date.

Accordingly, the agency has continued its implementation efforts by actively providing guidance and training to clinical laboratories on how to comply with medical device general controls.

Following the transition to the new Trump administration, it is unclear whether the Executive Branch of the U.S.

government will continue to defend the FDA’s rulemaking action in the consolidated litigation in Texas or if it will take steps to rescind or modify the LDT final rule.

Affected stakeholders also continue to press for a comprehensive legislative solution to create a harmonized paradigm for oversight of LDTs by both the FDA and CMS, instead of implementation of the FDA’s final rule, which may be disruptive to the industry and to patient access to certain diagnostic tests.

However, this FDA rulemaking was initiated after years of failed congressional attempts to harmonize the regulatory paradigms

applicable to LDTs and other IVDs, making it unclear whether any legislative efforts would be successful going forward.

The outcome of the November 2024 elections on the composition of the 2025-2026 Congress, with both the Senate and House transitions to Republican control, also creates uncertainties for the diagnostic industry.

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.

If and when the FDA begins to actively enforce its premarket submission regulations with respect to LDTs generally or to our tests in particular, whether as a result of new legislative authority or under the May 2024 LDT final rule, depending upon the risk classification of each individual test, we may be required to obtain premarket clearance for our diagnostic assays 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.

The process for submitting and obtaining FDA approval of a PMA generally takes from one to three years or even longer, and approval is not guaranteed.

PMA approval typically requires extensive clinical data and can be significantly longer, more expensive and more uncertain than the 510(k) clearance process.

If premarket review is required for some or all of our tests, the FDA could require that we stop selling our tests and testing services pending clearance or approval and conduct clinical testing prior to making submissions to FDA to obtain premarket clearance or approval.

The FDA could also require that we label our tests as investigational or limit the labeling claims we are permitted to make.

Regulation of Clinical Trials

We have also conducted and may in the future conduct research studies for our AVISE ® tests and our other tests in development that involve clinical investigators and human subjects (or stored specimens from human subjects) at sites in the United States.

We may need to conduct additional clinical trials for the AVISE ® tests, as well as other tests we may offer in the future, to drive test adoption in the marketplace and reimbursement.

Should we not be able to perform these studies, or should their results not provide clinically meaningful data and value for clinicians, adoption of our tests could be impaired and we may not be able to obtain reimbursement for them.

The conduct of clinical trials is also subject to extensive federal and institutional regulations intended to assure that the data and reported results are credible and accurate and that the rights, safety, and welfare of study participants are protected.

Most studies involving human participants must be reviewed and approved by, and conducted under the auspices of, a duly-constituted institutional review board (IRB), which is a multi-disciplinary committee responsible for reviewing and evaluating the risks and benefits of a clinical trial for participating subjects and monitoring the trial on an ongoing basis.

Companies sponsoring the clinical trials and investigators also must comply with, as applicable, regulations, guidelines and IRB requirements for obtaining informed consent from the study subjects, following the protocol and investigational plan, adequately monitoring the clinical trial, and timely reporting of adverse events.

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.

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.

If the investigational device presents a “significant risk,” as defined by the FDA, the agency requires the device sponsor to submit an investigational device exemption application (IDE) to the FDA.

The exemption must become effective prior to commencing human clinical studies.

A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a patient and either is implanted, used in supporting or sustaining human life, substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk to a patient.

An IDE must be supported by appropriate non-clinical data, such as animal and laboratory test results, showing that the device has a safety profile appropriate for human testing and that the trial protocol is scientifically sound.

The IDE will automatically become effective 30 days after receipt by the FDA, unless the FDA expressly approves or denies the application in writing or notifies the sponsor that the investigation is on hold and may not begin until the sponsor provides supplemental information about the investigation that satisfies the agency’s concerns.

If the FDA determines that there are deficiencies or other concerns with an IDE that require modification of the trial, the FDA may permit a clinical trial to proceed under a conditional approval or the sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin.

If the device presents a non-significant risk to the patient according to criteria established by FDA as part of the IDE regulations, a sponsor may begin the clinical trial after obtaining approval for the trial by one or more IRBs without separate authorization from the FDA, but must still comply with abbreviated IDE requirements, such as monitoring the investigation, ensuring that the investigators obtain informed consent, and labeling and record-keeping requirements.

In the Consolidated Appropriations Act for 2023, Congress amended the FDCA to require the sponsor of any pivotal clinical trial that will be used to demonstrate the safety and effectiveness of a medical device marketing authorization submission to develop a diversity action plan for such trial, and if submission of an IDE application is required, to submit such diversity action plan to the FDA.

The action plan must include the sponsor’s diversity goals for enrollment, as well as a rationale for the goals and a description of how the sponsor will meet them.

The FDA may grant a waiver for some or all of the requirements for a diversity action plan.

It is unknown at this time how the diversity action plan may affect device pivotal clinical trial planning and timing, but if FDA objects to a sponsor’s diversity action plan and requires the sponsor to amend the plan or take other actions, it may delay trial initiation.

Although the FDA has statutory authority to assure that medical devices, including IVDs, are safe and effective for their intended uses, the agency had historically exercised its enforcement discretion and not enforced applicable device regulations with respect to LDTs, which are IVDs that are designed, manufactured and used within a single high-complexity CLIA-certified laboratory.

As LDTs increased in complexity over recent decades, the FDA took a risk-based approach to their regulation, while Congress also signaled interest in clarifying the regulatory landscape for LDTs.

However, following several years of inaction by Congress on this issue, the FDA issued a final rule in May 2024 to regulate LDTs under the existing medical device framework and to phase out the agency’s longstanding enforcement discretion policy;

the final rule became effective on July 5, 2024 and was expected to begin entering into force against non-exempt “LDT manufacturers” in May 2025.

Following issuance of the LDT final rule, the American Clinical Laboratory Association (ACLA) and one of its members, as well as the Association for Molecular Pathology (AMP) and one of its members, to file complaints against the FDA in the Eastern District of Texas and the Southern District of Texas, respectively.

Both complaints alleged that the agency did not have authority to promulgate the LDT final rule and sought to vacate the FDA’s action;

the two cases were subsequently consolidated into a single action.

On March 31, 2025, the U.S.

District Court for the Eastern District of Texas vacated the final rule in its entirety and remanded the matter to the FDA, holding that the rule exceeded the agency’s authority under the FDCA.

The FDA did not appeal the decision.

As a result, the phase-in deadlines established by the rule are no longer operative, and in September 2025 the FDA implemented the court’s vacatur of the final rule with a formal public notice.

The court’s decision striking down the final rule reduces the immediate regulatory burden for laboratories such as ours.

However, uncertainty remains regarding the future of federal oversight in this area, as Congress could enact new legislation establishing a statutory framework for regulating all IVDs, including LDTs.

Affected stakeholders continue to press for a comprehensive legislative solution to create a harmonized regulatory framework for oversight of LDTs by both the FDA and CMS.

Even though we believe that all of our AVISE® test products, and our near-term pipeline candidate tests, are LDTs and we presently commercialize them accordingly, the FDA may determine that any of our marketed tests is a

regulated IVD rather than an LDT, meaning that we and such test would become subject to more onerous regulation by the FDA.

Alternatively, we and our test products may become subject to regulation by the FDA, including premarket authorization requirements, if and when Congress passes legislation granting the FDA regulatory authority over LDTs.

Advertising of Laboratory Services or LDTs

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 discretion with respect to the FDA’s device requirements as LDTs.

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, regardless of whether the product or service is regulated as a medical device or LDT.

Under the Federal Trade Commission Act (the 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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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.

A financial relationship can be a compensation arrangement with or an ownership or investment interest in the laboratory.

Sanctions for a Stark Law violation include the following:

▪ denial of payment for the services provided in violation of the prohibition;

▪ refunds of amounts collected in violation of the Stark Law;

▪ refund of amounts collected in violation of the Stark Law;

▪ significant civil penalties for each bill or claim for a service arising out of the prohibited referral, and additional penalties for each arrangement or scheme that the parties know (or should know) has the principal purpose of circumventing the Stark Law's prohibition;

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▪ possible exclusion from federal healthcare programs, including Medicare and Medicaid.

The Stark Law applies regardless of any intent by the parties to induce or reward referrals or the reasons for the financial relationship and the referral.

The Stark Law applies regardless of the intent of the parties or the reasons for the financial relationship and the referral.

In addition, violations of the Stark Law may also serve as the basis for liability under the federal False Claims Act, which can result in additional civil penalties.

Similarly, PORA makes it unlawful for a physician or certain other healing arts licensees to refer a person for certain healthcare services, including clinical laboratory services, if the licensee has a financial interest with the person or entity that receives the referral, unless an exemption is met.

Similarly, PORA makes it unlawful for a physician or certain other healing arts licensees to refer a person for certain healthcare services, including clinical laboratory services, if the licensee or their immediate family member has a financial interest with the person or entity that receives the referral, unless an exemption is met.

Unlike the Stark Law, PORA applies regardless of the source of payment.

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The Federal Anti-Kickback Statute makes it a felony for a person or entity, including a clinical laboratory, to knowingly and willfully offer, pay, solicit or receive any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, in order to induce or in return for the referral of an individual for the furnishing of, or the recommending or arranging for the furnishing of, purchasing, leasing, ordering or arranging for or recommending purchasing, leasing or ordering of any item or service that is reimbursable in whole or in part, under any federal healthcare program.

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.

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.

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.

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Other Federal and State Healthcare Laws

In addition to the requirements discussed above, several other healthcare fraud and abuse laws could have an effect on our business.

In addition to the requirements discussed above, several other healthcare fraud and abuse laws could affect our business.

For example, federal law permits the U.S.

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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.

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.

Violation of the federal False Claims Act may result in 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, and the OIG may request that the defendant enter into a Corporate Integrity Agreement that imposes compliance-related obligations.

Several states, including California, have enacted comparable false claims laws that may apply regardless of payor.

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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.

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.

The 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.

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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.

We may become subject to such reporting requirements under the terms of current CMS regulations, however, if the FDA requires us to obtain marketing authorizations for our diagnostic tests as medical devices (whether because the agency determines that one or more of such tests do not fall within the scope of the agency’s existing LDT definition or because of its recently issued final rule to exercise authority over LDTs as medical devices) or Congress enacts legislative reforms to the federal oversight of LDTs to subject them to FDA regulation and/or the reporting requirements of the Sunshine Act.

It is presently unknown how CMS will respond to the recently finalized FDA policy change to effectively render all LDTs medical device products under federal law, and whether or when it will assert that the Sunshine Act’s reporting requirements will begin to apply to the manufacturers of such LDTs.

Given that litigation is ongoing between members of the clinical laboratory industry and FDA/HHS in relation to the May 2024 LDT final rule, it may be many months or even years before we have clarity on the applicability of state and federal Sunshine Act laws to our business.

We may become subject to such reporting requirements under the terms of current CMS regulations, however, if the FDA requires us to obtain marketing authorizations for our diagnostic tests as medical devices (because the agency determines that one or more of such tests do not fall within the scope of the agency’s existing LDT definition) or Congress enacts legislative reforms to the federal oversight of LDTs to subject them to FDA regulation and/or the reporting requirements of the Sunshine Act.

Certain states also require medical device manufacturers to maintain compliance programs and/or be licensed as manufacturers or distributors by a state professional board or health department.

Because the FDA’s now-in-effect final rule renders a clinical laboratory like ours a “medical device manufacturer,” we have begun the process of evaluating whether and to what extent those kinds of medical device-specific state requirements may be applicable to our operations.

We are also subject to applicable state restrictions on laboratory billing.

These laws vary from state to state but generally are intended to prevent a provider who ordered but did not perform the service from billing for that service at a markup.

or customer of the name, address and charges of the laboratory performing the test, and (b) charges no more than what the provider was charged by the clinical laboratory that performed the test except for any other service actually rendered to the patient by the provider (for example, specimen collection, processing and handling).

For example, California has an anti-markup statute with which we must comply, which prohibits a provider from charging for any laboratory test that it did not perform unless the provider (a) notifies the patient, client or customer of the name, address and charges of the laboratory performing the test, and (b) charges no more than what the provider was charged by the clinical laboratory that performed the test except for any other service actually rendered to the patient by the provider (for example, specimen collection, processing and handling).

This provision applies, with certain limited exceptions, to licensed persons such as physicians and clinical laboratories regulated under California’s Business and Professions Code.

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Many states also have "direct-bill" laws that require the party that performed the service to bill for the service, with certain exceptions.

If our operations are found to be in violation of any of the fraud and abuse laws described above or any other healthcare regulatory laws that apply to us, we may be subject to penalties, including potentially significant criminal and civil and/or administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government healthcare programs, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

and civil and/or administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government healthcare programs, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

International Regulations

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Breaches must be reported as soon as reasonably practicable, but no later than sixty days following discovery of the breach.

Reports must be made to affected individuals, the

Secretary, and depending on the size of the breach, the local and national media.

Reports must be made to affected individuals, the Secretary, and depending on the size of the breach, the local and national media.

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.

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A single breach incident can violate multiple requirements, resulting in potential penalties in excess of $2.1 million.

Additionally, a person who knowingly obtains or discloses individually identifiable health information in violation of HIPAA may face a criminal penalty of up to $50,000 and up to one year of imprisonment.

Additionally, a person who knowingly obtains or discloses individually identifiable health information in violation of

HIPAA may face a criminal penalty of up to $50,000 and up to one year of imprisonment.

These criminal penalties increase if the wrongful conduct involves false pretenses or the intent to sell, transfer or use identifiable health information for commercial advantage, personal gain, or malicious harm.

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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.

Various states such as Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Kentucky, Maryland, Montana, Nebraska, New Hampshire, New Jersey, Oregon, Rhode Island, Tennessee, Texas, Utah, and Virginia have enacted their own omnibus consumer

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.

Many other states have enacted, or are considering enacting, their own omnibus consumer privacy laws similar to the CCPA, 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.

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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.

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.

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.

Congress has also been considering similar federal legislation relating to data privacy and data protection.

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Failure to maintain compliance, or changes in state or federal laws regarding privacy or security, could result in civil and/or criminal penalties and damages and could have a material adverse effect on our business.

Also, more than thirty states regulate artificial intelligence (AI) or are considering proposed legislation that would regulate AI.

Also, more than thirty states regulate AI or are considering proposed legislation that would regulate AI.

Generally, such regulations aim to protect individuals such as consumers, employees, and/or job applicants from bias, discrimination, and invasion of privacy and to promote transparency with respect to use of AI by companies.

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In Europe, the General Data Protection Regulation (GDPR) went into full effect in May 2018.

data and pseudonymized (i.e., key-coded) data, mandatory data breach notification requirements, more robust rights for individuals in regard to their personal data and higher standards for controllers to demonstrate that they have obtained valid consent for certain data processing activities.

The GDPR implements stringent operational requirements for processors and controllers of personal data, including, for example, expanded disclosures about how personal information is collected and used, limitations on retention of information, increased requirements pertaining to health data and pseudonymized (i.e., key-coded) data, mandatory data breach notification requirements, more robust rights for individuals in regard to their personal data and higher standards for controllers to demonstrate that they have obtained valid consent for certain data processing activities.

It provides that European Union (EU), and European Economic Area (EEA), member states may make their own further laws and regulations, which may impose further limitations, including in relation to the processing of biometric or health data, which may result in differences between member state laws, limit our ability to use and share personal data, cause our costs to increase and/or harm our business and/or financial condition.

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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.

Facebook (Case C-311-18), known as “Schrems II.” 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-U.S.

Facebook (Case C-311-18), known as “Schrems II.” 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-U.S.

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.

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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.

In June of 2021, the European Commission issued a decision, which was subsequently extended on December 19, 2025 through December 27, 2031, 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.

Billing and Government Reimbursement for Clinical Laboratory Services

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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.

As noted below, federal law has delayed implementation of further reductions until 2025, at which time the reduction cap will rise to 15% per test per year.

As noted below, federal law has delayed implementation of further reductions through 2026, after which time the reduction cap may rise to 15% per test per year.

PAMA did not impact Medicare reimbursement for AVISE ® CTD in 2025 compared to levels experienced in 2024.

Additionally, we do not expect PAMA and changes to the PFS will not have a significant impact to Medicare reimbursement for AVISE ® CTD in 2025 compared to levels experienced in 2024.

Additionally, we do not expect PAMA and changes to the PFS to have a significant impact to Medicare reimbursement for AVISE ® CTD in 2026 compared to levels experienced in 2025.

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, on September 26, 2024, Section 221 of the Continuing Appropriations and Extensions Act, 2025, was passed, and it delayed data reporting requirements for CDLTs that are not ADLTs as well as the phase-in of payment reductions.

The next data reporting period for CDLTs that are not ADLTs will be January 1, 2026 through March 31, 2026, and will be based on the original data collection period of January 1, 2019 through June 30, 2019.

recently, on February 3, 2026, Section 6226 of the Continuing Appropriations Act, 2026, further delayed data reporting requirements for CDLTs that are not ADLTs as well as the phase-in of payment reductions.

The next data reporting period for CDLTs that are not ADLTs will be from May 1, 2026 through July 31, 2026, and will be based on an updated data collection period of January 1, 2025 through June 30, 2025, relieving reporting companies from the burden of reporting 2019 data.

After this data reporting period, the three-year data reporting cycle for these tests will resume (e.g., 2028, 2031, etc.).

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 2025, as compared to the payment amounts for a test the preceding year.

The Further Continuing Appropriations and Other Extensions Act, 2025, further applied a 0.0% reduction limit for CY 2025.

Consequently, payment may not be reduced by more than 15% per year for CYs 2026 through 2028 as compared to the payment amounts established for a test the prior year.

The Continuing Appropriations Act, 2026, further applied a 0.0% reduction limit for CY 2026.

Consequently, payment may not be reduced by more than 15% per year from January 31, 2027 through December 31, 2028 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.

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Typically, we use licensed or otherwise qualified outside vendors to dispose of this waste.

However, many of these laws and regulations provide

for strict liability, holding a party potentially liable without regard to fault or negligence.

However, many of these laws and regulations provide for strict liability, holding a party potentially liable without regard to fault or negligence.

As a result, we could be held liable for damages and fines if our, or others', business operations or other actions result in contamination of the environment or personal injury due to exposure to hazardous materials.

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Occupational Safety and Health Administration relating to workplace safety for healthcare employees, including requirements to develop and implement programs to protect workers from exposure to blood-borne pathogens by preventing or minimizing any exposure through needle stick or similar penetrating injuries.

Information About Our Directors and Executive Officers

The following persons currently serve as the directors and executive officers of Exagen:

Directors and Executive Officers Position

Information About Our Executive Officers and Directors

The following persons currently serve as our executive officers and directors:

Executive Officers and Directors Position

Executive Officers

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Frank Stokes Chief Financial Officer, Castle Biosciences, Inc.

Environmental, Social and Governance Matters

In 2022, we created our 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.

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.

Chas McKhann Senior Advisor, McKinsey & Company

We rely on sole suppliers for the critical supply of reagents, equipment and other materials that we use to perform the tests that comprise our AVISE ® testing products.

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The information 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.

Investors should not rely on any such information in deciding whether to purchase our common securities.

Available Information

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

What changed 10-K

Item 1. Business