ngs testing in today’s precision medicine landscape...generation sequencing to identify actionable...

© 2019. All rights reserved by PierianDx 1

Chris Callahan, Chief Operating Officer and Executive

Vice President

NGS Testing in Today’s

Precision Medicine Landscape

What Labs are Running and What Your Lab should do now

© 2019. All rights reserved by PierianDx | Confidential 2

2003 WashU plays critical role in Human Genome Project.

Today Full suite of software and services

Independent CLIA/CAP “dry lab”

40+ medical center, cancer center, health system, and reference lab clients

200+ yrs of clinical genomics experience

2014 PierianDx est. after ~50 labs visit WashU to learn how clinical NGS is operationalized.

2011 WashU among first to validate and clinically report on somatic cancer NGS panels.

Leaders in Clinical Genomics Pioneers in Precision Medicine

2


Overview NGS Testing in Today’s Precision Medicine Landscape

2 ROI to Bringing Testing In House

3 What Your Laboratory Should Do Now

1 Recent Trends


NGS Testing is Coming of Age Recent Trends

Key Findings ■  AMCs and NCI Centers have brought clinical

NGS in-house ■  Physicians in community still sending out to

reference labs ■  Some laboratories have implemented reflex

testing for certain tumor types ■  Despite improved coverage, cost and

reimbursement can be challenging

Source: BHA analysis of qualitative interviews with 30 Pathologists and/or Lab Directors

Anticipated Growth of NGS Testing Market

Pathologists anticipate an increase in NGS-based testing moving forward as coverage landscape continues to improve and more targeted therapies get approved

$8.0B

5.5 MM Tests

2017

1.1MM NGS

2020

3.2MM NGS

$11B

8.0 MM Tests

12-15% per annum revenue growth

20% NGS in 2017 40% NGS in 2020

Source: Epstein Health


CMS’ National Coverage Decision Recent Trends

Private payors are covering for their managed Medicare lives, but not uniformly for commercial lives

On March 16, 2018 CMS released a national coverage determination to cover NGS in patients with cancer.

Two Pathways for Coverage CMS has created 2 pathways for coverage for next generation sequencing in advanced cancers for FDA-approved or cleared companion diagnostics:

CMS-identified, Covered Assays

FoundationFocus™ CDxBRCA (Foundation Medicine)

F1CDx (Foundation Medicine)

Oncomine™ Dx Target Test (Thermo Fisher Scientific, Inc.)

Praxis™ Extended RAS Panel (Illumina)

Source: BHA Analysis

The NCD preserves a Medicare coverage pathway for LDTs through the LCD process

NCD MACs


Key Reimbursement Updates Recent Trends

Oncology

NGS Coverage

Payer Cost Control

Coding and Payment

Regulatory

●  Molecular testing in advanced cancers expected to move from single marker to NGS ●  NGS testing will expand when coverage is widely established

●  Payors are moving toward mutation-based coverage policies ●  Private payors don’t embrace coverage with evidence development but there is movement to incorporate real-

world evidence in coverage decisions ●  MolDx program expected to expand

Source: Boston Healthcare Associates Analysis

●  Outsourcing to laboratory benefit managers is creating additional bureaucracy for laboratories ●  Several private payors have a desire to engage in risk-sharing agreements/value based contracting in oncology

but may have challenges implementing given cost and complexity

●  Coding and payment for NGS has evolved considerably with a move toward bundled or test-specific coding as opposed to stacked coding

●  There are recent examples of incremental reimbursement for FDA-approved testing from Medicare but similar examples aren’t expected from private payors

●  FDA is seeking to oversee and regulate LDTs; this will likely push labs to adopt FDA-approved kits whenever possible

●  Class-based CDx labeling will change the pharma-Dx partnering landscape with the potential for more consortia-type agreements


What Type of Tests are Labs Running? Recent Trends

“Explosion of biomarker testing. It’s been huge in the lung field, expanded in breast and colon. I think it's being used more in thyroid. I can't speak to the other rare tumor types. I know we'll do an NGS panel on tumors when we are unclear on primary diagnosis or we are looking for targeted therapy.” - Pathologist, Community Hospital

Growth of NGS testing for TMB, and MMR proficiency with a view towards immunotherapy and more generally, an increase in testing to qualify patients for therapy.” - Pathologist, Community Hospital

NGS Testing Biomarker Testing

Progressive increase in oncology due to tumor agnostic biomarkers developed to inform targeted and immune therapies

Standardized testing algorithms drive biomarker testing for common tumors (NSCLC, CRC, breast) at diagnosis at many healthcare settings


More laboratories performing NGS for common tumor types with approved therapies

Tumor agnostic markers, such as MSI, TMB and NTRK fusions are significant driver of more NGS testing

Improving payor coverage with recent Medicare coverage for FDA-approved NGS tests


Oncology Testing is Evolving Recent Trends

Current Near-Term Long-Term

Single Markers and Hotspot Panels Specific patient populations are tested for specific biomarkers using conventional methods (e.g., EGFR PCR for NSCLC

Limits on tissue availability make this approach less sustainable long-term

Multi-Modality Mix of test methods gives best picture

Possible reflex test patterns with some tests being prioritized because of their ease of use/affordable cost

Some FDA approved; some LDTs

Broad NGS Testing NGS / CGP increasingly dominates conventional methods (e.g., PCR, FISH

Use of a single test on a single sample to obtain a comprehensive biomarker status of the patient

Informatics deployed to create genotypic and phenotypic profile of patient


In vitro Diagnostics is a Game Changer Commercial Pan-cancer Assays

2019

500+

1+

5-50

2011

<2011

2019

2017

500+ Provider Assay Genes

PGDx PGDx 500+

Illumina TruSightTM Oncology 500

Memorial Sloan MSK-Impact 468

Foundation Medicine F1CDx 324

Illumina TruSightTM Tumor 170

ThermoFisher Oncomine 162

50+

Sold as kits for RUO/LDT

Public plans for IVD

Genes

What if, instead of multiple tests, you could perform a single test that looked at all relevant biomarkers simultaneously?


CGP Can Identify Actionable Alterations Recent Trends

1. Stransky N, Cerami E, Schalm S, Kim JL, Lengauer C. The landscape of kinase fusions in cancer. Nat Commun. 2014;5:4846. doi:10.1038/ncomms5846. 2. Boland GM, Piha-Paul SA, Subbiah V, et al. Clinical next generation sequencing to identify actionable aberrations in a phase I program. Oncotarget. 2015;6(24):20099-20110. 3. Massard C, Michiels S, Ferte C, et al. High-throughput genomics and clinical outcome in hard-to-treat advanced cancers: results of the MOSCATO 01 trial. Cancer Discov. 2017;7(6):586-595. 4. Harris MH, DuBois SG, Glade Bender JL, et al. Multicenter feasibility study of tumor molecular profiling to inform therapeutic decisions in advanced pediatric solid tumors: the individualized cancer therapy (iCat) study. JAMA Oncol. 2016;2(5):608-615. 5. Parsons DW, Roy A, Yang Y, et al. Diagnostic yield of clinical tumor and germline whole-exome sequencing for children with solid tumors. JAMA Oncol. 2016;2(5):616-624.; 6. Reitsma et al., 2019. Effect of a Collaboration Between a Health Plan, Oncology Practice, and Comprehensive Genomic Profiling Company from the Payer PerspectiveJournal of Managed Care & Specialty Pharmacy.

30%–90% Of patients who undergo Genomic Profiling may have actionable alterations

2 Studies with pediatric solid tumors4,5

Prospective Clinical Trials—843 patients with advanced

cancers3

500 patients with advanced cancer, multiple

tumor types2

49% 31–39% 30%

% of patients found to have an ACTIONABLE genetic alteration, after genomic profiling

96 patients with multiple tumor types6

90%

Slide courtesy of Illumina


CGP Has Value in Patient Management Recent Trends

Increase Clinical Trial Eligibility Greater than 1000-fold

4% → 54% Increase Targeted Therapy

Utilization projected to double

6% → 13%

Reduce Adverse Events Decreased by one-third

↓33% Reduce Costs of

Non-targeted Therapy Cost decreases by $6.6M

$6.6M ↓

Reitsma et al., 2019. Effect of a Collaboration Between a Health Plan, Oncology Practice, and Comprehensive Genomic Profiling Company from the Payer Perspective Journal of Managed Care & Specialty Pharmacy.



Insourcing NGS Testing Molecular diagnostic market size is projected to reach $10.12 Billion from $6.54 Billion in 2016, at a CAGR of 9.1%. As most diagnostic tests are performed in-house, the hospital & academic laboratories segment is expected to dominate the market.

Source: ReportsnReports

2016

$6.5B $10.1B

2021

Volume

Hospitals billing for comprehensive genomic profiling (CGP)

IDNs (Non-NCI)

45

149

33

3

NCI - Designated Centers Community Hospitals (Non-NCI, Non-IDN, Non-AMC)

AMCs (Non-NCI, Non-IDN)

Today, most of the CGP volume is going to a few independent reference labs.1

Recent Trends

Source: Boston Healthcare Associated Analysis

However, academic medical centers and community hospitals are expected to insource more of these tests now that there’s a clear pathway to reimbursement.

Source: Admin. With CMS coverage policy, NGS cancer testing goes large. CAP TODAY. https://www.captodayonline.com/cms-coverage-policy-ngs-cancer-testing-goes-large/. Accessed April 26,

2019.

Source: Boston Healthcare Associated Analysis


Why Bring NGS Testing In-House Return on Investment


Gain Control, Reduce Costs, and Expand Leadership

Control Achieve reduction in QNS by performing in-house4

■  QNS as high as 27% in NSCLC2 send-out tests

■  University of Vermont has a QNS of 1-2% by bringing testing in-house1

Decrease TAT

■  TAT for send-outs is 21+ days

■  Pull data from qual survey

Tissue

Quality

Workflow

Adverse Events

Testing

Costs

Limit need for rebiopsy

■  Reduce costs associated with invasive and risky tissue biopsies3,6

Reduce spend to send-out laboratories

■  Dartmouth has achieved cost savings of 77% in direct variable costs compared with send-outs. When considering labor and other fixed costs, the hospital saved 39%1.

Leadership/ROI Market Differentiation

■  Attract/retain patients5,7

■  Improve relationships with payors/providers7

■  Recruit top talent7 ■  Increase clinical trial

referrals7

Accumulate Valuable Data

■  Research ■  ACO/Population health

Market Value

Data

Sources: 1. PierianDx. Why Are Other Healthcare Institutions Bringing Clinical NGS Testing In-House? PierianDx. https://www.pieriandx.com/news-room/learn-why-healthcare-organizations-are-insourcing-clinical-ngs-testing. Accessed April 19, 2019. 2. Using Multiplexed Assays of Oncogenic Drivers in Lung Cancers to Select Targeted Drugs. Jama. 2014 3. Genomic Profiling of Advanced Non-Small Cell Lung Cancer in Community Settings: Gaps and Opportunities. Clin Lung Cancer. 2017.

4. Comprehensive Validation of Cytology Specimens for NGS and Clinical Practice Expertise. 2018 5. The High Cost of Cancer Treatment. AARP. 2018. 6. Percutaneous Lung Biopsy: Technique, Efficacy, and Complications. Semin Intervent Radiol. 2013. 7. Determining Value of a Precision Medicine Program. Precision Medicine Summit. 2019.

ROI to Bring NGS Testing in House


Survey of Early Adopters ROI to Bring NGS Testing in House

Reason for Insourcing NGS # of Institutions

Demand from clinicians 13

Anticipated efficiencies 12

Gain expertise in tech, informatics 9

Advance personalized medicine 7

Institutional stature 5

Value for research 5

Improved TAT for Molecular DX 4

Develop in-house expertise 3

Desire to provide leadership 2

Competitive market advantage 2

Reduce overall cost in clinical care 2

Most cited benefits from PierianDx customers


Financial Data from Dartmouth ROI to Bring NGS Testing in House

“It does make financial sense to [insource]...The goal for our lab is to maintain the send-out volume at less than 5% and keep the send out costs at about 7-8% of the total operating costs for the lab.” Eric Loo Asst. Professor, Pathology & Lab Medicine

Source: “Bringing NGS Testing In-House.” PierianDx Webinar.

www.pieriandx.com

NGS Panel

Direct Variable Complete Cost If Sent Out

Myeloid ~$75,000 ~$215,000 ~$325,000

Lung ~$70,000 ~$175,000 ~$300,000

Melanoma ~$20,000 ~$50,000 ~$90,000

~$165,000 ~$440,000 ~$715,000

Savings 76.79% 38.57%*

To Lab To Institution *Dollar figures were altered for confidentiality. Savings are accurate.


How to Bring NGS Testing In-House

Recommended Strategies


What Your Lab Should Do Now

Amount of data to curate

Validation of clinical testing protocols

Scarcity of informatics expertise

Expense of implementation

Rapidly changing nature of technologies

Reimbursement Uncertainty

Test Validation

Pre-Launch Preparation

Training and Optimization

Institutional Approval

Initiate Planning

Procure Equipment Go-Live

How We Can Help

What We Have Learned


Align with Your Larger Organization What Your Lab Should Do Now

“We fundamentally believe that genomically-informed clinical care involves strategic integration of the best genomic technology, with people and processes beyond the laboratory to realize the promise of precision medicine for each unique patient.”

Nikoletta Sidiropoulos MD, Associate Professor and Director of Molecular Pathology

Source: “Accelerating Your NGS Testing with an End-to-End Integrated Workspace.” PierianDx Webinar.

Identify key stakeholders and clinical areas Evaluate your organization, identify stakeholders and key strengths, secure funding, and develop a plan. Consider what other internal initiatives are synergistic. Take a multidisciplinary approach Collaborate with laboratory personnel, oncologists, bioinformaticians, and other staff to build a test menu that physicians want to order from Think about how data will be used ■  Align with research? ■  Biobank? ■  Integration with EMR or other phenotypic database? ■  Data warehouse?


Clinical programming Examine Institutional Strengths

Research programs Informatics

Examine Institutional Priorities Clinical

programming Research & Education Market & Stature

Identify Clinical Need

Establish Business Plan Institutional Resourcing

Reimbursement Strategies

Research Resources

Prioritize Initial Clinical Applications

Develop Project Plan Timeline and Monitors Governance Outcomes

Measures

Obtain Institutional Approval

Implement

Unanticipated Resources

Monitor

Based on recommendations from the CAP Personalized Health Care Committee

Crawford, et al. The business of genomic testing: a survey of early adopters. Genetics in Medicine 2014

Align with Your Larger Organization What Your Lab Should Do Now


Library Extraction,

Sample Prep Sequencing

Variant Calling (Bioinformatic

Pipelines)

Variant Annotation & Classification

Data Visualization, QC Analysis

Final Report & Medical

Director Sign-out

Data Integration

EMR, 3rd Party

Professional Dry Bench Wet Bench

Clinical Interpretation & Reporting

A CLIA/CAP certified lab is allowed to outsource any of the three components to another CLIA/CAP certified lab.

Consider a Distributive Model What Your Lab Should Do Now


Take a Strategic Approach to Test Menu What Your Lab Should do Now

Today 3 Months 12 Months 2+ Years

All Solid Tumor

All Solid Tumor TSO 500

ArcherDx Myeloid

TSO 500

Lymphoid, Myeloid

TSO 500

ArcherDx Myeloid

6 Months

TruSight Cancer

In-House

Lab Services

Send-Out

Lymphoid, Myeloid

Solid Tumor

Hereditary

Liquid Biopsy

Liquid Biopsy

Hereditary Cancer

Hereditary Cancer

Heme

One Example


Address the Interpretation Bottleneck What Your Lab Should Do Now

Interpretation of the clinical

significance of genomic alterations

remains the most severe bottleneck

preventing the realization of

personalized medicine in cancer.

Good, et al. Organizing knowledge to enable personalization of medicine in cancer. Genome Biology 2014


Develop a Reimbursement Strategy What Your Lab Should Do Now

High Quality Test

Actionable Turnaround Time

Actionable Reporting

Clinical and Economic Evidence

Clinical Validity Clinical Utility Economic Utility

Coverage and Access

Guideline Inclusion Key Opinion Leader (KOL) Support

Key to Successful Commercialization Strategic development of clinical and economic evidence that clearly communicate the test’s value story Source: BHA Analysis



Payor Tool Description

Payor Coverage Presentation

30-min slide presentation which succinctly makes the case for coverage Shown to payor medical directors by payor relations group, medical science liaison, local KOL physician supporters

Payor Monograph, Dossier

White paper type document which explains issues with current treatment paradigm and describes the test’s impact on treatment

Payor Data Binder Binder containing the key supportive studies and clinical trial information

Cost/Budget Impact Models

Spreadsheet model which shows savings to payor or benefit to physician in financial terms over 2-3 year timeframe (i.e., avoided treatment costs, etc.)

Payor Profiling Database of account level information about major relevant payors which can be used to create account-specific tactics for driving positive coverage



Conclusion

1 Recent trends indicate increased NGS testing and in particular, Comprehensive Genomic Profiling.

3 Align, strategize on test menu and reimbursement, and consider distributing the workload.

2 Laboratories can increase quality, reduce costs, and gain expertise by insourcing clinical NGS testing.


Technology Enabled Services Let us Help!

Laboratory Services Turnkey, validated assays and informatics

Validation & Interpretation Services Experienced team to fast-track growth

Medically Powered Knowledgebase The largest opt-in content sharing network

Clinical Genomics Workspace All-in-one informatics and reporting software


Let Us Help! Building Your NGS Testing Program?

Chris Callahan Chief Operations Officer and Executive Vice President [email protected]

Resources Available www.pieriandx.com


A Record Number of Personalized Therapies Recent Trends


Pan-Cancer Biomarkers Approved Emerging

Microsatellite Instability NTRK Fusions (Vitrakvi) Tumor Mutational Burden

Recent Trends


Comprehensive Genomic Profiling (CGP) Recent Trends

Source: Tsao AS, et al. J Thorac Oncol. 2016;11:613-638.


Frequency of molecular aberrations in various driver oncogenes in lung adenocarcinomas and current available drugs against these oncogenic proteins.

+ TMB, MSI


Recent Trends

Protecting Access to Medicare Act (PAMA) is ensuring that all codes on the Clinical Lab Fee Schedule are valued according to commercial payor rates Coverage and payment for those related to CGP and TMB will be driven by strength of evidence and Payor policy

Source: CMS CLFS, BHA analysis

2017 National Limitation Amounts 2018 National Limitation Amounts

Winners Losers

81162 BRCA

81206 BRC-ABL

81301 MSI

81275 KRAS

81210 BRAF

81235 EGFR

81311 NRAS

81445 GSP 5-50

81321 PTEN

81292 MLH1

81211 BRCA

81450 GSP 5-50

Heme

81298 MSH6

81295 MSH2

81455 GSP 51+

Reimbursement Tied to Evidence, Payor Policy


Collaborate What Your Lab Should Do Now

Pathologist Oncologist

Diagnostic Predictive/CDx

6

1

Lung

Breast

Colorectal 5

18 Physician

Order Only

6 w/ Some Reflex

Testing

Most NGS testing is at the request of the oncologist or treating physician

2

1

Reflex testing employed in specific tumor types is a mix of single

biomarkers and panels

AMC Community

Many labs indicate NGS testing may be done at initial diagnosis or upon disease progression

depending on tumor type/stage

4 Upfront

15 Both 7 Disease progression

Timing of NGS Testing

Source: BHA analysis of qualitative interviews with 30 Pathologists and/or Lab Directors



Overview Goal Tools

Top Down (Policy level)

Direct engagement with key decision makers (Medical Director or Tech Assessment Influencer) Payor education for access expansion

Leveraging KOL support Driving policy change through evidence and/or guidelines inclusion

Positive coverage policy that can be leveraged by sales force as evidence of assured reimbursement

Payor value dossier/presentation, account profiling, etc.

Bottom Up (Claims level)

Working at the grassroots level to ensure each test request is bolstered by supporting medical necessity documentation

Managing/Guiding prior authorization requests with physicians

Align with payor on preferred coding approach (e.g., code stacks vs. GSP codes) Leveraging denied/claims paid to create enough interest in test to encourage Payors to generate a policy and pay for the test

Maximize the number of claims paid, build interest in the test at Payor level

Medical necessity documentation, appeals

A defined coding strategy: Z-codes should be applied for in advance


ngs testing in today’s precision medicine landscape...generation sequencing to identify actionable...

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