Molecular diagnostics developer OncoCyte said it will step up its pursuit of coverage by private insurers for its DetermaRx™ non-small cell lung cancer (NSCLC) test, after receiving a final local coverage determination (LCD) from Palmetto GBA, the Medicare Administrative Contractor for the Centers for Medicare & Medicaid Services (CMS).
DetermaRx is a 14-gene molecular stratification test designed to enable identification of Stage IA, 1B, and IIA non-squamous NSCLC patients who may benefit from adjuvant chemotherapy post-surgical resection. DetermaRx was called the “Razor test” until OncoCyte renamed it after acquiring Razor Genomics for at least $11 million in September 2019—soon after CMS gave the test a positive reimbursement.
The final LCD—formally titled “MolDX: Predictive Classifiers for Early Stage Non-Small Cell Lung Cancer”—takes effect on June 14, six weeks after it was announced, to allow for pricing discussions. At deadline, Oncocyte had not yet been informed of CMS’ pricing decision for reimbursement for DetermaRx. Piper Sandler analyst Rachel Vatnsdal has projected that reimbursement will be between $3,000 and $4,000.
The final LCD is particularly encouraging news for OncoCyte, which reasons that about 70% of its patient volume for DetermaRx will be people aged 65 and up.
“With this approval, we now have a really nice opportunity to go after about 70% of the market opportunity,” OncoCyte CEO Ron (Ronnie) Andrews told GEN Edge. “Once CMS establishes the final decision and the price of that decision, we can then begin to work with private payers, because now we have a benchmark as to what the value is in the industry. We’ve already started the outreach to private payers in the key areas of the country that we are focusing on to launch the test.”
Those key areas, Andrews said, are the 10 areas of the U.S. with the highest incidence rates of lung cancer outside of New York, where the company needs a state license to offer its tests. They include Florida, the Southern states within the “Tobacco Belt” of five major tobacco-growing states (Kentucky, North Carolina, South Carolina, Tennessee, and Virginia), and portions of the Midwest and West Coast.
The company is also reaching out to thoracic surgeons that perform a significant amount of lung cancer surgeries.
Encouraging Sign
One encouraging sign for OncoCyte: In a few individual cases, private payers have agreed to pay for tests as billed for patients that paid a co-payment.
“Anthem was one that actually accepted our bill,” Andrews recalled, referring to the for-profit payer whose affiliated companies serve more than 79 million people, including 41 million within its family of health plans. “That doesn’t mean they will accept them all. If we start sending lots of bills to them, they’re going to want a contract. But for right now, the one-offs, they seem to be willing to accept those bills, especially given the letters of recommendation that the physicians send to the payer to recommend payment, because of the urgent need of that information.”
Since the test was launched in January, DetermaRx has been onboarded into 20 sites, including some large healthcare systems. More than 1500 people have participated in online physician education programs to learn more about the test, OncoCyte said, as the company pivoted to virtual physician engagement due to COVID-19.
“When physicians found themselves without surgical suites, they found themselves with a little extra time. They began to join our virtual training programs, and we also sponsored a CME program, and we saw that get a lot of positive response,” Andrews said. “We’ve been very pleased with how our virtual commercial efforts have been received by the marketplace.”
Interest in the test has come despite the shift of surgical procedures, access to surgical suites and potential ventilators away from lung cancer patients to COVID-19 patients as a result of the global pandemic.
“We are seeing that loosen up significantly now. As many areas of the country do not have full hospitals, we’re starting to see these surgical suites open back up,” Andrews said.
Because of the disruption caused by COVID-19, Andrews said, OncoCyte is unable to project its revenues for this year, something it originally expected would occur soon after the launch of DetermaRx. The company finished the first quarter with a net loss of $7.7 million, compared with a net loss of $3.9 million in Q1 2019. One factor was a jump in sales and marketing expenses, which rose to $1.5 million from $0.2 million in the year-ago quarter primarily due to ramping up key hires and other activity for commercializing DetermaRx.
“We’re Very Grateful”
“The government processes did, rightly so, become incredibly focused on all things SARS-CoV-2, and obviously the COVID-19 disease that goes with SARS-CoV-2 infection. We did feel like it was going to be a slowdown in the response from CMS, and there was a slight one, but it wasn’t nearly as long as we thought it would be,” Andrews added. “We’re very grateful that they remained focused on other important areas, especially lung cancer.”
An abstract about DetermaRx detailing what the company said was potential significant health economic savings provided by the test has been selected for presentation at the 2020 American Society of Clinical Oncology (ASCO) Virtual Meeting, set for May 29-31.
And in August at American Thoracic Society (ATS) 2020 Virtual, OncoCyte has been selected for oral presentation of its abstract with long-term follow-up data from a 195-patient study demonstrating the clinical utility of DetermaRx in identifying high-risk cancers that can recur rapidly if untreated, as well as the potential to safely reduce follow-up for low-risk patients to conserve healthcare resources and limit patient stress.
In the long-term follow-up abstract, published in the American Journal of Respiratory and Clinical Care Medicine, Barbara Hamilton, MD, clinical fellow, thoracic surgery at University of California, San Francisco, and colleagues, reported that one in three patients who identified as high risk through testing with DetermaRx experienced a recurrence of their cancer, with 70% of these patients experiencing a recurrence within two years of surgery.
Additionally, 96% of patients identified as low risk through DetermaRx testing did not recur but continued to undergo frequent scans, which are associated with patient stress and can be an inefficient use of healthcare resources. The data also showed that limiting the follow up of those low risk patients to annual surveillance scans would have reduced overall scan frequency by 50%, while having little impact on detection of cancer recurrence.
DetermaDx and DetermaIO
Andrews also discussed two other tests in development by OncoCyte. One is DetermaDx, which uses a proprietary immune system interrogation approach designed to clarify if a patients’ lung nodules are benign, and thus could potentially avoid potentially risky invasive diagnostic procedures. OncoCyte expects in early June to have completed the Immune Response for Nodule Evaluation (IRENE), a clinical validation study with 2,903 subjects being evaluated across 62 sites including both academic and community practices.
“We’ll organize and synthesize the data, and we’ll be prepared to announce the results by the end of June,” Andrews said.
The largest reported cohort consists of participants with pulmonary nodules 5–30 mm, intended to be representative of the U.S. patient population. An abstract detailing the study and results has also been selected for presentation at ATS 2020 Virtual.
OncoCyte has completed CLIA validation for its DetermaIO™, a gene expression test designed to identify patients more likely to respond to PD-1/PD-L1 checkpoint immunotherapies, and has advanced the test to commercial availability for research use only.
OncoCyte gave DetermaIO its current name when it acquired privately-held Insight Genetics for approximately $12 million—$7 million cash, $5 million in stock—in a deal signaling its intent to broaden its lung cancer test menu. Insight Genetics’ offerings included the test, previously known as the Immune Modulation (IM) Score, which measures the state of the immune system in biopsies from cancer patients.
The potential utility of DetermaIO in triple-negative breast cancer (TNBC), in addition to NSCLC, will be detailed in an abstract also accepted for presentation at the 2020 ASCO Virtual Meeting.
