Prostatype Genomics acquires CLIA Certificate to facilitate rapid US market launch with a significantly stronger financial outlook

Prostatype Genomics AB ("Prostatype Genomics" or "the Company") announces that its wholly-owned US subsidiary Prostatype Genomics Inc. has acquired a CLIA Certificate in its own name. Together with the announced CLIA laboratory agreement with Research Dx, this will enable the Company to enter the US prostate cancer market with its prognostic biomarker test Prostatype® upon accreditation from the CAP (College of American Pathologists) and formal technical validation of the Prostatype® test services. Prostatype Genomics expects to achieve these remaining steps and to initiate clinical use of Prostatype® test services in the US, in collaboration with selected American urologists, in Q1 2024. Furthermore, by holding a CLIA Certificate, Prostatype Genomics Inc. will be able to accept reimbursement payments from Medicare and commercial payers and then utilize its CLIA laboratory for analyzing the tests. This significantly increases Prostatype Genomics’ potential revenue as well as profit margin in the US compared to previously discussed alternatives for entering the US market, such as signing a licensing agreement with a CLIA laboratory partner where the partner would be responsible for the full testing and payment procedure.

On February 5, 2024, Prostatype Genomics announced that its wholly-owned US subsidiary Prostatype Genomics, Inc. has entered into a collaboration with ResearchDx and its affiliate PacificDx to perform Prostatype® testing in the US market as a so called CLIA-accredited laboratory. This means that the needed laboratory infrastructure for analyzing the test is in place, and thus that a key milestone towards entering the US market has been achieved.

Prostatype Genomics now announces that Prostatype Genomics, Inc. has acquired the CLIA Certificate needed to market, sell and accept reimbursement payments for the Prostatype® test as a LDT product (Laboratory Developed Test). By directly holding this certificate, Prostatype Genomics now has full flexibility and freedom when rapidly entering the US market, with first clinical use expected in Q1, 2024 together with selected American urologists, and explore commercial opportunities and partnerships going forward.

Owning the certificate also has a significant positive effect on the Company’s revenue and profit margin in the US, as it is the holder of the CLIA Certificate that receives reimbursement payments from Medicare and commercial payers such as insurance companies. This approach is thus expected to significantly reduce the Company’s overall entry costs for US testing, while also saving a substantial amount of time compared to previously discussed alternatives, meaning that the time to market launch becomes considerably shorter. The Medicare reimbursement level for prostate cancer prognostic biomarkers in the US is currently 3,784 USD per test. Prognostic biomarkers are also already included in US national clinical guidelines for prostate cancer, meaning, as previously informed, there is no need for Prostatype to go through a lengthy and costly process to apply for a new reimbursement code.

As previously communicated, the target for Prostatype Genomics is to achieve reimbursement approval for Prostatype® from Medicare at the end of 2024. To reach this target, a CLIA laboratory partner and a CLIA Certificate are prerequisites by Medicare that needs to be in place to achieve reimbursement approval. The final steps remaining before being able to enter the US market is to receive CLIA accreditation from the CAP (College of American Pathologists), and to perform the formal technical validation of Prostatype® within the CLIA-laboratory environment. Both of these steps are expected to be completed shortly, and it is worth noting that patient material from patients already analyzed in the ongoing validation study in the US also will be used for the laboratory validation.

Prostatype Genomics’ CEO Fredrik Persson comments:
“We continue to move forward at a high pace in the US, and we are now even ahead of our own optimistic time plan. As previously communicated, the US market is Prostatype Genomics’ highest priority from a commercial point of view. The existing US market for prostate cancer biomarker testing is valued at approximately USD 200 million, or SEK 2 billion, while the estimated market potential is valued at approximately USD 600 million or SEK 6 billion. The existing market is of course substantial, but there is also a significant upside to explore. By becoming the direct owner of a CLIA Certificate, we now have full freedom and flexibility to swiftly move forward in the process of identifying the best commercial partnership for our wholly-owned US subsidiary Prostatype Genomics Inc. This process is already initiated. We have strong indications that the fulfillment of this important milestone makes Prostatype Genomics even more attractive for commercial partners.”

Fredrik Persson continues:
“Apart from having the full freedom and flexibility to operate, and to keep different commercial options open, the acquisition of the CLIA Certificate also has a strong positive impact on our potential US revenue and hence our profitability in this market. It is also important to highlight that the prognostic biomarkers for prostate cancer that are commercially available today, which are approved for Medicare reimbursement and have been on the market for several years, are also sold as LDT- products. We are thus using the same route as others to introduce a new product generation in this segment, which naturally lowers the remaining regulatory and commercial risks for us, while making it easier to navigate towards our US launch and potential Medicare reimbursement approval which we expect to achieve in the end of 2024.”

“The regulatory and commercial risks are also further reduced by the fact that we are not applying for any new reimbursement code with Medicare, but rather aim to be approved for the code already in use by older prognostic biomarkers. This saves us a lot of time, which is important as we are proceeding towards a full commercial US market launch of Prostatype® as an LDT-test as soon as possible,” Fredrik Persson concludes.

LDT stands for “Laboratory Developed Test” and is an alternative to launch a product in USA without an FDA-approval. The total annual market for all LDT-products in USA is estimated to be worth around USD 3.5 billion, expected to increase to approximately USD 5 billion by 2030.