DermTech Simplifies the DermTech Melanoma Test (DMT) by Discontinuing the Optional TERT Add-on Assay
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Insights
The discontinuation of the optional TERT promoter mutation add-on assay by DermTech is a strategic business decision influenced by clinical research findings. From a medical research perspective, the Trust 2 Study's confirmation of a high negative predictive value (NPV) of 99.7% for the DermTech Melanoma Test (DMT) is significant. It suggests that the test is highly reliable in ruling out melanoma in suspicious pigmented lesions without the TERT mutation analysis. This level of NPV is a critical metric in the diagnostic accuracy of such tests and implies that false negatives are extremely rare, which is crucial for patient safety and clinical decision-making.
The study's outcome that less than one-third of samples had sufficient genomic material for TERT analysis indicates a practical limitation in the assay's utility. Moreover, the slight decrease in specificity with the addition of TERT mutation testing may have implications for the overall cost-effectiveness of the test. Eliminating the assay could streamline the testing process, reduce costs and simplify the interpretation of results for clinicians. The high NPV maintained by the foundational gene expression assay alone reinforces the DMT's value proposition in the precision dermatology market.
From an industry standpoint, DermTech's decision to streamline its melanoma testing offering could have implications for its market positioning and competitive dynamics. The precision dermatology sector is becoming increasingly crowded and payers are scrutinizing the cost-effectiveness of diagnostic tests. By focusing on their core gene expression assay, DermTech may enhance their product's appeal to insurers and clinicians by offering a test with a proven high NPV and potentially lower costs.
In the long term, the move may also reflect an adaptive strategy to focus on core competencies and tests that offer the most clinical value. It could also be indicative of the company's responsiveness to clinician feedback, which is a positive signal to the market regarding their commitment to meeting customer needs. This could help in strengthening their brand and potentially lead to increased adoption of the DMT, impacting DermTech's revenue and market share.
The financial implications of DermTech's decision to discontinue the TERT promoter mutation assay could be multifaceted. On one hand, cost savings from discontinuing a less-utilized assay could improve the company's gross margins. On the other hand, there might be concerns about how this decision could affect sales if the TERT assay was a differentiating factor for some clinicians. However, given the high NPV of the foundational test, it is likely that the financial impact will be positive by reducing complexity and focusing on the most effective components of their service.
Investors will be interested in monitoring how this change affects DermTech's operational efficiency and whether it translates into improved profitability. Additionally, the market will watch for any shifts in customer demand and physician adoption rates following this streamlining of services. It's essential to consider the potential for increased market penetration against the backdrop of a healthcare environment that increasingly values precision medicine and cost-effective diagnostics.
- Trust 2 Study confirms negative predictive value (NPV) of
- Optional TERT promoter mutation testing does not significantly alter sensitivity, NPV or positive predictive value (PPV)
Multiple studies, including the Company’s recently completed Trust 2 Study, demonstrated the DMT’s negative predictive value (NPV) to be
“Clinician feedback, in addition to the Trust 2 Study results, suggests that the TERT promoter mutation add-on assay has limited impact on decision-making when evaluating pigmented lesions for melanoma,” said Loren Clarke, M.D., chief medical officer, DermTech. “The DMT will now consist of the foundational gene expression assay for LINC00518 and PRAME. With an NPV that remains at
“These findings establish in a large real-world cohort that the DMT’s high NPV is not enhanced by the addition of TERT mutation testing,” commented Laura K. Ferris, M.D., Ph.D., Professor of Dermatology, University of Pittsburgh School of Medicine, and a participant in the study.
About The DermTech Melanoma Test
DermTech originally marketed its foundational assay under the name Pigmented Lesion Assay (PLA). The PLA assesses pigmented skin lesions, moles or dark skin spots for melanoma. In particular, the PLA detects expression of the LINC00518 (LINC) and preferentially expressed antigen in melanoma (PRAME) genes using reverse transcription-polymerase chain reaction (RT-PCR). The Company introduced an add-on assay to PLA in 2021, which is designed to identify the presence of mutations in TERT gene promoter region using DNA sequencing. The Company has since branded its PLA and TERT add-on-assay as the DermTech Melanoma Test (DMT). The DMT may be ordered with or without the add-on test for TERT. Positive results for LINC, PRAME or TERT correlate with a lesion at higher risk for melanoma. If none of the biomarkers are detected, this result indicates a
About DermTech
DermTech is a leading genomics company in dermatology and is creating a new category of medicine, precision dermatology, enabled by its non-invasive skin genomics technology. DermTech’s mission is to improve the lives of millions by providing non-invasive precision dermatology solutions that enable individualized care. DermTech provides genomic analysis of skin samples collected using its Smart Stickers™. DermTech develops and markets products that facilitate the assessment of melanoma. For additional information, please visit DermTech.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The expectations, estimates, and projections of DermTech may differ from its actual results and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “runway,” "outlook," “anticipate,” “intend,” “plan,” “strive," “may,” “will,” “sustain,” “could,” “should,” “believe,” “predict,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, expectations and evaluations with respect to: the performance, patient benefits, cost- effectiveness, commercialization and adoption of DermTech’s products and the market opportunity for these products; expectations regarding DermTech’s potential growth, scale, patient reach, financial outlook, including its cash runway and future financial performance DermTech’s ability to increase its test volume, revenue and the proportion of reimbursed billable tests and control or reduce cost, expenses and cash burn; and expectations regarding agreements with or reimbursement or cash collection patterns from government payers (including Medicare) or commercial payers and related billing practices or number of covered lives. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside of the control of DermTech and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) the outcome of any legal proceedings that may be instituted against DermTech; (2) DermTech’s ability to obtain additional funding to develop and market its products; (3) the existence of favorable or unfavorable clinical guidelines for DermTech’s tests; (4) the reimbursement of DermTech’s tests by government payers (including Medicare) and commercial payers; (5) the ability of patients or healthcare providers to obtain coverage of or sufficient reimbursement for DermTech’s products; (6) DermTech’s ability to grow, manage growth and retain its key employees and maintain or improve its operating efficiency and reduce operating expenses; (7) changes in applicable laws or regulations; (8) the market adoption and demand for DermTech’s products and services together with the possibility that DermTech may be adversely affected by other economic, business, and/or competitive factors; and (9) other risks and uncertainties included in the “Risk Factors” section of the most recent Annual Report on Form 10-K filed by DermTech with the Securities and Exchange Commission (the “SEC”), and other documents filed or to be filed by DermTech with the SEC, including subsequently filed reports. DermTech cautions that the foregoing list of factors is not exclusive. You should not place undue reliance upon any forward- looking statements, which speak only as of the date made. DermTech does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240116386434/en/
Steve Kunszabo
DermTech
(858) 291-1647
steve.kunszabo@dermtech.com
Source: DermTech, Inc.
FAQ
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What is the negative predictive value (NPV) of the DermTech Melanoma Test (DMT)?
When will the optional TERT promoter mutation add-on assay be discontinued for the DMT?
What studies confirmed the high NPV of the DMT?
What impact did the TERT promoter mutation add-on assay have on decision-making when evaluating pigmented lesions for melanoma?
