American Medical Association Grants PLA Code to Tempus Algorithmic Test, PurISTSM

Rhea-AI Summary

Tempus AI (NASDAQ: TEM) has received a proprietary laboratory analysis (PLA) code from the American Medical Association (AMA) for its PurISTSM algorithmic test, effective October 1, 2024. PurISTSM analyzes previously sequenced RNA data to classify pancreatic cancer patients into subtypes, aiding first-line therapy decisions. The PLA code marks progress towards reimbursement for AI-driven algorithms. Clinical studies show PurISTSM stratifies overall survival for patients with specific therapies. The AMA's Category I CPT codes for RNA sequencing, effective January 2023, reflect growing recognition of RNA profiling. Major insurers like Medicare and Cigna deem RNA profiling medically necessary. Tempus's xR assay, submitted to the FDA, aims to qualify for ADLT status, facilitating advanced diagnostics and precision therapies.

Positive

• PurISTSM received a PLA code from AMA, effective October 1, 2024.
• PurISTSM aids in first-line therapy decisions for pancreatic cancer patients.
• Clinical validation shows PurISTSM effectively stratifies survival for PDAC patients.
• AMA's Category I CPT codes for RNA sequencing effective since January 2023.
• Medicare and Cigna recognize RNA profiling as medically necessary.
• Tempus's xR assay submitted to FDA for potential ADLT status.

Negative

• None.

Insights

Financial Analyst

Tempus AI’s receipt of a PLA code from the AMA for its PurISTSM test is a significant milestone. This paves the way for potential reimbursement, directly impacting the company’s revenue streams. PLA codes facilitate the billing of unique diagnostic tests, adding to Tempus AI's market credibility and enabling streamlined insurance claims. Reimbursement would not only make the test more accessible to patients but also bolster Tempus' financial health by expanding its commercial footprint. The clinical validation study that supports PurISTSM’s efficacy could further drive adoption and usage, leading to increased sales. Investors should note the potential for accelerated revenue growth once the code becomes effective in October 2024, especially if additional insurance providers follow the trend set by Cigna and Medicare. However, the long lead time before implementation and potential regulatory hurdles are risks to consider.

Oncology Doctor

The clinical implications of Tempus AI’s PurISTSM test receiving a PLA code are notable. This test categorizes pancreatic ductal adenocarcinoma (PDAC) into molecular subtypes, informing first-line therapy options. The ability to stratify patients based on RNA profiling can significantly improve personalized treatment approaches, potentially enhancing survival rates and patient outcomes. The clinical validation study showcasing the ability to scale PurISTSM's application provides strong backing for its clinical utility. As RNA profiling becomes more integrated into standard practice, the adoption of such precision-medicine tools will likely increase, driving better clinical decisions. However, the long-term success hinges on widespread clinical adoption and continuous validation through further studies.

Market Research Analyst

The AMA’s PLA code for the PurISTSM test represents a strategic advantage for Tempus AI in the competitive precision medicine market. By categorizing this AI-driven, RNA-based assay under a unique code, Tempus can differentiate its offerings, attract more healthcare providers and gain a competitive edge. As more payers recognize RNA profiling's necessity, this could lead to increased market share and broader acceptance of Tempus' suite of products. The move aligns with industry trends towards AI and personalized medicine, capitalizing on growing interest and investment in these areas. The ability to separate reimbursement for the algorithm itself could set a precedent, driving innovation and market differentiation. However, the market dynamics, including competition and payer policies, must be monitored closely to assess the long-term advantages accurately.

CHICAGO--(BUSINESS WIRE)-- Tempus AI, Inc. (NASDAQ: TEM), a leader in artificial intelligence and precision medicine, today announced that the company’s PurIST^SM algorithmic test has received a proprietary laboratory analysis (PLA) code from the American Medical Association (AMA). The new code will be effective on October 1, 2024. The PurIST^SM PLA code is the first common procedural terminology (CPT) code created to describe an algorithm-only analysis from previously-sequenced, laboratory developed test (LDT), transcriptomic (RNA) data, representing a meaningful step towards reimbursement for AI-enabled algorithms.

The PurIST^SM test is part of a growing number of algorithms that are based on RNA profiling. PurIST^SM identifies the molecular subtype of patients with unresectable stage III or stage IV pancreatic ductal adenocarcinoma (PDAC). PurIST^SM utilizes previously-sequenced RNA data to classify patients with PDAC into either a basal or classical subtype and may help inform first-line therapy management. The company recently completed a clinical validation study demonstrating that PurIST^SM can be used at scale to stratify overall survival of classical patients between two, first-line therapies, FOLFIRINOX and gemcitabine nab-paclitaxel.

RNA-based assays continue to receive significant attention from the American Medical Association, which created new Category I CPT codes for RNA sequencing in solid tumors and hematolymphoid cancers. Category I CPT codes are reserved for procedures that are widely used in clinical practice and for which clinical efficacy is well documented in peer reviewed literature. The RNA-specific codes went into effect in January 2023.

In addition to the AMA’s establishment of new CPT codes, public and private payers are increasingly determining that RNA profiling is medically necessary and therefore a reimbursable covered service. For example, in Local Coverage Decision 37810, National Government Services, the Medicare Administrative Contractor for Tempus’ Chicago laboratory, listed the AMA’s new RNA code as a covered test. Similarly, in Medical Coverage Policy 0520, Cigna, one of the largest commercial payers in the U.S., with whom Tempus is an in-network provider, lists RNA profiling as medically necessary when certain coverage criteria are met.

“Tempus has been a leader in RNA profiling since its inception. We believe our RNA-based offerings are increasingly valuable as the burgeoning field of RNA-directed therapeutics is set to revolutionize cancer care and rare disease indications,” said Ezra Cohen, MD, Chief Medical Officer of Oncology at Tempus. “We anticipate that the first RNA-based therapies in oncology will be approved within the next few years. Additionally, RNA-sequencing is vital for the development of personalized treatments, such as neoantigen vaccines that require knowledge of transcriptome expression.”

RNA is a rich source of biological data, which provides information essential to furthering clinical care and therapeutic research. Specifically, whole-transcriptome RNA profiling enables researchers to uncover potentially clinically actionable data about a tumor. With the full picture of a cancer’s genetic makeup, information from RNA sequencing can help clinicians guide patient care, while also generating the necessary data to power therapeutic discovery for the future.

The Tempus RNA assay, xR, is a next generation sequencing in vitro diagnostic test that uses targeted high throughput hybridization-based capture technology for detection of oncologically-relevant gene rearrangements (or fusions) and altered splicing using RNA isolated from formalin-fixed paraffin embedded (FFPE) tissue specimens from previously diagnosed cancer patients with solid malignant neoplasms. The xR assay does not rely on targeted amplicon pools or probes for specific fusion breakpoints, granting flexibility to detect both novel fusions and emerging fusion targets with significant clinical benefits, such as:

• In a pan-cancer cohort of 570 patients, whole genome and transcriptome sequencing and analysis (WGTA) delivered significant additional clinical insights. Specifically, “RNA expression data were particularly informative, contributing to 67% of WGTA-informed treatments; 25% of treatments were informed by RNA expression alone. Of a total 248 WGTA-informed treatments, 46% resulted in clinical benefit.” (Laskin et al, Annals of Oncology, Vol 33, Issue 9, June 2022, 939-949);
• In a pan-cancer cohort that received both DNA- and RNA-seq, 29.1% of the identified fusions were identified only via RNA-seq (Michuda et al., Journal of Clinical Oncology, 40 (16_suppl), 2022; poster presented at ASCO 2022);
• In a cohort of NSCLC patients who received both DNA- and RNA-seq, RNA-seq increased the detection of ALK fusions by 18% (Iams et al., Annals of Oncology, 32 (2_suppl), 2023; poster presented at ESMO 2023); and
• In a pan-cancer cohort of 500 patients, RNA sequencing expanded the numbers of patients that can be matched to precision therapies. With DNA-seq alone, 29.6% of patients matched to precision therapies supported by high levels of evidence or by well-powered studies. This proportion increased to 43.4% with the addition of RNA-seq and immunotherapy biomarker results. (White et al., Nature Biotechnology, 37, pages 1351-1360 (2019).

On June 27, 2024, Tempus submitted its xR assay to the FDA as part of its 510(k) premarket submission, which may qualify for Advanced Diagnostic Laboratory Test (ADLT) status if cleared.

PurIST^SM is part of a growing suite of AI-enabled algorithmic tests offered by Tempus, including Homologous Recombination Deficiency (HRD), Tumor Origin (TO), dihydropyrimidine dehydrogenase (DPYD), and UGT1A1, which leverage the sequencing data generated by xT and xR to further improve the clinical utility of these tests. While Tempus offers these algorithms as part of its assays, the new PLA code for PurIST^SM may enable separate reimbursement for the algorithm, which we believe can create a new paradigm for clinically-meaningful, AI-driven insights.

About Tempus

Tempus is a technology company advancing precision medicine through the practical application of artificial intelligence in healthcare. With one of the world’s largest libraries of multimodal data, and an operating system to make that data accessible and useful, Tempus provides AI-enabled precision medicine solutions to physicians to deliver personalized patient care and in parallel facilitates discovery, development and delivery of optimal therapeutics. The goal is for each patient to benefit from the treatment of others who came before by providing physicians with tools that learn as the company gathers more data. For more information, visit tempus.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, about Tempus and Tempus’ industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this press release are forward-looking statements, including, but not limited to, statements regarding reimbursement for covered services, the impact of Tempus’ RNA-based offerings on clinical and therapeutic outcomes, the approval of Tempus’ RNA-based offerings, and the qualification and impact of ADLT status for the Company’s xR assay. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “going to,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. Tempus cautions you that the foregoing may not include all of the forward-looking statements made in this press release.

You should not rely on forward-looking statements as predictions of future events. Tempus has based the forward-looking statements contained in this press release primarily on its current expectations and projections about future events and trends that it believes may affect Tempus’ business, financial condition, results of operations and prospects. These forward-looking statements are subject to risks and uncertainties related to: evolving practices in reimbursement for medical tests and procedures; the intended use of Tempus’ products and services; Tempus’ financial performance; the ability to attract and retain customers and partners; managing Tempus’ growth and future expenses; competition and new market entrants; compliance with new laws, regulations and executive actions, including any evolving regulations in the artificial intelligence space; the ability to maintain, protect and enhance Tempus’ intellectual property; the ability to attract and retain qualified team members and key personnel; the ability to repay or refinance outstanding debt, or to access additional financing; future acquisitions, divestitures or investments; the potential adverse impact of climate change, natural disasters, health epidemics, macroeconomic conditions, and war or other armed conflict, as well as risks, uncertainties, and other factors described in the section titled “Risk Factors” in Tempus’ Final Prospectus filed with the Securities and Exchange Commission (“SEC”) on June 17, 2024, pursuant to Rule 424(b)(4) under the Securities Act, as well as in other filings Tempus may make with the SEC in the future. In addition, any forward-looking statements contained in this press release are based on assumptions that Tempus believes to be reasonable as of this date. Tempus undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240708127757/en/

Tempus Communications

Erin Carron

media@tempus.com

Source: Tempus AI, Inc.

FAQ

What is Tempus's PurISTSM test?

PurISTSM is an algorithmic test by Tempus that analyzes RNA data to classify pancreatic cancer patients into subtypes, aiding in therapy decisions.

When will the PLA code for PurISTSM be effective?

The PLA code for PurISTSM will be effective on October 1, 2024.

What does the new PLA code signify for Tempus?

The new PLA code signifies a step towards reimbursement for Tempus's AI-driven algorithms.

How does PurISTSM benefit pancreatic cancer patients?

PurISTSM helps classify pancreatic cancer patients into subtypes, informing first-line therapy management and improving treatment outcomes.

Which major insurers recognize RNA profiling as medically necessary?

Medicare and Cigna recognize RNA profiling as medically necessary.

What is the significance of AMA's Category I CPT codes for RNA sequencing?

AMA's Category I CPT codes, effective January 2023, reflect the growing clinical use and documented efficacy of RNA sequencing.

What is Tempus's xR assay?

Tempus's xR assay is a next-generation sequencing test that detects oncologically relevant gene rearrangements and altered splicing using RNA from cancer patients.

Has Tempus submitted any assays to the FDA?

Yes, Tempus submitted its xR assay to the FDA on June 27, 2024, as part of its 510(k) premarket submission.