CMS Awards Tempus With Advanced Diagnostic Laboratory Test (ADLT) Status for its xT CDx Test
Tempus AI (NASDAQ: TEM) has been awarded Advanced Diagnostic Laboratory Test (ADLT) status by the Centers for Medicare & Medicaid Services (CMS) for its FDA-approved next-generation sequencing assay, xT CDx. This designation, the first of its kind, allows Tempus to offer tumor mutation profiling for patients with solid organ neoplasms. The initial ADLT reimbursement rate is set at $4,500, effective from July 1, 2024, to March 31, 2025. After this period, starting April 1, 2025, CMS will establish a new Medicare rate based on private payer data. Ezra Cohen, Chief Medical Officer of Oncology at Tempus, stated this milestone reflects their commitment to improving patient care through precision medicine.
- CMS grants ADLT status to Tempus' xT CDx, validating its novel diagnostic capabilities.
- Initial CMS reimbursement rate set at $4,500, providing financial predictability for the next nine months.
- xT CDx aids in tumor mutation profiling, enhancing precision medicine for solid organ neoplasms.
- Reimbursement rate changes post-March 2025 may impact revenue based on private payer data.
Insights
Tempus’ ADLT status for its xT CDx test is a noteworthy development, particularly for the medical community. The Advanced Diagnostic Laboratory Test (ADLT) status indicates that the test provides unique clinical diagnostic information that isn't obtainable through other means. The distinction also implies that the test has met stringent regulatory standards, which adds credibility to its clinical utility.
Next-Generation Sequencing (NGS) assays like xT CDx are important in oncology because they enable comprehensive tumor profiling, which can significantly influence treatment decisions. By providing matched normal sequence analysis, the test offers a more accurate assessment of tumor mutations, thus aiding in more precise and personalized treatment plans. This could potentially result in better patient outcomes.
From an investor's perspective, the ADLT status might contribute to increased adoption of the xT CDx test in clinical settings, thereby boosting Tempus’ revenue stream. However, it is essential to monitor how the test performs in real-world applications and its acceptance among oncologists and healthcare providers. The initial reimbursement rate of
The ADLT status awarded to Tempus' xT CDx test could have significant financial implications. Firstly, the established reimbursement rate of
It is also worth noting the potential market expansion this status could facilitate. With CMS backing, the test might see wider adoption across healthcare institutions, leading to increased sales and revenue. However, the company must efficiently navigate the nine-month period of private payer submissions to avoid any revenue disruptions post-March 2025.
For retail investors, it is essential to keep an eye on the company's financial health and market reception of the xT CDx test. Although the ADLT status is a positive development, it’s important to consider how it translates into real financial performance. Additionally, competition in the precision medicine space can impact Tempus’ market share and profitability.
The ADLT status for Tempus’ xT CDx test marks a significant milestone in the company's market positioning within the precision medicine sector. This designation not only elevates the test's profile but also differentiates it from other next-generation sequencing assays. Given the stringent criteria for ADLT status, the test's clinical value is validated, which can enhance its competitive edge.
However, while the initial reimbursement rate is promising, Tempus must manage expectations and plan strategically for the new Medicare rate post-April 2025. The company's ability to secure favorable private payer rates during the interim period will be important for sustained revenue growth.
Moreover, the recognition by CMS can potentially open doors for further collaborations and partnerships, enhancing Tempus' market reach. Investors should consider the broader market dynamics, including the competitive landscape and regulatory environment, which could influence the company's long-term growth prospects.
This CMS determination affirms that Tempus’ xT CDx meets the rigorous criteria for new ADLT status, which is reserved for novel products that provide new clinical diagnostic information that cannot be obtained any other way, or products cleared or approved by the FDA. The initial ADLT rate established by CMS is
“Since our inception, we have remained committed to expanding access to precision medicine solutions to all patients, and this designation is a significant milestone in our commitment to improving patient care through high-quality clinical laboratory testing,” said Ezra Cohen, MD, Chief Medical Officer of Oncology at Tempus. “We are grateful that CMS recognizes Tempus’ novel, high-quality approach to delivering physicians the molecular data necessary to improve patient outcomes.”
Please visit CMS.gov for more information about ADLTs, and for more information about Tempus’ xT CDx, visit tempus.com.
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.
About xT CDx
xT CDx is a qualitative Next Generation Sequencing (NGS)-based in vitro diagnostic device intended for use in the detection of substitutions (single nucleotide variants (SNVs) and multi-nucleotide variants (MNVs)) and insertion and deletion alterations (INDELs) in 648 genes, as well as microsatellite instability (MSI) status, using DNA isolated from formalin-fixed paraffin embedded (FFPE) tumor tissue specimens, and DNA isolated from matched normal blood or saliva specimens, from previously diagnosed cancer patients with solid malignant neoplasms.
The test is intended as a companion diagnostic (CDx) to identify patients who may benefit from treatment with the targeted therapies listed in the Companion Diagnostic Indications table in accordance with the approved therapeutic product labeling.
Additionally, xT CDx is intended to provide tumor mutation profiling to be used by qualified health care professionals in accordance with professional guidelines in oncology for patients with previously diagnosed solid malignant neoplasms. Genomic findings other than those listed in the Companion Diagnostic Indications table are not prescriptive or conclusive for labeled use of any specific therapeutic product.
xT CDx is a single-site assay performed at Tempus AI, Inc.,
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 test reimbursement for covered services, the intended uses of xT CDx and the potential for the xT CDx assay to improve patient outcomes. 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: changing Medicare rates; 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.
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Tempus Communications
Erin Carron
media@tempus.com
Source: Tempus AI, Inc.
FAQ
What is the significance of ADLT status for Tempus' xT CDx?
When does Tempus start receiving the ADLT reimbursement rate for xT CDx?
What will happen to the reimbursement rate for xT CDx after March 31, 2025?
How does the xT CDx test benefit patients with solid organ neoplasms?
