Dear Shareholders,
The summer is traditionally an opportunity for a respite for everyone and I hope that all of you have been able to
take a break. I am pleased to say that for MDxHealth it has been almost the opposite, with several key
milestones occurring during this period. In this update, we review the events over the first half, highlight the
development of our ClinicalMDx business and provide additional information about the reimbursement process.
MDxHealth's Clinical Molecular Diagnostics (ClinicalMDx) business is focused on providing physicians with
innovative and meaningful tests that aid in the identification and treatment of cancer patients. MDxHealth's
ClinicalMDx strategy is to develop and commercialize advanced epigenetic tests through its US-based CLIAaccredited,
CAP-certified laboratory facility. The ClinicalMDx business also includes epigenetic products
commercialized by our partners and licensees. MDxHealth's ClinicalMDx portfolio is divided into three primary
categories, including diagnostic, prognostic and predictive molecular diagnostic tests for multiple cancer types.
These tests are designed to address current diagnostic dilemmas faced by clinicians and will deliver actionable
results to help improve patient management decisions.
It is understandable that for some Europeans
following our company, there may be some
confusion about the regulatory clearances required
to sell our products in the US. As a general matter,
under its CLIA registration, MDxHealth can sell its
laboratory-developed testing services directly to
physicians throughout the US. However 6 out of the
50 US states also require an additional state-level
license. These states are California, Pennsylvania,
Maryland, Rhode Island, Florida and New York.
Today MDxHealth has obtained 5 out of the 6 state
licenses needed, and has submitted its application
to obtain a laboratory license from the state of New
York.
The ConfirmMDx™ for Prostate Cancer test has
been well received by urologists and sales are
growing according to plan. MDxHealth is now billing
insurance companies for tests performed and has
begun receiving payment for services rendered.
However, in the US there are over 800 insurance companies, and before sending out the first invoice,
MDxHealth must first open an account with each respective payor, a process that can take 4-6 weeks. Once
MDxHealth is registered in the respective insurance company's system, invoices can be submitted. For
companies like MDxHealth, entering this space with no previous billing history with insurance companies, the
initial set-up process requires a dedicated and systematic approach, which is standard practice for the industry.
MDxHealth has engaged leading experts such as Quorum Consulting of San Francisco and HillCo HEALTH of
Washington DC to help expedite this process. With their help MDxHealth has generated and plans to publish its
Budget Impact Model, a six-year longitudinal analysis on a subset of the Medicare population and a Cost
Effectiveness Analysis, each of which are intended to demonstrate the reduction in healthcare spending the test
can potentially deliver. The early success MDxHealth has experienced with its managed care and billing efforts
is a welcome sign that the test addresses an unmet medical need; however it is important to note that
reimbursement efforts take time to establish and as a result, the reported revenues during the first 9-12 month
period post-launch of the ConfirmMDx test may not fully reflect the total number of units being sold.
In the first half of this year, MDxHealth recruited and fielded a seasoned sales force with an average of 15 years
of diagnostic and oncology sales experience. Steve Gaal, MDxHealth's Director of Sales, provides some
interesting insights about the sales of our ConfirmMDx™ for Prostate Cancer test in the Q&A section below.
We appreciate your continued interest and support.
Sincerely,
Jan Groen