bdsx-10k_20201231.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2020

Commission File Number 001-39659

Biodesix, Inc.

(Exact name of Registrant as specified in its Charter)

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (303) 417-0500

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Common Stock, par value $0.001 per share BDSX The NASDAQ Global Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes☐No☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes☒No☐

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒No☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes☒No☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☒

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐No☒

The aggregate market value of the Registrant’s common stock, par value $.001 per share (the “Common Stock”) held by non-affiliates was approximately $344,635,079 based upon the December 31, 2020, closing price of $20.16 as reported by the Nasdaq Global Select Market. The Registrant has elected to use December 31, 2020 as the calculation date, which was the last trading date of the registrant’s most recently completed fiscal year, because on June 30, 2020 (the last business day of the registrant’s second fiscal quarter), the Registrant was a privately held company.

The number of shares of Registrant’s Common Stock outstanding as of March 12, 2021 was 26,577,782.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company’s definitive Proxy Statement for its 2021 Annual Meeting of Shareholders are to be incorporated by reference into Part

III, as specifically set forth in Part III.)

Table of Contents

Page

PART I

Item 1. Business 3

Item 1A. Risk Factors 45

Item 1B. Unresolved Staff Comments 100

Item 2. Properties 100

Item 3. Legal Proceedings 100

Item 4. Mine Safety Disclosures 100

PART II

Item 6. Selected Financial Data 101

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 115

Item 8. Financial Statements and Supplementary Data 115

Item 9A. Controls and Procedures 115

Item 9B. Other Information 115

PART III

Item 10. Directors, Executive Officers and Corporate Governance 116

Item 11. Executive Compensation 116

Item 14. Principal Accounting Fees and Services 116

PART IV

Item 15. Exhibits, Financial Statement Schedules 117

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Annual Report on Form 10-K, including statements regarding our future financial condition, results of operations, business strategy and plans, and objectives of management for future operations, as well as statements regarding industry trends, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “should,” “will” or the negative of these terms or other similar expressions.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, factors, and assumptions described under the section titled “Risk Factors” and elsewhere in this annual Report on Form 10-K, regarding, among other things:

• our inability to achieve or sustain profitability;

• difficulties managing our growth, which could disrupt our operations;

• product performance and reliability to maintain and grow our business;

• security or data privacy breaches or other unauthorized or improper access;

• significant disruptions in our information technology systems;

• potential effects of litigation and other proceedings;

• general economic and financial market conditions;

• our ability to attract and retain key personnel;

• compliance with healthcare fraud and abuse laws;

• future product recalls;

• the volatility of the trading price of our common stock;

These risks are not exhaustive. Other sections of this Annual Report on Form 10-K may include additional factors that could harm our business and financial performance. New risk factors may emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Annual Report on Form 10-K or to conform these statements to actual results or to changes in our expectations.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Annual Report on Form 10-K, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Annual Report on Form 10-K and the documents that we reference and have filed as exhibits with the understanding that our actual future results, levels of activity, performance and achievements may be different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

PART I

Item 1. Business.

Our mission is to improve every patient’s lung disease care by empowering physicians with swift, comprehensive and actionable insights.

Our vision is to be a trusted business partner that the world relies on for data-driven diagnostics in lung disease and beyond.

Business Overview

Biodesix, Inc. (“Biodesix”, “we,” “us,” “our” or the “Company”) is a leading data-driven diagnostic solutions company leveraging state of the art technologies with our proprietary artificial intelligence (AI) platform to discover, develop, and commercialize solutions for clinical unmet needs, with a primary focus in lung disease. By combining a technology agnostic approach with a holistic view of the patient’s disease state, we believe our solutions provide physicians with greater insights to help personalize their patient’s care and meaningfully improve disease detection, evaluation, and treatment. Our unique approach to precision medicine provides timely and actionable clinical information, which we believe improves overall patient outcomes and lowers the overall healthcare cost by reducing the use of ineffective and unnecessary treatments and procedures. In addition to our diagnostic tests, we provide biopharmaceutical companies with services that include diagnostic research, clinical trial testing, and the discovery, development, and commercialization of companion diagnostics.

Our core belief is that no single technology will answer all clinical questions that we encounter. Therefore, we employ multiple technologies, including genomics, transcriptomics, proteomics, and radiomics, and leverage our proprietary AI platform, the Diagnostic Cortex®, to discover innovative diagnostic tests for clinical use. Because of this approach, we believe we are unique in the diagnostics market as this approach allows for a broader and more holistic understanding of each patient’s disease state. Our data-driven and technology agnostic approach is designed to enable us to discover diagnostic tests that answer critical clinical questions faced by physicians, researchers, and biopharmaceutical companies.

We operate in a single segment and derive our revenue from two sources: (i) providing diagnostic testing services associated with blood-based lung and Coronavirus Disease 2019 (COVID-19) tests (Diagnostic Tests); and (ii) providing biopharmaceutical companies with services that include diagnostic research, clinical research, development and testing services generally provided outside the clinical setting and governed by individual contracts with third parties as well as development and commercialization of companion diagnostics (Services). We derived 90% and 71% of our total revenues for fiscal 2020 and fiscal 2019, respectively, from our diagnostic testing business.

We are dedicated to continuously publishing and presenting new data on the clinical validation and utility of our diagnostic tests. Since our inception, we have performed over 285,000 tests and continue to generate a large and growing body of clinical evidence. We have participated in 27 clinical studies, five of which are ongoing, and have published over 275 peer-reviewed publications and presentations. We have over 140,000 samples and data in our biobank, including tumor profiles and immune profiles, which are used for both internal and external research and development (R&D)initiatives.

We have commercialized six diagnostic tests which are currently on market and we perform over 30 assays for research use as part of our laboratory services that have been used by over 50 biopharmaceutical customers and academic partners.

Blood-Based Lung Tests

We have four diagnostic blood-based tests across the lung cancer continuum of care, which generated $12.6 million and $17.3 million in revenue for fiscal 2020 and 2019, respectively.

COVID-19 Tests

In response to the COVID-19 pandemic, through our partnership with Bio-Rad, we commercialized the Biodesix WorkSafeTM testing program. We generated $28.3 million in revenue from COVID-19 testing during fiscal 2020. Our scientific diagnostic expertise, technologies, and existing commercial infrastructure enabled us to rapidly commercialize two United States Food andDrugAdministration(FDA)EmergencyUseAuthorization(EUA)-authorizedtests,apartofourcustomizable WorkSafeTMprogram.Bothdiagnostictestsare ownedandweredevelopedbyBio-RadandBio-Radhasgranteduspermissiontoutilizebothtestsforcommercialdiagnosticservices.

In February 2020, the U.S. Department of Health and Human Services Secretary declared a public health emergency for COVID-19 which justified the authorization of emergency use of diagnostic tests for the detection and/or diagnosis of COVID-19. The Bio-Rad SARS-CoV-2 Droplet DigitalTM polymerase chain reaction (ddPCR) test and the Platelia SARS-CoV-2 Total Ab test have been granted FDA EUA pursuant to the current emergency declaration. The Bio-Rad SARS-CoV-2 ddPCR test was FDA EUA authorized on May 1, 2020, authorizing performance of the test in laboratories certified under the Clinical Laboratory Improvement Amendments (CLIA) to perform high complexity tests. The second test is the Platelia SARS-CoV-2 Total Ab test, which is an antibody test intended for detecting a B-cell immune response to SARS-CoV-2, indicating recent or prior infection. The Platelia SARS-CoV-2 Total Ab test was FDA EUA authorized on April 29, 2020. Medical products that are granted an EUA are only permitted to commercialize their products under the terms and conditions provided in the authorization. The FDA may revoke an EUA where it is determined that the underlying health emergency no longer exists or warrants such authorization, if the conditions for the issuance of the EUA are no longer met, or if other circumstances make revocation appropriate to protect the public health or safety, and we cannot predict how long the EUAs for the SARS-CoV-2 tests will remain in place. Using the Bio-Rad SARS-CoV-2 ddPCR test and the Platelia SARS-CoV-2 Total Ab tests, we operate and have commercialized the Biodesix WorkSafe testingprogram.

Prior to using the Bio-Rad tests as part of our WorkSafe testing program, we performed feasibility, verification, and validation studies, including developing software for process automation, sample accessioning, data management and reporting, all required to demonstrate the test operated as claimed by the manufacturer and as required by our certifying regulatory agencies for high complexity laboratory testing. We secured independent reference specimens run with EUA tests to validate these tests as fit for diagnostic use in our laboratories. Post-launch development support for these tests have included improvements in on-boarding new personnel, logistics of sample collection, sample receipt and data reporting, all required to support our testing program. Additional releases of the laboratory data management software are ongoing and planned for the foreseeable future.

These tests are utilized by healthcare providers, including hospitals and nursing homes, and are also offered to businesses and educational systems to assist in their back-to-work or back-to-school strategies, a crucial element of restarting economic activity. During 2020, we announced multiple partnerships for COVID-19 testing and have entered into an agreement with the State of Colorado to be one of the diagnostic companies to support wide-spread COVID-19 testing for the State. Additionally, we oversee and manage onsite testing and validating testing for the Big Ten Conference athletic competitions.

COVID-19 Pandemic

The COVID-19 pandemic has disrupted, and we expect will continue to disrupt, our non-COVID-19 testing operations. To protect the health and well-being of our workforce, partners, vendors and customers, we provide voluntary COVID-19 testing for employees working on-site, implemented social distance and building entry policies at work, restricted travel and facility visits, and followed the States of Colorado and Kansas’ public health orders and the guidance from the Centers for Disease Control and Prevention. Employees who can perform their duties remotely are asked to work from home and those on site are asked to follow our social distance guidelines. Our sales, marketing and business development efforts have also been constrained by our operational response to the COVID-19 pandemic due to travel restrictions. We expect to continue to adjust our operational norms in an effort to help slow the spread of COVID-19 in the coming months, including complying with government directives and guidelines as they are modified and supplemented.

The COVID-19 pandemic also has started to negatively affect, and we expect will continue to negatively affect, our non-COVID-19 testing- related revenue and our clinical studies. For example, cancer patients may have more limited access to hospitals, healthcare providers and medical resources as they take steps to control the spread of COVID-19. Our biopharmaceutical customers are facing challenges in recruiting patients and in conducting clinical trials to advance their pipelines, for which our tests could be utilized. As a result of the COVID-19 pandemic, beginning in the latter half of March 2020, we have been receiving fewer samples for non-COVID-19 testing on a daily average basis from our clinical and biopharmaceutical customers than before the outbreak of the COVID-19 pandemic. Further, our clinical studies, such as our ongoing INSIGHT study and our recently launched ALTITUDE study, as well as our arrangements with our biopharmaceutical customers, are expected to take longer to complete than what we originally expected before the outbreak of the COVID-19 pandemic.

Conversely, we are also experiencing an increase in revenues related to an increase in the demand for our Biodesix WorkSafe testing program which generated revenue of $28.3 million during fiscal 2020 of which $21.4 million is attributable to the fourth quarter 2020. As a result, our operating costs to expand capacity for COVID-19 testing also increased substantially during 2020 and we expect that trend to continue into the first quarter of 2021. There is no assurance that our COVID-19 testing program will continue to be accepted by the market or that other diagnostic tests will become more accepted, produce quicker results or are more accurate. Further, the longevity and extent of the COVID-19 pandemic is uncertain. If the pandemic were to dissipate, whether due to acquiring herd immunity based on previous natural infection, and the availability and rapid distribution of vaccines, the evolution of variant strains that impact diagnostic test performance, or otherwise, the need for a COVID-19 test could decrease significantly and this could have an adverse effect on our results of operations and profitability. As a result, the increase in revenue due to any increase in demand for these diagnostic tests may not be indicative of our future revenue. See “Risk Factors” for a description of how the COVID-19 pandemic may adversely affect our business, financial condition and results of operations.

Full Year Results for 2020

For the year ended December 31, 2020, compared to the prior year:

• Total Revenue was $45.6 million, an increase of 86%;

• Gross Margin was $23.6 million, an increase of 27%;

• Net Loss and Comprehensive Loss was $31.4 million, an increase of 2%;

• Basic and Diluted Net Loss Per Common Share was $6.48;

Our Market Opportunity

Diagnostic Testing Market Size and Opportunity

Despite significant advances over the last decade, lung cancer is still the deadliest type of cancer in both men and women in the United States today. While diagnostic testing has become routinely used at certain points in the lung cancer continuum of care (diagnosis, treatment and monitoring), we believe there is a substantial need for novel, advanced testing to improve on the current standard of care. We estimate that in the United States, the lung cancer continuum of care currently represents over 10 million annual testing opportunities, and is over a $27 billion market annually for testing alone.

Over the last two decades, the use of biomarker testing in clinical trials has increased, with 55% of oncology trials involving the use of biomarker testing in 2018 versus 15% in 2000. We believe the field of biomarker discovery and companion diagnostic development for biopharmaceutical therapeutics is set to continue growing as biopharmaceutical companies seek to de-risk their research and development pipelines and increase chances of drug development success. We estimate that the biopharmaceutical partnering and research opportunities represent over a $2 billion market annually.

Lung Cancer Continuum of Care – Clinical Unmet Needs

Standards of care in lung cancer have evolved rapidly over the past decade, along with our understanding of the disease. With the introduction ofnumeroustreatmentoptions,physiciansneedanever-increasingamountofinformationinordertoselectthebesttreatmentplanforeachindividualpatient.We believe that the lung cancer continuum of care has a variety of clinical unmet needs ranging from initial diagnosis of lung cancer after discovery of alungnoduletotreatmentguidanceforearlyandadvancedstagedisease,andmonitoringfordiseaseprogression.

Current Limitations in Biomarker Discovery and Companion Diagnostics

Weestimatethebiopharmaceuticalbiomarkertestingandcompaniondiagnosticmarketopportunityis$2billionannually.Overthelasttwodecades,the use of biomarker testing in clinical trials has increased, with 55% of oncology trials involving the use of biomarker testing in 2018 versus 15% in 2000.From2005to2015,a study identified that incorporating biomarkers into clinical development programs increased their probability of therapeutic success rate from phase 1 toFDA-approval by 570%, representing an increase from 1.6% without biomarkers to 10.7% with biomarkers. We believe the field of biomarker discoveryandcompaniondiagnosticdevelopmentforbiopharmaceuticaltherapeuticsissettocontinuegrowingasbiopharmaceuticalcompaniesseektode-risktheirproduct development efforts and increase chances of drug development success. However, we believe as the market continues to advance, inherentlimitationsofbothbiomarkerdiscoveryandcompaniondiagnosticdevelopmenthavebecomemoreapparent.

BiomarkerDiscovery:Therearemanylimitationswithbiomarkerdiscoveryinbiopharmaceuticaldrug development, including:

CompanionDiagnostics(CDx):Whiledevelopingcompaniondiagnosticsiscriticaltoprecisionmedicine,thepromiseofcompaniondiagnostics has not been fully realized and there are multiple limitations that still need resolution. The path to co-develop a successfulcompaniondiagnosticwithacorrespondingdrughasseveralchallenges,including:

The Diagnostic Cortex - Our Proprietary Artificial Intelligence (AI) Platform

The Diagnostic Cortex is an extensively validated deep learning platform optimized for the discovery of clinical diagnostic tests, which we believeovercomes standard machine learning challenges faced in life sciences research. Researchers commonly encounter issues with machine learning-basedbiological discoveries that cannot be repeated or validated when assessed in additional specimen cohorts. This challenge, commonly referred to asoverfitting,occurswhenthemachineidentifiesaperfectpatterninaninitialtrainingdatasetbutisunabletoidentifythesamepatterninanewdataset.Forover 15 years we have focused on developing our platform to overcome this challenge through proprietary computational techniques to ensure eachdiagnostictestthatisdiscoveredcanbefurtherdevelopedtoperformconsistentlyintheclinicaltestingenvironment.

Weareabletocombineblood-basedbiologicalinformationrelatedtothetumor,immunesystem,andhost-statuswithclinicalandradiomicdatathroughourproprietaryAIplatform,whichenablesustointerprettheholisticdiseasestateofeachpatientorclinicaldatasetweencounter.

We continuously evolve and improve the Diagnostic Cortex platform. These improvements range from basic code optimization to compleximprovementssuchastheincorporationofnovelcomputationalmethodsfortheoptimizationofmulti-omicdiagnostictests.AnyAIplatformisinherentlylimited without the highest quality data inputs. Therefore, all of the technologies that we employ have been chosen and developed to provide high-qualitydata to enable our Diagnostic Cortex platform. We feel that this level of data integrity is crucial for the development of diagnostic tests that require theadvancedpatternmatchingabilitiesofdeeplearningalgorithms.

We continuously incorporate new market insights and patient data to enhance our platform through a data-driven learning loop. We regularly engage our customers, key opinion leaders, and scientific experts to stay ahead of the rapidly evolving diagnostic and therapeutic landscape and learn aboutbiological discoveries that are clinically meaningful. Additionally, we incorporate clinical and molecular profiling data aggregated through our commercialclinical testing, research studies, clinical trials, and biopharmaceutical customers or academic partnerships, into our platform. We have over 140,000samplesanddatainourbiobank,includingtumorprofilesandimmuneprofiles,whichareusedforbothinternalandexternaldevelopmentinitiatives.Withour data-driven and technology agnostic approach as data inputs into the Diagnostic Cortex, we are able to discover diagnostic tests that answer criticalclinicalquestionsfacedbyphysicians,researchers,andbiopharmaceuticalcompanies.

Thefollowingisadiagramoutliningourinnovativediagnostictestdiscovery,developmentandcommercializationinfrastructureasoutlinedinthetextabove.

Weemploymultipletechnologies,asillustratedbelow,includinggenomics,proteomics,transcriptomics,andradiomics,generatedbydifferentassaytechniques,includingddPCR,NGS,LC-MS,ELISA,andourproprietaryDeepMALDImassspectrometryplatformfortheblood-basedmolecularanalysisof the tumor, immune system, and host-status of each patient and/or clinical dataset. Through our learning loop, we continuously revisit our technologystrategy and roadmap to integrate new technologies into our evolving platform, which ultimately support the addition of new service and product revenueofferings.Wefocusondevelopingtechnologiesthatarecapableofsingleandmulti-omicresearchanddevelopment.

Most diagnostic companies focus their strategy on using a single technology to discover biomarkers for a broad range of clinical questions. We believe that no single technology can interrogate the complexity of the human disease state to help solve all clinical questions. For that reason, we employ a technology agnostic approach to solving diagnostic challenges leveraging our proprietary AI platform. Because of this approach, we believe we are unique in the diagnostics market, allowing for a broader and more holistic understanding of each patient’s disease state.

We are experts in many technologies, but we are a true market leader with over 15 years of experience in the field of clinical proteomics. For over 10 years, we have been discovering and developing proteomic-based diagnostic tests and have a deep understanding of how to incorporate technologies that can be applied to blood samples in order to extract important protein-based biological information in the form of diagnostic tests, which can aid clinicians and scientists in understanding the dynamic biology of their system of interest, such as a patient with cancer.

Oursuiteoftechnologiesthatassistusindiscovery,developmentandcommercializationofnoveldiagnostictestsincludes:

DeepMALDI Mass Spectrometry

We have developed DeepMALDI, a proprietary high-density matrix-assisted laser desorption/ionization time-of-flight (MALDI-ToF) massspectrometry (MS) technology, to produce blood-based proteomic data for disease diagnosis, personalized health care, precision medicine for directtreatment options, and disease screening in lung and other disease states. DeepMALDI overcomes the limitations of conventional MALDI and other massspectrometrymethodstoproducehighlysensitive,stable,andreproducibledataby:(1)utilizingoptimizedsignal-to-noisereductionandsignalprocessingalgorithms; and (2) novel batch correction methods and spectral alignment methods. The combination of these improvements yields substantially higherqualitydatacontentandistherebymuchbettersuitedforthediscoveryofbiomarkerswithclinicalutility.

Our current DeepMALDI methods allow us to achieve finer mass resolution, greater sensitivity, and 20-times faster imaging speeds than otherinstruments. Additionally, we believe enhancements to our DeepMALDI methods and MALDI-ToF technology evolution will allow us to measureapproximately 1,500 proteins, an improvement from the estimated 900 proteins we can measure today. We intend to maintain our leadership role in thediscoveryofproteomics-baseddiagnostictests.WeutilizeourDeepMALDIandMALDI-ToFtechnologiesinourdiscoveryanddevelopmenteffortsandaspartofourcollaborationswithourbiopharmaceuticalcustomersandacademicpartners.

Liquid Chromatography Mass Spectrometry MS

We use Multiple Reaction Monitoring (MRM) MS with triple quadrupole mass spectrometers and up-front liquid chromatography (LC) sampleinjectionintheNodifyXL2test.Thismassspectrometrymethodoffershighlysensitive,specific,andcost-effectiveanalysisforsimultaneousquantitationof hundreds to several thousands of targeted peptides in a single experiment. We have since included the MRM technologies as part of our services fordiscoveryanddevelopmentwithourbiopharmaceuticalcustomersandacademicpartners.

Enzyme-Linked Immunosorbent Assay

ELISA is the most widely used ligand binding assay platform within and outside the pharmaceutical industry. Formats include direct, indirect and sandwich assays and are typically run in manually or semi-automated modes. We use a semi-automated implementation of ELISA in clinical testing for the Nodify CDT test and the Platelia SARS-CoV-2 Total Ab test for COVID-19. The acquisition of Oncimmune USA in 2019 expanded our ability to conduct very high throughput and cost-effective ELISAs in our clinical testing laboratory. We have now included the ELISA technologies for research and development both internally and externally with our biopharmaceutical customers and academic partners.

Droplet Digital PCR Platform

WeusetheddPCRtechnologyformultiplexed,semi-automatednucleicaciddetection.Thisallowshighsensitivity,fastturn-aroundtimes,flexibilityin our laboratory workflows, rapid scaling from low to moderate analyte complexity, and high-volume scalability. ddPCR is an absolute quantitationmethodbasedonthepartitioningofcirculatingnucleicacidsintoupto20,000dropletsperreactionandisusedfortheGeneStrattestandBio-Rad SARS-CoV-2ddPCRtestforCOVID-19.WehaveincludedtheddPCRtechnologiesforresearchanddevelopmentbothinternallyandexternallywithourbiopharmaceuticalcustomersandacademicpartners.

Next Generation Sequencing Technology

WeuseanNGStechnologyforbroadgenomicsequencingofclinicalspecimens.OurstrategywithNGSreliesonamenuofoff-the-shelfandcustomresearch use assays, which we develop and make available as a part of our biopharmaceutical test services. The NGS technology integrates automatedsystemstoyieldhighsensitivityresultswitharapidturnaroundtime.Sinceadoptionofthistechnology,wehaveincludedtheNGS technologiesforresearchanddevelopmentbothinternallyandexternallywithourbiopharmaceuticalcustomersandacademicpartners.

Our Solutions and Products

Tohelpaddressthecurrentlimitationswithstandardofcareinlungcancerdiagnosis,treatment,andmonitoring,weusecombinationsoftumor,immune and host profiling, radiological imaging, patient clinical profiling, and our proprietary AI platform to provide a holistic view of each patient’sdynamicdiseasestate.

Wehavefourblood-baseddiagnostictestsacrossthelungcancercontinuumofcaretohelpaddressclinicalunmetneedsbyphysicians.

Diagnosis – Nodule Management

We believe we are the only company to offer two commercial blood-based tests to help physicians reclassify risk of malignancy in patients withsuspicious lung nodules. Our blood-based nodule management offering, Nodify Lung Nodule Risk Assessment assists physicians in reclassifying apatient’sriskoflungcancerbyincorporatingtheirproteinbiomarkerresultswithradiographicimagingandclinicalcharacteristics.NodifyLungconsistsofthe Nodify CDT and Nodify XL2 proteomic tests, which can be ordered separately or together from a single blood draw to help reclassify risk of cancer toaidphysiciansinstratifyingpatientsintodistinctnodulemanagementpathways:interventionorsurveillance.

The Nodify CDT test is used to help identify lung nodules that are likely malignant and the Nodify XL2 test helps identify lung nodules that arelikely benign. Nodify Lung is available for patients 40 years or older, with nodules between 8 and 30mm, and less than 65% pre-test risk of lung cancer.The testing strategy starts with the Nodify CDT test to determine if a nodule is likely malignant or at a higher risk of lung cancer. The Nodify CDT testhelps physicians identify cancer more quickly by prioritizing patients with a higher risk of malignancy for a diagnostic procedure, such as biopsy orsurgery. If the nodule is not identified as having a high risk of malignancy by Nodify CDT, then the Nodify XL2 test is performed to help determine if thepatient’snoduleislikelybenignorhasareducedriskoflungcancerandmaybeacandidateforCTimagingsurveillance.TheNodifyLungtestingstrategyis represented graphically in the image below starting with the patient’s pre-test risk of malignancy and ending with the guideline-recommended diagnosticprocedureforeachriskcategory.

We believe we are the only company to offer two commercial blood-based tests to help physicians reclassify risk of malignancy in patients withsuspiciouslungnodules.WelaunchedtheNodifyLungcombinedofferingofNodifyCDTandNodifyXL2inMarch2020.However,theNodifyXL2testhas been available to all physicians since September 2019 and has been available to a select group of physicians since October 2018. We acquired theNodifyXL2testfromIntegratedDiagnosticsinJuly2018,andacquiredtheNodifyCDTfromOncimmuneUSAinOctober2019.

NodifyCDT

NodifyCDTisablood-basedproteomictestthathelpsidentifypatientswhohaveasuspiciouslungnodulethatislikelymalignantoratahigherriskof being cancerous. Results allow physicians to identify patients who may be better candidates for timely invasive diagnostic procedures such asbronchoscopy, transthoracic needle biopsy, or surgical resection, with the hope of catching cancer earlier. Nodify CDT enhances lung nodule riskassessment to facilitate compliance with clinical treatment guidelines such as those of the American College of Chest Physicians (ACCP). Nodify CDT isintendedforuseinpatientswhoare40yearsorolder,havenodulesbetween8and30mm,andpre-testriskoflungcanceroflessthan65%.

The test measures the levels of seven circulating autoantibodies (P53, NY-ESO-1, CAGE, GBU4-5, SOX2, HuD, and MAGE A4) associated withlungcancer,combinedbyanalgorithmtoreportoutthreepotentialresults:HighLevel,ModerateLevel,orNoSignificantLevelsofAntibodiesDetected(NSLAD).Thesevenautoantibodieshaveshowntobeelevatedforalltypesoflungcancer,andfromtheearlieststageofthedisease.

Unlike the tumor antigens themselves, the autoantibody levels can be measured accurately through a blood sample, based upon the signal amplification generated by the immune response to cancer. This mechanism of action likely reflects very early events in a tumor’s evolution; as the immune system initiates a response to the cancer, it can also trigger an expansion of self-reactive antibodies that can be measured in circulation.

In addition to the test result of High Level, Moderate Level, or NSLAD, each test report includes the patient’s pre-test risk of malignancy ascalculated by the Solitary Pulmonary Nodule Risk Assessment calculator, and their post-test risk of cancer incorporating the result of the test. The SolitaryPulmonary Nodule Risk Assessment calculator was developed by Stephen Swensen, M.D., of the Mayo Clinic and is designed to provide a risk ofmalignancy for a patient with a newly discovered incidental nodule. The model incorporates six clinical and radiologic factors into the equation: age,nodule size, smoking status, nodule location, spiculation (nodule edge characteristic), and previous history of lung cancer. Incorporating the autoantibodylevelswiththeriskmodelprovidesphysicianswithamoreaccurateassessmentofrisk.Thetesthasbeenstudiedin14peerreviewedpublishedstudiesandpresentations.

NodifyXL2

NodifyXL2isablood-basedproteomictestthathelpsidentifypatientswhohaveasuspiciouslungnodulethatislikelybenignoratareducedriskofbeing cancerous. Results allow physicians to identify patients who may be better candidates for routine CT surveillance to monitor for growth or shrinkageof the nodule over time instead of an invasive diagnostic procedure. Nodify XL2 is used for patients who are 40 years or older, have nodules between 8 and30mm,andhaveapre-testriskoflungcanceroflessthanorequalto50%.

Nodify XL2 integrates peptides measured by LC-MS with clinical and radiological characteristics that are combined by an algorithm to report outthreepotentialresults:LikelyBenign,ReducedRisk,orIndeterminate.Specifically,theNodifyXL2testmeasurestherelativeabundanceoftwopeptides(LG3BPandC163A)in circulationinthepatient’sblood.Thenativeproteinsfromwhichthepeptidesarederived,havebeenassociatedwithaninflammatoryresponsetocancer.Theclinicalfactorsarepatientageandsmokingstatus,andradiologicalfactorsarenodulesize,location,andedgecharacteristics.

In addition to the test result of Likely Benign, Reduced Risk, or Indeterminate, each test report includes the patient’s pre-test risk of lung cancer ascalculatedbytheSolitaryPulmonaryNoduleRiskAssessmentcalculator,andtheirpost-NodifyXL2riskofmalignancyincorporatingtheresultofthetest.Incorporatingthepeptidelevelswiththeriskmodelprovidesphysicianswitharevisedassessmentofriskincorporatingthepatient’sbiology.

Insummary,theinclusionoftheNodifyLungtestingstrategyintoclinicalpracticehelpsphysiciansreclassifyriskofmalignancyoflowtomoderaterisk lung nodules by incorporating the patient’s own biology into the assessment. The Nodify CDT test helps physicians identify patients with a high-risklung nodule who may benefit from timely intervention, which can ultimately help identify lung cancer earlier. The Nodify XL2 test helps physiciansidentifypatientswithaverylowrisklungnodulewhomaybenefitfromCTsurveillanceandcouldavoidunnecessaryinvasiveprocedures.

BloodsamplesforNodifyXL2andNodifyCDTcanbecollectedinthephysician’soffice,laboratory,orathomethroughuseofmobilephlebotomy.Mobile phlebotomy options facilitate testing for patients even if they are not seen in person by the physician and instead are seen through telehealth visits.This benefits the patient as scheduling can be conveniently fit to their needs and can keep them away from a physician’s office or hospital for safetyconcerns, especially with the evolving coronavirus pandemic. Additionally, mobile phlebotomy benefits the physician as the logistics around a blood drawor tissue sampling are out of their hands. We have a national network of contracted Nurses and Phlebotomists to support at-home or mobile bloodcollection.

Both tests require a single blood sample shipped at ambient temperature to our certified, high-complexity clinical laboratory in De Soto, Kansas. NodifyCDTrequireswholebloodandNodifyXL2requireswholebloodspottedontoourproprietaryBloodCollectionDevice(BCD).TheintroductionoftheBCDasaqualifiedspecimen collectionmethodforusewiththeNodifyXL2testalleviatedtheneedforserumseparationprocessingstepsbyphlebotomistsatblooddrawsitessuchascentrifugation, and cold chain (dry ice) shipments, which has increased the market access to our proteomic-based tests. Results for Nodify CDT alone aretypically available within one day. If both tests are ordered for the patient and Nodify CDT returns a result of NSLAD, then both test results are typicallyavailablewithin4to5days.Allresultsareavailablethroughaportal,fax,hardcopy,ormobiledevice.

Treatment Guidance and Monitoring

Profiling the tumor through blood-based testing can help identify mutations in genes that may be driving growth of the tumor and may be targets fortherapeutics. However, tumors also suppress intrinsic mechanisms that prevent the patient’s immune system from identifying and eliminating the cancercells. Profiling the immune system can show if the patient’s immune system may have been subverted and therefore, is less likely to be responsive toimmunotherapies.Ourblood-basedBiodesixLungReflextestingstrategyconsistsoftheGeneStrattumorprofilingtestandtheVeriStratimmuneprofilingtest,whichcanbeorderedtogetherorseparatelyforpatientswithNSCLC.Together,theteststypicallyhavea3-dayturnaroundtime,providingphysicianswithtimelyresultstofacilitatetreatmentdecisions.

GeneStrat

GeneStrat is a blood-based tumor profiling test that detects the guideline recommended, actionable mutations in lung cancer: EGFR, KRAS, BRAF,EML4-ALK, ROS-1, and RET. Physicians can order one or any combination of the gene tests, whichever they deem medically necessary for the individualpatient.Thepresenceofamutationinoneofthegenescouldindicatethepatientisacandidatefortheassociatedguideline-recommendedtargetedtherapy.TheGeneStrattestperformanceandpotentialclinicalutilityhavebeenpublishedin3peerreviewedstudies.

GeneStrat test results are typically available within 72 hours from our receipt of the sample in our Boulder, Colorado clinical laboratory. In a study atEasternCarolinaUniversity,itwasobservedthatblood-basedtestingwasuptothreeweeksfasterthantissue-basedtesting,withtissue-basedtestingtakinga median of 26 days from sample collection. With GeneStrat testing, results are typically available in time for the patients first oncology visit, allowing thepatienttostartfront-linetreatmentasquicklyaspossible.Inthesamestudy,itwasobservedthatonly4%ofpatientshadtissue-basedmoleculartestresultsprior to start of front-line treatment. Meanwhile, after integrating Biodesix Lung Reflex testing at the institution, 72% of patients had molecular test resultsavailable.TestingwiththeGeneStrattestcanhelpphysiciansidentifydrivermutationsquicklytohelpspeeduptimetotreatment.

Webelievethatrapid,blood-basedtumorprofilingwiththeGeneStrattestiscomplementarytobothtargetedtissue-basedtesting(includingPD-L1)andbroadgenomicsequencing.TestingwithGeneStratatdiagnosiscanhelpquicklyidentifypatientswhoareeligiblefortargetedtherapies.Additionally,blood-based testing upfront can help save valuable tissue for diagnostic evaluation, PD-L1 testing and broad genomic profiling for rare mutations to enrollinclinicaltrials.

VeriStrat

VeriStrat is a blood-based proteomic test that provides a personalized view of each patient’s immune response to their lung cancer. Results helpinformphysicianswhethertheirpatienthasamoreaggressivecancerandcanhelpwithtreatmentplanning.VeriStratprofilesthepatient’simmunesystembymeasuringeightproteinfeaturesmeasuredbymassspectrometryandinterpretedbyaproprietarymachinelearning-basedalgorithmtoproduceeitheraVeriStratGoodorVeriStratPoortestresult.

The presence of a VeriStrat Poor result indicates the presence of chronic inflammation and a chronic acute phase immune response. A chronic acutephase immune response can trigger the immune system to provide growth factors to the tumor to increase blood flow and tumor growth. The test has beenstudiedinover85peer-reviewedandpublishedclinicalstudiesacrossmanydifferenttypesoftherapiessuchaschemotherapy,targetedtherapies,immunetherapies, and combinations. The results consistently show the test to be predictive of outcomes, independent of other prognostic factors including PD-L1expression and performance status. Patients who test as VeriStrat Poor, on average, have an overall survival that is less than half of those who test asVeriStrat Good, independent of treatment type, demonstrating that the test is strongly prognostic. Conversely, patients with a VeriStrat Good test resulttypicallyrespondbettertostandardofcaretreatmentsthanthose patientsthattestasVeriStratPoor.ByusingtheVeriStrattestforimmuneprofiling,physicianscanhelpidentifythepatientswithanimmunestatusassociatedwithgenerallypoorprognosiswhoshouldbetreatedwithalternatetherapiesorinclinicaltrials.

GeneStratrequireswholebloodandVeriStratrequiresawholebloodsamplespottedontoourproprietaryBCD.Bothsamplesareshippedatambienttemperature and testing is performed in our certified, high-complexity clinical laboratory in Boulder, Colorado. GeneStrat is performed using the ddPCRtechnology, and the protein features in VeriStrat are measured using matrix-assisted laser desorption/ionization time of flight (MALDI-ToF) massspectrometry.Resultsaretypicallyavailablewithin72hoursthroughaportal,fax,hardcopy,ormobiledevice.

COVID-19

BiodesixWorkSafeCOVID-19TestingProgram

InresponsetotheCOVID-19pandemic,throughourpartnershipwithBio-Rad,wecommercializedtheBiodesixWorkSafetestingprogram.Ourscientificdiagnosticexpertise,technologies,andexistingcommercialinfrastructureenabledustorapidlycommercializetwodiagnostictestsforthe SARS-CoV-2virusthatcausesCOVID-19.ThefirsttestistheBio-RadSARS-CoV-2ddPCRtest,whichisamoleculartestintendedfordetectingactiveSARS-CoV-2 infection. The test was FDA EUA authorized on May 1, 2020, authorizing performance of the test in laboratories certified under CLIA toperform high complexity tests. The second test is the Platelia SARS-CoV-2 Total Ab test, which is an antibody test intended for detecting a B-cellimmuneresponsetoSARS-CoV-2,indicatingrecentorpriorinfection.ThetestwasFDAEUAauthorizedonApril29,2020.

Within a month of initiating our development collaboration with Bio-Rad, we were able to launch two tests for commercial use. We were able tobringtheseteststomarketasfastaspossibleduetoourscientificdiagnosticexpertise,technologiesandexistingcommercialinfrastructure.Inadditiontoour launch agility, we have been able to rapidly scale our laboratory operations for high-volume testing. We remain committed to delivering rapid testresultsin24to48hoursonaverage.

UsingtheBio-RadSARS-CoV-2ddPCRtestandthePlateliaSARS-CoV-2TotalAbtests,weoperateandhavecommercializedtheBiodesixWorkSafetestingprogram.

Prior to using the Bio-Rad tests as part of our testing program, we performed feasibility, verification, and validation studies, including developingsoftware for process automation, sample accessioning, data management and reporting, all required to demonstrate the test operated as claimed by themanufacturerandasrequiredbyourcertifyingregulatoryagenciesforhighcomplexitylaboratorytesting.Wesecuredindependentreferencespecimensrunwith EUA tests to validate these tests as fit for diagnostic use in our laboratories. Post-launch development support for these tests have includedimprovements in on-boarding new personnel, logistics of sample collection, sample receipt and data reporting, all required to support our testing program.Additionalreleasesofthelaboratorydatamanagementsoftwareareongoingandplannedfortheforeseeablefuture.

Ourtestsareutilizedbyhealthcareproviders,includinghospitalsandnursinghomesandarealsoofferedtobusinessesandeducationalsystemstoassist in their back-to-work or back to school strategies. Recently, we announced multiple partnerships for COVID-19 testing, and Colorado GovernorJared Polis announced at a press conference on July 23, 2020 that we will now be supporting wide-spread COVID-19 testing for the State of Colorado.Additionally, we announced a partnership as the official COVID-19 testing partner for the Major League Lacrosse as they competed in their 2020tournament. We also announced on September 30, 2020that we will oversee and manage onsite testing and testing validation for the Big Ten Conference athleticcompetitions.

Bio-RadSARS-CoV-2ddPCRtest

The Bio-Rad SARS-CoV-2 ddPCR test, also known as a molecular or viral test, is intended for the qualitative detection of nucleic acid from SARS-CoV-2, the virus that causes COVID-19. The test targets detection of the nucleic acid from SARS-CoV-2 (not from any other viruses or pathogens) in respiratory specimens to identify and isolate infected individuals. Recent studies have shown that ddPCR-based testing is more sensitive than qPCR for detecting SARS-CoV-2, specifically in the reduction of false negative results. In one study, the ddPCR test demonstrated 95% accuracy vs. 47% for other “bulk” RT-PCR technologies used in other molecular tests Specimens are shipped at ambient temperature or dry ice depending on the viral transport media (VTM) used, and testing is performed using ddPCR in our certified, high-complexity clinical laboratory in Boulder, Colorado. Results are typically available through fax, hard copy, or encrypted email within 24 to 48 hours on average from receipt of the sample.

PlateliaSARS-CoV-2TotalAbTest

The Platelia SARS-CoV-2 Total Ab test (also known as a serology or antibody test) is intended for use as an aid in identifying individuals whohave developed an adaptive immune response to the SARS-CoV-2 virus, indicating recent or prior infection. The test uses whole blood to detectcirculating antibodies against the virus. The sensitivity is 98% and specificity is 99% eight days after the onset of symptoms. At this time, it is not knownhow long antibodies persist following infection and if the presence of antibodies confers protective immunity. The test is intended for the qualitativedetection of total anti-SARS-CoV-2 nucleocapsid antibodies (IgG, IgM and IgA) in human serum or plasma specimens. The test requires a 3 mL blooddraw, and samples are shipped at ambient temperature. Testing is conducted using semi-automated ELISA technology in our certified, high-complexityclinicallaboratoryinDeSoto,Kansas.Resultsaretypicallyavailablewithin24to48hoursfromreceiptofthesamplethroughfax,hardcopy,orencryptedemail.

Biopharmaceutical Diagnostic Discovery, Development and Testing Services Business

We believe our leadership in clinical proteomics and our technology agnostic approach to probe the cancer disease state provides our customers witha clear and distinct advantage over other diagnostic service providers who solely focus on either genomics or proteomics. Similar to our commercialclinicaltestingbusiness,ourbiopharmaceuticaldiagnosticdiscovery,developmentandtestingservicesbusinessleveragestheDiagnosticCortextoprovideanextensivelyvalidatedanddeeplearningapproachtodiscoveringnewbiomarkers,whichinturnhelpsdrivetheclinicaldevelopmentoftherapeutics.Werecognize each clinical development program is complex, which is why we offer end-to-end diagnostic solutions, ranging from initial biomarker discoveryandfeasibilityprojectstocommercializationofcompaniondiagnostics.

To address the increasing complexity of disease biology and new drug mechanisms of action, we employ a technology agnostic approach to uncoverinsights about the tumor biology and patient’s immune response to cancer for therapeutics in clinical development. With our broad technology and serviceoffering, including the performance of over 30 assays for research use as part of our laboratory services (see diagram below), we are able to provide thedepth and breadth of biomarker tools for our partners for multi-omic analyses across their product development efforts. Although we recognize theimportance of a multi-omic, technology agnostic approach in translational research, we are experts in discovering and developing proteomic-baseddiagnosticteststohelpinterrogatetheimmuneprofileandhostdiseasestateofpatientsonparticulartherapeutics.Traditionally,oncologybiomarkershavebeen discovered from tumor tissue, but with the increased trend in the number of programs featuring immuno-oncology agents in therapeutic development,webelievethereisaclinicalunmetneedforblood-basedtumormarkersandhost/immunebiomarkerstocomplementinformationobtainedfromtissue.

We believe we provide benefit to our biopharmaceutical customers as they integrate strategies for increasing the probability of success for pivotalclinical trials. Specifically, our diagnostic testing services may help enable quicker enrollment rates for patients in prospective clinical trials, ranging fromphase 1 to phase 3, and could help identify patient populations who may experience the greatest benefit from new therapeutics. Ultimately, our goal is tohelpbiopharmaceuticalcustomersrealizegreaterefficiencyintheirclinicaldevelopmentprograms.Additionally,wehavetheabilitytoaccessandleverageourlargesampleanddatabiobankforourpartners’dataminingneeds,includingnewtestdiscovery.

Whileourbiopharmaceuticaldiscovery,diagnosticdevelopmentandtestingrevenuecontinuestogrow,itisimportanttonotethatwebenefitgreatlyfromthesepartnershipsinmanywaysthatexpandbeyondrevenue.We are continuously expanding our knowledge and biological understanding of multiple diseases and the rapidly evolving treatment landscape, while ourDiagnosticCortexcontinuestobepoweredthroughthesebiomarkeranalyses.Additionally,oursampleanddatabiobankcontinuetogrowandcanbefurther leveraged for internal test development and external partnering. Importantly, we look to supplement our product development efforts withcompaniondiagnosticsastheyaredeveloped.

To date, we have over 50 biopharmaceutical customers and academic partners who have utilized our diagnostic tests and services. The following are a few case studies of early-stage biomarker discovery and development with our biopharmaceutical customers.

Our Competitive Advantages

We believe the following are our key competitive advantages:

Our Strategy

Westrivetoprovideswift,comprehensiveandactionableinsightstoimprovepatientoutcomesacrosslungdiseaseandtohelpanswercriticalclinicalquestionsfacedbyphysicians,researchers,andbiopharmaceuticalcompanies.Toachievethis,weintendto:

• Introduce new diagnostic tests in lung disease by:

• Enhance our proprietary AI platform and expand our technology portfolio by:

• Continue to expand and leverage our biobank by:

• monetizing these commercial opportunities.

Our Diagnostic Tests in Development

Withthegoaloffindingsolutionsforclinicalunmetneedsrelatedtodiagnosis,treatmentandmonitoringinlungdisease,ourdiagnostictestsindevelopmentincludethefollowing:

Early-StageNSCLC—RiskofRecurrence

Currently,surgicalresectionofthetumorwithoutsystemicorradiationtherapyisstandardofcareforstageINSCLCpatients.However,20to40%of surgically treated patients will suffer a recurrence within 5 years after surgery. From market research with pulmonologists, thoracic surgeons, andmedicaloncologists,weidentifiedasignificantclinicalunmetneedforablood-basedtesttohelpidentifystageINSCLCpatientswhoareatahigherriskofrecurrenceandmaybenefitfromneoadjuvantoradjuvantsystemictreatment.Withthisinformation,wediscoveredtheRiskofRecurrence(ROR)test,which is a pre-surgery blood-based proteomic test, designed with the Diagnostic Cortex to predict whether a stage I NSCLC patient has a higher risk ofrecurrence post-surgical resection. Knowing this information early and before surgery may support treatment decisions such as neoadjuvant or adjuvanttherapy, which have the potential to reduce tumor volume and address micro-metastatic disease as early as possible. Our ROR test validated in anindependentsampleset,andweare currentlyworkingwithmajoracademicinstitutionsacrosstheUnitedStatestofurthervalidatethetest.

Late-Stage NSCLC—Immunotherapy Treatment Guidance

In 2015, the first immunotherapy-based treatment regimen was approved by the FDA for use in lung cancer. Currently, there are 9 immunecheckpointinhibitor(ICI)regimens(singleagentorcombinations)recommendedbytheNCCNguidelinesfortreatmentofadvancedNSCLCpatients.Foraportionofpatientstreated,thesedrugscanresultinsignificantimprovementinoverallsurvivalcomparedwithplatinum-basedchemotherapyoptions.

ThecombinationICIregimensseesomeimprovementinperformanceoversingleagentICI,butsideeffectprofilesareworse,andcostsarehigherthanforsingle agent ICI. In addition, recent data have shown that a subset of patients experience more rapid disease progression on ICI compared withchemotherapy. We utilized the Diagnostic Cortex platform to discover our Primary Immune Response (PIR) test. PIR is a blood-based proteomic testdesigned to profile a patient’s immune response to their cancer and stratify by who is likely to respond to ICI treatment. Our PIR test has been validated inmultiple independent sample sets for advanced stage NSCLC patients treated with single agent ICI, and we are currently working with major academicinstitutionsacrosstheUnitedStatestofurthervalidatethetestinaprospectivestudycalledBEACON-Lung.

Monitoring – Progression & Resistance

Blood-based monitoring with our ddPCR technology may offer a feasible method to non-invasively evaluate therapeutic mechanism of action,disease progression, and the emergence of resistance mutations in patients treated with targeted therapies. Our internal validation studies have shown theutilityoftheGeneStratEGFRddPCRtestinallthreeoftheseindications.Thetestcanidentifydiseaseprogressionupto3months(median)inadvanceofstandard imaging. Using ddPCR for longitudinal blood-based monitoring of EGFR cell-free DNA mutations is a cost-effective testing method whilepatientsarebeingtreatedwithtargetedtherapies.

COVID-19 Viral Infection – Risk of Severe Outcomes

Despite significant medical advances in the prevention and treatment of COVID-19, the virus continues to place health systems under pressure, with COVID-19 hospitalization rates in the United States exceeding 417 hospitalizations per 100,000 population the week ending January 31, 2021. Better understanding of how to identify which patients are at greatest risk of developing severe lung disease, requiring intubation, or dying from COVID-19 would help inform physicians of the risks and benefits of treatments, target higher risk patients for clinical trials, compare outcomes between patients with similar risk, and prioritize resources in a time of shortage. In partnership with an academic institution, we have developed an artificial intelligence (AI)-based algorithm for clinical decision support to help stratify patients hospitalized with COVID-19 who are likely to require intervention, such as treatment with ventilators, admission to intensive care units, or those patients who may develop acute respiratory distress syndrome (ARDS), versus those who will likely not require intervention. Our COVID-19 AI-based algorithm validated in a blinded, independent study, and uses 26 easily obtainable variables from the emergency department at time of initial evaluation to classify patients, including patient characteristics, vital signs, and readily available laboratory test values. We are working with a United States and International COVID-19 consortia consisting of major academic institutions to perform additional large, blinded, independent validation testing of the classifier and we are currently exploring options for making the algorithm widely available to hospitals for future patient use.

Clinical Trials

We are dedicated to continuously publishing and presenting new data on the clinical validation and utility of our diagnostic tests. We haveparticipatedin27clinicalstudies,5 ofwhichareongoing,andhavepublishedover275peer-reviewedpublicationsandpresentations.Thefollowingareourongoingclinicalstudiesforourdiagnostictestingsolutions.

ORACLERegistryStudy(NCT03766958)

The ORACLE registry study was designed to develop real-world clinical utility data for Nodify XL2 and is titled “An Observational Registry StudytoEvaluatethePerformanceoftheNodifyXL2Test”.Thestudyobjectivesaretoshowareductionininvasiveproceduresonpatientswithbenignnodulescompared to a historical control obtained from chart review. The first patient enrolled on October 16, 2018. As of May 1, 2020, 423 patients have beenenrolledandareundergoingprimaryendpointanalysis,with2-yearfollow-upestimatedtobecompletedbythefirsthalfof2022.

ALTITUDEClinicalUtilityStudy(NCT04171492)

The ALTITUDE clinical utility study is designed to evaluate the performance of Nodify Lung (Nodify XL2 and Nodify CDT) in a randomizedcontrolled study (RCT). The study is titled “A Multicenter, Randomized Controlled Trial, Prospectively Evaluating the Clinical Utility of the Nodify XL2Proteomic Test in Incidentally Discovered Low to Moderate Risk Lung Nodules”. We received central investigational review board (IRB) approval inDecember2019andhaveanenrollmentgoalof2,000patients.ThestudyobjectivesaretoevaluatehowtheadditionoftheNodifyLungtestresultimpactsthe clinical decision making for patients with new, incidentally identified solid lung nodules assessed as low to moderate risk of lung cancer. The trial hasan adaptive study design with a blinded standard of care arm and 2:1 randomization for open-label results for Nodify XL2. The study launched in December of 2020. Phase 1 of the study with only Nodify XL2 is expected to enroll 500 patients. Phase 2 of the adaptive study design willincludeanopen-labelarmforNodifyCDT,whichisalignedwithourcommercialtestingalgorithm.

INSIGHTObservationalStudy(NCT03289780)

TheINSIGHTobservationalstudyisdesignedtoevaluatethereal-worldclinicalutilityandperformanceoftheBiodesixLungReflex(GeneStratandVeriStrat) testing strategy. The title is “Observational Study Assessing the Clinical Effectiveness of VeriStrat and Validating Immunotherapy Tests inSubjects with Non-Small Cell Lung Cancer (INSIGHT)” and the first patient enrolled was on May 11, 2016. To date, we have over 3,500 patients enrolledwith a target 5,000 enrollment goal. Final analysis with 3-year follow-up is estimated to be completed by 2024. Results of an interim analysis werepresented at ASCO 2020. The study rationale is to guide the adoption of VeriStrat and inform medical decision making, including treatment choice, andenable the validation of additional mass spectrometry-based proteomic tests. The primary study objective is to describe the impact of the VeriStrat testresults on treatment decisions, including but not limited to the percentage change in treatment decision, differences in chosen treatments between patientsclassifiedasVeriStratGoodandthoseclassifiedasVeriStratPoor,andthepercentageofpatientsreceivingsystemictherapyorsupportivetherapiesonly.

BEACON-LungClinicalStudy(Trial in Progress)

InpartnershipwithALCMI(AddarioLungCancerMedicalInstitute),theBEACON-Lungclinicalstudyisintendedtoevaluatetheperformanceandutility of our proteomic product currently in development, PIR, in advanced stage NSCLC patients who express high PD-L1. The study title is “ABiomarker Analysis in High PD-L1 Expressing NSCLC Patients Treated With An Immune Checkpoint Inhibitor (ICI) With or Without Platinum-BasedChemotherapy.” The study design is an observational, multicenter, open-label study to assessbiomarkers (serum, microbiome, radiomics and tissue) as predictive of early progression in 390 treatment-naive patients with advanced stage NSCLC andPD-L1 greater than or equal to 50% treated with two standard of care regimens, triplet therapy (platinum-based chemotherapy plus ICI regimen) and ICImonotherapy (single agent ICI). The objectives are to collect biospecimens and evaluate candidate biomarkers, with a focus on PIR, to detect earlyprogressiononICImonotherapyversustriplettherapy.

DROPLET (Pending IRB Submission)

Droplet is an exploratory direct to patient study to assess the utility a novel gene linkage phenomenon as measured by the Bio-Rad SARS-CoV-2 ddPCR test, on the correlative immune response in individuals previously infected with the COVID-19 virus. The primary objective of this study (titled “ddPCR Linkage, Viral Load and Immune Response in Individuals Infected with COVID-19”) is to evaluate the correlation between linkage, viral load and the immune responses in individuals who have had a natural infection with SARS-CoV-2. Fifty patients will be enrolled and serially tested for viral load and immune responses for up to 12 months.

Commercialization

For our lung cancer and nodule management tests, commercial efforts are focused on the promotion of our testing strategies to healthcareprofessionals actively involved in the diagnosis and treatment of lung cancer. Primarily focusing on pulmonology, the commercial team, consisting ofspecialty sales representatives, medical affairs, marketing and customer care representatives, works to educate and inform the entire patient care groupconsisting of physicians, nurses, office staff, laboratory personnel, and administration as to the appropriate use and value provided by our testing. Theteam’sgoalistodrivetestadoptionthrougharticulatingthescientificandclinicalevidencebehindourtests,howtheyimpacttheclinicalcareofapatient,andhowthetestscanultimatelyhelptoimprovepatientoutcomes.

Patients with pulmonary nodules are concentrated in this sub-specialty, where additional resources such as lung cancer screening and nodulemanagementclinicsmayexisttoprovideanincreasedlevelofcare.Wearealsoengaginglargehospitalsystemsina“top-down”approach,withagoalofincorporatingourtestsintosystemwidepathwaysandprotocols.

Afteraphysicianordersourtests,bloodiscollectedeitherinthephysicianofficeorlaboratory,third-party“storefront”patientservicecenters,oritcan be collected in the patient’s home or workplace. We have contracted with a network of patient service centers and mobile phlebotomy services to beenablecollectionofbloodsamplesoutsideofthephysicianoffice,athomeorworkforpatientsacrosstheUnitedStates.

ForourBiodesixWorkSafeCOVID-19testingprogram,wehaveadedicatedoutreachteamthatworkswiththe State of Colorado healthcareprovidersandhospitals,andemployers looking to safely return to work across many industries, including food services, oil and gas, biotechnology and pharmaceuticals, sports teams,universities, and many small businesses. We recognize everyone’s COVID-19 situation is unique, which is why we provide end-to-end customizedsolutions to support testing for our different customers, such as risk assessment tools, physician ordering services, on-site testing, phlebotomy services,shippinglogistics,andongoingclient support.

Our business development team is focused on selling our complete offering of tests and services to biopharmaceutical companies in the United States and internationally. Our team consists of customer facing business development associates that work with our biopharmaceutical customers to identify projects, draw up statements of work and negotiate service agreements. Alliance managers help to manage the contractual obligations and scope of the project, whereas our operations team assures the project is managed with adequate resources and delivers on time. We take a two-pronged approach generating business in this segment. Primarily, we leverage existing projects and relationships to expand sales in current accounts. We also actively map ongoing drug development projects in biopharmaceutical companies and target programs best suited to our platform for new test development.

Coverage and Reimbursement

The primary source of reimbursement for our tests in the United States is from third-party payers including government payers, such as Medicare,andcommercialpayers,suchasinsurancecompanies.ForourCOVID-19testingprogram,theprimarysourceofreimbursementisthroughcontractswithhospitals, companies providing wellness testing for their employees, or direct pay from patients. We believe that our lung cancer tests can both improvepatient outcomes and help guide cost-effective treatment choices for patients with and at-risk of lung cancer. Achieving broad coverage and adequatereimbursementforeachofourtestsisakeycomponentofourfinancialsuccessandwillcontinuetobeimportantovertime.

Under the Families First Coronavirus Response Act (FFCRA) and Coronavirus Aid, Relief, and Economic Security Act (CARES), Congress hasimposedabroadrequirementthatMedicarefee-for-service,MedicareAdvantage,Medicaid,andcommercialpayersgenerallycoverclinicaldiagnosticlaboratorytestsadministeredduringthePublicHealthEmergencyforthedetectionofSARS-CoV-2orthediagnosisofthevirusthatcauses COVID-19.Whereapplicable,theFFCRAandCARESrequirepayerstocoverCOVID-19testswithoutcostsharingormedicalmanagementtechniqueslikepriorauthorization.Medicarefee-for-servicedoesnotrequirecostsharingorpriorauthorizationforanyclinicaldiagnosticlaboratorytests.

TheDepartmentofHealth&HumanServices(HHS)hasindicatedinguidancethatthecoveragerequirementsoftheFFCRAandCAREScanapplyboth to infection and serological testing, but that they are only applicable to testing that is “diagnostic,” which “may include testing of individuals withsigns or symptoms compatible with COVID-19, as well as asymptomatic individuals with known or suspected recent exposure to SARS-CoV-2.” Testingthat is “not primarily intended for individualized diagnosis or treatment of COVID-19 or another health condition,” including “testing conducted to screenfor general workplace health and safety,” is beyond the scope of the statutory coverage requirements. We believe these coverage requirements apply to theBio-Rad SARS-CoV-2 ddPCR test and the Platelia SARS-CoV-2 Total Ab test when performed for diagnostic purposes. In some cases, wesubmit claims to insurance payers for the Bio-Rad SARS-CoV-2 ddPCR test and/or the Platelia SARS-CoV-2 Total Ab test. In these cases,insurance payers may have a different position on the scope of mandatory coverage of our tests under the FFCRA and CARES. More commonly, we enter into arrangementswithclientsunderwhichtheclientpaysusdirectlyfortesting.

Compliancewithapplicablelawsandregulations,aswellasinternalcompliancepoliciesandproceduresaddscomplexitytothebillingprocess.The Centers for Medicare & Medicaid Services (CMS) is responsible for overseeing the establishment of new Healthcare Common Procedure Coding System (HCPCS) codes for billing the Medicareprogramandotherpayers.CMScontinuouslyevaluatesandimplementschangestotheMedicarebilling,coding,andreimbursementprocesses.Toreceivereimbursement from third-party payers, we bill our tests using a variety of HCPCS codes or Current Procedural Terminology (CPT) codes, as defined by the American Medical Association.For some of the tests we conduct, there may not be a specific CPT or HCPCS code, in which case the test may be billed under a miscellaneous code for anunlisted molecular pathology procedure or unlisted multiple analyte test with algorithmic analysis (MAAA) procedure. Because these miscellaneouscodes do not describe a specific service, the third-party payer claim may be examined to determine the service provided, whether the service wasappropriate and medically necessary and whether payment should be rendered. This process can result in a delay in processing the claim, a lowerreimbursementamount,and/ordenialoftheclaim.

Competitors

We primarily face competition from lung cancer diagnostic solutions companies in the United States, Europe and Asia seeking to answer clinicalquestionsinthespace,allofwhomprovidecancer-focuseddiagnosticteststohospitals,researchers,clinicians,laboratoriesandothermedicalfacilities.

Diagnosis—NoduleManagement

Wearenotawareofanyothercompanythatofferstwocommercialblood-basedteststohelpphysiciansreclassifyriskofmalignancyinpatientswithsuspicious lung nodules. We are aware of efforts by Veracyte, Inc. to develop and validate a test that may be competitive to the Nodify XL2 and/or NodifyCDT tests in the future. Additionally, Veracyte currently markets a test that is used post-bronchoscopy that is not competitive with our pre-bronchoscopynoduleriskassessmenttests.

Prognosis,TreatmentGuidanceandMonitoring—NSCLC

Weareunawareofanyotherdiagnostictestavailable,commerciallyorindevelopment,thatwillcompetewithourVeriStratimmuneprofilingtest.There is substantial interest and activity in tumor profiling through liquid biopsy. Our genomic test offering, GeneStrat, faces competition from academichospital laboratories, and companies such as Guardant Health and Foundation Medicine. We believe that there are several companies and academicresearchinstitutionsintheprocessofdevelopingtestsformonitoringpatientsonorfollowingtreatmentforrecurrenceorprogressionoflungcancer.

COVID-19Testing

We believe that our competitors include university and state laboratories, national reference laboratories such as Lab Corporation and Quest Diagnostics, in-hospital laboratories, and a number of other diagnostic providers. We are aware that a number of other companies have announced development efforts to develop COVID-19 tests.

BiopharmaceuticalDiagnosticDiscovery,Development&TestingServices

Weareawareofanumberofcompanieswhocompetewithourdiagnostictestsandservices,includingdiagnosticresearch,clinicaltrialtesting,andthe discovery, development, and commercialization of companion diagnostics. From the perspective of tumor profiling, we believe Guardant Health andFoundation Medicine are our most significant competitors. Conversely, in the immune profiling market, we believe Adaptive Biotechnologies andPersonalisareourmostsignificantcompetitors.

ClinicalLaboratoryOperations

We perform the VeriStrat, GeneStrat, and COVID-19 ddPCR tests in our Boulder, Colorado clinical laboratory. The laboratory is CAP-accredited,CLIA-certified,NewYorkDepartmentofHealth(NYSDOH)—permittedandlicensed,ISO13485:2016QualityManagementSystems—RequirementsforRegulatory Purposes for Medical Devices certified, along with all other states that require licensing: California, Maryland, Pennsylvania, and Rhode Island.All aspects of the testing process from receipt of the test requisition form through to delivery of test results are performed in the Boulder, Colorado facility.The proprietary testing methods use semi-automated workflows that facilitate the successful delivery of greater than 90% of our tests within 3 days, and we believeourexistingworkflowswillcontinuetosuccessfullydeliverourtestswithinthistimeframe.

The Nodify XL2, Nodify CDT, and COVID-19 total antibody tests are performed in our De Soto, Kansas clinical laboratory. This clinicallaboratory is CLIA-certified, COLA-accredited, New York Department of Health—permitted and licensed, and licensed by California, Maryland,Pennsylvania, and Rhode Island. Efforts are underway with the NYSDOH to become permitted and licensed to perform Nodify XL2 and Nodify CDTtesting for samples from the state of New York. Receipt of requisitions and testing is performed in our De Soto, Kansas clinical laboratory. Delivery of thetest results is performed by personnel from our Boulder, Colorado headquarters. The proprietary testing methods use semi-automated workflows thatfacilitatethesuccessfuldeliveryofgreaterthan90%ofourtestswithin5days,andwebelieveourexistingworkflowswillcontinuetosuccessfullydeliverourtestswithinthistimeframe.

Personnelinbothfacilitiesareresponsibleforqualityassuranceoversight,licensing,andregulationcomplianceandmaintenancetoensuredataintegrityandconsistent,validatedprocesses.

SupplyChain

We rely on third-party suppliers, including in some instances single source suppliers, to provide us with certain components of our diagnostic tests. The number of suppliers feeding into the production of our diagnostic tests is in excess of 65 worldwide. We consider a select few of these suppliers,locatedintheUnitedStates,EuropeandChina,ascriticalsinglesourceprovidersofcomponents.Bio-Rad,asdescribedbelow,isthesolesourcesupplierfor our GeneStrat test and COVID-19 and antibody testing program. Oncimmune is also the sole source supplier for our Nodify CDT tests butthere are known secondary suppliers for these materials. We have initiated the second source qualification process for the majority of these criticalcomponents.

Inaddition,wepurchasesuppliesthroughpurchaseorderswithoutlong-termsupplyagreementswith,orguaranteedcommitmentsfrom,manyofoursuppliers,includingsinglesourcesuppliers.Additionally,atpresent,werelyoncontractmanufacturersfortheproductionofourdiagnostictests.Wedepend on our suppliers and contract manufacturers to provide us and our customers with materials in a timely manner that meet our and their quality,quantityandcostrequirements.

We entered into a nonexclusive license and supply agreement with Bio-Rad in August 2019. We rely on Bio-Rad to supply equipment and reagentsused to perform ddPCR testing, a service offered by us under a variety of fee for service agreements and the core technology powering the GeneStrat test,butthesesuppliesareabletobesuppliedbyknownsuppliers.AdisruptiontothissupplywouldnegativelyimpactourabilitytoperformtheGeneStratandSARS-CoV-2testsuntilalternativescouldbevalidated.

Whilewehaveinitiatedthesecondsourcequalificationprocessforthemajorityofthesecriticalcomponents,wemaynotbesuccessfulinsecuringsecond sourcing for all of them at all or on a timely basis. A disruption to this supply would negatively impact our ability to perform these tests until analternativesuppliercouldbevalidated.

AllmaterialsforourVeriStrattestandNodifyXL2testshavealternativesuppliersreadilyavailable,andadisruptioninanysinglesupplierwouldnotmateriallyimpactourabilitytodeliverthetest.

TheCOVID-19pandemichasallowedustopressure-testoursupplychainandlogisticsprocessesaswepurchasedadditionalmanufacturingcapacityabove our normal run rates to ensure that supply to execute on tests for the foreseeable future was available in-stock and in-house. Our suppliers have beenable to allocate sufficient capacity to meet this increased demand with reasonable lead times and therefore we believe sufficient capacity exists for all testsforthenext24months.

IntellectualProperty

Our success depends, in part, on our ability to obtain and maintain intellectual property and proprietary protection for our products and other know-how, to operate our business without infringing, misappropriating or otherwise violating the intellectual property and proprietary rights of others, and to defend and enforce our intellectual property and proprietary rights. We take efforts to protect our proprietary position using a variety of methods, which include pursuit of United States and foreign patent applications related to our proprietary technology, inventions and improvements that we determine are important to our business. We also may rely on trade secrets, trademarks, know-how, continuing technological innovation and potential in-licensing and acquisition opportunities to develop and maintain our proprietary position. For more information regarding risks relating to intellectual property, please see “Risk Factors—Risks Related to Our Intellectual Property.”

We have invested heavily in the protection of our key assets, namely the VeriStrat® and GeneStrat® tests, and we acquired a patent portfolio relating to the Nodify XL2® and Nodify CDTTM tests in our acquisitions of Integrated Diagnostics in June 2018, and of Oncimmune USA in October 2019 fromOncimmune Limited (Oncimmune). We own patents and patent applications as well as trade secrets relating to our products currently in development,collection device for whole blood, business strategy, client lists and business methods. Further, we have expanded our access to key intellectual propertythroughlicenseandco-developmentagreements,includingourNon-ExclusiveLicenseAgreementwithBio-Rad(theBio-RadLicense),whichallowsustousetheDropletDigitalPCRTMtechnologydevelopedbyBio-RadandwhichweemployinourGeneStrattest.

Our patent strategy has focused on creating and acquiring protection for our VeriStrat and Nodify XL2 proteomic tests, while utilizing trade secretand some methods patent protection for our genomic test (the GeneStrat test) and ELISA test (the Nodify CDT test). We have entered into a non-exclusivelicense agreement with Bio-Rad, without the right to grant sublicenses, to utilize certain of Bio-Rad’s intellectual property, machinery, materials, reagents,supplies and know-how necessary for the performance of ddPCR in cancer detection testing for third parties in the United States. For more informationregarding this license and supply agreement, please see “—Material Agreements—Agreements with Bio-Rad.” Bio-Rad owns patents relating to ddPCRand to which we have a non-exclusive license to utilize for the performance of ddPCR in cancer detection testing for third parties as set forth in the Bio-Rad License Agreement. In addition, we have separately been granted permission by Bio-Rad to use the Bio-Rad SARS-CoV-2 ddPCR testand PlateliaSARS-CoV-2 Total Ab testfor commercial diagnostic services. For more information regarding the permission granted to us by Bio-Rad with respect tosuchtests,pleasesee“Business—MaterialAgreements—AgreementswithBio-Rad.”WeareunawareofpatentsownedbyBio-RadrelatingtoitsCOVID-19 antibody test but acknowledge that Bio-Rad has know-how and trade secrets relating to this test. We have patent protection in the United States andother countries around the world for the primary use of the VeriStrat test for profiling of patients with NSCLC, and various other uses of the VeriStrat test,such as breast cancer, prostate cancer, head and neck cancer have received patent protection. We have also received patent protection relating to our coreclassifier development program, our Diagnostic Cortex® technologies and our approaches to using mass shot matrix-assisted laser desorption time of flight(MALDI-ToF) technology (DeepMALDI® techniques). Additionally, our first device patent was issued in 2019 for our internally designed bloodcollectiondevice.

As of October 21, 2020, our patent portfolio includes approximately 49 issued United States patents, 38 issued foreign patents, which includes 3EuropeanpatentsthatwerenationalizedinmultipleEuropeancountries,and40pendingapplications(including23foreignpatentapplications). With regard to our product development efforts, provisional applications have been filed around new developments relating to ARDS and COVID diagnostics, and national stage applications are now in active prosecution to protect our ROR and PIRtests.

Thepatentportfoliocanbebrokendowninto5categories:

ThepatentsrelatingtotheVeriStrattestarescheduledtoexpirebetween2026and2032.ThepatentsrelatingtotheNodifyXL2testarescheduledtoexpire beginning in 2031 (excluding any patent term extension granted by the USPTO), and the patents relating to the Nodify CDT test are scheduled toexpire in 2027. The patent related to the blood collection device is scheduled to expire in 2039. Should our current patent applications in prosecution in theUnited States issue, the resulting patents would be scheduled to have expiration dates between 2036 and 2040 (excluding any patent term extension(s)grantedbytheUSPTO).

While we do not currently have any pending PCT applications, we often convert provisional patent applications to PCT applications. PCT patent applications are not eligible to become issued patents until, among other things, we file such PCT applications as national stagepatent application(s) within 30 months in the countries in which we seek patent protection. If we do not timely file any national stage patent applications,we may lose our priority date with respect to any such PCT patent applications and any patent protection on the inventions disclosed in such PCT patentapplications. Provisional patent applications are not eligible to become issued patents but can become the basis of PCT foreign stage and United States non-provisionalpatentapplications,ifsuchapplicationsarefiledwithin12monthsoffilingtherelatedprovisionalpatentapplication.If we do not timely file any non-provisional patent applications, we will lose our priority date and any patent protection on the inventions disclosed in anysuchprovisionalpatentapplication.

In addition, the term of individual issued patents depends upon the legal term for patents in the countries in which they are obtained. In mostcountries in which we have filed, including the United States, the patent term is generally 20 years from the earliest filing date of a non-provisional patentapplication, assumingthepatent hasnotbeen terminallydisclaimedover acommonly-ownedpatentor apatentnaming acommoninventor, oroverapatent not commonly owned but that was disqualified as prior art as the result of activities undertaken within the scope of a joint research agreement. Thelife of a patent, and the protection it affords, is therefore limited and once the patent lives of our issued patents have expired, we may face competition,includingfromothercompetingtechnologies.IntheUnitedStates,thetermofapatentmayalsobeeligibleforpatenttermadjustmentfordelayswithintheUSPTO. The term of a patent that covers a biological product may also be eligible for patent term extension when FDA approval is granted for a portion ofthe term effectively lost as a result of the FDA regulatory review period, subject to certain limitations and provided statutory and regulatory requirementsare met. Any such patent term extension can be for no more than five years, only one patent per approved product can be extended, the extension cannotextend the total patent term beyond 14 years from approval, and only those claims covering the approved biological product, a method for using it or amethod for manufacturing it may be extended. We may not receive an extension if we fail to exercise due diligence during the testing phase or regulatoryreview process, fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicablerequirements. Moreover, the length of the extension could be less than we request. There can be no assurance that we will benefit from any patent termextensionorfavorableadjustmenttothetermofanyofourpatents.Asaresult,ourownedandlicensedpatentportfoliomaynotprovideuswithsufficientrightstoexcludeothersfromcommercializingproductssimilaroridenticaltoours.

Ourabilitytomaintainandsolidifyourproprietaryandintellectualpropertypositionwilldependonoursuccessinobtainingeffectivepatentclaimsand maintaining and enforcing claims that are granted. However, our owned and licensed patents could be invalidated or narrowed or otherwise fail toadequately protect our proprietary and intellectual property position and our pending owned and licensed patent applications, and any patent applicationsthatwemayinthefuturefileorlicensefromthirdparties,maynotresultintheissuanceofpatents.

Because branding is as much a part of any intellectual property strategy as patent or trade secret protection we have a number of registered andpending trademarks relating to our company and products. We have received or filed for trademark protection in the United States for our tradename(Biodesix),thenamesoffourofourcommercialtests(namelytheVeriStrat,GeneStrat,NodifyXL2andNodifyCDTtests),andasuiteofresearchtests(ImmunoStrat), as well as having trademark protection for our core development and methodological platforms, such as our Diagnostic Cortex andDeepMALDI technologies. In all, as of September 21, 2020, we have 22 uniquely registered United States trademarks 10 of which (including Biodesix,VeriStrat,andGeneStrat)havereceivedforeignissuancesaswell.WewillcontinuetopursueprotectionintheUnitedStatesandabroadforourbrandedassetsandwillcontinuetousebrandingtoprotectproductscurrentlyindevelopment,keyBiodesixdevelopmentsandnon-tradesecretmethodologies.

We also rely on trade secrets, including know how, confidential information, unpatented technologies and other proprietary information, to strengthen or enhance our competitive position, protect and maintain aspects of our business that are not amenable to, or that we do not presently consider appropriate for, patent protection, and prevent competitors from reverse engineering or copying our technologies. We have decided that some technologies, such as our laboratory methodologies (including sample preparation and assay development), and some information (such as client and billing information) are best kept as trade secrets. However, trade secrets and confidential know-how are difficult to protect. To avoid inadvertent and improper disclosure of trade secrets, and to avoid the risks of former employees using these trade secrets to future employment, it is our policy to require employees, consultants and independent contractors to assign all rights to intellectual property they develop in connection with their employment with or services for the Company to the Company. We also protect our existing and developing intellectual property expressly through confidentiality provisions in agreements with third parties. There can be no assurance, however, that these agreements will be self-executing or otherwise provide meaningful protection for our trade secrets or other intellectual property or proprietary information, or adequate remedies in the event of unauthorized use or disclosure of such trade secrets or other intellectual property or proprietary information.

We also seek to preserve the integrity and confidentiality of our trade secrets and other confidential information by maintaining physical security ofourpremisesandphysicalandelectronicsecurityofourinformationtechnologysystems.Whilewehaveconfidenceinthemeasureswetaketoprotectandpreserve our trade secrets, such measures can be breached, and we may not have adequate remedies for any such breach. In addition, our trade secrets mayotherwisebecomeknownorbeindependentlydiscoveredbycompetitors.

Weintendtopursueadditionalintellectualpropertyprotectiontotheextentwebelieveitwouldadvanceourbusinessobjectives,whichmayincludeobjectives within and outside the United States. Despite our efforts to protect our intellectual property rights, and despite the breadth of protection that hasissued around our key assets, these rights may not be respected in the future or may be circumvented or challenged (and potentially invalidated) in a legalproceeding in any jurisdiction where we have intellectual property rights. In addition, the laws of various foreign countries where we have receivedintellectual property protection and where we may eventually distribute our products may not afford the same protections or assurances to the same extentas the laws in the United States. See “Risk Factors—Risks Related to Our Intellectual Property” for additional information regarding these and other risksrelatedtoourintellectualpropertyportfolioandtheirpotentialeffectonus.

GovernmentRegulations

Clinical laboratory tests like our diagnostic tests are regulated under CLIA and State law. The FDA regulates medical devices pursuant to theFDCA, including many diagnostic test kits, such as IVDs. However, most LDTs are not currently subject to the FDA’s regulation (although reagents,instruments, software or components provided by third parties and used to perform LDTs may be subject to such regulation) because the FDA hashistorically exercised enforcement discretion over LDTs. LDTs are a subset of in vitro diagnostic (IVD) tests that are intended for clinical use anddeveloped,validated,andofferedwithinasinglelaboratoryforuseonlyinthatlaboratory.FDA’sauthoritytoregulateLDTshasbeencontestedformanyyears,andtherehavebeenseverallegislativeandadministrativeproposalsregardingLDTregulationseekingtoendorlimitenforcementdiscretionandtobringLDTsunderneworexistingFDAregulatoryframeworks:

We currently market our GeneStrat, VeriStrat, Nodify XL2 and Nodify CDT tests as LDTs in the United States. As a result, we believe our diagnostic services are not currently subject to the FDA’s enforcement of its medical device regulations and the applicable FDCA provisions. If the FDA disagrees with the LDT status of any of our tests, the FDA may consider the test to be an unapproved medical device and may subject us to FDA enforcement action, including, without limitation, requiring us to seek clearance, authorization or approval for the laboratory test. If the FDA were to begin enforcement with respect to our LDTs, we could incur substantial costs and delays associated with trying to obtain pre-market clearance or approval and costs associated with complying with post-market requirements.

Todate,theFDAhasnotengagedinnotice-and-commentrulemakingorreleasedbroad-sweepingguidance,butitcouldchoosetodosointhefutureand if pre-market review is required, our business could be negatively impacted as a result of commercial delay that may be caused by the newrequirements.Thecostofconductingclinicaltrialsandotherwisedevelopingdataandinformationtosupportpre-marketapplicationsmaybesignificant.Ifwe are required to submit applications for our currently marketed tests, we may be required to conduct additional studies, which may be time-consuming,costly and could result in our currently-marketed tests being withdrawn from the market. Continued compliance with the FDA’sregulations would increase the cost of conducting our business, and subject us to heightened regulation by the FDA including penalties for failure tocomply with these requirements. Failure to comply with applicable regulatory requirements could result in an enforcement action by the FDA, such asfines, product suspensions, warning letters, recalls, injunctions and other civil and criminal sanctions. There are other regulatory and legislative proposalsthatwouldincreasegeneralFDAoversightofclinicallaboratoriesandLDTs.UntiltheFDAfinalizesitsregulatorypositionregardingLDTs,ortheVALIDAct or other legislation is passed reforming the federal government’s regulation of LDTs, it is unknown how the FDA may regulate our tests in the futureand what testing and data may be required to support any required clearance or approval. The outcome and ultimate impact of such proposals on thebusiness is difficult to predict at this time and we are monitoring developments and anticipate that our products will be able to comply with requirements thatmaybeimposedbytheFDA.Inthemeantime,wemaintainourCLIAaccreditation,whichpermitstheuseofLDTsfordiagnosticspurposes.

FDAEmergencyUseAuthorization

Section 564 of the FDCA allows the FDA to authorize the shipment of drugs, biological products, or medical devices that either lack requiredapproval,licensure,orclearance(unapprovedproducts),orareapprovedbutaretobeusedforunapprovedwaystodiagnose,treat,orpreventseriousdiseasesorconditionsintheeventofanemergencydeclarationbytheHHSSecretary.21U.S.C.§360bbb-3(a)(1)-(2).

On February 4, 2020, HHS Secretary Alex M. Azar II declared a public health emergency for COVID-19, under 21 U.S.C. § 360bbb-3(b)(1),justifyingtheauthorizationofemergencyuseofIVDsfordetectionand/ordiagnosisofCOVID-19.ThisdeterminationwaspublishedintheFederalRegisteronFebruary7,2020.85Fed.Reg.7316(Feb.7,2020).

Whilethisemergencydeclarationiseffective,theFDAmayauthorizetheuseofanunapprovedproductoranunapproveduseofanapprovedproductifitconcludesthat:

• any other criteria prescribed by the FDA is satisfied. Id. § 360bbb-3(c).

Medical products that are granted an EUA are only permitted to commercialize their products under the terms and conditions provided in theauthorization.TheFDAmayrevokeanEUAwhereitisdeterminedthattheunderlyinghealthemergencynolongerexistsorwarrantssuchauthorization,ifthe conditions for the issuance of the EUA are no longer met, or if other circumstances make revocation appropriate to protect the public health or safety,andwecannotpredicthowlongtheEUAsfortheSARS-CoV-2testswillremaininplace.

The Bio-Rad SARS-CoV-2 ddPCR test and the Platelia SARS-CoV-2 Total Ab test have been granted FDA EUA pursuant to the current emergencydeclaration. We have completed all required performance verification studies to validate the use of the tests in our laboratories in accordance with the FDAPolicyforCoronavirusDisease-2019TestsDuringthePublicHealthEmergency,CAPandNewYorkStateClinicalLaboratoryStandardsofPractice(NYSCLEP) requirements. The FDA Policy for COVID-19 tests is a guidance document that explains the FDA’s current thinking on the topic, is subject tochange, and does not establish any legally enforceable responsibilities. As stated in the FDA’s Policy for COVID-19, the FDA does not expect a separatenotificationorEUArequestfromlaboratoriesthatareperformingtestingusingEUA-authorizedtestkitspurchasedfromcommercialmanufacturersortheirdistributors. According to the FDA Policy for COVID-19 tests, a laboratory may make certain modifications to an EUA-authorized test if the modified testis validated using a bridging study without submitting an EUA amendment or formal notification. A laboratory may modify an EUA authorized test for useof a new specimen through a bridging study when the new specimen type has been previously authorized for another test of the same technology withoutsubmittinganEUAamendmentorformalnotification.

FederalandStateLaboratoryLicensingRequirements

TheBiodesixBoulder,Coloradoclinicallaboratoryisa College of American Pathology (CAP)-accreditedclinicallaboratoryregulatedbyCMSpursuanttoCLIA.CMShasgrantedCAPdeemingauthorityunderCLIA,whichallowsCAPtoinspectlaboratoriesinlieuofCMS.InadditiontoholdingaCLIACertificateandCAPlaboratoryaccreditation,Biodesix’sQualityManagementSystem(QMS) holds an ISO 13485:2016 certificate. The Biodesix Boulder, Colorado clinical laboratory has received approval from The New York State Department of Health (NYSDOH), New York State Clinical Laboratory Evaluation Program (NYS CLEP) inSoluble Tumor Markers and Molecular, Cellular Tumor Markers as well as holding state permits and licenses in California, Maryland, New York,Pennsylvania,andRhodeIsland.

CLIAregulationsestablishstandardsforproficiencytesting;facilityadministration;generallaboratorysystems;pre-analytic,analyticsystems,post-analytic systems; personnel qualifications and responsibilities; quality control, quality assessment; and specific provisions for laboratories performingmoderatetohighcomplexitytests.OurBoulder,ColoradoclinicallaboratoryisinspectedbienniallyaspartofitsongoingcertificationunderCLIAcertificateofaccreditationbyCAP.TheBoulder,ColoradoclinicallaboratorymostrecentlypasseditsCAPinspectioninFebruary2019.

UnderCLIA,alaboratoryisanyfacilitythatperformslaboratorytestingonspecimensderivedfromhumansforthepurposeofprovidinginformationfor the diagnosis, prevention or treatment of disease, or the impairment of or assessment of health. CLIA requires that a laboratory hold a certificateapplicable to the type of laboratory examinations it performs and that it complies with, among other things, standards covering operations, personnel,facilities administration, quality systems and proficiency testing, which are intended to ensure, among other things, that clinical laboratory testing servicesareaccurate,reliableandtimely.

TheBiodesixDeSoto,KansasclinicallaboratoryisaCOLA-accreditedclinicallaboratoryregulatedbyCMSpursuanttoCLIA.COLAInc.(COLA)was founded in 1988 as a private alternative to help laboratories stay in compliance with CLIA. In 1993, the Health Care Financing Administration (nowCMS) granted COLA deeming authority under CLIA, and in 1997 The Joint Commission also recognized COLA Inc.’s laboratory accreditation program.The De Soto, Kansas clinical laboratory is inspected biennially by COLA. The De Soto, Kansas clinical laboratory most recently passed inspection inAugust 2019. The De Soto, Kansas clinical laboratory also holds state permits and licenses in California, Maryland, New York, Pennsylvania, and RhodeIsland.

The International Organization for Standardization (ISO)isanindependent,non-governmentalinternationalorganizationthatdefinesworld-classspecificationsforproducts,servicesandsystems,toensure quality, safety and efficiency. ISO 13485:2016 is a harmonized, international regulatory benchmark for quality management systems that addressesmost orall ofthe QMSrequirements inmarkets includingthe UnitedStates, EuropeanUnion, Australia,Japan andCanada. TheISO 13485:2016certificate confirms that an organization operates a QMS that conforms to the standards established by ISO.The FDA has proposed a rule toharmonize and modernize its QSR, which would supplant the existing requirements with ISO 13485:2016 although this rule has been delayed several times spring 2018. In February 2021, we passed an ISO 13485:2016inspection.

TorenewourCLIAcertificate,wearesubjecttosurveyandinspectioneverytwoyearstoassesscompliancewithprogramstandards.Laboratoriessuch as ours, which are performing high complexity testing, are required to meet more stringent CLIA requirements than laboratories performing lesscomplex tests, and therefore our laboratories are also subject to random, unannounced survey and inspection at any time. In addition, a laboratory that iscertified as “high complexity” under CLIA may develop, manufacture, validate and use proprietary LDTs. CLIA requires analytical validation includingaccuracy, precision, specificity, sensitivity and establishment of a reference range for any LDT used in clinical testing. The regulatory and compliancestandardsapplicabletothetestingweperformmaychangeovertimeandanysuchchangescouldhaveamaterialeffectonourbusiness.

CLIA provides that a state may adopt laboratory regulations that are more stringent than those under federal law, and a number of states haveimplemented their own more stringent laboratory regulatory requirements. State laws may require that out-of-state laboratories maintain an in-statelaboratorylicensetoperformtestsonsamplesfrompatientswhoresideinthatstate.Asaconditionoflicensure,certainstatesmayrequirethatlaboratorypersonnelmeetqualifications,qualitycontrolprocedures,facilityrequirements,recordmaintenancerequirementsorotherstate-specificrequirements.

Because our Boulder, Colorado clinical laboratory is located in the State of Colorado, we do not need a specific State of Colorado laboratory license, however, we maintain licenses to conduct testing in other states where nonresident laboratories are required to obtain state laboratory licenses. We maintain licenses for our Boulder, Colorado and De Soto, Kansas laboratories with the New York State Dept. of Health (NYSDOH). We also hold licenses in other states in which we operate, including California, Maryland, Pennsylvania and Rhode Island, that require licensing of out-of-state laboratories under certain circumstances. Other states may currently have or adopt similar licensure requirements in the future, which may require us to modify, delay or stop its operations in those states until such requirements are met.

FailuretocomplywithCLIAcertificationandstateclinicallaboratorylicensurerequirementsmayresultinarangeofenforcementactions,includingcertificate or license suspension, limitation, or revocation, directed plan of action, onsite monitoring, civil monetary penalties, criminal sanctions, andrevocationofthelaboratory’sapprovaltoreceiveMedicareandMedicaidpaymentforitsservices,aswellassignificantadversepublicity.

CLIAandstatelawsandregulations,operatingtogether,sometimeslimittheabilityoflaboratoriestoofferconsumer-initiatedtesting,alsoknownasdirectaccesstesting.Wedonotofferdirectaccesstestingandinsteadrequirethatourtestsbeorderedbylicensedhealthcareproviders.

Our Boulder, Colorado and De Soto, Kansas laboratories are certified and adhere to the New York State Clinical Laboratory Evaluation Program (NYS CLEP), based on New York State Public Health Law,Article 5 Title 5. New York State Clinical Laboratory Evaluation Program is exempt from CLIA and establishes their own method of laboratory certification and test validation approval. To processNew York State patient specimens a laboratory must submit a robust analytical and clinical validation package to demonstrate clinical utility of the test and receiveapprovalpriortoofferingthetestinthestateofNewYork.OurGeneStratandVeriStrattestshavereceivedNew York State Clinical Laboratory Evaluation Programapproval.New York State Clinical Laboratory Evaluation Programrequiressemi-annual inspections to ensure the laboratory meets all general and specialty standards. Biodesix passed New York State Clinical Laboratory Evaluation Program inspection in May 2019 and is currentlyscheduled for a routine re-inspection in May 2021.

RegulatoryframeworkformedicaldevicesintheUnitedStates

Pursuant to its authority under the FDCA, the FDA has jurisdiction over medical devices, which are defined to include, among other things, IVDs.TheFDAregulatestheresearch,design,development,pre-clinicalandclinicaltesting,manufacturing,safety,effectiveness,packaging,labeling,storage,recordkeeping, pre-market clearance or approval, adverse event reporting, marketing, promotion, sales, distribution and import and export of medicaldevices. It is possible that one of our current, or future, tests will be subject to FDA authority and oversight as either an IVD or a CDx pursuant to theFDA’sauthoritytoregulatemedicaldevicesundertheFDCA.

Medical devices are subject to extensive regulation in the United States and elsewhere, including by the FDA and its foreign counterparts. Governmentregulationsspecifictomedicaldevicesarewiderangingandgovern,amongotherthings:

• product design, development, manufacture, and release;

• product safety and efficacy;

• premarketing clearance or approval;

• service operations;

• record keeping;

• product marketing, promotion and advertising, sales and distribution;

• post-market approval studies; and

• product import and export

Area (EEA), a medical device must meet the Medical Devices Directive’s (MDD)/In Vitro Medical Devices Directive’s (IVDD) Essential Requirements or, applicable on May 26, 2021, the Medical Devices Regulation’s (MDR) / applicable on May 26, 2022, In Vitro Medical Devices Regulation’s (IVDR) General Safety and Performance Requirements which apply to it, taking into account its intended purpose as defined by the data supplied by the manufacturer on the label, in the instructions for use or in promotional or sales materials or

statements and as specified by the manufacturer in the clinical evaluation. Before placing a medical device on the EEA market, the manufacturer must draw up a declaration of conformity, certifying that the device complies with the MDD/IVDD/MDR/IVDR, and must then affix the CE mark. For medium and high-risk devices as well as low risk devices that are placed on the market in sterile condition, have a measuring function, or are reusable surgical instruments, the manufacturer must obtain a CE Certificate from a notified body. The notified body typically audits and examines the device’s technical documentation, including the clinical evaluation, and the quality system for the manufacture, design and final inspection of the relevant device before issuing a CE Certificate. Following the issuance of this CE Certificate, manufacturers may draw up the declaration of conformity and affix the CE mark to the devices covered by this CE Certificate.

Manufacturers of medical devices must document in a clinical evaluation report (CER) the evaluation of the clinical data related to the device. The CER is part of the device’s technical file. The evaluation shall document that the applicable Essential Requirements/General Safety and Performance Requirements are met and document the evaluation of the undesirable side-effects and the acceptability of the benefit-risk- ratio. The CER must be updated based on information from the post-market surveillance and vigilance activities related to the device. The CER shall consist, inter alia, of analyzed clinical data collected from a clinical investigation of the device, or the results of other studies on substantially equivalent devices. Reliance on “substantially equivalent” devices is very restrictive and requires, inter alia, that the manufacturer has full access to the technical documentation of the equivalent device on an ongoing basis and, if the “equivalent device” is not its own, that the manufacture has in place a contract with the manufacturer of the “equivalent device.”

Similar requirements apply in the UK. For access to the UK market, manufacturers must obtain a UKCA Certificate and affix a UKCA mark to their medical devices. However, the CE mark will be accepted in the UK until July 1, 2023.

Device classification

Under the FDCA, medical devices are classified into one of three classes: Class I, Class II or Class III, depending on the degree of risk to patients that is associated with each medical device and the amount of oversight needed to provide reasonable assurances with respect to safety and effectiveness of the medical device.

Class I includes devices with the lowest risk to the patient and are those for which safety and effectiveness can be reasonably assured by adherence to a set of FDA regulations, referred to as the General Controls for Medical Devices, which require compliance with the applicable portions of the FDA’s QSR, facility registration and product listing, reporting of adverse events and malfunctions, and appropriate, truthful and non-misleading labeling and promotional materials. Some Class I devices also require premarket clearance by the FDA through the 510(k) premarket notification process described below. Most Class I products are exempt from the premarket notification requirements.

Class II devices are subject to the General Controls as well as any special controls as deemed necessary by the FDA to ensure the safety and effectiveness of the device. These special controls can include performance standards, patient registries, FDA guidance documents and post-market surveillance. Most Class II devices are subject to premarket review and clearance by the FDA. Premarket review and clearance by the FDA for Class II devices is accomplished through the 510(k) premarket notification process, although some Class II devices are exempt from the 510(k) requirements.

Class III devices include devices deemed by the FDA to pose the greatest risk: such as life-supporting or life-sustaining devices, implantable devices, or those deemed novel and not substantially equivalent to a predicate device following the 510(k) process. CDx tests are regularly considered Class III devices.

Premarket submission process

Unless a statutory or regulatory exemption or enforcement discretion policy applies, before a new medical device, or a new intended use of, claim for, or significant modification to an existing device, can be marketed in the United States, the manufacturer must obtain the FDA’s: (1) permission for commercial distribution under section 510(k) of the FDCA (510(k) clearance); or (2) approval of a PMA; or (3) de novo classification and authorization. These processes can be resource intensive, expensive, and lengthy, and require payment of significant user fees.

Under the 510(k) clearance process, the manufacturer must submit to the FDA a premarket notification, demonstrating that the device is “substantially equivalent” to a legally marketed predicate device. A predicate device is a legally marketed device that is not subject to a PMA, i.e., a device that was legally marketed prior to May 28, 1976 (pre-amendments device) and therefore a PMA is not required, a device that has been reclassified from Class III to Class II or I, or a device that was previously found substantially equivalent through the 510(k) process. To be “substantially equivalent,” the proposed device must have the same intended use as the predicate device, and either have the same technological characteristics as the predicate device or have different technological characteristics and not raise different questions of safety or effectiveness than the predicate device. Premarket notifications typically include bench, analytical, and preclinical data. Clinical data is sometimes required to support substantial equivalence. If a manufacturer obtains a 510(k) clearance for its device and then makes a modification that could significantly affect the device’s safety or effectiveness or constitutes a major change or modification in the intended use of the device, a new clearance, authorization or approval may be required.

By statute, the FDA is required to complete its review of a 510(k) notification within 90 days of receiving the 510(k) notification. As a practical matter, clearance often takes longer, and clearance is never assured. Although many 510(k) premarket notifications are cleared without clinical data, the FDA may require further information, including clinical data, to make a determination regarding substantial equivalence, which may significantly prolong the review process. If the FDA agrees that the device is substantially equivalent, it will grant clearance to commercially market the device. If the FDA determines that the device is not “substantially equivalent” to a predicate device, or if the device is automatically classified into Class III, the device sponsor must then fulfill the much more rigorous, costly, and time-consuming PMA approval process or seek reclassification of the device through the de novo process.

To obtain a PMA, the applicant must submit data and information demonstrating reasonable assurance of the safety and effectiveness of the device for its intended use to the FDA’s satisfaction. Accordingly, a PMA typically includes, but is not limited to, extensive technical information regarding device design and development, pre-clinical and clinical trial data, manufacturing information, labeling, and financial disclosure information for the clinical investigators in device studies. The PMA application must provide valid scientific evidence that demonstrates to the FDA’s satisfaction a reasonable assurance of the safety and effectiveness of the device for its intended use.

Once filed as a PMA, the FDA has 180 days to review the filed PMA application, although the review of an application more often occurs over a significantly longer period of time. During this review period, the FDA may request additional information or clarification of information already provided, and the FDA may issue a major deficiency letter to the applicant, requesting the applicant’s response to deficiencies communicated by the FDA.

Prior to approval of a PMA, the FDA may conduct inspections of any clinical trial data and clinical trial sites, as well as inspections of any manufacturing facility and processes. The FDA can delay, limit or deny approval of a PMA application for many reasons, including (1) the device may not be shown safe or effective to the FDA’s satisfaction; (2) the data from pre-clinical studies and/or clinical trials may be found unreliable or insufficient to support approval; (3) the manufacturing process or facilities may not meet applicable requirements; and (4) changes in FDA approval policies or adoption of new regulations may require additional data.

If the FDA evaluation of a PMA is favorable, the FDA will issue either an approval letter, or an approvable letter, the latter of which usually contains a number of conditions that must be met in order to secure final approval of the PMA. When and if those conditions have been fulfilled to the satisfaction of the FDA, the agency will issue a PMA approval letter authorizing commercial marketing of the device, subject to the conditions of approval and the limitations established in the approval letter. The FDA also may determine that additional tests or clinical trials are necessary, in which case the PMA approval may be delayed for several months or years while the trials are conducted and data is submitted in an amendment to the PMA, or the PMA is withdrawn and resubmitted when data is available. The PMA process can be expensive, uncertain and lengthy. A number of devices for which the FDA approval has been sought by other companies have never been approved by the FDA for marketing. New PMA applications or PMA supplements are required for any modifications to the manufacturing process, equipment or facility, quality control procedures, sterilization, packaging, expiration date, labeling, device specifications, ingredients, materials or design of a device that has been approved through the PMA process.

As a condition of PMA application approval, the FDA may also require some form of post-approval study or post-market surveillance, whereby the applicant conducts a follow-up study or follows certain patient groups for a number of years and makes periodic reports to the FDA on the clinical status of those patients when necessary to protect the public health or to provide additional or longer-term safety and effectiveness data for the device. The FDA may also approve a PMA application with other post-approval conditions intended to ensure the safety and effectiveness of the device, such as, among other things, restrictions on labeling, promotion, sale, distribution and use.

Alternatively, the FDA also allows the submission of a direct de novo petition. This procedure allows a manufacturer whose novel device is automatically classified into Class III to request down-classification of its medical device into Class I or Class II on the basis that the device presents low or moderate risk, rather than requiring the submission and approval of a PMA application. Prior to the enactment of FDASIA, a medical device could only be eligible for de novo classification if the manufacturer first submitted a 510(k) premarket notification and received a determination from the FDA that the device was not substantially equivalent. FDASIA streamlined the de novo classification pathway by permitting manufacturers to request de novo classification directly without first submitting a 510(k) premarket notification to the FDA and receiving a not substantially equivalent determination.

The 510(k), de-novo or PMA processes can be expensive, lengthy and unpredictable. The FDA’s 510(k) clearance process usually takes from three to 12 months, but can last longer. The process of obtaining a PMA is much more costly and uncertain than the 510(k) clearance process and generally takes from one to three years, or even longer, from the time the application is filed with the FDA. In addition, a PMA generally requires the performance of one or more clinical trials. Despite the time, effort and cost, a device may not be approved or cleared by the FDA. Any delay or failure to obtain necessary regulatory clearances or approvals could harm our business. Furthermore, even if we are granted regulatory clearances or approvals, they may include significant limitations on the indicated uses for the device, which may limit the market for the device.

Companion Diagnostics and the Premarket Process

We believe that one of our future product candidates may include a companion diagnostic or complementary diagnostic (collectively CDx). CDx’s can identify patients who are most likely to benefit from a particular therapeutic product; identify patients likely to be at increased risk for serious side effects as a result of treatment with a particular therapeutic product; or monitor response to treatment with a particular therapeutic product for the purpose of adjusting treatment to achieve improved safety or effectiveness. The use of the CDx will be stipulated in the labeling of both the CDx and the therapeutic product. The FDA may require an application for the CDx separate from the drug approval process, and this could potentially delay the approval of any new drug application or the CDx, or complicate the review process. CDx’s are generally regulated as Class III medical devices by the FDA and are therefore most often subject to the PMA approval process.

The FDA issued guidance in July 2016 for the co-development of CDx tests with a therapeutic product and issued another draft guidance in December 2018 specific to oncology CDx tests. The FDA finalized this draft guidance in April 2020 in “Developing and Labeling In vitro Companion Diagnostic Devices for a Specific Group of Oncology Therapeutic Products.” The guidance is meant to guide the development of CDx products, which are defined as IVDs that provide information that is essential for the safe and effective use of the therapeutic product. A CDx is often developed and approved or cleared contemporaneously with the therapeutic, and the use of the CDx is stipulated in the labeling of both the CDx and the corresponding therapeutic product. While it supports contemporaneous marketing authorizations, if there are any deficiencies in the submissions, the FDA may place a PMA review of a CDx on hold or request additional testing, which could potentially delay the approval of the corresponding new drug application or the marketing authorization of the CDx, or otherwise complicate the review process. Some oncology CDx tests can be developed in a way that results in labeling for a specific group of oncology therapeutic products, rather than a single therapeutic product.

Post-Market FDA Regulation

Even if regulatory clearance, authorization or approval of a device is granted, the FDA may impose limitations on the uses and indications for which the device may be labeled and promoted, and the device remains subject to significant regulatory requirements. Medical devices may be marketed only for the uses and indications for which they are cleared, authorized or approved. After a device, including a device exempt from FDA premarket review, is placed on the market, numerous post-market regulatory requirements apply, and the FDA has broad authority to enforce these requirements. Medical device manufacturers are subject to unannounced inspections by the FDA and other state, local and foreign regulatory authorities to assess compliance with the QSR and other applicable regulations, and these inspections may include the manufacturing facilities of any suppliers. Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include sanctions such as: warning letters, fines, injunctions, consent decrees and civil penalties; unanticipated expenditures, including requirements to repair, replace, and/or refund the cost of the devices, recall or seizure of our products; operating restrictions, partial suspension or total shutdown of production; the FDA’s refusal of our requests for 510(k) clearance, de novo classification, or PMA of new products, new intended uses or modifications to existing products; the FDA’s refusal to issue certificates to foreign governments needed to export products for sale in other countries; and withdrawing 510(k) clearance or PMAs that have already been granted and criminal prosecution. In the event that a supplier fails to maintain compliance with the FDA’s or our quality requirements, we may have to qualify a new supplier and could experience manufacturing delays as a result.

Federal and State Fraud and Abuse Laws

We are subject to federal fraud and abuse laws such as the federal Anti-Kickback Statute (AKS), the federal prohibition against physician self- referral (Stark Law), the Eliminating Kickbacks in Recovery Act (EKRA), and the federal False Claims Act (FCA). We are also subject to similar state and foreign fraud and abuse laws.

The AKS prohibits knowingly and willfully offering, paying, soliciting, or receiving remuneration, directly or indirectly, overtly or covertly, in cash or in kind, in return for or to induce such person to refer an individual, or to purchase, lease, order, arrange for, or recommend purchasing, leasing or ordering, any item or service that may be reimbursable, in whole or in part, under a federal healthcare program, such as Medicare or Medicaid. There are a number of statutory exceptions and regulatory safe harbors to the AKS that provide protection from AKS liability to arrangements that fully satisfy the applicable requirements.

EKRA prohibits knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in return for the referral of a patient to, or in exchange for an individual using the services of certain entities, including laboratories, if the services are covered by a health care benefit program. The term “health care benefit program” is broadly defined such that EKRA extends to referrals reimbursed by both governmental and commercial third-party payers. EKRA includes a number of statutory exceptions that provide protection from EKRA liability if the applicable requirements are met.

The Stark Law generally prohibits, among other things, clinical laboratories and other so-called “designated health services” entities from billing Medicare for any services when the physician ordering the service, or any member of such physician’s immediate family, has a financial relationship, such as a direct or indirect investment interest in or compensation arrangement with the billing entity, unless the arrangement meets an exception to the prohibition. The Stark Law also prohibits physicians from making such referrals to a designated health services entity. There are also similar state laws that apply where Medicaid and/or commercial payers are billed.

The FCA imposes civil penalties against individuals or entities for, among other things, knowingly presenting, or causing to be presented, claims for payment to the government that are false or fraudulent, or knowingly making, using or causing to be made or used a false record or statement material to such a false or fraudulent claim, or knowingly concealing or knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money to the federal government. This statute also permits a private individual acting as a “qui tam” whistleblower to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery. FCA liability is potentially significant in the healthcare industry because the statute provides for treble damages and mandatory penalties of $11,665 to $23,331 per false claim or statement for penalties assessed after June 19, 2020, with respect to violations occurring after November 2, 2015.

Other federal statutes pertaining to healthcare fraud and abuse include the civil monetary penalties statute, which prohibits, among other things, the offer or payment of remuneration to a Medicaid or Medicare beneficiary that the offeror or payer knows or should know is likely to influence the beneficiary to order or receive a reimbursable item or service from a particular provider, practitioner, or supplier, and contracting with an individual or entity that the person knows or should know is excluded from participation in a federal health care program. In addition, federal criminal statutes created by HIPAA prohibit, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program or obtain by means of false or fraudulent pretenses, representations or promises any money or property owned by or under the control of any healthcare benefit program in connection with the delivery of or payment for healthcare benefits, items or services.

In addition to these federal laws, there are often similar state anti-kickback and false claims laws that typically apply to arrangements involving reimbursement by a state-funded Medicaid or other health care program. Often, these laws closely follow the language of their federal law counterparts, although they do not always have the same exceptions or safe harbors. In some states, these anti-kickback laws apply with respect to all payers, including commercial payers.

A number of states have enacted laws that require pharmaceutical and medical device companies to monitor and report payments, gifts and other remuneration made to physicians and other healthcare providers, and, in some states, marketing expenditures. In addition, some state statutes impose outright bans on certain manufacturer gifts to physicians or other health care professionals. Some of these laws, referred to as “aggregate spend” or “gift” laws, carry substantial fines if they are violated.

Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs and extensive annual trainings for all of our employees and contractors. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion from participation in government-funded healthcare programs, such as Medicare and Medicaid, disgorgement, contractual damages, reputational harm, diminished profits and future earnings, additional reporting or oversight obligations if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with the law, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations. If any of the physicians or other healthcare providers or entities with whom we do business is found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government-funded healthcare programs.

Anti-Corruption

The FCPA and similar international bribery laws make it unlawful for entities to make payments to foreign government officials to assist in obtaining and maintaining business. Specifically, the anti-bribery provisions of the FCPA prohibit any offer, payment, promise to pay, or authorizing the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to do or omit to do an act in violation of his or her duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business, to any person. In addition to the anti-bribery provisions of the FCPA, the statute also contains accounting requirements designed to operate in tandem with the anti-bribery provisions. Covered companies are required to make and keep books and records that accurately and fairly reflect the transactions of the company and devise and maintain an adequate system of internal accounting controls. With our international operations through our third-party partnerships, we could incur significant fines and penalties, as well as criminal liability, if we fail to comply with either the anti-bribery or accounting requirements of the FCPA, or similar international bribery laws. Even an unsuccessful challenge of our compliance with these laws could cause us to incur adverse publicity and significant legal and related costs.

Privacy and Data Protection Laws

Numerous federal and state laws and regulations, including HIPAA, as amended by the HITECH, govern the collection, dissemination, security, use and confidentiality of protected health information (PHI) and personal information. In the course of performing our business we obtain personal information, including PHI. Laws and regulations relating to privacy, data protection, and consumer protection are evolving and subject to potentially differing interpretations. Under HIPAA and HITECH, the HHS, issues regulations that establish uniform standards governing the conduct of certain electronic healthcare transactions and requirements for protecting the privacy and security of PHI, used or disclosed by covered entities (CEs) and their authorized business associates (BAs). Because we are a health care provider that electronically transmits health care information, we are at times either a CE or a BA, as defined by HIPAA. Our subcontractors that create, receive, maintain, transmit or otherwise process PHI on our behalf are HIPAA BAs and must also comply with HIPAA, as applicable.

HIPAA and HITECH include the privacy and security rules, breach notification requirements and electronic transaction standards. The privacy rule governs the use and disclosure of PHI by CEs and BAs. The privacy rule generally prohibits the use or disclosure of PHI except as permitted under the rule. The rule also sets forth individual patient rights, such as the right to access or amend certain records containing such individual’s PHI, or to request restrictions on the use or disclosure of such individual’s PHI. The security rule requires CEs and BAs to safeguard the confidentiality, integrity, and availability of electronically transmitted or stored PHI (also referred to as ePHI) by implementing administrative, physical and technical safeguards. Under HITECH’s breach notification rule, a CE must notify individuals, the Secretary of HHS, and in some circumstances, the media of certain breaches of unsecured PHI or ePHI.

Penalties for failure to comply with a requirement of HIPAA and HITECH vary depending on the number and nature of the violations and any history of prior violations, but can be significant and include civil monetary or criminal penalties. HIPAA is enforced by the Department of Health and Human Services, Office for Civil Rights, and HIPAA also authorizes state attorneys general to file suit on behalf of their residents for violations. Courts are able to award damages, costs and attorneys’ fees related to violations of HIPAA in such cases. While HIPAA does not create a private right of action allowing individuals to file suit in civil court for violations of HIPAA, its standards have been used as the basis for duty of care cases in state civil suits such as those for negligence or recklessness in the misuse or breach resulting in improper access to PHI. In addition, HIPAA mandates that the Secretary of HHS conduct periodic compliance audits of HIPAA CEs, such as us, and their BAs for compliance with the HIPAA privacy and security standards. It also tasks HHS with establishing a methodology whereby harmed individuals who were the victims of breaches of unsecured PHI may receive a percentage of the civil monetary penalty paid by the violator.

In addition, we may be subject to state privacy, cybersecurity, and data breach notification laws, which may govern the collection, use, disclosure and protection of health-related and other personal information. California, for example, has enacted the Confidentiality of Medical Information Act, which, in addition to HIPAA and HITECH, sets forth standards with which all California health care providers must abide. State laws may be more stringent, broader in scope or offer greater individual rights with respect to PHI than HIPAA, and state laws may differ from each other, which may complicate compliance efforts. For instance, the CCPA became effective on January 1, 2020. The CCPA, among other things, gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing and receive detailed information about how their personal information is used by requiring covered companies to provide new disclosures to California consumers (as that term is broadly defined) and provide such consumers new ways to opt-out of certain sales of personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. The CCPA has been amended from time to time, and it remains unclear what, if any, further modifications will be made to this legislation or how it will be interpreted. Although there are certain exemptions for PHI and clinical trial data, the CCPA’s implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future and the CCPA may increase our compliance costs and potential liability. Additionally, a California ballot initiative, the California Privacy Rights Act (CPRA) was adopted by California voters. The CPRA will impose additional data protection obligations on companies doing business in California, including additional consumer rights processes and opt outs for certain uses of sensitive data. It would also create a new California data protection agency specifically tasked to enforce the law, which would likely result in increased regulatory scrutiny of California businesses in the areas of data protection and security. Similar laws have been proposed in other states and at the federal level, and if passed, such laws may have potentially conflicting requirements that could continue to make compliance challenging and costly.

Additionally, the Federal Trade Commission (FTC) and state attorneys general enforce consumer protection laws that prohibit unfair and deceptive acts and practices, including Section 5 of the FTC Act, which creates standards for the collection, use, dissemination and security of health-related and other personal information. Claims of unfair or deceptive trade practices regarding privacy and security can lead to significant liabilities and consequences, including regulatory investigations, penalties, fines and orders as well as civil claims, which could impact our data practices and operations or cause reputational damage.

We may also be subject to laws and regulations in foreign countries covering data privacy and other protection of health and employee information that may add additional compliance burden and complexity. For example, in the EEA, the collection and use of personal data is governed by the GDPR. In the United Kingdom, the GDPR will be adopted in substantially the same form. The GDPR, together with national legislation, regulations and guidelines of the EU member states and the United Kingdom governing the processing of personal data, impose strict obligations and restrictions on the ability to collect, analyze, store, transfer and otherwise process personal data. European and United Kingdom data protection authorities may interpret the GDPR and national laws differently and impose additional requirements, which adds to the complexity of processing personal data in or from the EEA or United Kingdom. Guidance on implementation and compliance practices are often updated or otherwise revised. GDPR applies extra-territorially under certain circumstances and imposes stringent requirements on controllers and processors of personal data, including, for example, requirements to ensure a legal bases to process personal information, provide robust disclosures to individuals, facilitate data subject rights, provide data security breach notifications within 72 hours after discovering a breach in certain circumstances, limit retention of personal information and apply enhanced protections to health data and other categories of sensitive personal information. The GDPR also has requirements around international transfers of personal data. Requirements around transfers to the United States and other jurisdictions have increased since a July 2020 decision by the Court of Justice of the European Union invalidated the Privacy Shield as a basis to transfer personal data from Europe to the United States, and added requirements for reliance on Standard Contractual Clauses. Regulatory guidance on requirements for international transfers, and other GDPR compliance matters, continues to evolve. Failure to comply with the requirements of the GDPR may result in fines of up to €20 million or up to 4% of the total worldwide annual turnover of our preceding fiscal year, whichever is higher, and other administrative penalties. To comply with the GDPR and other applicable international data protection laws and regulations, we may be required to put in place additional mechanisms ensuring compliance, which may result in other substantial expenditures.

Cybersecurity

Our business relies on secure and continuous processing of information and the availability of our IT networks and IT resources, as well as critical IT vendors that support our technology, research and other data processing operations. While we take steps to protect our systems and data, security incidents, data breaches, computer malware and computer hacking attacks have become more prevalent across industries, including the life sciences sector, and may occur on our systems or those of our third-party service providers. Unauthorized persons may in the future be able to exploit weaknesses in the security systems of our (or our third-party service providers) IT networks and gain access to PHI and other personal information, or sensitive trade secrets or other proprietary information. Any wrongful use or disclosure of PHI, other personal information, trade secrets or other proprietary information by us or our third-party service providers could subject us to regulatory fines or penalties, third-party claims or otherwise could adversely affect our business and results of operations. Although HIPAA and the regulations promulgated thereunder do not provide for a private right of action, failures to adequately protect PHI or our IT systems could be viewed as violations of the HIPAA security rule or violations of other applicable information security laws, regulations, contractual obligations or industry standards, and could further result in costly data breach notification obligations that negatively impact our reputation.

Moreover, data security incidents or data breaches, as well as attacks on our IT systems, could result in operational disruptions or data loss or corruption that could adversely impact our business and operations, result in substantial investment of resources to investigate, recover and remediate and subject us to heightened regulatory scrutiny.

International Regulations

Many countries in which we may offer any of our diagnostic tests in the future have anti-kickback regulations prohibiting providers from offering, paying, soliciting or receiving remuneration, directly or indirectly, in order to induce business that is reimbursable under any national health care program. In situations involving physicians employed by state-funded institutions or national health care agencies, violation of the local anti-kickback law may also constitute a violation of the FCPA.

The FCPA prohibits any United States individual, business entity or employee of a United States business entity to offer or provide, directly or through a third party, including any potential distributors we may rely on in certain markets, anything of value to a foreign government official with corrupt intent to influence an award or continuation of business or to gain an unfair advantage, whether or not such conduct violates local laws. In addition, it is illegal for a company that reports to the SEC to have false or inaccurate books or records or to fail to maintain a system of internal accounting controls. We will also be required to maintain accurate information and control over sales and distributors’ activities that may fall within the purview of the FCPA, its books and records provisions and its anti-bribery provisions.

The standard of intent and knowledge in anti-bribery cases is minimal. Intent and knowledge are usually inferred from that fact that bribery took place. The accounting provisions do not require intent. Violations of the FCPA’s anti-bribery provisions for corporations and other business entities are subject to a fine of up to $2 million and officers, directors, stockholders, employees, and agents are subject to a fine of up to $100,000 and imprisonment for up to five years. Other countries, including the United Kingdom and other OECD Anti-Bribery Convention members, have similar anti-corruption regulations, such as the United Kingdom Anti-Bribery Act.

When marketing our diagnostic tests outside of the United States, we may be subject to foreign regulatory requirements governing human clinical testing, prohibitions on the import of tissue necessary for us to perform our diagnostic tests or restrictions on the export of tissue imposed by countries outside of the United States or the import of tissue into the United States, and marketing approval. These requirements vary by jurisdiction, differ from those in the United States and may in some cases require us to perform additional pre-clinical or clinical testing. In many countries outside of the United States, coverage, pricing and reimbursement approvals are also required.

Market access, sales and marketing of medical devices in non-U.S. countries are subject to foreign regulatory requirements that vary widely from country to country. For example, in the European Economic Area (EEA), a medical device must meet MDDs/ IVDD Essential Requirements or, applicable on May 26, 2021, the MDR applicable on May 26, 2022, IVDR General Safety and Performance Requirements which apply to it, taking into account its intended purpose as defined by the data supplied by the manufacturer on the label, in the instructions for use or in promotional or sales materials or statements and as specified by the manufacturer in the clinical evaluation. Before placing a medical device on the EEA market, the manufacturer must draw up a declaration of conformity, certifying that the device complies with the MDD/IVDD/MDR/IVDR, and must then affix the CE mark. For medium and high-risk devices as well as low risk devices that are placed on the market in sterile condition, have a measuring function, or are reusable surgical instruments, the manufacturer must obtain a CE Certificate from a notified body. The notified body typically audits and examines the device’s technical documentation, including the clinical evaluation, and the quality system for the manufacture, design and final inspection of the relevant device before issuing a CE Certificate. Following the issuance of this CE Certificate, manufacturers may draw up the declaration of conformity and affix the CE mark to the devices covered by this CE Certificate.

Manufacturers of medical devices must document in a CER the evaluation of the clinical data related to the device. The CER is part of the device’s technical file. The evaluation shall document that the applicable Essential Requirements/General Safety and Performance Requirements are met and document the evaluation of the undesirable side-effects and the acceptability of the benefit-risk- ratio. The CER must be updated based on information from the post-market surveillance and vigilance activities related to the device. The CER shall consist, inter alia, of analyzed clinical data collected from a clinical investigation of the device, or the results of other studies on substantially equivalent devices. Reliance on “substantially equivalent” devices is very restrictive and requires, inter alia, that the manufacturer has full access to the technical documentation of the equivalent device on an ongoing basis and, if the “equivalent device” is not its own, that the manufacture has in place a contract with the manufacturer of the “equivalent device.”

Healthcare Reform

In March 2010, the Patient Protection and Affordable Care Act (ACA) was enacted in the United States. The ACA made a number of substantial changes to the way healthcare is financed both by governmental and private insurers. For example, the ACA requires each medical device manufacturer to pay a sales tax equal to 2.3% of the price for which such manufacturer sells its medical devices. The medical device tax was permanently repealed at the end of 2019. The ACA also contains a number of other provisions, including provisions governing enrollment in federal and state healthcare programs, reimbursement matters, and fraud and abuse, which we expect will impact our industry and our operations in ways that we cannot currently predict.

BDSX US Equity

BDSX · 10-K · period ended 2020-12-31

Item 1. Business 3

Item 1A. Risk Factors 45

Item 1B. Unresolved Staff Comments 100

BDSX US Equity☆

BDSX · 10-K · period ended 2020-12-31

Item 1. Business 3

Item 1A. Risk Factors 45

Item 1B. Unresolved Staff Comments 100

BDSX US Equity