NEW YORK – Renalytix's stock jumped more than 90 percent on Thursday after Medicare administrative contractor National Government Services (NGS) released a proposed local coverage determination that would cover Renalytix's KidneyIntelX.dkd test in certain circumstances.
Under the proposed LCD, the test — referred to as KidneyIntelX when offered as a laboratory-developed test — would be covered once in a patient's lifetime when the results are used to facilitate therapeutic prognostic decision-making in the medical management of a selected population and when the results are used to determine the risk of progressive decline in kidney function in patients older than 21. Patients must have type 2 diabetes and existing early-stage chronic kidney disease, and the test must be ordered by the treating physician or qualified non-physician practitioner. The assay must be performed in a CLIA-certified laboratory that is qualified to perform high-complexity testing, and the specific reason for the test must be documented by the treating practitioner in the medical documentation and demonstrate that the test is medically reasonable and necessary, NGS said.
NGS noted that the test is not medically reasonable and necessary for patients on renal recovery treatments, patients who are pregnant or currently hospitalized, people taking etanercept, or those with certain eGFR values. The comment period for the LCD ends on March 23, 2024.
Renalytix President Tom McLain said that the firm has been receiving payment from both NGS and fellow MAC First Coast Service Operations for individual claims, but that the proposed LCD marks the first coverage determination for its test. The proposed LCD will serve as the "foundation" for rapidly expanding coverage by private payors and affirms that the test has value for patient care, he added. The test is priced by Medicare at $950.
BTIG analyst Mark Massaro wrote in a note to investors that the draft LCD "reduces any uncertainty around its Medicare payment mechanism." Massaro added that the "one missing ingredient" for the firm "seems to be more investment dollars required to invest in this massive opportunity," which he estimates at about $13 billion or more.
The test received marketing authorization from the US Food and Drug Administration in June.
The immunoassay utilizes three proprietary plasma biomarkers combined with clinical data from electronic health records into a machine-learning algorithm that generates a risk score, stratifying patients based on risk for rapid progressive kidney function decline within five years.
Renalytix's share price was up 97 percent to $.54 at the close of market on Thursday.