Opening remarks:

Members of the Panel, organizing committee and the FDA, we appreciate the
opportunity to provide our perspective regarding Oversight of Laboratory
Developed Tests. We believe that this issue has significant implications for patient
heath, treatment and safety.

I am Winton Gibbons, Senior Vice President of Business Development at

Nanosphere, Inc.

Today, Nanosphere would like to address the need to apply a consistent process for
deciding clinical utility for intended medical use of a diagnostic test, whether the
test is a marketed laboratory-developed test or a marketed manufacturer developed
test.

The use of a common process for deciding clinical utility across all marketed
diagnostic tests and lab services will:

1. Improve patient safety.

2. Reduce confusion among doctors, hospitals and patients. This would increase the
quality of health care, while accelerating acceptance of medically-proven diagnostic
tests.

3. Lower health care costs, by making better, more consistent and cost-effective
medical decisions. Manufacturers will be able to develop and market tests with the
same intended medical uses as those same tests developed by laboratories.
Moreover, the laboratories will then have more options. They can develop the test
themselves or buy the test from a manufacturer. This flexibility will reduce medical
costs.

There are current examples of laboratory-developed tests being offered for use in
medical practice, while the FDA has stated that the clinical utility of those tests have
not been established. Therefore, a diagnostic manufacturer would need to perform
additional clinical work and submit for premarket approval showing clinical utility
for the intended medical use, while lab-developed tests do not have this
requirement.

The clinical utility and intended medical uses for specific diagnostic tests are
expanding more and more beyond just diagnosis, for example to selecting specific
therapies or procedures, or assessing the safety and effectiveness of a given
therapeutic agent or how a patient will respond. There seems to be little scientific
reason not to require practical approaches to confirming that those specific tests
help medically as intended. Moreover, the same standard of medical proof should
be applied to lab-developed tests, as those developed by IVD manufacturers.
This approach to proving clinical utility must be practical, as the diagnostic industry
cannot afford clinical studies that are too costly and time consuming. But the
clinical studies should be done nonetheless. Incentives must not be ignored for
diagnostics manufacturers or laboratories to pursue new test that may still need
expensive clinical studies. As a manufacturer of diagnostic tests, our business
prospects are based on what we provide for our customers. We also know that most
clinical labs have difficult budgets and don’t have enough people. But, it is both of
our jobs to make sure that we provide quality, clinically useful test results—
whether we sell diagnostic products or lab services.

Additionally, we understand that differences may exist in the confirmation of the

technical performance for a laboratory-developed test, if that test is used only in the
lab that developed it. Whereas, a manufacturer’s test, that is distributed to many
places, could need to be checked more to ensure its technical performance.

Historical situation:

Regarding history, we would repeat a number of points already mentioned and add
our own thoughts.

Historically, many of the tests that have been performed as LDTs have been for well-
characterized analytes and with well known relationships to medical conditions.

We also believe that there are still medical conditions that are too infrequent to bear
the cost of more clinical studies, and can rely on clinical observations.

We do understand that that developing an LDT test has likely both a time and cost
advantage over following the manufacturer’s FDA pathways. However, it cannot be
assured that this speed and cost advantage translates into good medicine, if it lacks
proof of clinical utility for its intended use by physicians.

What is needed is a regulatory process, common to both FDA-reviewed

manufactured tests and laboratory developed tests, proving the clinical utility of a
test. Currently, there is no single standard or regulation applicable to all. Rather,
laboratories are reasonably free to develop and apply new tests, including genetic
tests, as they think appropriate--whether or not the FDA would accept that the
medical data proves clinically utility.

Evolving environment:

As we see things evolving, new tests have arisen through medical observation and
put into LDTs on which physicians rely, often without strong proof. This is
particularly problematic when those tests are used to pick procedures or guide
therapies.
Clinical risk and safety also plays a role in the type and thoroughness of proof that is
required.

The diagnostics industry is used to proof, such as diagnostic accuracy, as it relates to

correctly identifying those with a disease versus missed or wrong diagnosis.
However, for new test or new uses of existing tests, these accuracy concepts have no
meaning without enough medical data. What is the impact of missing a diagnosis or
misdiagnosing patients? These risks have to be taken seriously and addressed by
the clinical studies for each new use of an existing test and for each new test.

Recommendation:

Our recommendation is that FDA policy should be scientifically-based, dependable

and consistent for all providers of diagnostics.

Well-designed clinical studies should be used to prove the clinical utility for
intended medical uses for diagnostic tests. These studies should be scientifically
and statistically valid.

We believe that it would be the FDA’s role to create sufficiently detailed guidelines
for these clinical studies or the determination of sufficiency of published clinical
studies. Moreover, we think that there needs to be objective, third party expertise
to make sure that the studies meet these guidelines, and to review the results—a
role also suited to the FDA.

Risk assessments should be used in order to determine the level of evidence needed
from these studies.

During the period while the studies to prove clinical utility for an intended medical
use are going on, we believe that there is a role for other, legitimate clinical studies
that are observational, but do not intervene in any diagnosis or therapy.

Lastly, we believe that there still is a role for Humanitarian Use Exemptions or a
similar exemption for rare diseases.