Company Overview

diaDexus is a privately held diagnostics company, located in South San Francisco, California, focusing on the development and commercialization of patent-protected
in vitro diagnostic products addressing unmet needs in cardiovascular disease. diaDexus was formed in 1997 as a joint venture between SmithKline Beecham (now GlaxoSmithKline) and Incyte; upon formation, GSK granted diaDexus an exclusive license to certain diagnostic intellectual property, including the PLAC^® Test for Lp-PLA₂. The PLACTest is the only blood test cleared by the FDA to assess risk for coronary heart disease and ischemic stroke associated with atherosclerosis.

The PLAC Test
The PLAC Test provides new information, over and above traditional risk factors, to help identify individuals at increased risk of suffering a heart attack or stroke, the #1 and #3 causes of death respectively in the U.S. These events can be prevented with earlier detection and more aggressive risk-reducing strategies, including treatment to lower
LDL-cholesterol (LDL-C) goals with statins. The PLAC Test has been granted a
Category I CPT Code (83698) by the American Medical Association and is reimbursed by the Centers for Medicare and Medicaid Services (CMS) with a National Limitation Amount (NLA) of $48.62 in the 2010 CMS Clinical Laboratory Fee Schedule. CIGNA announced a positive coverage decision in 2008, but most large private payers do not yet reimburse for the PLAC Test, classifying it as experimental and investigational. The PLAC Test is available nationally through leading clinical reference, hospital, and physician office laboratories.

The Company launched an automated format of the PLAC Test in 2008 that runs on the large installed base of clinical chemistry analyzers. Previously, the PLAC Test was only available in a microtiter plate format, which limited the ability of most laboratories to use the test. The automated PLAC Test not only dramatically expands the number of clinical laboratories and physician offices that are able to offer the test, but it significantly reduces the cost associated with running the test.

Lp-PLA₂: Implicated in Plaque Rupture
Traditional risk factors, whose limitations have been well publicized, provide an incomplete cardiovascular risk assessment. Notably, 50% of cardiovascular events strike individuals with normal lipid levels, highlighting the significant prevalence of hidden cardiovascular risk. The shortcomings of traditional risk factor assessment has fueled intense research in identifying new risk markers that are able to add to the predictive power of traditional risk factors.

The PLAC Test measures lipoprotein-associated phospholipase A₂ (Lp-PLA₂), a vascular-specific inflammatory enzyme implicated in the formation of rupture-prone plaque. Over 65 published papers support Lp-PLA₂ as a novel cardiovascular risk marker that provides new information over and above traditional risk factors. Elevated Lp-PLA₂ levels have shown a consistent association with risk for coronary heart disease and stroke, conferring about a 2-fold increase in risk. The PLAC Test is particularly useful when used in combination with another inflammatory diagnostic marker, hs-CRP. A large study of more than 15,000 individuals found that, when both markers were elevated, individuals were 4-times as likely to suffer a cardiovascular event and 11-times more likely to suffer a stroke, compared to individuals with low levels of both markers.

The PLAC Test Provides Actionable Information
In June 2008, a panel of leading cardiologists and neurologists published a consensus recommendation in a supplement of the American Journal of Cardiology, proposing that the PLAC Test should be used as an adjunct to traditional risk factor assessment to identify which moderate and high risk individuals, as initially assessed by traditional risk factors, may actually be at an increased risk for heart attack or stroke. This recommendation is consistent with National Cholesterol Education Program Adult Treatment Panel III guidelines (ATP III) for inflammatory marker testing. An elevated PLAC Test identifies individuals requiring more aggressive risk-reducing strategies, including treatment to lower LDL-C goals (see Figure 1). The PLAC Test addresses a large patient population; 40% of adults in the U.S. (~60MM individuals) fall into the moderate-risk category for cardiovascular disease and are candidates for further risk stratification. Physicians routinely test this population for lipids, ordering approximately 100 million lipid panels and over 10 million hs-CRP tests each year in the U.S. alone.

Given the potential role of Lp-PLA₂ in the formation of rupture-prone plaque and the convincing epidemiological data, GSK has developed an Lp-PLA₂ inhibitor, darapladib, and is currently evaluating the drug in two large, global, Phase III clinical trials involving approximately 27,000 patients. diaDexus believes that the availability of this drug may trigger an increase in demand for Lp-PLA₂ testing.

Commercialization
Although the PLAC Test is a covered service for approximately 120 million Americans, the lack of universal reimbursement has limited utilization of the test. In the event the PLAC Test is not covered by insurance, the individual will be required to pay between $50 and $100 for the test. The Company is in active discussions with private payers to expand the universe of covered lives.

In the U.S., the PLAC Test is currently marketed to physicians through a direct Company sales force of 8 representatives who also manage the primary distributors, Fisher HealthCare, PSS World Medical and INOVA Diagnostics, Inc. Internationally, the Company has recently established a network of over 20 distributors covering 30 countries. The PLAC Test is a patent protected test with 22 issued and 11 pending patents.

The PLAC Test Identifies Individuals Requiring
More Aggressive Risk-Reducing Strategies

Figure 1

Please click to enlarge