Depends on what you define 'delivery' as .... seems a bit more work to be done yet
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For Bar put an Analysis on this today. The longer it takes is better for PEB. Short version.
It has been 206 days since Pacific Edge's (PEB) Local Coverage Determination (LCD) comment period ended. We have undertaken thorough analysis of every proposed LCD since 1 January 2010. In this time there have been 2,013 unique proposed LCDs. Of these 84% have been finalised (unfavourable for PEB). Despite this evidence, our analysis shows that as time passes the odds tilt in PEB's favour. Of LCD decisions over 200 days, the odds of finalisation reduce dramatically with only 55% finalised (versus 92% for those under 200 days). We retain our NEUTRAL rating. Our analysis shows (1) the odds are evenly split at this point in the process, and (2) the stock price broadly reflects the current balance of probabilities. It is a binary outcome and we expect the stock price to remain range bound until we get increased clarity.
Most LCDs are finalised but as time passes the odds tilt in PEB's favour
On 1 August 2022, PEB confirmed notification of Cxbladder codes in a proposal for a different approach to determine which cancer biomarker tests are eligible for reimbursement. If finalised, PEB will no longer receive reimbursement payments for its CMS tests (~80% of FY23 sales). Novitas must finalise or reject the draft LCD within a year of the announcement date (28 July 2022).
In the 206 days since PEB's comment period ended we have learnt very little about whether the proposal will go ahead or not. We have undertaken a thorough exercise by analysing all 2,013 unique LCDs that have occurred since 2010 to understand (1) the finalisation rate of proposed LCDs, and (2) the decision timeframes. We acknowledge this analysis isn't perfect given the nuanced nature of each LCD, and PEB is of the view the proposal won't go ahead, but history is ultimately our most useful indicator.
- Decision outcome — the majority of LCDs are finalised: 84% of LCDs have been finalised, 13% rejected and 3% are still pending.
- Decision timeframes — finalised LCDs are much shorter than rejected LCDs: Of all finalised LCDs, the median time to decision is 69 days. Of all rejected LCDs, the median time to decision is 182 days. By Bayesian inference, the probability reduces dramatically for those decisions that occur after 200 days — 55% finalisation rate for those over 200 days versus 92% for those under 200 days.
Breaking it down — Novitas, molecular diagnostics and National Comprehensive Cancer Network (NCCN)
To further add to our analysis we have specifically filtered for LCDs related to Novitas, molecular diagnostics, and NCCN references.
- Novitas appears more stringent relative to other contractors: 93% of its LCDs have been finalised.
- Molecular diagnostics: 74% have been finalised. Median finalisation time of 119 days and median rejection time of 221 days.
- NCCN: 296 LCDs had some reference to NCCN, only PEB's current proposal specifically uses guidelines as a coverage criteria.
If I'm understanding: Rejection refers to rejecting the inclusion in the draft of non inclusions. So rejection means inclusion of coverage and is a positive rather than the more oft negative inferance of the term 'rejection'.
45% positive rejection still feels like gambling with ods favouring the bookie
You cant beat Bayesian influences to give a likely result
Interesting close today up .02, are we expecting anything special ?