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Study further shows ~73% of cases which academic pathologists determined were previously misdiagnosed, have definite or possible material impact on patient treatment plans

NEW HAVEN, CT, (January 10th, 2018) – Specialty cancer diagnostics company Precipio, Inc. (NASDAQ: PRPO), today announced preliminary data from an ongoing study on the impact of academic pathology expertise on diagnostic accuracy.

The purpose of the study was to independently evaluate the effect of academic pathology on the massive problem of misdiagnosis, and determine the impact of Precipio’s business model as a solution to this problem.

Initial data shows that of the biopsy samples that Yale specialist pathologists provided a second opinion on and arrived at different diagnoses, ~73% arrived at a diagnosis that either definitely or possibly changed the patient treatment plans.

Superior Diagnostic Accuracy

This is a substantial number, both strengthening industry data on the problem of misdiagnosis; providing powerful evidence to the consequences to patient care; and validating Precipio’s business model as the only innovative solution of its kind to combat the problem of misdiagnosis.

This data is further strengthened by the comparative data generated internally by Precipio, demonstrating that in the first 100 cases initially diagnosed by academic expert pathologists at Yale and then sent to an outside pathologist for a second opinion, in 99% of those cases, the second opinion confirmed the primary diagnosis arrived at by Yale.

“Preliminary findings of the study are consistent with independently reported data on cancer misdiagnosis rates of about 20%,” said Dr. Christopher Sebastian, a pathology resident at Yale University and co-principal investigator. “Pathology is complex and rapidly evolving. It’s not surprising that subspecialty training and an academic focus help pathologists more accurately diagnose patients.”

“This is further independent evidence of the importance of academic level, specialist pathology in preventing billions of wasted dollars and untold family trauma resulting annually from pervasive cancer misdiagnosis,” commented Ilan Danieli, president & CEO. “It’s a validation of our mission to bring life-saving, academic level diagnostics to the millions of US patients diagnosed with cancer every year along with enormous cost saving benefits to physicians, hospitals, and insurance companies. Our unique business model continues to demonstrate that it can bring both tremendous clinical impact, as well as substantial, quantifiable financial value to the industry stakeholders.

The Study

The study’s purpose, launched July 2017, is to evaluate the hypothesis that academic pathologists’ expertise result in a higher rate of diagnostic accuracy than the current industry is providing. The study was designed to retrospectively evaluate the concordance in two sets of data in order to demonstrate this hypothesis.

The first cohort consists of patients who received their primary diagnoses non-academic community hospitals or national reference labs (representative of the industry), and were then referred to an academic pathology institution (Yale University) for a second opinion consultation. The purpose of evaluating this cohort was to re-assess the diagnosis received outside of an academic institution, and then have an academic expert specialist evaluate its accuracy.

The second cohort consists of patients initially diagnosed at Yale University, and then referred to another academic institution for a second opinion consultation, (for example at the Brigham & Women’s Hospital in Boston, or at Memorial Sloan Kettering Cancer Center in New York). The purpose of evaluating this cohort was to review the diagnosis rendered by an academic expert, and assess its accuracy by having it reviewed by a peer academic expert – thus, subject to the same scrutiny as the first cohort. In the cases where there is a disagreement between primary diagnosis and the second opinion evaluation, the patient sample will be submitted to a third party academic institution to act as the arbiter (a process which currently does not exist in the industry). For the purpose of this study, academic expert pathologists at University of Pennsylvania will review each of the discordant cases and determine the correct diagnosis.

Study investigators at Yale anticipated the first cohort would show a significant rate of misdiagnosis with meaningful consequences to the patient; while the second cohort would show minimal discordance, reflecting an overall substantially higher level of diagnostic accuracy rendered by academic pathologists.

Preliminary Results

To date, a total of 315 cases have been reviewed, 213 of which belong to the first cohort of the study, consisting of patients initially diagnosed at a non-academic facility, and then receiving a second opinion consult at Yale University. The preliminary data reveals that, of the cohort of patients initially diagnosed at a non-academic institution, in 45 patients (21% of the cases) the academic pathologist arrived at a different conclusion during their second opinion assessment.

Furthermore, in 33 of those cases (>73%), the change in diagnosis had a potential substantial impact on patient treatment plan and is considered a material discordance. In the remaining 102 cases reviewed that belong to the second cohort, in only 5% of the patients that were initially diagnosed by an academic expert, the second opinion diagnosis differed from the primary diagnosis. However, in 0% of those cases, did the change impact the patient treatment plan and is therefore not considered a material discordance.

Ongoing Study

The study will ultimately include at least 1,000 patients to further demonstrate the value of academic expertise in the diagnostic process. It is expected to be completed by the end of Q1-2018, after which the results will be compiled and published in a peer-reviewed industry journal.

“These preliminary results demonstrate the value of academic expertise in pathology diagnosis. They also lend support to the Precipio business model of utilizing academic pathologists to reach superior diagnostic accuracy in the reference lab setting,” said Professor David Hudnall, Yale Professor of Pathology and Precipio medical director. “I look forward to witnessing the impact of Precipio’s model of academic-reference lab collaboration on patient care, and how it will affect the industry”, concluded Dr. Hudnall.

In our mission to eradicate disease misdiagnosis, Precipio harnesses academic expertise and delivers it to community oncologists and hospitals worldwide, helping to provide patients with the most accurate diagnosis. In an industry that is gradually shifting towards value-based services, the importance of arriving at an accurate diagnosis can no longer be overlooked. Our clinical laboratory receives patient specimens and ensures that they are reviewed by the specific expert relevant to the type of disease diagnosed. This has resulted in a substantially higher level of accuracy delivered by Precipio. While the obvious key beneficiary is the patient and their physician who are armed with the correct information to battle cancer; the health insurance companies too can avoid billions of dollars in waste as a result of misdiagnosis.

About Precipio

Precipio has built a platform designed to eradicate the problem of misdiagnosis by harnessing the intellect, expertise and technology developed within academic institutions and delivering quality diagnostic information to physicians and their patients worldwide. Through its collaborations with world-class academic institutions specializing in cancer research, diagnostics and treatment such as the Yale School of Medicine and Harvard’s Dana-Farber Cancer Institute, Precipio offers a new standard of diagnostic accuracy enabling the highest level of patient care. For more information, please visit www.www.precipiodx.com.

Forward-Looking Statements

Certain statements in this press release constitute “forward-looking statements,” within the meaning of federal securities laws, including statements related to ICP technology, including financial projections related thereto and potential market opportunity, plans and prospects and other statements containing the words “anticipate,” “intend,” “may,” “plan,” “predict,” “will,” “would,” “could,” “should,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors. Factors that could cause future results to materially differ from the recent results or those projected in forward-looking statements include the known risks, uncertainties and other factors described in the Company’s definitive proxy statement filed on May 12, 2017, the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, the Company’s prior filings and from time to time in the Company’s subsequent filings with the Securities and Exchange Commission. Any change in such factors, risks and uncertainties may cause the actual results, events and performance to differ materially from those referred to in such statements. All information in this press release is as of the date of the release and the Company does not undertake any duty to update this information, including any forward-looking statements, unless required by law.