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CareDx, Inc.$28.41$.281.00%

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 CareDx Reports Second Quarter 2019 Results
   Thursday, August 01, 2019 4:01:00 PM ET

BRISBANE, Calif., Aug. 01, 2019 (GLOBE NEWSWIRE) -- CareDx, Inc. (NASDAQ: CDNA), a leading precision medicine company focused on the discovery, development and commercialization of clinically differentiated, high-value healthcare solutions for transplant patients and caregivers, today reported financial results for the quarter ended June 30, 2019.

Recent highlights:

  • Accelerated leadership position in transplantation in the second quarter of 2019
    - Provided 7,355 AlloSure patient results for 5,548 kidney transplant patients
    - Continued progress in AlloSure Registry (K-OAR) enrollment, with 51 centers initiated and 1,204 patients enrolled as of June 30, 2019
    - Provided 4,572 AlloMap patient results, increasing 11% year-over-year
    - Established new Digital transplant business through acquisition of OTTR, an electronic medical records company used in 60 U.S. Transplant Centers
    - Introduced AlloSeq product line at EFI (European Immunogenetics and Histocompatibility Conference) which will provide more than 1 million worldwide transplant patients access to novel surveillance solutions
  • Achieved total revenue of $31.5 million for the second quarter of 2019, increasing 76% year-over-year
    - Testing services revenue of $25.7 million, growth of 83% compared to prior year period
    - Product revenue of $4.6 million, an increase of 29% year-over-year
    - Digital & other revenue of $1.2 million
  • Generated GAAP net loss of $7.8 million, non-GAAP net loss of $0.1 million, and positive adjusted EBITDA of $0.1 million


“The CareDx team continues to execute at a high level, delivering another consecutive record quarter, with revenue increasing 76% year-over-year and the Company generating its fourth consecutive quarter of positive adjusted EBITDA.”  said Peter Maag, CareDx Chief Executive Officer. “The American Transplant Congress marked another milestone in the Company’s history, with CareDx and key opinion leaders presenting strong AlloSure clinical data, further solidifying our position as a pioneer in the transplant industry. During the quarter, we announced the next generation in kidney transplantation surveillance, KidneyCare, a multimodality test combining next generation sequencing, gene expression and smart analytical tools, bringing precision medicine to transplantation and widening CareDx’s competitive moat. Our results highlight the momentum in our business, and we are optimally positioned for continued growth in 2019 and beyond.”

Second Quarter 2019 Financial Results 

Revenue for the three months ended June 30, 2019 was $31.5 million, compared with $17.8 million in the second quarter of 2018.  Testing services revenue for the second quarter was $25.7 million compared with $14.0 million in the same period of 2018. Product revenue in the three months ended June 30, 2019 was $4.6 million, compared to $3.6 million in the same period of 2018.  Digital and other revenue for second quarter 2019 was $1.2 million, reflecting our recent acquisition of OTTR.

For the second quarter of 2019, the net loss was $7.8 million compared to a net loss of $14.1 million in the same period of 2018. The second quarter 2019 net loss included $5.0 million of stock-based compensation expense and a $1.4 million expense from the change in estimated fair value of common stock warrant liabilities.  Basic and diluted net loss per share was $0.19 in the second quarter of 2019, compared to basic and diluted net loss per share of $0.40 in the second quarter of 2018. 

Non-GAAP net loss was $0.1 million in the second quarter of 2019 compared to a $1.3 million non-GAAP net loss in the second quarter of 2018. Basic and diluted non-GAAP net loss per share was $0.00 in the second quarter of 2019, compared to a non-GAAP net loss per share of $0.04 in the second quarter of 2018.

Adjusted EBITDA for the second quarter of 2019 was a gain of $0.1 million, compared to an adjusted EBITDA loss of $0.8 million in the second quarter of 2018.

Cash and cash equivalents were $43.5 million as of June 30, 2019.

For additional information regarding non-GAAP financial measures discussed herein, please see “Use of Non-GAAP financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below.

2019 Guidance
For the full year 2019, CareDx now expects revenue to be in the range of $123 million to $125 million (previously $113 million to $115 million).

About CareDx
CareDx, Inc., headquartered in Brisbane, California, is a leading precision medicine solutions company focused on the discovery, development and commercialization of clinically differentiated, high-value healthcare solutions for transplant patients and caregivers. CareDx offers products, testing services and digital healthcare solutions along the pre- and post-transplant patient journey, and is the leading provider of genomics-based information for transplant patients.

For more information, please visit: www.CareDx.com .

Forward Looking Statements
This press release includes forward-looking statements, including expectations regarding the Company’s fiscal 2019 revenue, achievement of our financial and operational goals and our prospects and the opportunity for patients through the AlloSeq product line. These forward-looking statements are based upon information that is currently available to CareDx and its current expectations, speak only as of the date hereof, and are subject to numerous risks and uncertainties, including general economic and market factors, among others discussed in CareDx’s filings with the SEC, including the Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed by CareDx with the SEC on March 6, 2019 and the periodic reports that CareDx has subsequently filed with the SEC. Any of these may cause CareDx’s actual results, performance or achievements to differ materially and adversely from those anticipated or implied by CareDx’s forward-looking statements. CareDx expressly disclaims any obligation, except as required by law, or undertaking to update or revise any such forward-looking statements.

Use of Non-GAAP Financial Measures
CareDx has presented in this release certain financial information in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and also on a non-GAAP basis, including non-GAAP net income, non-GAAP net loss, non-GAAP basic and diluted net income and net loss per share and adjusted EBITDA.  We define non-GAAP net income and non-GAAP net loss and per share results as the GAAP net income or loss and per share results excluding the impacts of stock-based compensation; changes in estimated fair value of warrants, derivative liabilities and contingent consideration; acquisition related impairment charges and amortization of intangible assets, purchase accounting adjustments and related tax effects; costs involved with completing an acquisition; amortization of debt discount; and certain other financing charges. We define adjusted EBITDA as non-GAAP net income/(loss) before net interest expense, income tax expense, depreciation and amortization, other expense, and net loss attributable to noncontrolling interest. We are presenting these non-GAAP financial measures to assist investors in assessing our operating results through the eyes of management and because we believe that these measures provide an additional tool for investors to use in comparing our core business operating results over multiple periods. Management believes this non-GAAP information is useful for investors, when considered in conjunction with CareDx's GAAP financial statements, because management uses such information internally for its operating, budgeting and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of CareDx's operating results as reported under GAAP. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are not necessarily comparable to similarly-titled measures presented by other companies. A reconciliation between GAAP and non-GAAP financial information is provided immediately following the financial tables.

CONTACTS:

Investor Relations
David Clair
Westwicke Partners
646-277-1266
david.clair@icrinc.com

 
 
CareDx, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share data)
      
 Three Months Ended Six Months Ended
 June 30, 2019June 30, 2018 June 30, 2019June 30, 2018
      
Revenue:     
Testing services revenue$25,677 $13,997  $47,195 $24,601 
Product revenue 4,593  3,550   9,026  6,857 
Digital and other revenue 1,184  276   1,215  418 
Total revenue 31,454  17,823   57,436  31,876 
Cost of revenue 11,512  7,207   21,245  13,591 
Gross profit 19,942  10,616   36,191  18,285 
Operating expenses:     
Research and development 7,630  3,496   13,244  6,864 
Sales and marketing 10,644  5,860   17,569  9,945 
General and administrative 8,512  5,596   17,618  10,903 
Change in estimated fair value of contingent consideration -  873   -  1,017 
Total operating expenses 26,786  15,825   48,431  28,729 
Loss from operations (6,844) (5,209)  (12,240) (10,444)
Other income (expense):     
Interest income (expense), net 300  (424)  642  (3,119)
Debt extinguishment expenses -  -   -  (2,806)
Change in estimated fair value of common stock warrant liability and derivative liability (1,351) (8,768)  (4,360) (7,447)
Other expense, net (172) (42)  (246) (45)
Total other income (expense) (1,223) (9,234)  (3,964) (13,417)
Loss before income taxes (8,067) (14,443)  (16,204) (23,861)
Income tax benefit 220  381   826  805 
Net loss$(7,847)$(14,062) $(15,378)$(23,056)
Net loss attributable to noncontrolling interest -  -   -  (25)
Net loss attributable to CareDx, Inc.$(7,847)$(14,062) $(15,378)$(23,031)
Net loss per share attributable to CareDx, Inc.:     
Basic$(0.19)$(0.40) $(0.37)$(0.71)
Diluted$(0.19)$(0.40) $(0.37)$(0.71)
      
Weighted average shares used to compute net loss per share attributable to CareDx, Inc.:     
Basic 42,132,396  35,549,837   41,873,337  32,599,032 
Diluted 42,132,396  35,549,837   41,873,337  32,599,032 
      
      

 

CareDx, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
   
 June 30, 2019December 31, 2018
       
Assets      
Current assets:      
Cash and cash equivalents$43,469 $64,616 
Accounts receivable 17,052  9,760 
Inventory 5,341  4,943 
Prepaid and other current assets 2,462  1,795 
Total current assets 68,324  81,114 
Property and equipment, net 3,508  4,134 
Operating leases right-of-use assets 2,657  - 
Intangible assets, net 45,604  33,252 
Goodwill 22,559  12,005 
Restricted cash 255  192 
Total assets$142,907 $130,697 
       
Liabilities and stockholders’ equity      
Current liabilities:      
Accounts payable 7,380  4,711 
Accrued compensation 7,490  9,156 
Accrued and other liabilities 13,750  5,637 
Total current liabilities 28,620  19,504 
Deferred tax liability 2,310  2,968 
Common stock warrant liability 11,286  10,003 
Deferred payment for intangible assets 4,930  - 
Other liabilities 2,595  2,294 
Total liabilities 49,741  34,769 
       
Stockholders’ equity:      
Common stock 42  41 
Additional paid-in capital 425,418  412,010 
Accumulated other comprehensive loss (5,071) (4,278)
Accumulated deficit (327,223) (311,845)
Total stockholders' equity 93,166  95,928 
Total liabilities and stockholders’ equity$142,907 $130,697 
       
       

 

CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands, except share and per share data)
    
 Three Months Ended June 30, Six Months Ended June 30,
  2019  2018   2019  2018 
              
Net loss attributable to CareDx, Inc.$(7,847)$(14,062) $(15,378)$(23,031)
Stock-based compensation expense 4,992  2,512   11,045  3,217 
Acquisition related-amortization of purchased intangibles 805  734   1,541  1,498 
Acquisition related fees and expenses 568  -   568    
Change in estimated fair value of contingent consideration -  873   -  1,017 
Change in estimated fair value of common stock warrant liability and derivative liability 1,351  8,768   4,360  7,447 
Amortization of debt discount -  55   -  1,978 
Loss on conversion from debt to equity -  -   -  2,806 
Tax effect related to amortization of purchased intangibles (122) (190)  (245) (422)
Acquisition-related amortization of inventory valuation adjustment 17  25   35  189 
Impairment 150  -   150  - 
Non-GAAP net income (loss)$(86)$(1,285) $2,076 $(5,301)
Net loss attributable to noncontrolling interest -  -   -  (25)
Net loss attributable to CareDx, Inc.$(86)$(1,285) $2,076 $(5,276)
              
GAAP basic and diluted net loss per share attributable to CareDx$(0.19)$(0.40) $(0.37)$(0.71)
GAAP basic and diluted net loss per share attributable to CareDx$(0.19)$(0.40) $(0.37)$(0.71)
              
Non-GAAP basic net income (loss) per share attributable to CareDx$(0.00)$(0.04) $0.05 $(0.16)
Non-GAAP diluted net income (loss) per share attributable to CareDx$(0.00)$(0.04) $0.05 $(0.16)
              
Shares used in computing non-GAAP basic net income (loss) per share 42,132,396  35,549,837   41,873,337  32,599,032 
Shares used in computing non-GAAP diluted net income (loss) per share 42,132,396  35,549,837   44,897,442  32,599,032 
              
              

 

CareDx, Inc.
Reconciliation of Non-GAAP to Adjusted EBITDA Financial Measures
(Unaudited)
(In thousands)
      
 Three Months Ended Six Months Ended
 June 30, 2019June 30, 2018 June 30, 2019June 30, 2018
      
Non-GAAP net income (loss)$(86)$(1,285) $2,076 $(5,301)
Interest income (expense) (300) 369   (642) 1,141 
Income tax benefit (98) (191)  (581) (383)
Depreciation expense 397  248   804  526 
Other expense, net 172  42   246  45 
Net loss attributable to noncontrolling interest -  -   -  (25)
Adjusted EBITDA$85 $(817) $1,903 $(3,997)
      

 

CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands, except share and per share data)
         
         
         
 Three Months Ended June 30, 2019
 Total
revenue
Cost of
revenue
Research
and
development
Sales and
marketing
General and
administrative
Total other
income
(expense)
Income tax
benefit
Net income
(loss)
GAAP$31,454$11,512 $7,630 $10,644 $8,512 $(1,223)$220 $(7,847)
Non-GAAP adjustments:        
Stock-based compensation expense  (508) (1,441) (940) (2,103)   4,992 
Acquisition related-amortization of purchased intangibles  (522)  (283)    805 
Acquisition related fees and expenses     (568)   568 
Change in estimated fair value of contingent consideration        - 
Change in estimated fair value of common stock warrant liability and derivative liability      1,351   1,351 
Amortization of debt discount        - 
Debt extinguishment expenses        - 
Tax effect related to amortization of purchased intangibles       (122) (122)
Acquisition-related amortization of inventory valuation adjustment  (17)      17 
Impairment    (150)    150 
Non-GAAP$31,454$10,465 $6,189 $9,271 $5,841 $128 $98 $(86)
         
 Six Months Ended June 30, 2019
 Total revenueCost of
revenue
Research
and
development
Sales and
marketing
General and
administrative
Total other
income
(expense)
Income tax
benefit
Net income
(loss)
GAAP$57,436$21,245 $13,244 $17,569 $17,618 $(3,964)$826 $(15,378)
Non-GAAP adjustments:        
Stock-based compensation expense  (1,284) (2,273) (1,667) (5,821)   11,045 
Acquisition related-amortization of purchased intangibles  (995)  (546)    1,541 
Acquisition related fees and expenses     (568)   568 
Change in estimated fair value of contingent consideration        - 
Change in estimated fair value of common stock warrant liability and derivative liability      4,360   4,360 
Amortization of debt discount        - 
Debt extinguishment expenses        - 
Tax effect related to amortization of purchased intangibles       (245) (245)
Acquisition-related amortization of inventory valuation adjustment  (35)      35 
Impairment    (150)    150 
Non-GAAP$57,436$18,931 $10,971 $15,206 $11,229 $396 $581 $2,076 


CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands, except share and per share data)
           
 Three Months Ended June 30, 2018
 Total
revenue
Cost of
revenue
Research
and
development
Sales and
marketing
General and
administrative
Change in
estimated fair
value of
contingent
consideration
Total other
income
(expense)
Income tax
benefit
Net loss
attributable to
noncontrolling
interest
Net loss
attributable to
CareDx, Inc.
GAAP$17,823$7,207 $3,496 $5,860 $5,596 $873 $(9,234)$381 $- $(14,062)
Non-GAAP adjustments:          
Stock-based compensation expense  (191) (466) (462) (1,393)     2,512 
Acquisition related-amortization of purchased intangibles  (485)  (249)      734 
Acquisition related fees and expenses          - 
Change in estimated fair value of contingent consideration      (873)    873 
Change in estimated fair value of common stock warrant liability and derivative liability       8,768    8,768 
Amortization of debt discount       55    55 
Debt extinguishment expenses          - 
Tax effect related to amortization of purchased intangibles        (190)  (190)
Acquisition-related amortization of inventory valuation adjustment  (25)        25 
Impairment          - 
Non-GAAP$17,823$6,506 $3,030 $5,149 $4,203 $- $(411)$191 $- $(1,285)
           
           
           
 Six Months Ended June 30, 2018
 Total
revenue
Cost of
revenue
Research and
development
Sales and
marketing
General and
administrative
Change in
estimated fair
value of
contingent
consideration
Total other
income
(expense)
Income tax
benefit
Net loss
attributable to
noncontrolling
interest
Net loss
attributable to
CareDx, Inc.
GAAP$31,876$13,591 $6,864 $9,945 $10,903 $1,017 $(13,417)$805 $(25)$(23,031)
Non-GAAP adjustments:          
Stock-based compensation expense  (252) (679) (526) (1,761)     3,217 
Acquisition related-amortization of purchased intangibles  (995)  (503)      1,498 
Acquisition related fees and expenses          - 
Change in estimated fair value of contingent consideration      (1,017)    1,017 
Change in estimated fair value of common stock warrant liability and derivative liability       7,447    7,447 
Amortization of debt discount       1,978    1,978 
Debt extinguishment expenses       2,806    2,806 
Tax effect related to amortization of purchased intangibles        (422)  (422)
Acquisition-related amortization of inventory valuation adjustment  (189)        189 
Impairment          - 
Non-GAAP$31,876$12,155 $6,185 $8,916 $9,142 $- $(1,186)$383 $(25)$(5,301)
           

CareDx logo.jpg

Source: CareDx, Inc.


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