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Aug 04, 2020

CareDx Reports Second Quarter 2020 Results

Patient-focused during COVID-19 pandemic and succeeding

SOUTH SAN FRANCISCO, Calif., Aug. 04, 2020 (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, 2020.

Second Quarter 2020 and Recent Highlights:

  • Achieved total revenue of $41.8 million for the three months ended June 30, 2020, increasing 33% year-over-year
  • Provided over 17,100 AlloSure Kidney and AlloMap Heart patient results, with over 40% originating from RemoTraC and mobile phlebotomy
  • Recorded first-ever AlloCell revenue from a cell therapy partnership
  • Completed successful public offering raising $134.6 million in net proceeds, increasing cash and cash equivalents to $211.4 million

“Throughout this challenging time, our team at CareDx successfully executed across our initiatives and never wavered from our commitment to improving the lives of transplant patients. Our performance in the second quarter, highlighted by strong growth and robust results from RemoTraC, is a testament to our patient-focus and dedication,” said Peter Maag, CareDx Chairman and Chief Executive Officer. “As we look to the second half of this year, while uncertainty continues, what remains clear is the dedication of our team, our ability to navigate through this time and our confidence to be able to continue to deliver durable long-term operational growth.”

Second Quarter 2020 Financial Results

Revenue for the three months ended June 30, 2020 was $41.8 million, compared with $31.5 million in the second quarter of 2019. Testing services revenue for the second quarter was $36.3 million, compared with $25.7 million in the same period of 2019. Product revenue in the three months ended June 30, 2020 was $3.3 million, compared to $4.6 million in the same period of 2019. Digital and other revenue for the second quarter 2020 was $2.2 million, compared to $1.2 million in the same period of 2019.

For the second quarter of 2020, the net loss was $6.6 million compared to a net loss of $7.8 million in the same period of 2019. Diluted net loss per share was $0.15 in the second quarter of 2020, compared to a diluted net loss per share of $0.19 in the second quarter of 2019.

Non-GAAP net income was $1.7 million in the second quarter of 2020 compared to $0.1 million non-GAAP net loss in the second quarter of 2019. Diluted non-GAAP net income per share was $0.04 in the second quarter of 2020, compared to a diluted non-GAAP net loss per share of $0.00 in the second quarter of 2019.

Adjusted EBITDA for the second quarter of 2020 was a loss of $2.8 million, compared to an adjusted EBITDA gain of $0.1 million in the second quarter of 2019.

Cash and cash equivalents were $211.4 million as of June 30, 2020.

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

2020 Guidance

While CareDx experienced improved trends in the second quarter, due to the continued uncertainties with respect to the COVID-19 pandemic, CareDx will not be providing guidance at this time.

About CareDx

CareDx, Inc., headquartered in South San Francisco, 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 testing services, products, 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 achievement of our financial and operational goals and our prospects. 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, 2019, filed by CareDx with the SEC on February 28, 2020, 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 basic and diluted net income per share and adjusted EBITDA. We define non-GAAP net income and per share results as the GAAP net income 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, and other income and expense. 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.

Investor Relations Contact

Greg Chodaczek
347-620-7010
investor@caredx.com 

 
CareDx, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share data)
         
    Three Months Ended June 30,   Six Months Ended June 30,
    2020   2019   2020   2019
Revenue:                
Testing services revenue   $ 36,293     $ 25,677     $ 67,735     $ 47,195  
Product revenue   3,291     4,593     7,986     9,026  
Digital and other revenue   2,217     1,184     4,460     1,215  
Total revenue   41,801     31,454     80,181     57,436  
Cost of revenue   15,025     11,512     27,417     21,245  
Gross profit   26,776     19,942     52,764     36,191  
Operating expenses:                
Research and development   13,129     7,630     23,142     13,244  
Sales and marketing   12,134     10,644     23,857     17,569  
General and administrative   12,316     8,512     22,319     17,618  
Total operating expenses   37,579     26,786     69,318     48,431  
Loss from operations   (10,803 )   (6,844 )   (16,554 )   (12,240 )
Other income (expense):                
Interest income, net   21     300     117     642  
Change in estimated fair value of common stock warrant liability   (664 )   (1,351 )   (1,069 )   (4,360 )
CARES Act Provider Relief Fund   4,813     —     4,813     —  
Other expense, net   (255 )   (172 )   (318 )   (246 )
Total other income (expense)   3,915     (1,223 )   3,543     (3,964 )
Loss before income taxes   (6,888 )   (8,067 )   (13,011 )   (16,204 )
Income tax benefit   330     220     630     826  
Net loss   $ (6,558 )   $ (7,847 )   $ (12,381 )   $ (15,378 )
Net loss per share:                
Basic   $ (0.15 )   $ (0.19 )   $ (0.28 )   $ (0.37 )
Diluted   $ (0.15 )   $ (0.19 )   $ (0.28 )   $ (0.37 )
Weighted-average shares used to compute net loss per share:                
Basic   44,708,037     42,132,396     43,765,732     41,873,337  
Diluted   44,708,037     42,132,396     43,765,732     41,873,337  
                         


 
CareDx, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
       
  June 30, 2020   December 31, 2019
Assets      
Current assets:      
Cash and cash equivalents $ 211,409     $ 38,223  
Accounts receivable 27,111     24,057  
Inventory 8,741     6,014  
Prepaid and other current assets 4,286     3,628  
Total current assets 251,547     71,922  
Property and equipment, net 7,313     4,430  
Operating leases right-of-use assets 16,416     4,730  
Intangible assets, net 44,356     45,541  
Goodwill 23,857     23,857  
Restricted cash 253     256  
Other assets 1,000     1,000  
Total assets $ 344,742     $ 151,736  
Liabilities and stockholders’ equity      
Current liabilities:      
Accounts payable $ 8,675     $ 5,506  
Accrued compensation 11,089     12,484  
Accrued and other liabilities 16,682     16,838  
Deferred revenue - CMS advance payment 20,496     —  
Total current liabilities 56,942     34,828  
Deferred tax liability 1,313     1,973  
Common stock warrant liability 1,681     6,607  
Deferred payments for intangible assets 5,400     5,207  
Operating lease liability, less current portion 17,025     2,370  
Other liabilities 1,614     1,751  
Total liabilities 83,975     52,736  
Commitments and contingencies      
Stockholders’ equity:      
Common stock 47     42  
Additional paid-in capital 612,228     437,976  
Accumulated other comprehensive loss (5,314 )   (5,205 )
Accumulated deficit (346,194 )   (333,813 )
Total stockholders’ equity 260,767     99,000  
Total liabilities and stockholders’ equity $ 344,742     $ 151,736  
               


 
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,
  2020   2019   2020   2019
               
Net loss per share $ (6,558 )   $ (7,847 )   $ (12,381 )   $ (15,378 )
Stock-based compensation expense 6,417     4,992     10,676     11,045  
Acquisition related-amortization of purchased intangibles 1,160     822     2,309     1,576  
Acquisition related fees and expenses —     568     —     568  
Change in estimated fair value of contingent consideration 76     —     266     —  
Change in estimated fair value of common stock warrant liability 664     1,351     1,069     4,360  
Accretion of liability 88     —     192     —  
Tax effect related to amortization of purchased intangibles (119 )   (122 )   (239 )   (245 )
Impairment —     150     —     150  
Non-GAAP net income (loss) $ 1,728     $ (86 )   $ 1,892     $ 2,076  
               
GAAP basic and diluted net loss per share $ (0.15 )   $ (0.19 )   $ (0.28 )   $ (0.37 )
               
Non-GAAP basic net income (loss) per share $ 0.04     $ (0.00 )   $ 0.04     $ 0.05  
Non-GAAP diluted net income (loss) per share $ 0.04     $ (0.00 )   $ 0.04     $ 0.05  
               
Shares used in computing non-GAAP basic net income (loss) per share 44,708,037     42,132,396     43,765,732     41,873,337  
Shares used in computing non-GAAP diluted net income (loss) per share 45,882,569     42,132,396     44,604,886     44,897,442  
                       


 
CareDx, Inc.
Reconciliation of Non-GAAP to Adjusted EBITDA Financial Measures
(Unaudited)
(In thousands)
       
  Three Months Ended June 30,   Six Months Ended June 30,
  2020   2019   2020   2019
               
Non-GAAP net income (loss) $ 1,728     $ (86 )   $ 1,892     $ 2,076  
Interest expense (21 )   (300 )   (117 )   (642 )
Income tax benefit (211 )   (98 )   (391 )   (581 )
Depreciation expense 381     397     748     804  
CARES Act Provider Relief Fund (4,813 )   —     (4,813 )   —  
Other expense, net 167     172     126     246  
Adjusted EBITDA $ (2,769 )   $ 85     $ (2,555 )   $ 1,903  
                               


 
CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands)
     
    Three Months Ended June 30, 2020
    Total
revenue

  Cost of
revenue

  Research
and
development

  Sales and
marketing

  General and
administrative

  Total
other
income

  Income
tax
benefit
(expense)

  Net income
(loss)

GAAP   $ 41,801     $ 15,025     $ 13,129     $ 12,134     $ 12,316     $ 3,915     $ 330     $ (6,558 )
Non-GAAP adjustments:                  
Stock-based compensation expense     (711 )   (1,456 )   (1,581 )   (2,669 )       6,417  
Acquisition related-amortization of purchased intangibles     (804 )     (356 )         1,160  
Change in estimated fair value of contingent consideration           (76 )       76  
Change in estimated fair value of common stock warrant liability             664       664  
Accretion of liability             88       88  
Tax effect related to amortization of purchased intangibles               (119 )   (119 )
Non-GAAP   $ 41,801     $ 13,510     $ 11,673     $ 10,197     $ 9,571     $ 4,667     $ 211     $ 1,728  


    Six Months Ended June 30, 2020
    Total
revenue

  Cost of
revenue

  Research
and
development

  Sales and
marketing

  General and
administrative

  Total
other
income

  Income
tax
benefit
(expense)

  Net income
(loss)
GAAP   $ 80,181     $ 27,417     $ 23,142     $ 23,857     $ 22,319     $ 3,543     $ 630     $ (12,381 )
Non-GAAP adjustments:                  
Stock-based compensation expense     (1,076 )   (2,267 )   (2,550 )   (4,783 )       10,676  
Acquisition related-amortization of purchased intangibles     (1,596 )     (713 )         2,309  
Change in estimated fair value of contingent consideration           (266 )       266  
Change in estimated fair value of common stock warrant liability             1,069       1,069  
Accretion of liability             192       192  
Tax effect related to amortization of purchased intangibles               (239 )   (239 )
Non-GAAP   $ 80,181     $ 24,745     $ 20,875     $ 20,594     $ 17,270     $ 4,804     $ 391     $ 1,892  
                                                                 


 
CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands)
     
    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
(expense)

  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     (539 )     (283 )         822  
Acquisition related fees and expenses           (568 )       568  
Change in estimated fair value of common stock warrant liability             1,351       1,351  
Tax effect related to amortization of purchased intangibles               (122 )   (122 )
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
revenue

  Cost of
revenue

  Research
and
development

  Sales and
marketing

  General and
administrative

  Total
other
income
(expense)

  Income
tax
benefit
(expense)

  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     (1,030 )     (546 )         1,576  
Acquisition related fees and expenses           (568 )       568  
Change in estimated fair value of common stock warrant liability             4,360       4,360  
Tax effect related to amortization of purchased intangibles               (245 )   (245 )
Impairment         (150 )         150  
Non-GAAP   $ 57,436     $ 18,931     $ 10,971     $ 15,206     $ 11,229     $ 396     $ 581     $ 2,076  
                                                                 

 


CareDx logo.jpg

Source: CareDx, Inc.

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