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CareDx Reports Third Quarter 2017 Financial Results
Recent highlights:
- Achieved total revenue for the third quarter of 2017 of
$12.2 million
-- AlloMap® revenue was$8.2 million in the quarter, with US test volume increasing 7% year-over-year
-- Olerup® revenue contributed$3.9 million in the third quarter - Launched AlloSure® commercially on
October 9 th, 2017 with Medicare reimbursement at$2,840.75 per test and 14 U.S. transplant centers providing AlloSure testing to patients in October - Received preliminary 2018 Clinical Laboratory Fee Schedule (CLFS) from Medicare that includes a 14% increase to AlloMap reimbursement to
$3,240 , effectiveJanuary 1, 2018 - Completed an upsized public offering in October, raising
$18.3 million in net proceeds
"With our core products performing well, we have a strong platform in place to grow CareDx's business in 2018 and beyond. We are excited to have had a successful AlloSure launch ahead of our original timeline, representing a transformational business opportunity for
Third Quarter 2017 Financial Results
Revenue for the three months ended
For the third quarter of 2017, net loss was
For the third quarter of 2017, non-GAAP net loss was
Net cash used in operating activities in the third quarter of 2017 was
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.
2017 Guidance
For the full year 2017,
About
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 2017 revenue, prospects and drive toward future profitability. These forward-looking statements are based upon information that is currently available to
Use of Non-GAAP Financial Measures
CONTACTS:
Chief Commercial Officer
415-287-2393
sking@caredx.com
Investor Relations
646-277-1266
david.clair@icrinc.com
Consolidated Statements of Operations | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenue: | ||||||||||||||||
Testing revenue | $ | 8,163 | $ | 8,613 | $ | 24,485 | $ | 22,317 | ||||||||
Product revenue | 3,873 | 3,754 | 10,916 | 7,228 | ||||||||||||
Collaboration and license revenue | 155 | 108 | 420 | 226 | ||||||||||||
Total revenue | 12,191 | 12,475 | 35,821 | 29,771 | ||||||||||||
Operating expenses: | ||||||||||||||||
Cost of testing | 3,156 | 2,604 | 9,224 | 8,228 | ||||||||||||
Cost of product | 2,053 | 3,355 | 6,558 | 6,411 | ||||||||||||
Research and development | 2,959 | 2,930 | 9,360 | 9,231 | ||||||||||||
Sales and marketing | 3,255 | 3,451 | 9,747 | 8,544 | ||||||||||||
General and administrative | 4,038 | 5,180 | 14,672 | 16,250 | ||||||||||||
- | - | 1,958 | - | |||||||||||||
Change in estimated fair value of contingent consideration | 594 | (112 | ) | 309 | (422 | ) | ||||||||||
Total operating expenses | 16,055 | 17,408 | 51,828 | 48,242 | ||||||||||||
Loss from operations | (3,864 | ) | (4,933 | ) | (16,007 | ) | (18,471 | ) | ||||||||
Interest expense | (1,685 | ) | (568 | ) | (4,166 | ) | (1,351 | ) | ||||||||
Other expense, net | (317 | ) | (133 | ) | (1,191 | ) | (3,334 | ) | ||||||||
Change in estimated fair value of common stock warrant liability and derivative liability | (8,599 | ) | 1,386 | (3,404 | ) | (1,779 | ) | |||||||||
Loss before income taxes | (14,465 | ) | (4,248 | ) | (24,768 | ) | (24,935 | ) | ||||||||
Income tax benefit | 178 | 449 | 837 | 888 | ||||||||||||
Net loss | (14,287 | ) | (3,799 | ) | (23,931 | ) | (24,047 | ) | ||||||||
Net loss attributable to noncontrolling interest | (19 | ) | (35 | ) | (133 | ) | (58 | ) | ||||||||
Net loss attributable to | $ | (14,268 | ) | $ | (3,764 | ) | $ | (23,798 | ) | $ | (23,989 | ) | ||||
Net loss per share attributable to | ||||||||||||||||
Basic | $ | (0.63 | ) | $ | (0.20 | ) | $ | (1.09 | ) | $ | (1.61 | ) | ||||
Diluted | $ | (0.63 | ) | $ | (0.26 | ) | $ | (1.09 | ) | $ | (1.61 | ) | ||||
Weighted average shares used to compute net loss per share attributable to | ||||||||||||||||
Basic | 22,526,615 | 19,098,626 | 21,765,292 | 14,894,218 | ||||||||||||
Diluted | 22,526,615 | 19,481,424 | 21,765,292 | 14,894,218 | ||||||||||||
Condensed Consolidated Balance Sheets | |||||||||
(In thousands) | |||||||||
(Unaudited) | |||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 5,976 | $ | 17,258 | |||||
Accounts receivable | 3,270 | 2,768 | |||||||
Inventory | 6,170 | 5,461 | |||||||
Prepaid and other assets | 1,530 | 1,186 | |||||||
Total current assets | 16,946 | 26,673 | |||||||
Property and equipment, net | 2,281 | 2,931 | |||||||
Intangible assets, net | 34,307 | 33,124 | |||||||
12,005 | 13,839 | ||||||||
Restricted cash | 9,554 | 143 | |||||||
Other assets | - | 20 | |||||||
Total assets | $ | 75,093 | $ | 76,730 | |||||
Liabilities and stockholders' equity | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 3,396 | $ | 3,065 | |||||
Accrued payroll liabilities | 4,453 | 3,851 | |||||||
Accrued and other liabilities | 3,895 | 5,320 | |||||||
Accrued royalties | 294 | 263 | |||||||
Deferred revenue | 39 | 42 | |||||||
Deferred purchase consideration | 2,514 | 5,445 | |||||||
Derivative liability | 1,370 | - | |||||||
Current debt | 15,000 | 22,846 | |||||||
Total current liabilities | 30,961 | 40,832 | |||||||
Deferred rent, net of current portion | 1,018 | 1,301 | |||||||
Deferred revenue, net of current portion | 740 | 759 | |||||||
Deferred tax liability | 5,950 | 6,057 | |||||||
Deferred purchase consideration, net of current portion | 2,880 | - | |||||||
Long-term debt, net of current portion | 21,174 | 1,098 | |||||||
Contingent consideration | 801 | 492 | |||||||
Common stock warrant liability | 10,431 | 5,208 | |||||||
Other liabilities | 1,313 | 1,222 | |||||||
Total liabilities | 75,268 | 56,969 | |||||||
Stockholders' equity: | |||||||||
Common stock | 23 | 21 | |||||||
Additional paid-in capital | 238,215 | 235,673 | |||||||
Accumulated other comprehensive loss | (2,198 | ) | (3,659 | ) | |||||
Accumulated deficit | (236,351 | ) | (212,553 | ) | |||||
(311 | ) | 19,482 | |||||||
Noncontrolling interest | 136 | 279 | |||||||
Total stockholders' equity (deficit) | (175 | ) | 19,761 | ||||||
Total liabilities and stockholders' equity | $ | 75,093 | $ | 76,730 | |||||
(1) The condensed balance sheets at | |||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Cost of testing reconciliation: | ||||||||||||||||
GAAP cost of testing | $ | 3,156 | $ | 2,604 | $ | 9,224 | $ | 8,228 | ||||||||
Stock-based compensation expense | (38 | ) | (38 | ) | (157 | ) | (105 | ) | ||||||||
Non-GAAP cost of testing | $ | 3,118 | $ | 2,566 | $ | 9,067 | $ | 8,123 | ||||||||
Cost of product reconciliation: | ||||||||||||||||
GAAP cost of product | $ | 2,053 | $ | 3,355 | $ | 6,558 | $ | 6,411 | ||||||||
Acquisition related-amortization of purchased intangibles | (383 | ) | (343 | ) | (1,093 | ) | (646 | ) | ||||||||
Acquisition related-amortization of inventory valuation adjustment | (250 | ) | (1,273 | ) | (420 | ) | (2,438 | ) | ||||||||
Non-GAAP cost of product | $ | 1,420 | $ | 1,739 | $ | 5,045 | $ | 3,327 | ||||||||
Research and development expenses reconciliation: | ||||||||||||||||
GAAP research and development expenses | $ | 2,959 | $ | 2,930 | $ | 9,360 | $ | 9,231 | ||||||||
Stock-based compensation expense | (104 | ) | (47 | ) | (279 | ) | (118 | ) | ||||||||
Non-GAAP research and development expenses | $ | 2,855 | $ | 2,883 | $ | 9,081 | $ | 9,113 | ||||||||
Sales and marketing expenses reconciliation: | ||||||||||||||||
GAAP sales and marketing expenses | $ | 3,255 | $ | 3,451 | $ | 9,747 | $ | 8,544 | ||||||||
Acquisition related-amortization of purchased intangibles | (254 | ) | (241 | ) | (719 | ) | (454 | ) | ||||||||
Stock-based compensation expense | (32 | ) | (109 | ) | (127 | ) | (321 | ) | ||||||||
Non-GAAP sales and marketing expenses | $ | 2,969 | $ | 3,101 | $ | 8,901 | $ | 7,769 | ||||||||
General and administrative expenses reconciliation: | ||||||||||||||||
GAAP general and administrative expenses | $ | 4,038 | $ | 5,180 | $ | 14,672 | $ | 16,250 | ||||||||
Acquisition related fees and expenses | — | (458 | ) | — | (4,298 | ) | ||||||||||
Stock-based compensation expense | (256 | ) | (261 | ) | (753 | ) | (723 | ) | ||||||||
Non-GAAP general and administrative expenses | $ | 3,782 | $ | 4,461 | $ | 13,919 | $ | 11,229 | ||||||||
GAAP goodwill impairment | $ | — | $ | — | $ | 1,958 | $ | — | ||||||||
— | — | (1,958 | ) | — | ||||||||||||
Non-GAAP goodwill impairment | $ | — | $ | — | $ | — | $ | — | ||||||||
Change in estimated fair value of contingent consideration reconciliation: | ||||||||||||||||
GAAP change in estimated fair value of contingent consideration | $ | 594 | $ | (112 | ) | $ | 309 | $ | (422 | ) | ||||||
Change in estimated fair value of contingent consideration | (594 | ) | 112 | (309 | ) | 422 | ||||||||||
Non-GAAP change in estimated fair value of contingent consideration | $ | — | $ | — | $ | — | $ | — | ||||||||
Interest expense reconciliation: | ||||||||||||||||
GAAP interest expense | $ | (1,685 | ) | $ | (568 | ) | $ | (4,166 | ) | $ | (1,351 | ) | ||||
Amortization of debt discount | 650 | 43 | 1,367 | 127 | ||||||||||||
Non-GAAP interest expense | $ | (1,035 | ) | $ | (525 | ) | $ | (2,799 | ) | $ | (1,224 | ) | ||||
Other expense, net reconciliation: | ||||||||||||||||
GAAP other expense, net | $ | (317 | ) | $ | (133 | ) | $ | (1,191 | ) | $ | (3,334 | ) | ||||
Debt financing related fees and expenses | — | — | 309 | 2,939 | ||||||||||||
Non-GAAP other expense, net | $ | (317 | ) | $ | (133 | ) | $ | (882 | ) | $ | (395 | ) | ||||
Change in estimated fair value of common stock warrant liability and derivative liability reconciliation: | ||||||||||||||||
GAAP change in estimated fair value of common stock warrant liability and derivative liability | $ | (8,599 | ) | $ | 1,386 | $ | (3,404 | ) | $ | (1,779 | ) | |||||
Change in estimated fair value of common stock warrant liability and derivative liability reconciliation: | 8,599 | (1,386 | ) | 3,404 | 1,779 | |||||||||||
Non-GAAP change in estimated fair value of common stock warrant liability and derivative liability | $ | — | $ | — | $ | — | $ | — | ||||||||
Income tax benefit reconciliation: | ||||||||||||||||
GAAP income tax benefit | $ | 178 | $ | 449 | $ | 837 | $ | 888 | ||||||||
Tax effect related to amortization of purchased intangibles | (199 | ) | (427 | ) | (535 | ) | (807 | ) | ||||||||
Non-GAAP income tax benefit | $ | (21 | ) | $ | 22 | $ | 302 | $ | 81 | |||||||
Net loss reconciliation: | ||||||||||||||||
GAAP net loss attributable to | $ | (14,268 | ) | $ | (3,764 | ) | $ | (23,798 | ) | $ | (23,989 | ) | ||||
Acquisition related-amortization of purchased intangibles | 637 | 584 | 1,812 | 1,100 | ||||||||||||
Acquisition related-amortization of inventory valuation adjustment | 250 | 1,273 | 420 | 2,438 | ||||||||||||
Tax effect related to amortization of purchased intangibles | (199 | ) | (427 | ) | (535 | ) | (807 | ) | ||||||||
Acquisition related fees and expenses | — | 458 | — | 4,298 | ||||||||||||
Debt financing related fees and expenses | — | — | 309 | 2,939 | ||||||||||||
Amortization of debt discount | 650 | 43 | 1,367 | 127 | ||||||||||||
Stock-based compensation expenses | 430 | 455 | 1,316 | 1,267 | ||||||||||||
— | — | 1,958 | — | |||||||||||||
Change in estimated fair value of contingent consideration | 594 | (112 | ) | 309 | (422 | ) | ||||||||||
Change in estimated fair value of common stock warrant liability and derivative liability | 8,599 | (1,386 | ) | 3,404 | 1,779 | |||||||||||
Non-GAAP net loss | $ | (3,307 | ) | $ | (2,876 | ) | $ | (13,438 | ) | $ | (11,270 | ) | ||||
Basic net loss per share reconciliation: | ||||||||||||||||
GAAP basic and diluted net loss per share attributable to | $ | (0.63 | ) | $ | (0.20 | ) | $ | (1.09 | ) | $ | (1.61 | ) | ||||
Acquisition related-amortization of purchased intangibles | 0.03 | 0.03 | 0.08 | 0.07 | ||||||||||||
Acquisition related-amortization of inventory valuation adjustment | 0.01 | 0.07 | 0.02 | 0.16 | ||||||||||||
Tax effect related to amortization purchased intangibles | (0.01 | ) | (0.02 | ) | (0.02 | ) | (0.05 | ) | ||||||||
Acquisition related fees and expenses | - | 0.02 | - | 0.29 | ||||||||||||
Debt financing related fees and expenses | - | - | 0.01 | 0.20 | ||||||||||||
Amortization of debt discount | 0.03 | 0.00 | 0.06 | 0.01 | ||||||||||||
Stock-based compensation expenses | 0.02 | 0.02 | 0.06 | 0.09 | ||||||||||||
- | - | 0.09 | - | |||||||||||||
Change in estimated fair value of contingent consideration | 0.03 | (0.01 | ) | 0.01 | (0.03 | ) | ||||||||||
Change in estimated fair value of common stock warrant liability and derivative liability | 0.38 | (0.07 | ) | 0.16 | 0.12 | |||||||||||
Non-GAAP basic net loss per share attributable to | $ | (0.15 | ) | $ | (0.15 | ) | $ | (0.62 | ) | $ | (0.76 | ) | ||||
Non-GAAP diluted net loss per share attributable to | $ | (0.15 | ) | $ | (0.15 | ) | $ | (0.62 | ) | $ | (0.76 | ) | ||||
Non-GAAP adjustment summary: | ||||||||||||||||
Cost of testing | $ | 38 | $ | 38 | $ | 157 | $ | 105 | ||||||||
Cost of product | 633 | 1,616 | 1,513 | 3,084 | ||||||||||||
Research and development | 104 | 47 | 279 | 118 | ||||||||||||
Sales and marketing | 286 | 350 | 846 | 775 | ||||||||||||
General and administrative | 256 | 719 | 753 | 5,021 | ||||||||||||
— | — | 1,958 | — | |||||||||||||
Change in estimated fair value of contingent consideration | 594 | (112 | ) | 309 | (422 | ) | ||||||||||
Interest expense | 650 | 43 | 1,367 | 127 | ||||||||||||
Other expense, net | — | — | 309 | 2,939 | ||||||||||||
Change in estimated fair value of common stock warrant liability and derivative liability | 8,599 | (1,386 | ) | 3,404 | 1,779 | |||||||||||
Tax effect related to amortization of purchased intangibles | (199 | ) | (427 | ) | (535 | ) | (807 | ) | ||||||||
Total Non-GAAP adjustment summary: | $ | 10,961 | $ | 888 | $ | 10,360 | $ | 12,719 | ||||||||
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