cdna-20200804
0001217234FALSE00012172342020-08-042020-08-04

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 4, 2020
 
CAREDX, INC.
(Exact Name of Registrant as Specified in its Charter)
 
Delaware 001-36536 94-3316839
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
1 Tower Place, 9th Floor
South San Francisco, California 94080
(Address of Principal Executive Offices) (Zip Code)
(415) 287-2300
Registrant’s telephone number, including area code
N/A
(Former Name, or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 
 Securities registered pursuant to Section 12(b) of the Exchange Act:
(Title of each class)(Trading Symbol)(Name of exchange on which registered)
Common Stock, $0.001 Par ValueCDNAThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 2.02 Results of Operations and Financial Condition.
On August 4, 2020, CareDx, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2020. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in this Item 2.02, including the press release attached hereto as Exhibit 99.1, is intended to be furnished under Item 2.02 and Item 9.01 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
99.1 



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: August 4, 2020  
CAREDX, INC.

  By: /s/ Michael Bell
   Michael Bell
   Chief Financial Officer


Document
Exhibit 99.1
https://cdn.kscope.io/5b8a76d45dce4bea5a0e91fa6042f5a8-a190801cdnaq2fy19earni.gif

CareDx Reports Second Quarter 2020 Results

Patient-focused during COVID-19 pandemic and succeeding
SOUTH SAN FRANCISCO, CA, August 4, 2020 -- 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,
2020201920202019
Revenue:
Testing services revenue$36,293  $25,677  $67,735  $47,195  
Product revenue3,291  4,593  7,986  9,026  
Digital and other revenue2,217  1,184  4,460  1,215  
Total revenue41,801  31,454  80,181  57,436  
Cost of revenue15,025  11,512  27,417  21,245  
Gross profit26,776  19,942  52,764  36,191  
Operating expenses:
Research and development13,129  7,630  23,142  13,244  
Sales and marketing12,134  10,644  23,857  17,569  
General and administrative12,316  8,512  22,319  17,618  
Total operating expenses37,579  26,786  69,318  48,431  
Loss from operations(10,803) (6,844) (16,554) (12,240) 
Other income (expense):
Interest income, net21  300  117  642  
    Change in estimated fair value of common stock warrant liability
(664) (1,351) (1,069) (4,360) 
CARES Act Provider Relief Fund4,813  —  4,813  —  
Other expense, net(255) (172) (318) (246) 
Total other income (expense)3,915  (1,223) 3,543  (3,964) 
Loss before income taxes(6,888) (8,067) (13,011) (16,204) 
Income tax benefit330  220  630  826  
Net loss$(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:
Basic44,708,037  42,132,396  43,765,732  41,873,337  
Diluted44,708,037  42,132,396  43,765,732  41,873,337  





CareDx, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
June 30, 2020December 31, 2019
Assets
Current assets:
Cash and cash equivalents$211,409  $38,223  
Accounts receivable27,111  24,057  
Inventory8,741  6,014  
Prepaid and other current assets4,286  3,628  
Total current assets251,547  71,922  
Property and equipment, net7,313  4,430  
Operating leases right-of-use assets16,416  4,730  
Intangible assets, net44,356  45,541  
Goodwill23,857  23,857  
Restricted cash253  256  
Other assets1,000  1,000  
Total assets$344,742  $151,736  
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$8,675  $5,506  
Accrued compensation11,089  12,484  
Accrued and other liabilities16,682  16,838  
Deferred revenue - CMS advance payment20,496  —  
Total current liabilities56,942  34,828  
Deferred tax liability1,313  1,973  
Common stock warrant liability1,681  6,607  
Deferred payments for intangible assets5,400  5,207  
Operating lease liability, less current portion17,025  2,370  
Other liabilities1,614  1,751  
Total liabilities83,975  52,736  
Commitments and contingencies
Stockholders’ equity:
Common stock
47  42  
Additional paid-in capital612,228  437,976  
Accumulated other comprehensive loss(5,314) (5,205) 
Accumulated deficit(346,194) (333,813) 
Total stockholders’ equity260,767  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,
2020201920202019
Net loss per share$(6,558) $(7,847) $(12,381) $(15,378) 
Stock-based compensation expense6,417  4,992  10,676  11,045  
Acquisition related-amortization of purchased intangibles1,160  822  2,309  1,576  
Acquisition related fees and expenses—  568  —  568  
Change in estimated fair value of contingent consideration76  —  266  —  
Change in estimated fair value of common stock warrant liability664  1,351  1,069  4,360  
Accretion of liability88  —  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 share44,708,037  42,132,396  43,765,732  41,873,337  
Shares used in computing non-GAAP diluted net income (loss) per share45,882,569  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,
2020201920202019
Non-GAAP net income (loss)$1,728  $(86) $1,892  $2,076  
Interest expense(21) (300) (117) (642) 
Income tax benefit(211) (98) (391) (581) 
Depreciation expense381  397  748  804  
CARES Act Provider Relief Fund(4,813) —  (4,813) —  
Other expense, net167  172  126  246  
Adjusted EBITDA$(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 revenueCost of revenueResearch and developmentSales and marketingGeneral and administrativeTotal other incomeIncome 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 liability664  664  
Accretion of liability88  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 revenueCost of revenueResearch and developmentSales and marketingGeneral and administrativeTotal other incomeIncome 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 liability1,069  1,069  
Accretion of liability192  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 revenueCost of revenueResearch and developmentSales and marketingGeneral and administrativeTotal 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 liability1,351  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 revenueCost of revenueResearch and developmentSales and marketingGeneral and administrativeTotal 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 liability4,360  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