CareDx Reports Third Quarter 2020 Results

SOUTH SAN FRANCISCO, Calif., Oct. 29, 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 September 30, 2020.

Third Quarter 2020 and Recent Highlights:

  • Achieved total revenue of $53.4 million for the three months ended September 30, 2020, increasing 58% year-over-year
     
  • Provided over 21,800 AlloSure Kidney and AlloMap Heart patient results
     
  • Received final positive Medicare coverage decision for AlloSure Heart
     
  • Announced publication of pivotal AlloSure Lung data

“Our team continues to deliver the winning formula for CareDx. Beginning with a decision to drive our initiatives with a singular focus on transplantation, we continue to execute on our objectives and achieve tremendous results as we march forward with our mission to improve transplant patient care,” said Peter Maag, CareDx Chairman and Chief Executive Officer. “We truly have an imminent opportunity to make our solutions be the standard of care for transplanted organ surveillance, and our efforts are centered on making this a reality.”

Third Quarter 2020 Financial Results

Revenue for the three months ended September 30, 2020 was $53.4 million, compared with $33.8 million in the third quarter of 2019. Testing services revenue for the third quarter was $45.5 million, compared with $28.2 million in the same period of 2019. Product revenue in the three months ended September 30, 2020 was $5.4 million, compared to $4.2 million in the same period of 2019. Digital and other revenue for the third quarter 2020 was $2.5 million, compared to $1.4 million in the same period of 2019.

For the third quarter of 2020, the net loss was $2.8 million compared to a net loss of $1.8 million in the same period of 2019. Diluted net loss per share was $0.06 in the third quarter of 2020, compared to a diluted net loss per share of $0.04 in the third quarter of 2019.

Non-GAAP net income was $5.1 million in the third quarter of 2020 compared to $0.9 million non-GAAP net income in the third quarter of 2019. Diluted non-GAAP net income per share was $0.10 in the third quarter of 2020, compared to a diluted non-GAAP net income per share of $0.02 in the third quarter of 2019.

Adjusted EBITDA for the third quarter of 2020 was a gain of $5.6 million, compared to an adjusted EBITDA gain of $0.8 million in the third quarter of 2019.

Cash and cash equivalents were $213.8 million as of September 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 third quarter, due to the continued uncertainties with respect to the COVID-19 pandemic, CareDx will not be providing revenue 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 income/(expense), income tax benefit, 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 September 30,   Nine Months Ended September 30,
  2020   2019   2020   2019
Revenue:              
Testing services revenue $ 45,529     $ 28,226     $ 113,264     $ 75,421  
Product revenue 5,383     4,200     13,369     13,226  
Digital and other revenue 2,457     1,385     6,917     2,600  
Total revenue 53,369     33,811     133,550     91,247  
Operating expenses:              
Cost of testing services 11,900     7,421     30,631     21,928  
Cost of product 3,705     2,986     9,635     9,161  
Cost of digital and other 1,210     1,087     3,966     1,650  
Research and development 12,474     8,521     35,616     21,765  
Sales and marketing 13,870     11,058     37,727     28,627  
General and administrative 13,117     9,485     35,436     27,103  
Total operating expenses 56,276     40,558     153,011     110,234  
Loss from operations (2,907 )   (6,747 )   (19,461 )   (18,987 )
Other income (expense):              
Interest income, net 29     37     146     679  
Change in estimated fair value of common stock warrant liability 79     4,346     (990 )   (14 )
CARES Act Provider Relief Fund         4,813      
Other expense, net (254 )   (398 )   (572 )   (644 )
Total other (expense) income (146 )   3,985     3,397     21  
Loss before income taxes (3,053 )   (2,762 )   (16,064 )   (18,966 )
Income tax benefit 235     949     865     1,775  
Net loss $ (2,818 )   $ (1,813 )   $ (15,199 )   $ (17,191 )
Net loss per share:              
Basic $ (0.06 )   $ (0.04 )   $ (0.33 )   $ (0.41 )
Diluted $ (0.06 )   $ (0.04 )   $ (0.33 )   $ (0.41 )
Weighted-average shares used to compute net loss per share:              
Basic 49,010,680     42,393,550     45,526,810     42,048,647  
Diluted 49,010,680     42,393,550     45,526,810     42,048,647  
 

 

 

CareDx, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)

  September 30, 2020   December 31, 2019
Assets      
Current assets:      
Cash and cash equivalents $ 213,798     $ 38,223  
Accounts receivable 30,610     24,057  
Inventory 9,906     6,014  
Prepaid and other current assets 4,345     3,628  
Total current assets 258,659     71,922  
Property and equipment, net 10,144     4,430  
Operating leases right-of-use assets 15,802     4,730  
Intangible assets, net 43,830     45,541  
Goodwill 23,857     23,857  
Restricted cash 260     256  
Other assets 1,000     1,000  
Total assets $ 353,552     $ 151,736  
Liabilities and stockholders’ equity      
Current liabilities:      
Accounts payable $ 9,519     $ 5,506  
Accrued compensation 13,791     12,484  
Accrued and other liabilities 18,617     16,838  
Deferred revenue - CMS advance payment 20,496      
Total current liabilities 62,423     34,828  
Deferred tax liability 1,187     1,973  
Common stock warrant liability 532     6,607  
Deferred payments for intangible assets 3,480     5,207  
Operating lease liability, less current portion 16,539     2,370  
Other liabilities 747     1,751  
Total liabilities 84,908     52,736  
Commitments and contingencies      
Stockholders’ equity:      
Common stock 47     42  
Additional paid-in capital 621,961     437,976  
Accumulated other comprehensive loss (4,352 )   (5,205 )
Accumulated deficit (349,012 )   (333,813 )
Total stockholders’ equity 268,644     99,000  
Total liabilities and stockholders’ equity $ 353,552     $ 151,736  
 

 

 

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

  Three Months Ended September 30,   Nine Months Ended September 30,
  2020   2019   2020   2019
Cost of testing services reconciliation:              
GAAP cost of testing services $ 11,900     $ 7,421     $ 30,631     $ 21,928  
Stock-based compensation expense (431 )   (294 )   (1,101 )   (1,423 )
Acquisition related-amortization of purchased intangibles (329 )   (156 )   (987 )   (408 )
Non-GAAP cost of testing services $ 11,140     $ 6,971     $ 28,543     $ 20,097  
Cost of product reconciliation:              
GAAP cost of product $ 3,705     $ 2,986     $ 9,635     $ 9,161  
Stock-based compensation expense (97 )   (77 )   (289 )   (192 )
Acquisition related-amortization of purchased intangibles (445 )   (346 )   (1,210 )   (1,067 )
Non-GAAP cost of product $ 3,163     $ 2,563     $ 8,136     $ 7,902  
Cost of digital and other reconciliation:              
GAAP cost of digital and other $ 1,210     $ 1,087     $ 3,966     $ 1,650  
Stock-based compensation expense (124 )   (54 )   (338 )   (90 )
Acquisition related-amortization of purchased intangibles (86 )   (74 )   (259 )   (131 )
Non-GAAP cost of digital and other $ 1,000     $ 959     $ 3,369     $ 1,429  
Research and development expenses reconciliation:              
GAAP research and development expenses $ 12,474     $ 8,521     $ 35,616     $ 21,765  
Stock-based compensation expense (1,224 )   (954 )   (3,490 )   (3,227 )
Non-GAAP research and development expenses $ 11,250     $ 7,567     $ 32,126     $ 18,538  
Sales and marketing expenses reconciliation:              
GAAP sales and marketing expenses $ 13,870     $ 11,058     $ 37,727     $ 28,627  
Stock-based compensation expense (1,623 )   (1,125 )   (4,175 )   (2,796 )
Acquisition related-amortization of purchased intangibles (376 )   (336 )   (1,089 )   (882 )
Impairment             (150 )
Non-GAAP sales and marketing expenses $ 11,871     $ 9,597     $ 32,463     $ 24,799  
General and administrative expenses reconciliation:              
GAAP general and administrative expenses $ 13,117     $ 9,485     $ 35,436     $ 27,103  
Stock-based compensation expense (3,249 )   (3,460 )   (8,031 )   (9,282 )
Change in estimated fair value of contingent consideration (35 )       (301 )    
Acquisition related fees and expenses     (86 )       (654 )
Non-GAAP general and administrative expenses $ 9,833     $ 5,939     $ 27,104     $ 17,167  
Total other income (expense) reconciliation:              
GAAP other income (expense), net $ (146 )   $ 3,985     $ 3,397     $ 21  
Change in estimated fair value of common stock warrant liability (79 )   (4,346 )   990     14  
Accretion of liability 80     173     272     173  
Non-GAAP other income (expense), net $ (145 )   $ (188 )   $ 4,659     $ 208  
Income tax benefit reconciliation:              
GAAP income tax benefit $ 235     $ 949     $ 865     $ 1,775  
Tax effect related to amortization of purchased intangibles (130 )   (119 )   (369 )   (364 )
Non-GAAP income tax benefit $ 105     $ 830     $ 496     $ 1,411  
 

 

 

CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands, except share and per share data)

  Three Months Ended September 30,   Nine Months Ended September 30,
  2020   2019   2020   2019
               
Net loss $ (2,818 )   $ (1,813 )   $ (15,199 )   $ (17,191 )
Stock-based compensation expense 6,748     5,964     17,424     17,010  
Acquisition related-amortization of purchased intangibles 1,236     912     3,545     2,488  
Acquisition related fees and expenses     86         654  
Change in estimated fair value of contingent consideration 35         301      
Change in estimated fair value of common stock warrant liability (79 )   (4,346 )   990     14  
Accretion of liability 80     173     272     173  
Tax effect related to amortization of purchased intangibles (130 )   (119 )   (369 )   (364 )
Impairment             150  
Non-GAAP net income $ 5,072     $ 857     $ 6,964     $ 2,934  
               
GAAP basic and diluted net loss per share $ (0.06 )   $ (0.04 )   $ (0.33 )   $ (0.41 )
               
Non-GAAP basic net income per share $ 0.10     $ 0.02     $ 0.15     $ 0.07  
Non-GAAP diluted net income per share $ 0.10     $ 0.02     $ 0.15     $ 0.07  
               
Shares used in computing non-GAAP basic net income per share 49,010,680     42,393,550     45,526,810     42,048,647  
Shares used in computing non-GAAP diluted net income per share 50,446,939     43,775,682     46,571,527     44,111,648  
 

 

 

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

  Three Months Ended September 30,   Nine Months Ended September 30,
  2020   2019   2020   2019
               
Non-GAAP net income $ 5,072     $ 857     $ 6,964     $ 2,934  
Interest income (29 )   (37 )   (146 )   (679 )
Income tax benefit (105 )   (830 )   (496 )   (1,411 )
Depreciation expense 486     395     1,235     1,199  
CARES Act Provider Relief Fund         (4,813 )    
Other expense, net 174     398     300     644  
Adjusted EBITDA $ 5,598     $ 783     $ 3,044     $ 2,687  

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