CareDx Reports Second Quarter Results
August 09 2018 - 4:01PM
AlloSure launch momentum drives 48%
revenue growth
CareDx, Inc. (NASDAQ: CDNA), a molecular diagnostics company
focused on the discovery, development and commercialization of
clinically differentiated, high-value diagnostic solutions for
transplant patients, today reported financial results for the
second quarter ended June 30, 2018.
Recent highlights:
- Accelerated AlloSure penetration in key kidney transplant
centers
- Less than 9 months into AlloSure launch, CareDx supports
approximately 1% of the U.S. living kidney transplant patient
population
- As of June 30, 2018, 76 U.S. transplant centers have provided
AlloSure testing
- Continued progress in AlloSure Registry (K-OAR) enrollment,
with 27 centers initiated as of June 30, 2018 and 237 K-OAR
patients enrolled
- Notable presence at the 2018 American Transplant Congress
including a standing room only symposium on clinical experiences
with AlloSure
- Achieved total revenue of $17.8 million for the second quarter
of 2018, increasing 48% year-over-year
- Testing services revenue of $14.0 million, with 2,300 AlloSure
and 4,132 AlloMap patient results provided
- Product revenue of $3.6 million.
- Broadened testing services and product offerings
- Entered into partnership with Illumina to develop and sell Next
Generation Sequencing transplant products
- Launched HeartCare, a comprehensive diagnostic solution for
surveillance of heart transplant patients, combining AlloMap with
AlloSure-Heart
- Validated Olerup QTYPE on multiple platforms and received CE
mark certification
- Announced the addition of Amy Abernethy, MD, PhD, Flatiron
Health’s Chief Medical Officer and Chief Science Officer, to our
Board of Directors.
“The CareDx team delivered a record quarter, including 48%
year-over-year revenue growth. The rapid clinical adoption of
AlloSure demonstrates the medical need and the potential for better
surveillance in this patient population. We are executing well on
our strategy to focus on peer-reviewed published clinical and
analytical validation data and Medicare reimbursement,” said Peter
Maag, CareDx President and Chief Executive Officer. “Our sole focus
on transplantation sets us apart and creates a genomic informatics
platform for future innovations and partnerships in transplant
patient care.”
Second Quarter 2018 Financial Results
Revenue for the three months ended June 30, 2018 was $17.8
million, an increase of 48% compared with $12.0 million in the
second quarter of 2017. Testing services revenue for the
second quarter was $14.0 million compared with $8.4 million in the
same period of 2017. Product revenue in the three months ended June
30, 2018 was $3.6 million, compared to $3.4 million in the same
period of 2017.
For the second quarter of 2018, the net loss was $14.1 million
compared to a net loss of $4.0 million in the same period of 2017.
Basic and diluted net loss per share was $0.40 in the second
quarter of 2018, compared to basic and diluted net loss per share
of $0.19 in the second quarter of 2017.
Non-GAAP net loss was $1.3 million in the second quarter of 2018
compared to $3.6 million in the second quarter of 2017. Basic and
diluted non-GAAP net loss per share was $0.04 in the second quarter
of 2018, compared to $0.17 in the second quarter of 2017.
Adjusted EBITDA for the second quarter of 2018 was a loss of
$0.8 million, compared to a loss of $2.1 million in the second
quarter of 2017.
Net cash used in operating activities in the second quarter of
2018 was $1.9 million compared with $3.2 million in the comparative
2017 period. Cash and cash equivalents were $16.2 million as of
June 30, 2018.
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.
2018 Guidance For the full year 2018, CareDx
expects revenue to be in the range of $68 million to $70 million
(previously $64 million to $66 million), with adjusted EBITDA
profitability expected during the current half of the year.
About CareDx CareDx,
Inc., headquartered in Brisbane, California, is a molecular
diagnostics company focused on the discovery, development and
commercialization of clinically differentiated, high-value
diagnostic solutions for transplant recipients. CareDx offers
products along the pre- and post-transplant testing continuum.
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 2018 revenue, timing for adjusted
EBITDA profitability and achievement of our financial and
operational goals and 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, 2017 filed by CareDx
with the SEC on March 22, 2018 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 MeasuresCareDx 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 loss,
non-GAAP basic and diluted net loss per share and adjusted
EBITDA. We define non-GAAP net loss and per share results as
the GAAP net 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 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:
CareDx, Inc.Sasha KingChief Commercial
Officer415-287-2393sking@caredx.com
Investor RelationsDavid ClairIntegrated Corporate Relations,
Inc.646-277-1266david.clair@icrinc.com
CareDx, Inc. |
Consolidated Statements of
Operations |
(Unaudited) |
(In thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
Testing
services revenue |
|
$ |
13,997 |
|
|
$ |
8,420 |
|
|
$ |
24,601 |
|
|
$ |
16,322 |
|
Product
revenue |
|
|
3,550 |
|
|
|
3,376 |
|
|
|
6,857 |
|
|
|
7,043 |
|
Collaboration and license revenue |
|
|
276 |
|
|
|
250 |
|
|
|
418 |
|
|
|
265 |
|
Total
revenue |
|
|
17,823 |
|
|
|
12,046 |
|
|
|
31,876 |
|
|
|
23,630 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Cost of
testing services |
|
|
4,568 |
|
|
|
3,011 |
|
|
|
8,680 |
|
|
|
6,068 |
|
Cost of
product |
|
|
2,639 |
|
|
|
2,178 |
|
|
|
4,911 |
|
|
|
4,505 |
|
Research
and development |
|
|
3,496 |
|
|
|
3,118 |
|
|
|
6,864 |
|
|
|
6,401 |
|
Sales and
marketing |
|
|
5,860 |
|
|
|
3,270 |
|
|
|
9,945 |
|
|
|
6,492 |
|
General
and administrative |
|
|
5,596 |
|
|
|
4,132 |
|
|
|
10,903 |
|
|
|
10,634 |
|
Goodwill
impairment |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,958 |
|
Change in
estimated fair value of contingent consideration |
|
|
873 |
|
|
|
(64 |
) |
|
|
1,017 |
|
|
|
(285 |
) |
Total
operating expenses |
|
|
23,032 |
|
|
|
15,645 |
|
|
|
42,320 |
|
|
|
35,773 |
|
Loss
from operations |
|
|
(5,209 |
) |
|
|
(3,599 |
) |
|
|
(10,444 |
) |
|
|
(12,143 |
) |
Interest
expense |
|
|
(424 |
) |
|
|
(1,691 |
) |
|
|
(3,119 |
) |
|
|
(2,481 |
) |
Other
expense, net |
|
|
(42 |
) |
|
|
(188 |
) |
|
|
(2,851 |
) |
|
|
(874 |
) |
Change
in estimated fair value of common stock warrant liability and
derivative liability |
|
|
(8,768 |
) |
|
|
1,067 |
|
|
|
(7,447 |
) |
|
|
5,195 |
|
Loss
before income taxes |
|
|
(14,443 |
) |
|
|
(4,411 |
) |
|
|
(23,861 |
) |
|
|
(10,303 |
) |
Income
tax benefit |
|
|
381 |
|
|
|
376 |
|
|
|
805 |
|
|
|
659 |
|
Net
loss |
|
|
(14,062 |
) |
|
|
(4,035 |
) |
|
|
(23,056 |
) |
|
|
(9,644 |
) |
Net loss
attributable to noncontrolling interest |
|
|
— |
|
|
|
(67 |
) |
|
|
(25 |
) |
|
|
(114 |
) |
Net loss
attributable to CareDx, Inc. |
|
$ |
(14,062 |
) |
|
$ |
(3,968 |
) |
|
$ |
(23,031 |
) |
|
$ |
(9,530 |
) |
|
|
|
|
|
|
|
|
|
Net loss
per share attributable to CareDx, Inc.: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.40 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.71 |
) |
|
$ |
(0.45 |
) |
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
(0.40 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.71 |
) |
|
$ |
(0.45 |
) |
|
|
|
|
|
|
|
|
|
Weighted
average shares used to compute net loss per share attributable
to CareDx, Inc.: |
|
|
|
|
|
|
|
|
Basic |
|
|
35,549,837 |
|
|
|
21,412,480 |
|
|
|
32,599,032 |
|
|
|
21,378,321 |
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
35,549,837 |
|
|
|
21,412,480 |
|
|
|
32,599,032 |
|
|
|
21,378,321 |
|
|
CareDx, Inc. |
Condensed Consolidated Balance
Sheets |
(In thousands) |
|
|
|
|
|
|
|
June 30, 2018 |
|
December 31, 2017 (1) |
|
|
|
|
|
Assets |
|
|
|
|
Current
assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
16,246 |
|
|
$ |
16,895 |
|
Accounts
receivable |
|
|
8,072 |
|
|
|
2,991 |
|
Inventory |
|
|
4,666 |
|
|
|
5,529 |
|
Prepaid
and other assets |
|
|
1,593 |
|
|
|
1,352 |
|
Total
current assets |
|
|
30,577 |
|
|
|
26,767 |
|
Property
and equipment, net |
|
|
2,360 |
|
|
|
2,075 |
|
Intangible assets, net |
|
|
34,760 |
|
|
|
33,139 |
|
Goodwill |
|
|
12,005 |
|
|
|
12,005 |
|
Restricted cash |
|
|
177 |
|
|
|
9,579 |
|
Total
assets |
|
$ |
79,879 |
|
|
$ |
83,565 |
|
|
|
|
|
|
Liabilities and stockholders’ (deficit)
equity |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
3,480 |
|
|
$ |
3,391 |
|
Accrued
payroll liabilities |
|
|
5,576 |
|
|
|
5,013 |
|
Accrued
and other liabilities |
|
|
4,703 |
|
|
|
3,735 |
|
Deferred
revenue |
|
|
39 |
|
|
|
39 |
|
Deferred
purchase consideration |
|
|
378 |
|
|
|
407 |
|
Derivative liability |
|
|
- |
|
|
|
14,600 |
|
Current
debt |
|
|
- |
|
|
|
15,721 |
|
Total
current liabilities |
|
|
14,176 |
|
|
|
42,906 |
|
Deferred
rent, net of current portion |
|
|
686 |
|
|
|
913 |
|
Deferred
revenue, net of current portion |
|
|
711 |
|
|
|
730 |
|
Deferred
tax liability |
|
|
3,693 |
|
|
|
4,933 |
|
Long-term debt, net of current portion |
|
|
13,337 |
|
|
|
18,338 |
|
Contingent consideration |
|
|
- |
|
|
|
1,672 |
|
Common
stock warrant liability |
|
|
16,800 |
|
|
|
18,712 |
|
Other liabilities |
|
|
1,524 |
|
|
|
1,315 |
|
Total
liabilities |
|
|
50,927 |
|
|
|
89,519 |
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
Common
stock |
|
|
36 |
|
|
|
29 |
|
Additional paid-in capital |
|
|
321,144 |
|
|
|
264,204 |
|
Accumulated other comprehensive loss |
|
|
(4,108 |
) |
|
|
(2,345 |
) |
Accumulated deficit |
|
|
(288,120 |
) |
|
|
(268,022 |
) |
Total CareDx, Inc.
stockholders' equity (deficit) |
|
|
28,952 |
|
|
|
(6,134 |
) |
Noncontrolling interest |
|
|
- |
|
|
|
180 |
|
Total
stockholders' equity (deficit) |
|
|
28,952 |
|
|
|
(5,954 |
) |
Total
liabilities and stockholders’ equity |
|
$ |
79,879 |
|
|
$ |
83,565 |
|
|
|
|
|
|
(1)
The condensed balance sheets at December 31, 2017 have been derived
from audited financial statements. |
|
|
|
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, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
GAAP net loss |
|
$ |
(14,062 |
) |
|
$ |
(3,968 |
) |
|
$ |
(23,031 |
) |
|
$ |
(9,530 |
) |
Stock-based compensation expense |
|
|
2,512 |
|
|
|
495 |
|
|
|
3,217 |
|
|
|
886 |
|
Acquisition related-amortization of purchased intangibles |
|
|
734 |
|
|
|
587 |
|
|
|
1,498 |
|
|
|
1,175 |
|
Change in
estimated fair value of contingent consideration |
|
|
873 |
|
|
|
(64 |
) |
|
|
1,017 |
|
|
|
(285 |
) |
Amortization of debt discount |
|
|
55 |
|
|
|
606 |
|
|
|
1,978 |
|
|
|
717 |
|
Debt
financing related fees and expenses |
|
|
- |
|
|
|
(125 |
) |
|
|
- |
|
|
|
309 |
|
Loss on
conversion from debt to equity |
|
|
- |
|
|
|
- |
|
|
|
2,806 |
|
|
|
- |
|
Change in
estimated fair value of common stock warrant and derivative
liabilities |
|
|
8,768 |
|
|
|
(1,067 |
) |
|
|
7,447 |
|
|
|
(5,195 |
) |
Tax
effect related to amortization of purchased intangibles |
|
|
(190 |
) |
|
|
(181 |
) |
|
|
(422 |
) |
|
|
(336 |
) |
Acquisition related-amortization of inventory valuation
adjustment |
|
|
25 |
|
|
|
138 |
|
|
|
189 |
|
|
|
170 |
|
Goodwill
impairment |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,958 |
|
Non-GAAP net loss |
|
$ |
(1,285 |
) |
|
$ |
(3,579 |
) |
|
$ |
(5,301 |
) |
|
$ |
(10,131 |
) |
|
|
|
|
|
|
|
|
|
GAAP basic and diluted
net loss per share attributable to CareDx |
|
$ |
(0.40 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.71 |
) |
|
$ |
(0.45 |
) |
|
|
|
|
|
|
|
|
|
Non-GAAP basic and
diluted net loss per share attributable to CareDx |
|
$ |
(0.04 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.47 |
) |
|
|
|
|
|
|
|
|
|
Shares used in
computing basic and diluted not losses per share |
|
|
35,549,837 |
|
|
|
21,412,480 |
|
|
|
32,599,032 |
|
|
|
21,378,321 |
|
|
|
|
|
|
|
|
|
|
CareDx, Inc. |
Reconciliation of Non-GAAP to Adjusted EBITDA
Financial Measures |
(Unaudited) |
(In thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
Non-GAAP net loss |
|
$ |
(1,285 |
) |
|
$ |
(3,579 |
) |
|
$ |
(5,301 |
) |
|
$ |
(10,131 |
) |
Interest
expense |
|
|
369 |
|
|
|
1,085 |
|
|
|
1,141 |
|
|
|
1,764 |
|
Income
tax benefit |
|
|
(191 |
) |
|
|
(195 |
) |
|
|
(383 |
) |
|
|
(323 |
) |
Depreciation expense |
|
|
248 |
|
|
|
300 |
|
|
|
526 |
|
|
|
646 |
|
Other
expense |
|
|
42 |
|
|
|
313 |
|
|
|
45 |
|
|
|
565 |
|
Net loss
attributable to noncontrolling interest |
|
|
- |
|
|
|
(67 |
) |
|
|
(25 |
) |
|
|
(114 |
) |
Adjusted EBITDA |
|
$ |
(817 |
) |
|
$ |
(2,143 |
) |
|
$ |
(3,997 |
) |
|
$ |
(7,593 |
) |
|
|
|
|
|
|
|
|
|
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