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CareDx Reports First Quarter 2019 Results

AlloSure momentum drives 85% first quarter revenue growth

/EIN News/ -- BRISBANE, Calif., May 08, 2019 (GLOBE NEWSWIRE) -- 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 quarter ended March 31, 2019.

Recent highlights:

  • Accelerated leadership position in transplantation diagnostics in the first quarter of 2019
    - Provided 5,710 AlloSure patient results for approximately 4,300 kidney transplant patients
    - Continued progress in AlloSure Registry (K-OAR) enrollment, with 50 centers initiated and 1,006 patients enrolled as of March 31, 2019
    - Provided 4,280 AlloMap patient results, increasing 11% year-over-year
  • Achieved total revenue of $26.0 million for the first quarter of 2019, increasing 85% year-over-year
    - Testing services revenue of $21.5 million, growth of 103% compared to prior year period
    - Product revenue of $4.4 million, increase of 34% year-over-year
  • Generated GAAP net loss of $7.5 million, adjusted net income of $2.2 million and positive adjusted EBITDA of $1.8 million
  • Acquired OTTR Complete Transplant Management, enabling direct integration into transplant center EMR systems

“The CareDx team continues to execute on our plan, delivering another consecutive record quarter, with revenue increasing 85% year-over-year, driving positive adjusted EBITDA for the third consecutive quarter. We also recently acquired OTTR, the leading provider of organ transplant patient tracking software, marking the beginning of CareDx’s leadership in transplant artificial intelligence and adding another key component to our personalized transplantation medicine platform,” said Peter Maag, CareDx Chief Executive Officer. “I am very pleased with the strong start to 2019, with CareDx poised to deliver another record year and build on our position as the leading provider of genomics-based information in transplantation.”

First Quarter 2019 Financial Results 

Revenue for the three months ended March 31, 2019 was $26.0 million, compared with $14.1 million in the first quarter of 2018. Testing services revenue for the first quarter was $21.5 million compared with $10.6 million in the same period of 2018. Product revenue in the three months ended March 31, 2019 was $4.4 million, compared to $3.3 million in the same period of 2018.

For the first quarter of 2019, the net loss was $7.5 million compared to a net loss of $9.0 million in the same period of 2018. The first quarter 2019 net loss included $6.1 million of stock-based compensation expense and a $3.0 million expense from the change in estimated fair value of common stock warrant liabilities. Basic and diluted net loss per share was $0.18 in the first quarter of 2019, compared to basic and diluted net loss per share of $0.30 in the first quarter of 2018. 

Non-GAAP net income was $2.2 million in the first quarter of 2019 compared to a $4.0 million non-GAAP net loss in the first quarter of 2018. Basic and diluted non-GAAP net income per share was $0.05 in the first quarter of 2019, compared to a non-GAAP net loss per share of $0.14 in the first quarter of 2018.

Adjusted EBITDA for the first quarter of 2018 was a gain of $1.8 million, compared to an adjusted EBITDA loss of $3.2 million in the first quarter of 2018.

Cash and cash equivalents were $57.4 million as of March 31, 2019.

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.

2019 Guidance
For the full year 2019, CareDx expects revenue to be in the range of $113 million to $115 million (previously $105 million to $107 million).

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, 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 Company’s fiscal 2019 revenue, 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, 2018 filed by CareDx with the SEC on March 6, 2019 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 net loss, non-GAAP basic and diluted net income and net loss per share and adjusted EBITDA. We define non-GAAP net income and non-GAAP net loss and per share results as the GAAP net income or 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 income/(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:

Investor Relations
David Clair
Westwicke Partners
646-277-1266
david.clair@icrinc.com


CareDx, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share data)
         
    Three Months Ended March 31,
    2019   2018
         
Revenue:        
Testing services revenue   $ 21,518     $ 10,604  
Product revenue     4,433       3,307  
License and other revenue     31       142  
Total revenue     25,982       14,053  
Operating expenses:        
Cost of testing services     6,838       4,112  
Cost of product     2,895       2,272  
Research and development     5,614       3,368  
Sales and marketing     6,925       4,085  
General and administrative     9,106       5,307  
Change in estimated fair value of contingent consideration     -       144  
Total operating expenses     31,378       19,288  
Loss from operations     (5,396 )     (5,235 )
Other income (expense):        
Interest income (expense), net     342       (2,695 )
Debt extinguishment expenses     -       (2,806 )
Change in estimated fair value of common stock warrant liability and derivative liability     (3,009 )     1,321  
Other expense, net     (74 )     (3 )
Total other income (expense)     (2,741 )     (4,183 )
Loss before income taxes     (8,137 )     (9,418 )
Income tax benefit     606       424  
Net loss     (7,531 )     (8,994 )
Net loss attributable to noncontrolling interest     -       (25 )
Net loss attributable to CareDx, Inc.     (7,531 )     (8,969 )
Net loss per share attributable to CareDx, Inc.:        
Basic   $ (0.18 )   $ (0.30 )
         
Diluted   $ (0.18 )   $ (0.30 )
         
Weighted-average shares used to compute net loss per share attributable to CareDx, Inc.:        
Basic     41,611,399       29,615,441  
         
Diluted     41,611,399       29,615,441  
         

 

CareDx, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
         
    March 31, 2019   December 31, 2018
         
Assets        
Current assets:        
Cash and cash equivalents   $ 57,432     $ 64,616  
Accounts receivable     12,525       9,760  
Inventory     5,177       4,943  
Prepaid and other current assets     2,444       1,795  
Total current assets     77,578       81,114  
Property and equipment, net     3,820       4,134  
Operating leases right-of-use assets     2,506       -  
Intangible assets, net     31,759       33,252  
Goodwill     12,005       12,005  
Restricted cash     191       192  
Total assets   $ 127,859     $ 130,697  
         
Liabilities and stockholders’ equity        
Current liabilities:        
Accounts payable   $ 3,859     $ 4,711  
Accrued compensation     4,860       9,156  
Accrued and other liabilities     7,651       5,637  
Total current liabilities     16,370       19,504  
Deferred tax liability     2,571       2,968  
Common stock warrant liability     10,521       10,003  
Other liabilities     2,775       2,294  
Total liabilities     32,237       34,769  
         
Stockholders’ equity:        
Common stock     41       41  
Additional paid-in capital     419,959       412,010  
Accumulated other comprehensive loss     (5,002 )     (4,278 )
Accumulated deficit     (319,376 )     (311,845 )
Total stockholders' equity     95,622       95,928  
Total liabilities and stockholders’ equity   $ 127,859     $ 130,697  
         

 

CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands, except share and per share data)
         
    Three Months Ended March 31,
    2019   2018
         
Net loss attributable to CareDx, Inc.   $ (7,531 )   $ (8,969 )
Stock-based compensation expense     6,053       706  
Acquisition-related amortization of purchased intangibles     736       764  
Change in estimated fair value of contingent consideration     -       144  
Amortization of debt discount     -       1,923  
Debt extinguishment expenses     -       2,806  
Change in estimated fair value of common stock warrant liability and derivative liability     3,009       (1,321 )
Tax effect related to amortization of purchased intangibles     (123 )     (232 )
Acquisition-related amortization of inventory valuation adjustment     18       164  
Non-GAAP net income (loss)   $ 2,162     $ (4,015 )
         
GAAP basic and diluted net loss per share attributable to CareDx   $ (0.18 )   $ (0.30 )
         
Non-GAAP basic net income (loss) per share attributable to CareDx   $ 0.05     $ (0.14 )
Non-GAAP diluted net income (loss) per share attributable to CareDx   $ 0.05     $ (0.14 )
         
Shares used in computing non-GAAP basic net income (loss) per share     41,611,399       29,615,441  
         
Shares used in computing non-GAAP diluted net income (loss) per share     43,975,282       29,615,441  
         

 

CareDx, Inc.
Reconciliation of Non-GAAP to Adjusted EBITDA Financial Measures
(Unaudited)
(In thousands)
         
    Three Months Ended March 31,
    2019
  2018
         
Non-GAAP net income (loss)   $ 2,162     $ (4,015 )
Interest (income) expense     (342 )     772  
Income tax benefit     (483 )     (192 )
Depreciation expense     407       278  
Other expense, net     74       3  
Net loss attributable to noncontrolling interest     -       (25 )
Adjusted EBITDA   $ 1,818     $ (3,179 )
         

 

CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands)
                                           
  Three Months Ended March 31, 2019
  Total revenue   Cost of testing services   Cost of product    Research and development   Sales and marketing   General and administrative   Change in
estimated fair value
of contingent consideration
  Total other income (expense)   Income tax benefit   Net loss attributable to noncontrolling interest   Net loss attributable to CareDx, Inc.
GAAP $ 25,982   $ 6,838     $ 2,895     $ 5,614     $ 6,925     $ 9,106     $ -     $ (2,741 )   $ 606     $ -     $ (7,531 )
Non-GAAP adjustments:                                          
Stock-based compensation expense       (749 )     (27 )     (832 )     (727 )     (3,718 )                     6,053  
Acquisition-related amortization of purchased intangibles       (127 )     (345 )         (264 )                         736  
Change in estimated fair value of contingent consideration                                           -  
Amortization of debt discount                                           -  
Loss on conversion from debt to equity                                           -  
Change in estimated fair value of common stock warrant liability and derivative liability                               3,009               3,009  
Tax effect related to amortization of purchased intangibles                                   (123 )         (123 )
Acquisition-related amortization of inventory valuation adjustment           (18 )                                 18  
Non-GAAP $ 25,982   $ 5,962     $ 2,505     $ 4,782     $ 5,934     $ 5,388     $ -     $ 268     $ 483     $ -     $ 2,162  
                                           
                                           
                                           
  Three Months Ended March 31, 2018
  Total revenue   Cost of testing services   Cost of product    Research and development   Sales and marketing   General and administrative   Change in
estimated fair value
of contingent consideration
  Total other income (expense)   Income tax benefit   Net loss attributable to noncontrolling interest   Net loss attributable to CareDx, Inc.
GAAP $ 14,053   $ 4,112     $ 2,272     $ 3,368     $ 4,085     $ 5,307     $ 144     $ (4,183 )   $ 424     $ (25 )   $ (8,969 )
Non-GAAP adjustments:                                          
Stock-based compensation expense       (54 )     (7 )     (213 )     (64 )     (368 )                     706  
Acquisition-related amortization of purchased intangibles       (127 )     (383 )         (254 )                         764  
Change in estimated fair value of contingent consideration                           (144 )                 144  
Amortization of debt discount                               1,923               1,923  
Loss on conversion from debt to equity                               2,806               2,806  
Change in estimated fair value of common stock warrant liability and derivative liability                               (1,321 )             (1,321 )
Tax effect related to amortization of purchased intangibles                                   (232 )         (232 )
Acquisition-related amortization of inventory valuation adjustment           (164 )                                 164  
Non-GAAP $ 14,053   $ 3,931     $ 1,718     $ 3,155     $ 3,767     $ 4,939     $ -     $ (775 )   $ 192     $ (25 )   $ (4,015 )
                                           

 

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