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CareDx Reports Third Quarter 2021 Results; Increases Full Year Revenue Guidance

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SOUTH SAN FRANCISCO, Calif., Oct. 28, 2021 (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 third quarter ended September 30, 2021.

Recent Highlights:

  • Achieved record revenue of $75.6 million for the three months ended September 30, 2021, increasing 42% year-over-year

  • Grew testing services volume 86% year-over-year, with approximately 40,000 AlloSure and AlloMap patient results provided in the quarter - highlighted by an approximately 90% attach rate for HeartCare

  • Announced publication of KidneyCare validation study in Kidney360 – Multicenter study validating AlloMap and demonstrating the complementary value with AlloSure for detecting rejection

  • Received first commercial AlloSure Lung coverage, followed by commercial launch of AlloSure Lung, the first dd-cfDNA test available for lung transplant patients, in October

“I'm pleased with our strong performance in the third quarter, driven by 86% volume growth in testing services,” said Reg Seeto, President and Chief Executive Officer of CareDx. “We made significant progress toward our goal of OrganCare multi-modality, while continuing our pan-organ leadership in being the first with dd-cfDNA in Heart, Kidney and now Lung. We remain 100% committed to patients, and to transforming the transplant patient journey through innovation.”

Third Quarter 2021 Financial Results

Revenue for the three months ended September 30, 2021 was $75.6 million, an increase of 42% compared with $53.4 million in the third quarter of 2020. Testing services revenue for the third quarter was $66.5 million, compared with $45.5 million in the same period of 2020. Product revenue in the three months ended September 30, 2021 was $6.5 million, compared to $5.4 million in the same period of 2020. Digital and other revenue for the third quarter of 2021 was $2.6 million.

For the third quarter of 2021, net loss was $11.9 million compared to a net loss of $2.8 million in the same period of 2020. Basic and diluted net loss per share was $0.23 in the third quarter of 2021, compared to basic and diluted net loss per share of $0.06 in the third quarter of 2020.

Non-GAAP net income was $4.0 million in the third quarter of 2021 compared to a $5.1 million non-GAAP net income in the third quarter of 2020. Diluted non-GAAP net income per share was $0.07 in the third quarter of 2021, compared to a diluted non-GAAP net income per share of $0.10 in the third quarter of 2020.

Adjusted EBITDA for the third quarter of 2021 was a gain of $4.7 million, compared to an adjusted EBITDA of $5.6 million in the third quarter of 2020.

Cash, cash equivalents & marketable securities were $363.3 million as of September 30, 2021.

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.

2021 Guidance

For the full year 2021, CareDx now expects revenue to be in the range of $290 million to $293 million (previously $280 million to $290 million).

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 Company's fiscal 2021 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, 2020, filed by CareDx with the SEC on February 24, 2021, 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; net unrealized gains and losses related to equity securities, 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

Ian Cooney
(415) 287-2300 x 3550
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,

2021

2020

2021

2020

Revenue:

Testing services revenue

$

66,464

$

45,529

$

190,635

$

113,264

Product revenue

6,521

5,383

19,160

13,369

Digital and other revenue

2,604

2,457

7,382

6,917

Total revenue

75,589

53,369

217,177

133,550

Operating expenses:

Cost of testing services

18,038

11,900

51,756

30,631

Cost of product

4,919

3,705

13,771

9,635

Cost of digital and other

1,879

1,210

4,861

3,966

Research and development

19,439

12,474

54,479

35,616

Sales and marketing

21,370

13,870

56,421

37,727

General and administrative

18,671

13,117

50,216

35,436

Total operating expenses

84,316

56,276

231,504

153,011

Loss from operations

(8,727

)

(2,907

)

(14,327

)

(19,461

)

Other income (expense):

Interest income, net

20

29

147

146

Change in estimated fair value of common stock warrant liability

88

79

50

(990

)

CARES Act Provider Relief Fund

4,813

Other expense, net

(3,440

)

(254

)

(906

)

(572

)

Total other (expense) income

(3,332

)

(146

)

(709

)

3,397

Loss before income taxes

(12,059

)

(3,053

)

(15,036

)

(16,064

)

Income tax benefit

162

235

525

865

Net loss

$

(11,897

)

$

(2,818

)

$

(14,511

)

$

(15,199

)

Net loss per share:

Basic

$

(0.23

)

$

(0.06

)

$

(0.28

)

$

(0.33

)

Diluted

$

(0.23

)

$

(0.06

)

$

(0.28

)

$

(0.33

)

Weighted-average shares used to compute net loss per share:

Basic

52,681,451

49,010,680

52,034,450

45,526,810

Diluted

52,681,451

49,010,680

52,034,450

45,526,810


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

September 30,
2021

December 31,
2020

Assets

Current assets:

Cash and cash equivalents

$

353,082

$

134,669

Marketable securities

10,199

90,034

Accounts receivable

56,181

34,624

Inventory

18,800

10,012

Prepaid and other current assets

6,413

3,758

Total current assets

444,675

273,097

Property and equipment, net

18,719

10,704

Operating leases right-of-use assets

18,316

15,228

Intangible assets, net

48,367

44,355

Goodwill

26,051

23,857

Restricted cash

210

270

Other assets

6,834

1,000

Total assets

$

563,172

$

368,511

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

14,894

$

9,653

Accrued compensation

24,243

18,466

Accrued and other liabilities

30,599

20,602

Refund liability - CMS advance payment

20,496

Total current liabilities

69,736

69,217

Deferred tax liability

678

1,299

Common stock warrant liability

195

447

Deferred payments for intangible assets

2,084

3,560

Operating lease liability, less current portion

17,876

16,069

Other liabilities

456

240

Total liabilities

91,025

90,832

Commitments and contingencies

Stockholders’ equity:

Common stock

52

49

Additional paid-in capital

843,226

632,253

Accumulated other comprehensive loss

(4,093

)

(2,096

)

Accumulated deficit

(367,038

)

(352,527

)

Total stockholders’ equity

472,147

277,679

Total liabilities and stockholders’ equity

$

563,172

$

368,511


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

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Cost of testing services reconciliation:

GAAP cost of testing services

$

18,038

$

11,900

$

51,756

$

30,631

Stock-based compensation expense

(750

)

(431

)

(1,715

)

(1,101

)

Acquisition related-amortization of purchased intangibles

(329

)

(329

)

(987

)

(987

)

Non-GAAP cost of testing services

$

16,959

$

11,140

$

49,054

$

28,543

Cost of product reconciliation:

GAAP cost of product

$

4,919

$

3,705

$

13,771

$

9,635

Stock-based compensation expense

(156

)

(97

)

(446

)

(289

)

Acquisition related-amortization of purchased intangibles

(480

)

(445

)

(1,434

)

(1,210

)

Non-GAAP cost of product

$

4,283

$

3,163

$

11,891

$

8,136

Cost of digital and other reconciliation:

GAAP cost of digital and other

$

1,879

$

1,210

$

4,861

$

3,966

Stock-based compensation expense

(217

)

(124

)

(555

)

(338

)

Acquisition related-amortization of purchased intangibles

(209

)

(86

)

(458

)

(259

)

Non-GAAP cost of digital and other

$

1,453

$

1,000

$

3,848

$

3,369

Research and development expenses reconciliation:

GAAP research and development expenses

$

19,439

$

12,474

$

54,479

$

35,616

Stock-based compensation expense

(1,986

)

(1,224

)

(5,284

)

(3,490

)

Non-GAAP research and development expenses

$

17,453

$

11,250

$

49,195

$

32,126

Sales and marketing expenses reconciliation:

GAAP sales and marketing expenses

$

21,370

$

13,870

$

56,421

$

37,727

Stock-based compensation expense

(3,853

)

(1,623

)

(8,144

)

(4,175

)

Acquisition related-amortization of purchased intangibles

(502

)

(376

)

(1,344

)

(1,089

)

Non-GAAP sales and marketing expenses

$

17,015

$

11,871

$

46,933

$

32,463

General and administrative expenses reconciliation:

GAAP general and administrative expenses

$

18,671

$

13,117

$

50,216

$

35,436

Stock-based compensation expense

(3,677

)

(3,249

)

(10,439

)

(8,031

)

Change in estimated fair value of contingent consideration

(156

)

(35

)

35

(301

)

Acquisition related fees and expenses

(485

)

(866

)

Non-GAAP general and administrative expenses

$

14,353

$

9,833

$

38,946

$

27,104

Total other income (expense) reconciliation:

GAAP other income (expense), net

$

(3,332

)

$

(146

)

$

(709

)

$

3,397

Unrealized loss on long-term marketable equity securities

3,257

167

Change in estimated fair value of common stock warrant liability

(88

)

(79

)

(50

)

990

Accretion of liability

55

80

199

272

Non-GAAP other (expense) income, net

$

(108

)

$

(145

)

$

(393

)

$

4,659

Income tax benefit reconciliation:

GAAP income tax benefit

$

162

$

235

$

525

$

865

Tax effect related to amortization of purchased intangibles

(122

)

(130

)

(373

)

(369

)

Non-GAAP income tax benefit

$

40

$

105

$

152

$

496


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,

2021

2020

2021

2020

Net loss

$

(11,897

)

$

(2,818

)

$

(14,511

)

$

(15,199

)

Stock-based compensation expense

10,639

6,748

26,583

17,424

Unrealized loss on long-term marketable equity securities

3,257

167

Acquisition related-amortization of purchased intangibles

1,520

1,236

4,223

3,545

Acquisition related fees and expenses

485

866

Change in estimated fair value of contingent consideration

156

35

(35

)

301

Change in estimated fair value of common stock warrant liability

(88

)

(79

)

(50

)

990

Accretion of liability

55

80

199

272

Tax effect related to amortization of purchased intangibles

(122

)

(130

)

(373

)

(369

)

Non-GAAP net income

$

4,005

$

5,072

$

17,069

$

6,964

GAAP basic and diluted net loss per share

$

(0.23

)

$

(0.06

)

$

(0.28

)

$

(0.33

)

Non-GAAP basic net income per share

$

0.08

$

0.10

$

0.33

$

0.15

Non-GAAP diluted net income per share

$

0.07

$

0.10

$

0.31

$

0.15

Shares used in computing non-GAAP basic net income per share

52,681,451

49,010,680

52,034,450

45,526,810

Shares used in computing non-GAAP diluted net income per share

54,584,822

50,446,939

54,454,433

46,571,527


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

Three Months Ended
September 30,

Nine Months Ended
September 30,

2021

2020

2021

2020

Non-GAAP net income

$

4,005

$

5,072

$

17,069

$

6,964

Interest income

(20

)

(29

)

(147

)

(146

)

Income tax benefit

(40

)

(105

)

(152

)

(496

)

Depreciation expense

624

486

1,879

1,235

CARES Act Provider Relief Fund

(4,813

)

Other expense, net

128

174

540

300

Adjusted EBITDA

$

4,697

$

5,598

$

19,189

$

3,044


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