EX-99.1 4 d28203dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

CareDx Reports Third Quarter 2020 Results

SOUTH SAN FRANCISCO, CA, October 29, 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 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