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Organization and Description of Business
6 Months Ended
Jun. 30, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Organization and Description of Business

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

CareDx, Inc. (“CareDx” or the “Company”) together with its subsidiaries, is a leading precision medicine company focused on the discovery, development and commercialization of clinically differentiated, high-value healthcare solutions for transplant patients and caregivers.  The Company’s headquarters are in Brisbane, California. The primary operations are in Brisbane, California; Omaha, Nebraska; Fremantle, Australia and Stockholm, Sweden.

The Company’s commercially available testing services consist of AlloMap® Heart, which is a gene expression solution for heart transplant patients, and AlloSure® Kidney, which is a donor-derived cell-free DNA (“dd-cfDNA”) solution for kidney transplant patients. The Company also offers high quality products that increase the chance of successful transplants by facilitating a better match between a donor and a recipient of stem cells and organs.

On May 7, 2019, the Company completed the acquisition of 100% of the outstanding equity of OTTR Complete Transplant Management (“OTTR”). OTTR’s solutions enable integration with electronic medical records (“EMR”) systems, providing patient surveillance management tools and outcomes data to transplant centers. See Note 5 for further details.

Testing Services

AlloMap Heart is a covered service for Medicare beneficiaries since January 1, 2006. In 2018, the Medicare reimbursement rate for AlloMap Heart was set at $3,240, which remains applicable for 2019.  AlloMap Heart has also received positive coverage decisions from many of the largest U.S. private payers.

In October 2017, the Company commercially launched AlloSure Kidney, its proprietary next generation sequencing-based test that measures dd-cfDNA in kidney transplant recipients. The Medicare reimbursement rate for AlloSure Kidney is currently $2,841.  AlloSure Kidney has also received payments from private payers on a case-by-case basis. However, no positive coverage decisions have yet been made for AlloSure Kidney.

In September 2018, the Company initiated the Surveillance HeartCareTM Outcomes Registry (“SHORE”). SHORE is a prospective, multi-center, observational, registry of patients receiving HeartCare for surveillance. HeartCare combines the gene expression profiling technology of AlloMap Heart with the dd-cfDNA analysis of AlloSure® Heart in one surveillance solution.

In February 2019, AlloSure® Lung became available for lung transplant patients through a compassionate use program while the test is undergoing further studies.

In June 2019, the Company announced that it plans to commence the Outcomes of KidneyCareTM on Renal Allografts (“OKRA”) study. OKRA is an extension of the Kidney Allograft Outcomes AlloSure Kidney Registry (“K-OAR”). OKRA is a prospective, multi-center, observational, registry of patients receiving KidneyCare for surveillance. KidneyCare combines the dd-cfDNA analysis of AlloSure Kidney with the gene expression profiling technology of AlloMap® Kidney and the predictive artificial intelligence technology of KidneyCareTM iBox in one surveillance solution. The Company has not yet made any applications to payers for reimbursement coverage of AlloMap Kidney or KidneyCare iBox.

Products

Olerup SSP® is used to type Human Leukocyte Antigen (“HLA”) alleles, based on the sequence specific primer (“SSP”) technology.  Olerup SBTTM is a complete product range for sequence-based typing of HLA alleles. QTYPE® enables speed and precision in HLA typing at a low to intermediate resolution for samples that require a fast turn-around-time and uses real-time polymerase chain reaction, or PCR methodology.

In May 2018, the Company entered into a License and Commercialization Agreement (the “License Agreement”) with Illumina, Inc. (“Illumina”), which provides the Company with worldwide distribution, development and commercialization rights to Illumina’s next generation sequencing (“NGS”) product line for use in transplantation diagnostic testing. Pursuant to the License Agreement, the Company is the exclusive worldwide distributor of Illumina’s TruSight® HLA v1 and v2 product line. TruSight HLA is a NGS-based high resolution typing solution that provides NGS-level resolution to HLA typing. The Company’s suite of AlloSeq products are development-stage NGS-based kitted solutions that the Company acquired as a result of its License Agreement. These products include: AlloSeqTM Tx, a high-resolution HLA typing solution, AlloSeqTM cfDNA, a surveillance solution designed to measure dd-cfDNA in blood to detect active rejection in transplant recipients, and AlloSeqTM HCT, a solution for chimerism testing for stem cell transplant recipients.

Digital

Following the acquisition of OTTR on May 7, 2019, CareDx is a leading provider of transplant patient tracking software (“OTTR sofware”). OTTR software provides comprehensive solutions for transplant patient management, and is currently used in over 60 leading transplant centers in the US. OTTR software enables integration with EMR systems, including Cerner and Epic, providing patient surveillance management tools and outcomes data to transplant centers.

Revenue for OTTR software is included in digital and other revenue in our condensed consolidated statements of operations and was $1.1 million from the acquisition date of May 7, 2019 to June 30, 2019.

Liquidity

The Company has incurred significant losses and negative cash flows from operations since its inception and had an accumulated deficit of $327.2 million at June 30, 2019. As of June 30, 2019, the Company had cash and cash equivalents of $43.5 million.

The Company may require additional financing in the future to fund working capital and pay its obligations as they come due. Additional financing might include issuance of equity securities, debt, cash from collaboration agreements or a combination of these. However, there can be no assurance that the Company will be successful in acquiring additional funding at levels sufficient to fund its operations or on terms favorable to the Company. The Company believes its existing cash balance and expected revenues will be sufficient to meet its anticipated cash requirements for at least the next 12 months.