CareDx Reports Second Quarter 2020 Results

Tuesday, 04. August 2020 22:05

SOUTH SAN FRANCISCO, Calif., Aug. 04, 2020 (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 quarter ended June 30, 2020.

Second Quarter 2020 and Recent Highlights:

  • Achieved total revenue of $41.8 million for the three months ended June 30, 2020, increasing 33% year-over-year
  • Provided over 17,100 AlloSure Kidney and AlloMap Heart patient results, with over 40% originating from RemoTraC and mobile phlebotomy
  • Recorded first-ever AlloCell revenue from a cell therapy partnership
  • Completed successful public offering raising $134.6 million in net proceeds, increasing cash and cash equivalents to $211.4 million

“Throughout this challenging time, our team at CareDx successfully executed across our initiatives and never wavered from our commitment to improving the lives of transplant patients. Our performance in the second quarter, highlighted by strong growth and robust results from RemoTraC, is a testament to our patient-focus and dedication,” said Peter Maag, CareDx Chairman and Chief Executive Officer. “As we look to the second half of this year, while uncertainty continues, what remains clear is the dedication of our team, our ability to navigate through this time and our confidence to be able to continue to deliver durable long-term operational growth.”

Second Quarter 2020 Financial Results

Revenue for the three months ended June 30, 2020 was $41.8 million, compared with $31.5 million in the second quarter of 2019. Testing services revenue for the second quarter was $36.3 million, compared with $25.7 million in the same period of 2019. Product revenue in the three months ended June 30, 2020 was $3.3 million, compared to $4.6 million in the same period of 2019. Digital and other revenue for the second quarter 2020 was $2.2 million, compared to $1.2 million in the same period of 2019.

For the second quarter of 2020, the net loss was $6.6 million compared to a net loss of $7.8 million in the same period of 2019. Diluted net loss per share was $0.15 in the second quarter of 2020, compared to a diluted net loss per share of $0.19 in the second quarter of 2019.

Non-GAAP net income was $1.7 million in the second quarter of 2020 compared to $0.1 million non-GAAP net loss in the second quarter of 2019. Diluted non-GAAP net income per share was $0.04 in the second quarter of 2020, compared to a diluted non-GAAP net loss per share of $0.00 in the second quarter of 2019.

Adjusted EBITDA for the second quarter of 2020 was a loss of $2.8 million, compared to an adjusted EBITDA gain of $0.1 million in the second quarter of 2019.

Cash and cash equivalents were $211.4 million as of June 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 second quarter, due to the continued uncertainties with respect to the COVID-19 pandemic, CareDx will not be providing 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 expense, income tax expense, 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 June 30, Six Months Ended June 30,
  2020 2019 2020 2019
Revenue:        
Testing services revenue $36,293  $25,677  $67,735  $47,195 
Product revenue 3,291  4,593  7,986  9,026 
Digital and other revenue 2,217  1,184  4,460  1,215 
Total revenue 41,801  31,454  80,181  57,436 
Cost of revenue 15,025  11,512  27,417  21,245 
Gross profit 26,776  19,942  52,764  36,191 
Operating expenses:        
Research and development 13,129  7,630  23,142  13,244 
Sales and marketing 12,134  10,644  23,857  17,569 
General and administrative 12,316  8,512  22,319  17,618 
Total operating expenses 37,579  26,786  69,318  48,431 
Loss from operations (10,803) (6,844) (16,554) (12,240)
Other income (expense):        
Interest income, net 21  300  117  642 
Change in estimated fair value of common stock warrant liability (664) (1,351) (1,069) (4,360)
CARES Act Provider Relief Fund 4,813    4,813   
Other expense, net (255) (172) (318) (246)
Total other income (expense) 3,915  (1,223) 3,543  (3,964)
Loss before income taxes (6,888) (8,067) (13,011) (16,204)
Income tax benefit 330  220  630  826 
Net loss $(6,558) $(7,847) $(12,381) $(15,378)
Net loss per share:        
Basic $(0.15) $(0.19) $(0.28) $(0.37)
Diluted $(0.15) $(0.19) $(0.28) $(0.37)
Weighted-average shares used to compute net loss per share:        
Basic 44,708,037  42,132,396  43,765,732  41,873,337 
Diluted 44,708,037  42,132,396  43,765,732  41,873,337 
             


 
CareDx, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
    
 June 30, 2020 December 31, 2019
Assets   
Current assets:   
Cash and cash equivalents$211,409  $38,223 
Accounts receivable27,111  24,057 
Inventory8,741  6,014 
Prepaid and other current assets4,286  3,628 
Total current assets251,547  71,922 
Property and equipment, net7,313  4,430 
Operating leases right-of-use assets16,416  4,730 
Intangible assets, net44,356  45,541 
Goodwill23,857  23,857 
Restricted cash253  256 
Other assets1,000  1,000 
Total assets$344,742  $151,736 
Liabilities and stockholders’ equity   
Current liabilities:   
Accounts payable$8,675  $5,506 
Accrued compensation11,089  12,484 
Accrued and other liabilities16,682  16,838 
Deferred revenue - CMS advance payment20,496   
Total current liabilities56,942  34,828 
Deferred tax liability1,313  1,973 
Common stock warrant liability1,681  6,607 
Deferred payments for intangible assets5,400  5,207 
Operating lease liability, less current portion17,025  2,370 
Other liabilities1,614  1,751 
Total liabilities83,975  52,736 
Commitments and contingencies   
Stockholders’ equity:   
Common stock47  42 
Additional paid-in capital612,228  437,976 
Accumulated other comprehensive loss(5,314) (5,205)
Accumulated deficit(346,194) (333,813)
Total stockholders’ equity260,767  99,000 
Total liabilities and stockholders’ equity$344,742  $151,736 
        


 
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,
 2020 2019 2020 2019
        
Net loss per share$(6,558) $(7,847) $(12,381) $(15,378)
Stock-based compensation expense6,417  4,992  10,676  11,045 
Acquisition related-amortization of purchased intangibles1,160  822  2,309  1,576 
Acquisition related fees and expenses  568    568 
Change in estimated fair value of contingent consideration76    266   
Change in estimated fair value of common stock warrant liability664  1,351  1,069  4,360 
Accretion of liability88    192   
Tax effect related to amortization of purchased intangibles(119) (122) (239) (245)
Impairment  150    150 
Non-GAAP net income (loss)$1,728  $(86) $1,892  $2,076 
        
GAAP basic and diluted net loss per share$(0.15) $(0.19) $(0.28) $(0.37)
        
Non-GAAP basic net income (loss) per share$0.04  $(0.00) $0.04  $0.05 
Non-GAAP diluted net income (loss) per share$0.04  $(0.00) $0.04  $0.05 
        
Shares used in computing non-GAAP basic net income (loss) per share44,708,037  42,132,396  43,765,732  41,873,337 
Shares used in computing non-GAAP diluted net income (loss) per share45,882,569  42,132,396  44,604,886  44,897,442 
            


 
CareDx, Inc.
Reconciliation of Non-GAAP to Adjusted EBITDA Financial Measures
(Unaudited)
(In thousands)
    
 Three Months Ended June 30, Six Months Ended June 30,
 2020 2019 2020 2019
        
Non-GAAP net income (loss)$1,728  $(86) $1,892  $2,076 
Interest expense(21) (300) (117) (642)
Income tax benefit(211) (98) (391) (581)
Depreciation expense381  397  748  804 
CARES Act Provider Relief Fund(4,813)   (4,813)  
Other expense, net167  172  126  246 
Adjusted EBITDA$(2,769) $85  $(2,555) $1,903 
                


 
CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands)
   
  Three Months Ended June 30, 2020
  Total
revenue

 Cost of
revenue

 Research
and
development

 Sales and
marketing

 General and
administrative

 Total
other
income

 Income
tax
benefit
(expense)

 Net income
(loss)

GAAP $41,801  $15,025  $13,129  $12,134  $12,316  $3,915  $330  $(6,558)
Non-GAAP adjustments:         
Stock-based compensation expense  (711) (1,456) (1,581) (2,669)   6,417 
Acquisition related-amortization of purchased intangibles  (804)  (356)    1,160 
Change in estimated fair value of contingent consideration     (76)   76 
Change in estimated fair value of common stock warrant liability      664   664 
Accretion of liability      88   88 
Tax effect related to amortization of purchased intangibles       (119) (119)
Non-GAAP $41,801  $13,510  $11,673  $10,197  $9,571  $4,667  $211  $1,728 


  Six Months Ended June 30, 2020
  Total
revenue

 Cost of
revenue

 Research
and
development

 Sales and
marketing

 General and
administrative

 Total
other
income

 Income
tax
benefit
(expense)

 Net income
(loss)
GAAP $80,181  $27,417  $23,142  $23,857  $22,319  $3,543  $630  $(12,381)
Non-GAAP adjustments:         
Stock-based compensation expense  (1,076) (2,267) (2,550) (4,783)   10,676 
Acquisition related-amortization of purchased intangibles  (1,596)  (713)    2,309 
Change in estimated fair value of contingent consideration     (266)   266 
Change in estimated fair value of common stock warrant liability      1,069   1,069 
Accretion of liability      192   192 
Tax effect related to amortization of purchased intangibles       (239) (239)
Non-GAAP $80,181  $24,745  $20,875  $20,594  $17,270  $4,804  $391  $1,892 
                                 


 
CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands)
   
  Three Months Ended June 30, 2019
  Total
revenue

 Cost of
revenue

 Research
and
development

 Sales and
marketing

 General and
administrative

 Total
other
income
(expense)

 Income
tax
benefit
(expense)

 Net income
(loss)
GAAP $31,454  $11,512  $7,630  $10,644  $8,512  $(1,223) $220  $(7,847)
Non-GAAP adjustments:         
Stock-based compensation expense  (508) (1,441) (940) (2,103)   4,992 
Acquisition related-amortization of purchased intangibles  (539)  (283)    822 
Acquisition related fees and expenses     (568)   568 
Change in estimated fair value of common stock warrant liability      1,351   1,351 
Tax effect related to amortization of purchased intangibles       (122) (122)
Impairment    (150)    150 
Non-GAAP $31,454  $10,465  $6,189  $9,271  $5,841  $128  $98  $(86)


  Six Months Ended June 30, 2019
  Total
revenue

 Cost of
revenue

 Research
and
development

 Sales and
marketing

 General and
administrative

 Total
other
income
(expense)

 Income
tax
benefit
(expense)

 Net income
(loss)
GAAP $57,436  $21,245  $13,244  $17,569  $17,618  $(3,964) $826  $(15,378)
Non-GAAP adjustments:         
Stock-based compensation expense  (1,284) (2,273) (1,667) (5,821)   11,045 
Acquisition related-amortization of purchased intangibles  (1,030)  (546)    1,576 
Acquisition related fees and expenses     (568)   568 
Change in estimated fair value of common stock warrant liability      4,360   4,360 
Tax effect related to amortization of purchased intangibles       (245) (245)
Impairment    (150)    150 
Non-GAAP $57,436  $18,931  $10,971  $15,206  $11,229  $396  $581  $2,076 
                                 

 

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