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Exhibit 99.1

 

LOGO

CareDx, Inc. Reports First Quarter 2016 Financial Results

Brisbane, CA — May 6, 2016—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 first quarter ended March 31, 2016.

Recent Highlights

 

    Total revenue for the first quarter of 2016 was $6.6 million

 

    Completed acquisition of Allenex AB, creating an international transplant diagnostics company

 

    Increased AlloMap patient results volume by 8% in the first quarter of 2016 compared with the same period in 2015

 

    Built further momentum on AlloMap Variability with 41 centers now receiving longitudinal test results on a regular basis

 

    Expanded AlloMap registry (OAR) now established in 28 centers

 

    Participated at the International Society for Heart and Lung Transplantation (ISHLT) Annual Meeting with a total of 8 clinical abstracts

 

    Continued progress on the development of cell-free DNA with DART with 359 patients enrolled at 14 centers

 

    Raised $14 million gross proceeds in a private placement with an additional $8 million committed

“We’ve accomplished much to start 2016, highlighted by the closing of the acquisition of Allenex. This combination positions us as a leader across the pre-to post-transplant continuum,” said Peter Maag, CareDx President and Chief Executive Officer. “We are pleased with the underlying AlloMap test growth and are focused on execution of our initiatives to reverse the timing lag in our reimbursement collections.”

First Quarter Financial Results

Revenue for the three months ended March 31, 2016 was $6.6 million, compared with $7.2 million in the same period in 2015. Test volume increased approximately 8% for the first quarter of 2016 compared with the first quarter of 2015. The revenue trend reflects a continued lag in collections, which impacted revenue recognized on a cash basis following the transition of billings and collections from an outside vendor to an in-house team.


For the first quarter of 2016, the net loss was $9.8 million compared to net loss of $2.3 million in the first quarter of 2015. Basic and diluted net loss per share was $0.81 in the first quarter of 2016, compared to basic and diluted net loss per share of $0.19 in the first quarter of 2015. The increase in the year-over-year net loss reflects acquisition costs, financing charges, and our investment in the development of AlloSure™, a next-generation sequencing–based test to detect donor-derived cell-free DNA after transplantation.

With the acquisition of Allenex AB in April 2016, CareDx has become a significantly larger and more complex Company that will be subject to acquisition accounting and has incurred and will continue to incur costs connected with completing the acquisition, integration and management of a global company. As described and defined below under the caption, “Use of Non-GAAP Financial Measures”, management has begun to use non-GAAP information internally for its operating, budgeting and financial planning purposes. Management is herein reporting non-GAAP financial measures and believes this non-GAAP information is useful for investors, when considered in conjunction with CareDx’s GAAP financial statements.

For the first quarter of 2016, the non-GAAP net loss was $4.4 million compared to net loss of $2.2 million in the first quarter of 2015. The non-GAAP basic and diluted net loss per share was $0.37 in the first quarter of 2016, compared to basic and diluted earnings per share of $0.19 in the first quarter of 2015. The increase in the year-over-year non-GAAP net loss reflects our investment in the development of AlloSure™, a next-generation sequencing–based test to detect donor-derived cell-free DNA after transplantation. 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.

Cash and cash equivalents were $23.8 million as of March 31, 2016.

2016 Guidance

For the full year 2016, we expect revenue to grow by low- to mid-single digits on a pro forma basis, assuming that the Allenex acquisition closed at the beginning of 2016. Actual reported results will only include Allenex results subsequent to the close of the acquisition on April 14, 2016, and we expect reported revenue for the full year 2016 to be in the range of $40 million to $42 million.

Conference Call

Management will host a conference call today beginning at 5:30am PT/8:30am ET. Individuals interested in listening to the conference call may do so by dialing (855) 420-0616 for domestic callers or (678) 304-6848 for international callers. Please reference Conference ID 96537271. To listen to a live webcast, please visit the investor relations section of CareDx’s website at: www.CareDx.com.


A replay of the call will be available beginning May 6, 2016 at 8:30am PT/11:30am ET through 8:30 pm PT/11:30pm ET on May 7, 2016. To access the replay, dial (855) 859-2056 or (404) 537-3406 and reference Conference ID: 96537271. The webcast will also be available on CareDx’s website for one year following the completion of the call.

About CareDx

CareDx, Inc., headquartered in Brisbane, California, is a global molecular diagnostics company focused on the discovery, development and commercialization of clinically differentiated, high-value diagnostic solutions for transplant patients. The Company markets AlloMap®, a gene expression test that aids clinicians in identifying heart transplant patients with stable graft function who have a low probability of moderate to severe acute cellular rejection. CareDx is pursuing the development of additional products for transplant monitoring using a variety of technologies, including AlloSure™, a next-generation sequencing–based test to detect donor-derived cell-free DNA after transplantation.

CareDx’s, with its presence through Olerup AB, also develops, manufactures, markets and sells 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. Olerup SSP®, a set of HLA typing is used prior to hematopoietic stem cell/bone marrow transplantation and organ transplantation; and XM-ONE®, the first standardized test that quickly identifies a patient’s antigens against HLA Class I, Class II or antibodies against a donor’s endothelium. For more information, please visit: www.CareDx.com.

Forward Looking Statements

In addition to the historical information, this press release contains forward-looking statements with respect to our business, research, development and commercialization efforts and anticipated future financial results. These forward-looking statements are based upon information that is currently available to us and our current expectations, speak only as of the date hereof, and are subject to numerous risks and uncertainties, including the risk that our revenue or non-GAAP financial metrics may not be as high as anticipated, risks related to the successful integration of Allenex AB and Olerup SSP into our product line, risks relating to our dependence on the sales of one test, AlloMap, for substantially all of our current revenue, our dependence on Medicare for a substantial portion of our revenue, our dependence on health insurers and other third-party payers to provide coverage for our current test and future tests, if any, risks of increased competition from other market participants, many of whom have substantially greater resources than us and risks related to our development and commercialization of additional diagnostic solutions. These factors, together with those that are described in our filings with the SEC, including the Annual Report on Form 10-K for the fiscal year ended December 31, 2015 filed by us with the SEC on March 29, 2016, may cause our actual results, performance or achievements to differ materially and adversely from those anticipated or implied by our forward-looking statements. We expressly disclaim any obligation,


except as required by law, or undertaking to update or revise any such forward-looking statements. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2016. Our results for the most recent reporting period are not necessarily indicative of our operating results for any future periods.

Use of Non-GAAP Financial Measures

CareDx has presented certain financial information in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and also on a non-GAAP basis in this release, including non-GAAP net loss and non-GAAP basic and diluted net loss per share. We define non-GAAP net loss and per share results as the GAAP net loss and per share results excluding the impacts of stock-based compensation, changes in estimated fair value of contingent consideration, costs involved with completing an acquisition, and certain financing charges. 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.

 

Media Contacts – CareDx   Media Contacts - Investor
Molly Martell, Senior Director, Marketing   Jamar Ismail, Vice President
T: +1 415-728-6307   Westwicke Partners, LLC
E: mmartell@caredx.com   T: +1 415-513-1282
  E: jamar.ismail@westwicke.com


CareDx, Inc.

Condensed Statements of Operations

(Unaudited)

(In thousands, except share and per share data)

 

     Three Months Ended March 31,  
     2016     2015  

Revenue:

    

Testing revenue

   $ 6,452      $ 7,096   

Collaboration, license and other revenue

     110        120   
  

 

 

   

 

 

 

Total revenue

     6,562        7,216   

Operating expenses:

    

Cost of testing

     2,772        2,711   

Research and development

     3,159        1,421   

Sales and marketing

     1,737        2,023   

General and administrative

     5,676        2,705   

Change in estimated fair value of contingent consideration

     (213     (253
  

 

 

   

 

 

 

Total operating expenses

     13,131        8,607   
  

 

 

   

 

 

 

Loss from operations

     (6,569     (1,391

Interest expense

     (266     (827

Other (expense) income, net

     (2,917     (54
  

 

 

   

 

 

 

Net loss

   $ (9,752   $ (2,272
  

 

 

   

 

 

 

Net loss per share:

    

Basic and diluted

   $ (0.81   $ (0.19
  

 

 

   

 

 

 

Weighted average shares used to compute net loss per share:

    

Basic and diluted

     11,969,714        11,814,467   
  

 

 

   

 

 

 


CareDx, Inc.

Condensed Balance Sheets

(Unaudited)

(In thousands, except share and per share data)

 

     March 31, 2016     December 31, 2015 (1)  

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 23,752      $ 29,888   

Accounts receivable

     2,512        2,367   

Inventory

     595        766   

Prepaid and other assets

     807        1,341   
  

 

 

   

 

 

 

Total current assets

     27,666        34,362   

Property and equipment, net

     2,346        2,425   

Intangible assets, net

     6,650        6,650   

Goodwill

     12,005        12,005   

Restricted cash

     147        147   

Other noncurrent assets

     20        49   
  

 

 

   

 

 

 

Total assets

   $ 48,834      $ 55,638   
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

    

Current liabilities:

    

Accounts payable

   $ 2,536      $ 1,644   

Accrued payroll liabilities

     1,609        2,366   

Accrued and other liabilities

     5,298        2,892   

Accrued royalties

     232        242   

Deferred revenue

     137        142   

Current portion of long-term debt

     4,419        2,866   
  

 

 

   

 

 

 

Total current liabilities

     14,231        10,152   

Deferred rent, net of current portion

     1,347        1,426   

Deferred revenue, net of current portion

     693        703   

Long-term debt, net of current portion

     11,368        12,887   

Contingent consideration

     735        948   

Other liabilities

     —          28   
  

 

 

   

 

 

 

Total liabilities

     28,374        26,144   

Stockholders’ equity:

    

Common stock

     12        12   

Additional paid-in capital

     203,284        202,564   

Accumulated deficit

     (182,836     (173,082
  

 

 

   

 

 

 

Total stockholders’ equity

     20,460        29,494   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 48,834      $ 55,638   
  

 

 

   

 

 

 

 

(1) The condensed balance sheet at December 31, 2015 has been derived from audited financial statements.


CareDx, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)

(In thousands, except share and per share data)

 

     Three Months Ended March 31,  
     2016     2015  

Cost of testing reconciliation:

    

GAAP cost of testing

   $ 2,772      $ 2,711   

Stock-based compensation expense

     (28     (14
  

 

 

   

 

 

 

Non-GAAP cost of testing

   $ 2,744      $ 2,697   
  

 

 

   

 

 

 

Research and development expenses reconciliation:

    

GAAP research and development expenses

   $ 3,159      $ 1,421   

Stock-based compensation expense

     (113     (49
  

 

 

   

 

 

 

Non-GAAP research and development expenses

   $ 3,046      $ 1,372   
  

 

 

   

 

 

 

Sales and marketing expenses reconciliation:

    

GAAP sales and marketing expenses

   $ 1,737      $ 2,023   

Stock-based compensation expense

     (28     (18
  

 

 

   

 

 

 

Non-GAAP sales and marketing expenses

   $ 1,709      $ 2,005   
  

 

 

   

 

 

 

General and administrative expenses reconciliation:

    

GAAP general and administrative expenses

   $ 5,676      $ 2,705   

Acquisition related fees and expenses

     (2,259     —     

Stock-based compensation expense

     (277     (199
  

 

 

   

 

 

 

Non-GAAP general and administrative expenses

   $ 3,140      $ 2,506   
  

 

 

   

 

 

 

Change in estimated fair value of contingent consideration reconciliation:

    

GAAP change in estimated fair value of contingent consideration

   $ (213   $ (253

Revaluation gain of contingent consideration

     213        253   
  

 

 

   

 

 

 

Non-GAAP change in estimated fair value of contingent consideration

   $ —        $ —     
  

 

 

   

 

 

 

Other (expense) income, net reconciliation:

    

GAAP other (expense) income, net

   $ (2,917   $ (54

Debt financing related fees and expenses

     2,879        —     
  

 

 

   

 

 

 

Non-GAAP other (expense) income, net

   $ (38   $ (54
  

 

 

   

 

 

 

Net loss reconciliation:

    

GAAP net loss

   $ (9,752   $ (2,272

Acquisition related fees and expenses

     2,259        —     

Debt financing related fees and expenses

     2,879        —     

Stock-based compensation expenses

     446        280   

Revaluation gain of contingent consideration

     (213     (253
  

 

 

   

 

 

 

Non-GAAP net loss

   $ (4,381   $ (2,245
  

 

 

   

 

 

 

Basic and diluted net loss per share reconciliation:

    

GAAP basic and diluted net loss per share

   $ (0.81   $ (0.19

Acquisition related fees and expenses

     0.19        —     

Debt financing related fees and expenses

     0.24        —     

Stock-based compensation expenses

     0.03        0.02   

Revaluation gain of contingent consideration

     (0.02     (0.02
  

 

 

   

 

 

 

Non-GAAP basic and diluted net loss per share

   $ (0.37   $ (0.19
  

 

 

   

 

 

 

Non-GAAP adjustment summary:

    

Cost of testing adjustments

   $ 28      $ 14   

Research and development expenses adjustments

     113        49   

Sales and marketing expenses adjustments

     28        18   

General and administrative expenses adjustments

     2,536        199   

Change in estimated fair value of contingent consideration adjustments

     (213     (253

Other expense adjustments

     2,879        —     
  

 

 

   

 

 

 

Total Non-GAAP adjustment summary:

   $ 5,371      $ 27