Full Press Release Details
CareDx Reports Third Quarter Results
AlloSure launch momentum drives 74% revenue growth
BRISBANE, Calif., November 8, 2018 (GLOBE NEWSWIRE) 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 third quarter ended September 30, 2018.
The CareDx team delivered another record
quarter, including 74% year-over-year revenue growth. We achieved positive adjusted EBITDA and operating cash flow results one quarter ahead of our initial expectations. The strong clinical value of AlloSure continues to resonate with the transplant
community and, a year into the launch, we are 2% penetrated into this patient population, said Peter Maag,
CareDx President and Chief Executive Officer. Our success to date positions CareDx as the leading provider of genomics-based information in transplantation, with the goal to leverage
insights into the transplantome to benefit patients and improve their long-term outcomes.
Third Quarter 2018 Financial Results
Revenue for the three months ended September 30, 2018 was $21.2 million, compared with $12.2 million in the third quarter of 2017. Testing
services revenue for the third quarter was $16.8 million compared with $8.2 million in the same period of 2017. Product revenue in the three months ended September 30, 2018 was $4.2 million, compared to $3.9 million in the
same period of 2017.
For the third quarter of 2018, the net loss was $20.0 million compared to a net loss of $14.3 million in the same period
of 2017. Basic and diluted net loss per share was $0.54 in the third quarter of 2018, compared to basic and diluted net loss per share of $0.63 in the third quarter of 2017.
Non-GAAP net loss was $0.6 million in the third quarter of 2018 compared to $3.3 million in the third
quarter of 2017. Basic and diluted non-GAAP net loss per share was $0.01 in the third quarter of 2018, compared to $0.15 in the third quarter of 2017.
Adjusted EBITDA for the third quarter of 2018 was a gain of $0.2 million, compared to a loss of $1.7 million in the third quarter of 2017.
Net cash provided by operating activities in the third quarter of 2018 was $0.4 million compared with $2.2 million net cash used in operations in
the comparative 2017 period. Cash and cash equivalents were $26.2 million as of September 30, 2018.
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.
For the full year 2018, CareDx expects revenue to be in the range of $74 million to $75 million (previously $68 million to $70 million).
CareDx, Inc., headquartered in Brisbane,
California, is a molecular diagnostics company focused on the discovery, development and commercialization of clinically differentiated, high-value diagnostic solutions for transplant recipients. CareDx offers products along the pre- and post-transplant testing continuum.
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 2018 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, 2017 filed by CareDx with the SEC on March 22, 2018 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 loss, non-GAAP basic and diluted net loss per share and adjusted EBITDA. 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 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 loss before net interest expense, income tax expense, depreciation and amortization, other expense, and net loss attributable to
noncontrolling interest. 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.
Chief Commercial Officer
Integrated Corporate Relations, Inc.
Consolidated Statements of Operations
thousands, except share and per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Revenue: | ||||||||||||||||
| Testing services revenue | $ | 16,847 | $ | 8,163 | $ | 41,448 | $ | 24,485 | ||||||||
| Product revenue | 4,223 | 3,872 | 11,080 | 10,916 | ||||||||||||
| Collaboration and license revenue | 114 | 156 | 532 | 420 | ||||||||||||
| Total revenue | 21,184 | 12,191 | 53,060 | 35,821 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Cost of testing services | 5,752 | 3,156 | 14,432 | 9,224 | ||||||||||||
| Cost of product | 3,135 | 2,053 | 8,046 | 6,558 | ||||||||||||
| Research and development | 3,868 | 2,959 | 10,732 | 9,360 | ||||||||||||
| Sales and marketing | 5,971 | 3,255 | 15,916 | 9,747 | ||||||||||||
| General and administrative | 5,177 | 4,038 | 16,080 | 14,672 | ||||||||||||
| Goodwill impairment | 1,958 | |||||||||||||||
| Change in estimated fair value of contingent consideration | 594 | 1,017 | 309 | |||||||||||||
| Total operating expenses | 23,903 | 16,055 | 66,223 | 51,828 | ||||||||||||
| Loss from operations | (2,719 | ) | (3,864 | ) | (13,163 | ) | (16,007 | ) | ||||||||
| Interest expense | (408 | ) | (1,685 | ) | (3,527 | ) | (4,166 | ) | ||||||||
| Other expense, net | (40 | ) | (317 | ) | (2,891 | ) | (1,191 | ) | ||||||||
| Change in estimated fair value of common stock warrant liability and derivative liability | (17,093 | ) | (8,599 | ) | (24,540 | ) | (3,404 | ) | ||||||||
| Loss before income taxes | (20,260 | ) | (14,465 | ) | (44,121 | ) | (24,768 | ) | ||||||||
| Income tax benefit | 290 | 178 | 1,095 | 837 | ||||||||||||
| Net loss | (19,970 | ) | (14,287 | ) | (43,026 | ) | (23,931 | ) | ||||||||
| Net loss attributable to noncontrolling interest | (19 | ) | (25 | ) | (133 | ) | ||||||||||
| Net loss attributable to CareDx, Inc. | $ | (19,970 | ) | $ | (14,268 | ) | $ | (43,001 | ) | $ | (23,798 | ) | ||||
| Net loss per share attributable to CareDx, Inc.: | ||||||||||||||||
| Basic | $ | (0.54 | ) | $ | (0.63 | ) | $ | (1.26 | ) | $ | (1.09 | ) | ||||
| Diluted | $ | (0.54 | ) | $ | (0.63 | ) | $ | (1.26 | ) | $ | (1.09 | ) | ||||
| Weighted average shares used to compute net loss per share attributable to CareDx, Inc.: | ||||||||||||||||
| Basic | 37,154,293 | 22,526,615 | 34,134,138 | 21,765,292 | ||||||||||||
| Diluted | 37,154,293 | 22,526,615 | 34,134,138 | 21,765,292 |
Condensed Consolidated Balance Sheets
| September 30, 2018 | December 31, 2017 (1) | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 26,202 | $ | 16,895 | ||||
| Accounts receivable | 9,641 | 2,991 | ||||||
| Inventory | 4,621 | 5,529 | ||||||
| Prepaid and other assets | 1,479 | 1,352 | ||||||
| Total current assets | 41,943 | 26,767 | ||||||
| Property and equipment, net | 3,022 | 2,075 | ||||||
| Intangible assets, net | 34,284 | 33,139 | ||||||
| Goodwill | 12,005 | 12,005 | ||||||
| Restricted cash | 192 | 9,579 | ||||||
| Total assets | $ | 91,446 | $ | 83,565 | ||||
| Liabilities and stockholders (deficit) equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,676 | $ | 3,391 | ||||
| Accrued payroll liabilities | 8,017 | 5,013 | ||||||
| Accrued and other liabilities | 4,718 | 3,735 | ||||||
| Deferred revenue | 39 | 39 | ||||||
| Deferred purchase consideration | 367 | 407 | ||||||
| Derivative liability | 14,600 | |||||||
| Current debt | 15,721 | |||||||
| Total current liabilities | 15,817 | 42,906 | ||||||
| Deferred rent, net of current portion | 579 | 913 | ||||||
| Deferred revenue, net of current portion | 701 | 730 | ||||||
| Deferred tax liability | 3,447 | 4,933 | ||||||
| Long-term debt, net of current portion | 13,384 | 18,338 | ||||||
| Contingent consideration | 1,672 | |||||||
| Common stock warrant liability | 11,612 | 18,712 | ||||||
| Other liabilities | 1,518 | 1,315 | ||||||
| Total liabilities | 47,058 | 89,519 | ||||||
| Stockholders equity: | ||||||||
| Common stock | 39 | 29 | ||||||
| Additional paid-in capital | 356,427 | 264,204 | ||||||
| Accumulated other comprehensive loss | (3,988 | ) | (2,345 | ) | ||||
| Accumulated deficit | (308,090 | ) | (268,022 | ) | ||||
| Total CareDx, Inc. stockholders equity (deficit) | 44,388 | (6,134 | ) | |||||
| Noncontrolling interest | 180 | |||||||
| Total stockholders equity (deficit) | 44,388 | (5,954 | ) | |||||
| Total liabilities and stockholders equity | $ | 91,446 | $ | 83,565 |
Reconciliation of GAAP to Non-GAAP Financial Measures
thousands, except share and per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| GAAP net loss | $ | (19,970 | ) | $ | (14,268 | ) | $ | (43,001 | ) | $ | (23,798 | ) | ||||
| Stock-based compensation expense | 1,860 | 430 | 5,078 | 1,316 | ||||||||||||
| Acquisition related-amortization of purchased intangibles | 740 | 637 | 2,238 | 1,812 | ||||||||||||
| Change in estimated fair value of contingent consideration | 594 | 1,017 | 309 | |||||||||||||
| Amortization of debt discount | 70 | 650 | 2,048 | 1,367 | ||||||||||||
| Debt financing related fees and expenses | 309 | |||||||||||||||
| Loss on conversion from debt to equity | 2,806 | |||||||||||||||
| Change in estimated fair value of common stock warrant and derivative liabilities | 17,093 | 8,599 | 24,540 | 3,404 | ||||||||||||
| Tax effect related to amortization of purchased intangibles | (384 | ) | (199 | ) | (616 | ) | (535 | ) | ||||||||
| Acquisition related-amortization of inventory valuation adjustment | 35 | 250 | 224 | 420 | ||||||||||||
| Goodwill impairment | 1,958 | |||||||||||||||
| Non-GAAP net loss | $ | (555 | ) | $ | (3,307 | ) | $ | (5,666 | ) | $ | (13,438 | ) | ||||
| GAAP basic and diluted net loss per share attributable to CareDx | $ | (0.54 | ) | $ | (0.63 | ) | $ | (1.26 | ) | $ | (1.09 | ) | ||||
| Non-GAAP basic and diluted net loss per share attributable to CareDx | $ | (0.01 | ) | $ | (0.15 | ) | $ | (0.17 | ) | $ | (0.62 | ) | ||||
| Shares used in computing basic and diluted net losses per share | 37,154,293 | 22,526,615 | 34,134,138 | 21,765,292 |
Reconciliation of Non-GAAP to Adjusted EBITDA Financial Measures
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Non-GAAP net loss | $ | (555 | ) | $ | (3,307 | ) | $ | (5,666 | ) | $ | (13,438 | ) | ||||
| Interest expense | 338 | 1,035 | 1,479 | 2,799 | ||||||||||||
| Income tax (benefit) expense | 94 | 21 | (479 | ) | (302 | ) | ||||||||||
| Depreciation expense | 274 | 283 | 800 | 929 | ||||||||||||
| Other expense | 40 | 317 | 85 | 882 | ||||||||||||
| Net loss attributable to noncontrolling interest | (19 | ) | (25 | ) | (133 | ) | ||||||||||
| Adjusted EBITDA | $ | 191 | $ | (1,670 | ) | $ | (3,806 | ) | $ | (9,263 | ) |