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CareDx Reports Fourth Quarter and Full Year 2019 Results

SOUTH SAN FRANCISCO, Calif., Feb. 27, 2020 (GLOBE NEWSWIRE) -- CareDx, Inc. (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 fourth quarter and full year ended December 31, 2019.

Recent Highlights:

  • Achieved total revenue of $35.8 million for the three months ended December 31, 2019, increasing 52% year-over-year
  • Provided over 14,000 patient results in the fourth quarter and approximately 49,000 patient results in 2019
  • As of December 31, 2019, over 30 U.S.-based transplant centers have adopted an AlloSure Kidney testing protocol
  • Generated GAAP net loss of $4.8 million, non-GAAP net income of $1.6 million, and positive adjusted EBITDA of $1.5 million

"We are very pleased with our fourth quarter and 2019 annual financial results," said Peter Maag, CareDx Chief Executive Officer. "2019 was an exceptional year for CareDx, as we continued to build an incredible moat in Transplantation. With AlloSure and AlloMap, we impact more transplant patients every day. With our transplant focused clinical activities and our pipeline advancing, our platform is promising to deliver continued stellar growth."

Fourth Quarter 2019 Financial Results

Revenue for the three months ended December 31, 2019 was $35.8 million, an increase of 52% compared with $23.5 million in the fourth quarter of 2018. Testing services revenue for the fourth quarter was $29.1 million, compared with $18.9 million in the same period of 2018. Product revenue in the three months ended December 31, 2019 was $5.1 million, compared to $4.6 million in the same period of 2018. Digital and other revenue for the fourth quarter of 2019 was $1.6 million.

For the fourth quarter of 2019, net loss was $4.8 million compared to a net loss of $3.8 million in the same period of 2018. Basic and diluted net loss per share was $0.11 in the fourth quarter of 2019, compared to basic and diluted net loss per share of $0.09 in the fourth quarter of 2018.

Non-GAAP net income was $1.6 million in the fourth quarter of 2019 compared to a $0.3 million non-GAAP net income in the fourth quarter of 2018. Basic and diluted non-GAAP net income per share was $0.04 in the fourth quarter of 2019, compared to a basic and diluted non-GAAP net income per share of $0.01 in the fourth quarter of 2018.

Adjusted EBITDA for the fourth quarter of 2019 was a gain of $1.5 million, compared to an adjusted EBITDA gain of $0.8 million in the fourth quarter of 2018.

Net cash used in operating activities in the fourth quarter of 2019 was $1.1 million compared to $2.0 million net cash provided by operating activities in the comparative 2018 period. Cash and cash equivalents were $38.2 million as of December 31, 2019.

Full Year 2019 Financial Results

Revenue for the full year ended December 31, 2019 was $127.1 million, an increase of 66% compared with $76.6 million in full year 2018 revenue. Testing revenue for the year ended December 31, 2019 was $104.6 million, compared to $60.3 million in the same period of 2018. Product revenue for the full year 2019 was $18.3 million, compared to $15.7 million in 2018. Digital and other revenue for the full year 2019 was $4.2 million.

Net loss for the full year ended December 31, 2019 was $22.0 million compared to a net loss of $46.8 million in 2018. Basic and diluted net loss per share for the full year ended December 31, 2019 were $0.52 compared to a basic and diluted net loss per share of $1.31 in the full year 2018.

Non-GAAP net income was $4.6 million for the full year ended December 31, 2019 compared to a non-GAAP net loss of $5.3 million in 2018. Non-GAAP basic and diluted net income per share were $0.11 and $0.10, respectively, in the full year 2019, compared to basic and diluted net loss per share of $0.15 in 2018.

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

For the full year 2020, CareDx expects revenue to be in the range of $165 million to $168 million.

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 solutions along the pre- and post-transplant patient journey, and is a 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 Company's fiscal 2020 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, 2018 filed by CareDx with the SEC on March 6, 2019 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 net loss, non-GAAP basic and diluted net income and net loss per share and adjusted EBITDA. We define non-GAAP net income and non-GAAP net loss and per share results as the GAAP net income or 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 income/(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.

Investor Relations Contact

Greg Chodaczek
646-924-1769
investor@caredx.com


CareDx, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share data)

  Three Months Ended December 31,   Twelve Months Ended December 31,
  2019   2018   2019   2018
Revenue:              
Testing services revenue $ 29,129     $ 18,852     $ 104,550     $ 60,300  
Product revenue 5,053     4,594     18,279     15,674  
Digital and other revenue 1,639     63     4,239     595  
Total revenue $ 35,821     $ 23,509     127,068     76,569  
Cost of revenue 12,716     10,509     45,455     32,987  
Gross profit 23,105     13,000     81,613     43,582  
Operating expenses:              
Research and development 8,946     3,782     30,711     14,514  
Sales and marketing 10,267     5,754     38,894     21,670  
General and administrative 9,437     5,879     36,540     22,976  
Total operating expenses 28,650     15,415     106,145     59,160  
Loss from operations (5,545 )   (2,415 )   (24,532 )   (15,578 )
Other income (expense):              
Interest income (expense), net 306     (174 )   985     (3,701 )
Debt extinguishment expenses     (2,974 )       (5,780 )
Change in estimated fair value of common stock warrant and derivative liabilities 333     1,562     319     (22,978 )
Other expense, net (75 )   (93 )   (719 )   (178 )
Total other income (expense) 564     (1,679 )   585     (32,637 )
Loss before income taxes (4,981 )   (4,094 )   (23,947 )   (48,215 )
Income tax benefit 204     339     1,979     1,434  
Net loss (4,777 )   (3,755 )   (21,968 )   (46,781 )
Net loss attributable to noncontrolling interest             (25 )
Net loss attributable to CareDx, Inc. $ (4,777 )   $ (3,755 )   $ (21,968 )   $ (46,756 )
Net loss per share attributable to CareDx, Inc.              
Basic $ (0.11 )   $ (0.09 )   $ (0.52 )   $ (1.31 )
Diluted $ (0.11 )   $ (0.09 )   $ (0.52 )   $ (1.31 )
Weighted-average shares used to compute net loss per share attributable to CareDx, Inc.:              
Basic 42,457,171     40,104,341     42,151,617     35,638,956  
Diluted 42,457,171     40,104,341     42,151,617     35,638,956  
 


CareDx, Inc.
Consolidated Balance Sheets
(in thousands)

  As of December 31,
  2019   2018
Assets      
Current assets:      
Cash and cash equivalents $ 38,223     $ 64,616  
Accounts receivable 24,057     9,760  
Inventory 6,014     4,943  
Prepaid and other current assets 3,628     1,795  
Total current assets 71,922     81,114  
Property and equipment, net 4,430     4,134  
Operating leases right-of-use assets 4,730      
Intangible assets, net 45,541     33,252  
Goodwill 23,857     12,005  
Restricted cash 256     192  
Other assets 1,000      
Total assets $ 151,736     $ 130,697  
Liabilities and stockholders' equity      
Current liabilities:      
Accounts payable $ 5,506     $ 4,711  
Accrued compensation 12,484     9,156  
Accrued and other liabilities 16,838     5,637  
Total current liabilities 34,828     19,504  
Deferred tax liability 1,973     2,968  
Common stock warrant liability 6,607     10,003  
Deferred payments for intangible assets 5,207      
Other liabilities 4,121     2,294  
Total liabilities 52,736     34,769  
Commitments and contingencies      
Stockholders’ equity:      
Common stock 42     41  
Additional paid-in capital 437,976     412,010  
Accumulated other comprehensive loss (5,205 )   (4,278 )
Accumulated deficit (333,813 )   (311,845 )
Total stockholders' equity 99,000     95,928  
Total liabilities and stockholders' equity $ 151,736     $ 130,697  
 


CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands, except share and per share data)

  Three Months Ended December 31,   Twelve Months Ended December 31,
  2019   2018   2019   2018
               
Net loss attributable to CareDx, Inc. $ (4,777 )   $ (3,755 )   $ (21,968 )   $ (46,756 )
Stock-based compensation expense 5,407     2,060     22,417     7,138  
Acquisition related-amortization of purchased intangibles 1,154     779     3,642     3,241  
Acquisition related fees and expenses         654      
Change in estimated fair value of contingent consideration 210         210     1,017  
Change in estimated fair value of common stock warrant liability and derivative liability (333 )   (1,562 )   (319 )   22,978  
Amortization of debt discount     47         2,095  
Debt extinguishment     2,974         5,780  
Accretion of liability 108         281      
Tax effect related to amortization of purchased intangibles (129 )   (195 )   (493 )   (811 )
Impairment         150      
Non-GAAP net income (loss) $ 1,640     $ 348     $ 4,574     $ (5,318 )
               
GAAP basic and diluted net loss per share $ (0.11 )   $ (0.09 )   $ (0.52 )   $ (1.31 )
               
Non-GAAP basic net income (loss) per share $ 0.04     $ 0.01     $ 0.11     $ (0.15 )
Non-GAAP diluted net income (loss) per share $ 0.04     $ 0.01     $ 0.10     $ (0.15 )
               
Shares used in computing non-GAAP basic net income (loss) per share 42,457,171     40,104,341     42,151,617     35,638,956  
Shares used in computing non-GAAP diluted net income (loss) per share 43,464,685     41,270,703     44,344,803     35,638,956  
 


CareDx, Inc.
Reconciliation of Non-GAAP to Adjusted EBITDA Financial Measures
(Unaudited)
(In thousands)

  Three Months Ended December 31,   Twelve Months Ended December 31,
  2019   2019   2019   2019
               
Non-GAAP net income (loss) $ 1,640     $ 348     $ 4,574     $ (5,318 )
Interest income (306 )   127     (985 )   1,606  
Income tax benefit (75 )   (144 )   (1,486 )   (623 )
Depreciation expense 424     355     1,623     1,155  
Other expense, net (206 )   93     438     178  
Net loss attributable to noncontrolling interest             (25 )
Adjusted EBITDA $ 1,477     $ 779     $ 4,164     $ (3,027 )
 


CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands, except share and per share data)

  Three Months Ended December 31, 2019
  Total revenue Cost of revenue Research and development Sales and marketing General and administrative Total other income (expense) Income tax benefit Net income (loss)
GAAP $ 35,821   $ 12,716   $ 8,946   $ 10,267   $ 9,437   $ 564   $ 204   $ (4,777 )
Non-GAAP adjustments:                
Stock-based compensation expense   (478 ) (1,196 ) (1,212 ) (2,521 )     5,407  
Acquisition related-amortization of purchased intangibles   (788 )   (366 )       1,154  
Acquisition related fees and expenses         —         
Change in estimated fair value of contingent consideration         (210 )     210  
Change in estimated fair value of common stock warrant liability and derivative liability           (333 )   (333 )
Accretion of liability           108     108  
Tax effect related to amortization of purchased intangibles             (129 ) (129 )
Impairment       —          —   
Non-GAAP $ 35,821   $ 11,450   $ 7,750   $ 8,689    $ 6,706   $ 339   $ 75   $ 1,640  


   
  Twelve Months Ended December 31, 2019
  Total revenue Cost of revenue Research and development Sales and marketing General and administrative Total other income (expense) Income tax benefit Net income (loss)
GAAP $ 127,068   $ 45,455   $ 30,711   $ 38,894   $ 36,540   $ 585   $ 1,979   $ (21,968 )
Non-GAAP adjustments:                
Stock-based compensation expense   (2,244 ) (4,366 ) (4,004 ) (11,803 )     22,417  
Acquisition related-amortization of purchased intangibles   (2,394 )   (1,248 )       3,642  
Acquisition related fees and expenses         (654 )     654  
Change in estimated fair value of contingent consideration         (210 )     210  
Change in estimated fair value of common stock warrant liability and derivative liability           (319 )   (319 )
Accretion of liability           281     281  
Tax effect related to amortization of purchased intangibles             (493 ) (493 )
Impairment       (150 )       150  
Non-GAAP $ 127,068   $ 40,817   $ 26,345   $ 33,492   $ 23,873   $ 547   $ 1,486   $ 4,574  
 


CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands, except share and per share data)

  Three Months Ended December 31, 2018
  Total revenue Cost of revenue Research and development Sales and marketing General and administrative Total other income (expense) Income tax benefit Net loss attributable to noncontrolling interest Net loss attributable to CareDx, Inc.
GAAP 23,509   10,509   3,782   5,754   5,879   (1,679 ) 339       (3,755 )
Non-GAAP adjustments:                  
Stock-based compensation expense   (446 ) (193 ) (258 ) (1,163 )       2,060  
Acquisition related-amortization of purchased intangibles   (514 )   (265 )         779  
Change in estimated fair value of common stock warrant liability and derivative liability           (1,562 )     (1,562 )
Amortization of debt discount           47       47  
Debt extinguishment           2,974       2,974  
Tax effect related to amortization of purchased intangibles             (195 )     (195 )
Non-GAAP 23,509   9,549   3,589   5,231   4,716   (220 ) 144       348  


   
  Twelve Months Ended December 31, 2018
  Total revenue Cost of revenue Research and development Sales and marketing General and administrative Total other income (expense) Income tax benefit Net loss attributable to noncontrolling interest Net loss attributable to CareDx, Inc.
GAAP 76,569   32,987   14,514   21,670   22,976   (32,637 ) 1,434   (25 ) (46,756 )
Non-GAAP adjustments:                  
Stock-based compensation expense   (821 ) (1,635 ) (982 ) (3,700 )       7,138  
Acquisition related-amortization of purchased intangibles   (2,207 )   (1,034 )         3,241  
Change in estimated fair value of contingent consideration         1,017         1,017  
Change in estimated fair value of common stock warrant liability and derivative liability           22,978       22,978  
Amortization of debt discount           2,095       2,095  
Debt extinguishment           5,780       5,780  
Tax effect related to amortization of purchased intangibles             (811 )   (811 )
Non-GAAP 76,569   29,959   12,879   19,654   20,293   (1,784 ) 623    (25 ) (5,318 )