CareDx, Inc. (Nasdaq: CDNA) — The Transplant 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 second quarter ended June 30, 2022.
Recent Highlights:
- Delivered 45,000 patient test results, representing growth of 21% compared to second quarter of 2021
- Achieved revenue of $80.6 million, increasing 9% year-over-year
- Sustained strong overall GAAP gross margin of 66%
- Project to achieve profitable growth with positive adjusted EBITDA by first half of 2023
- Strong capital position with $306M cash, cash equivalents, marketable securities, and no debt
- Revised 2022 revenue expectations to the range of $325 million to $335 million due to higher than expected mix of commercial patients from the success of new launches and market expansion
"We ended the first half of 2022 in an excellent financial position and are pleased to see the momentum in our testing volume and growth in the patient digital solutions," said Reg Seeto, President and Chief Executive Officer of CareDx. "We will build on this momentum to achieve positive adjusted EBITDA in the first half of 2023 and extend our leadership in the transplant ecosystem."
Second Quarter 2022 Financial Results
Revenue for the three months ended June 30, 2022 was $80.6 million, an increase of 9% compared with $74.2 million in the second quarter of 2021. Testing services revenue for the second quarter of 2022 was $67.1 million, compared with $64.9 million in the same period of 2021. Product revenue in the three months ended June 30, 2022 was $6.7 million, compared to $6.9 million in the same period of 2021. Patient and digital solutions revenue for the second quarter of 2022 was $6.8 million, compared to $2.4 million in the same period of 2021.
For the second quarter of 2022, net loss was $21.7 million compared to a net loss of $1.9 million in the same period of 2021. Basic and diluted net loss per share was $0.41 in the second quarter of 2022, compared to basic and diluted net loss per share of $0.04 in the second quarter of 2021.
Non-GAAP net loss was $7.0 million in the second quarter of 2022 compared to a $5.9 million non-GAAP net income in the second quarter of 2021. Diluted non-GAAP net loss per share was $0.13 in the second quarter of 2022, compared to a diluted non-GAAP net income per share of $0.11 in the second quarter of 2021.
Adjusted EBITDA for the second quarter of 2022 was a loss of $5.7 million, compared to an adjusted EBITDA gain of $6.8 million in the second quarter of 2021.
Cash, cash equivalents and marketable securities were $306.2 million as of June 30, 2022.
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.
2022 Guidance
For the full year 2022, CareDx is revising our revenue expectations to be in the range of $325 million to $335 million due to higher than expected mix of commercial patients from the success of new launches and market expansion.
About CareDx– The Transplant Company
CareDx, Inc., headquartered in Brisbane, 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, patient and digital 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 CareDx's 2022 revenue and achieving positive adjusted EBITDA by first half of 2023. 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, general economic and market factors, and global economic and marketplace uncertainties related to the COVID-19 pandemic, 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, 2021 filed by CareDx with the SEC on February 24, 2022, 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/(loss), non-GAAP basic and diluted net income/(loss) per share and adjusted EBITDA. We define non-GAAP net income/(loss) and per share results as the GAAP net income (loss) and per share results excluding the impacts of stock-based compensation; changes in fair value of equity investments, 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 income/(expense), income tax benefit, 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.
|
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,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Testing services revenue
|
$
|
67,135
|
|
|
$
|
64,890
|
|
|
$
|
133,579
|
|
|
$
|
124,171
|
|
|
Product revenue
|
|
6,714
|
|
|
|
6,861
|
|
|
|
13,502
|
|
|
|
12,639
|
|
|
Patient and digital solutions revenue
|
|
6,785
|
|
|
|
2,437
|
|
|
|
12,969
|
|
|
|
4,778
|
|
|
Total revenue
|
|
80,634
|
|
|
|
74,188
|
|
|
|
160,050
|
|
|
|
141,588
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Cost of testing services
|
|
18,230
|
|
|
|
17,235
|
|
|
|
35,858
|
|
|
|
33,718
|
|
|
Cost of product
|
|
3,887
|
|
|
|
5,205
|
|
|
|
8,286
|
|
|
|
8,852
|
|
|
Cost of patient and digital solutions
|
|
5,422
|
|
|
|
1,533
|
|
|
|
10,277
|
|
|
|
2,982
|
|
|
Research and development
|
|
22,632
|
|
|
|
19,036
|
|
|
|
44,512
|
|
|
|
35,040
|
|
|
Sales and marketing
|
|
26,950
|
|
|
|
19,599
|
|
|
|
50,098
|
|
|
|
35,051
|
|
|
General and administrative
|
|
25,232
|
|
|
|
16,322
|
|
|
|
51,791
|
|
|
|
31,545
|
|
|
Total operating expenses
|
|
102,353
|
|
|
|
78,930
|
|
|
|
200,822
|
|
|
|
147,188
|
|
|
Loss from operations
|
|
(21,719
|
)
|
|
|
(4,742
|
)
|
|
|
(40,772
|
)
|
|
|
(5,600
|
)
|
|
Other (expense) income:
|
|
|
|
|
|
|
|
|
Interest income, net
|
|
478
|
|
|
|
1
|
|
|
|
667
|
|
|
|
127
|
|
|
Change in estimated fair value of common stock warrant liability
|
|
48
|
|
|
|
(65
|
)
|
|
|
75
|
|
|
|
(38
|
)
|
|
Other (expense) income, net
|
|
(553
|
)
|
|
|
2,779
|
|
|
|
(1,376
|
)
|
|
|
2,534
|
|
|
Total other (expense) income
|
|
(27
|
)
|
|
|
2,715
|
|
|
|
(634
|
)
|
|
|
2,623
|
|
|
Loss before income taxes
|
|
(21,746
|
)
|
|
|
(2,027
|
)
|
|
|
(41,406
|
)
|
|
|
(2,977
|
)
|
|
Income tax benefit
|
|
49
|
|
|
|
100
|
|
|
|
61
|
|
|
|
363
|
|
|
Net loss
|
$
|
(21,697
|
)
|
|
$
|
(1,927
|
)
|
|
$
|
(41,345
|
)
|
|
$
|
(2,614
|
)
|
|
Net loss per share:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.41
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(0.05
|
)
|
|
Diluted
|
$
|
(0.41
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(0.05
|
)
|
|
Weighted-average shares used to compute net loss per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
53,249,545
|
|
|
|
52,224,300
|
|
|
|
53,133,149
|
|
|
|
51,705,587
|
|
|
Diluted
|
|
53,249,545
|
|
|
|
52,224,300
|
|
|
|
53,133,149
|
|
|
|
51,705,587
|
|
|
CareDx, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)
|
|
|
|
June 30, 2022
|
|
December 31, 2021
|
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
$
|
166,832
|
|
|
$
|
348,485
|
|
|
Marketable securities
|
|
139,388
|
|
|
|
—
|
|
|
Accounts receivable
|
|
70,142
|
|
|
|
59,761
|
|
|
Inventory
|
|
18,861
|
|
|
|
17,186
|
|
|
Prepaid and other current assets
|
|
8,657
|
|
|
|
7,928
|
|
|
Total current assets
|
|
403,880
|
|
|
|
433,360
|
|
|
Property and equipment, net
|
|
32,904
|
|
|
|
22,044
|
|
|
Operating leases right-of-use assets
|
|
15,841
|
|
|
|
17,993
|
|
|
Intangible assets, net
|
|
46,318
|
|
|
|
50,195
|
|
|
Goodwill
|
|
37,084
|
|
|
|
36,983
|
|
|
Restricted cash
|
|
204
|
|
|
|
211
|
|
|
Other assets
|
|
5,057
|
|
|
|
5,835
|
|
|
Total assets
|
$
|
541,288
|
|
|
$
|
566,621
|
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
$
|
16,892
|
|
|
$
|
13,337
|
|
|
Accrued compensation
|
|
14,631
|
|
|
|
26,042
|
|
|
Accrued and other liabilities
|
|
46,933
|
|
|
|
37,922
|
|
|
Total current liabilities
|
|
78,456
|
|
|
|
77,301
|
|
|
Deferred tax liability
|
|
25
|
|
|
|
415
|
|
|
Common stock warrant liability
|
|
64
|
|
|
|
139
|
|
|
Deferred payments for intangible assets
|
|
2,877
|
|
|
|
5,041
|
|
|
Operating lease liability, less current portion
|
|
16,065
|
|
|
|
17,394
|
|
|
Other liabilities
|
|
252
|
|
|
|
455
|
|
|
Total liabilities
|
|
97,739
|
|
|
|
100,745
|
|
|
Commitments and contingencies
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
Common stock
|
|
52
|
|
|
|
52
|
|
|
Additional paid-in capital
|
|
875,213
|
|
|
|
853,683
|
|
|
Accumulated other comprehensive loss
|
|
(7,182
|
)
|
|
|
(4,670
|
)
|
|
Accumulated deficit
|
|
(424,534
|
)
|
|
|
(383,189
|
)
|
|
Total stockholders’ equity
|
|
443,549
|
|
|
|
465,876
|
|
|
Total liabilities and stockholders’ equity
|
$
|
541,288
|
|
|
$
|
566,621
|
|
|
CareDx, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands)
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Cost of testing services reconciliation:
|
|
|
|
|
|
|
|
|
GAAP cost of testing services
|
$
|
18,230
|
|
|
$
|
17,235
|
|
|
$
|
35,858
|
|
|
$
|
33,718
|
|
|
Stock-based compensation expense
|
|
(566
|
)
|
|
|
(570
|
)
|
|
|
(585
|
)
|
|
|
(965
|
)
|
|
Acquisition related-amortization of purchased intangibles
|
|
(329
|
)
|
|
|
(329
|
)
|
|
|
(658
|
)
|
|
|
(658
|
)
|
|
Non-GAAP cost of testing services
|
$
|
17,335
|
|
|
$
|
16,336
|
|
|
$
|
34,615
|
|
|
$
|
32,095
|
|
|
Cost of product reconciliation:
|
|
|
|
|
|
|
|
|
GAAP cost of product
|
$
|
3,887
|
|
|
$
|
5,205
|
|
|
$
|
8,286
|
|
|
$
|
8,852
|
|
|
Stock-based compensation expense
|
|
(402
|
)
|
|
|
(214
|
)
|
|
|
(530
|
)
|
|
|
(289
|
)
|
|
Acquisition related-amortization of purchased intangibles
|
|
(437
|
)
|
|
|
(489
|
)
|
|
|
(890
|
)
|
|
|
(954
|
)
|
|
Non-GAAP cost of product
|
$
|
3,048
|
|
|
$
|
4,502
|
|
|
$
|
6,866
|
|
|
$
|
7,609
|
|
|
Cost of patient and digital solutions reconciliation:
|
|
|
|
|
|
|
|
|
GAAP cost of patient and digital solutions
|
$
|
5,422
|
|
|
$
|
1,533
|
|
|
$
|
10,277
|
|
|
$
|
2,982
|
|
|
Stock-based compensation expense
|
|
(391
|
)
|
|
|
(230
|
)
|
|
|
(583
|
)
|
|
|
(338
|
)
|
|
Acquisition related-amortization of purchased intangibles
|
|
(236
|
)
|
|
|
(141
|
)
|
|
|
(472
|
)
|
|
|
(249
|
)
|
|
Non-GAAP cost of patient and digital solutions
|
$
|
4,795
|
|
|
$
|
1,162
|
|
|
$
|
9,222
|
|
|
$
|
2,395
|
|
|
Research and development expenses reconciliation:
|
|
|
|
|
|
|
|
|
GAAP research and development expenses
|
$
|
22,632
|
|
|
$
|
19,036
|
|
|
$
|
44,512
|
|
|
$
|
35,040
|
|
|
Stock-based compensation expense
|
|
(2,323
|
)
|
|
|
(1,940
|
)
|
|
|
(4,513
|
)
|
|
|
(3,298
|
)
|
|
Non-GAAP research and development expenses
|
$
|
20,309
|
|
|
$
|
17,096
|
|
|
$
|
39,999
|
|
|
$
|
31,742
|
|
|
Sales and marketing expenses reconciliation:
|
|
|
|
|
|
|
|
|
GAAP sales and marketing expenses
|
$
|
26,950
|
|
|
$
|
19,599
|
|
|
$
|
50,098
|
|
|
$
|
35,051
|
|
|
Stock-based compensation expense
|
|
(3,907
|
)
|
|
|
(2,632
|
)
|
|
|
(7,030
|
)
|
|
|
(4,292
|
)
|
|
Acquisition related-amortization of purchased intangibles
|
|
(543
|
)
|
|
|
(461
|
)
|
|
|
(1,148
|
)
|
|
|
(842
|
)
|
|
Non-GAAP sales and marketing expenses
|
$
|
22,500
|
|
|
$
|
16,506
|
|
|
$
|
41,920
|
|
|
$
|
29,917
|
|
|
General and administrative expenses reconciliation:
|
|
|
|
|
|
|
|
|
GAAP general and administrative expenses
|
$
|
25,232
|
|
|
$
|
16,322
|
|
|
$
|
51,791
|
|
|
$
|
31,545
|
|
|
Stock-based compensation expense
|
|
(5,004
|
)
|
|
|
(3,811
|
)
|
|
|
(9,986
|
)
|
|
|
(6,763
|
)
|
|
Change in estimated fair value of contingent consideration
|
|
(500
|
)
|
|
|
147
|
|
|
|
(564
|
)
|
|
|
191
|
|
|
Acquisition related fees and expenses
|
|
(186
|
)
|
|
|
(210
|
)
|
|
|
(329
|
)
|
|
|
(381
|
)
|
|
Non-GAAP general and administrative expenses
|
$
|
19,542
|
|
|
$
|
12,448
|
|
|
$
|
40,912
|
|
|
$
|
24,592
|
|
|
Total other income (expense) reconciliation:
|
|
|
|
|
|
|
|
|
GAAP other (expense) income, net
|
$
|
(27
|
)
|
|
$
|
2,715
|
|
|
$
|
(634
|
)
|
|
$
|
2,623
|
|
|
Unrealized (gain) loss on long-term marketable equity securities
|
|
(21
|
)
|
|
|
(3,090
|
)
|
|
|
486
|
|
|
|
(3,090
|
)
|
|
Change in estimated fair value of common stock warrant liability
|
|
(48
|
)
|
|
|
65
|
|
|
|
(75
|
)
|
|
|
38
|
|
|
Accretion of liability
|
|
37
|
|
|
|
64
|
|
|
|
92
|
|
|
|
144
|
|
|
Non-GAAP other expense, net
|
$
|
(59
|
)
|
|
$
|
(246
|
)
|
|
$
|
(131
|
)
|
|
$
|
(285
|
)
|
|
Income tax benefit reconciliation:
|
|
|
|
|
|
|
|
|
GAAP income tax benefit
|
$
|
49
|
|
|
$
|
100
|
|
|
$
|
61
|
|
|
$
|
363
|
|
|
Tax effect related to amortization of purchased intangibles
|
|
(107
|
)
|
|
|
(117
|
)
|
|
|
(220
|
)
|
|
|
(251
|
)
|
|
Non-GAAP income tax (loss) benefit
|
$
|
(58
|
)
|
|
$
|
(17
|
)
|
|
$
|
(159
|
)
|
|
$
|
112
|
|
|
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,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
GAAP net loss
|
$
|
(21,697
|
)
|
|
$
|
(1,927
|
)
|
|
$
|
(41,345
|
)
|
|
$
|
(2,614
|
)
|
|
Stock-based compensation expense
|
|
12,593
|
|
|
|
9,397
|
|
|
|
23,227
|
|
|
|
15,945
|
|
|
Unrealized (gain) loss on long-term marketable equity securities
|
|
(21
|
)
|
|
|
(3,090
|
)
|
|
|
486
|
|
|
|
(3,090
|
)
|
|
Acquisition related-amortization of purchased intangibles
|
|
1,545
|
|
|
|
1,420
|
|
|
|
3,168
|
|
|
|
2,703
|
|
|
Acquisition related fees and expenses
|
|
186
|
|
|
|
210
|
|
|
|
329
|
|
|
|
381
|
|
|
Change in estimated fair value of contingent consideration
|
|
500
|
|
|
|
(147
|
)
|
|
|
564
|
|
|
|
(191
|
)
|
|
Change in estimated fair value of common stock warrant liability
|
|
(48
|
)
|
|
|
65
|
|
|
|
(75
|
)
|
|
|
38
|
|
|
Accretion of liability
|
|
37
|
|
|
|
64
|
|
|
|
92
|
|
|
|
144
|
|
|
Tax effect related to amortization of purchased intangibles
|
|
(107
|
)
|
|
|
(117
|
)
|
|
|
(220
|
)
|
|
|
(251
|
)
|
|
Non-GAAP net (loss) income
|
$
|
(7,012
|
)
|
|
$
|
5,875
|
|
|
$
|
(13,774
|
)
|
|
$
|
13,065
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic and diluted net loss per share
|
$
|
(0.41
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic net (loss) income per share
|
$
|
(0.13
|
)
|
|
$
|
0.11
|
|
|
$
|
(0.26
|
)
|
|
$
|
0.25
|
|
|
Non-GAAP diluted net (loss) income per share
|
$
|
(0.13
|
)
|
|
$
|
0.11
|
|
|
$
|
(0.26
|
)
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing non-GAAP basic net loss/income per share
|
|
53,249,545
|
|
|
|
52,224,300
|
|
|
|
53,133,149
|
|
|
|
51,705,587
|
|
|
Shares used in computing non-GAAP diluted net loss/income per share
|
|
53,249,545
|
|
|
|
54,722,122
|
|
|
|
53,133,149
|
|
|
|
54,311,138
|
|
|
CareDx, Inc.
Reconciliation of Non-GAAP to Adjusted EBITDA Financial Measures
(Unaudited)
(In thousands)
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Non-GAAP net (loss) income
|
$
|
(7,012
|
)
|
|
$
|
5,875
|
|
|
$
|
(13,774
|
)
|
|
$
|
13,065
|
|
|
Interest income
|
|
(478
|
)
|
|
|
(1
|
)
|
|
|
(667
|
)
|
|
|
(127
|
)
|
|
Income tax benefit (expense)
|
|
58
|
|
|
|
17
|
|
|
|
159
|
|
|
|
(112
|
)
|
|
Depreciation expense
|
|
1,162
|
|
|
|
668
|
|
|
|
2,102
|
|
|
|
1,255
|
|
|
Other expense, net
|
|
537
|
|
|
|
247
|
|
|
|
798
|
|
|
|
412
|
|
|
Adjusted EBITDA
|
$
|
(5,733
|
)
|
|
$
|
6,806
|
|
|
$
|
(11,382
|
)
|
|
$
|
14,493
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220804005967/en/