CareDx, Inc (NASDAQ:CDNA) Q2 2018 Earnings Conference Call Transcript

Aug 09, 2018 • 04:30 pm ET

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CareDx, Inc (NASDAQ:CDNA) Q2 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Greetings, and welcome to the CareDx Second Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It's now my pleasure to introduce your host, David Clair, IR for CareDx. David, please go ahead.

Executive
David Clair

Good afternoon, and thank you for joining us today. Earlier today, CareDx released financial results for the quarter ended June 30th, 2018. The release is currently available on the company's website at www.caredx.com. Peter Maag, CEO and President; and Michael Bell, CFO, will host this afternoon's call.

(Forward-Looking Cautionary Statements)

This call will also include a discussion of a financial measure that is not calculated in accordance with generally accepted accounting principles. Reconciliation to the most directly comparable GAAP financial measure may be found in today's earnings release filed with the SEC.

I will now turn the call over to Peter.

Executive
Peter Maag

Thanks, David, and good afternoon, everyone. Thank you for joining us. We had an exciting second quarter. You have heard me speak about individual patients at the beginning of these calls. Now, less than nine months into the AlloSure launch, CareDx supports approximately 1% of all the US living kidney transplant patients.

Our strategy to bring high-value diagnostic solutions to transplant patients is now in commercial execution mode and drove strong financial performance in the quarter. This afternoon, I will provide an update on the recent achievements across our two key business drivers, transplant testing services and transplant lab products. Mike will then provide additional financial details on our second quarter performance and discuss our 2018 guidance. It's great to see the acceleration of our top line with total revenues growing 48% year-over-year to $17.8 million, driven by a 66 year-over-year percent increase in testing services revenue to $14 million.

Our second quarter adjusted EBITDA was a loss of $0.8 million, an improvement from a loss of $3.2 million in the prior quarter. We are clearly seeing momentum in our business and remain on track to deliver positive adjusted EBITDA in the back half of 2018. AlloSure remains the biggest contributor to our robust growth. With Medicare reimbursement in place and multiple peer-reviewed publications supporting clinical and analytical validity, AlloSure is positioned for continued exceptional growth in the quarters and years ahead. Our laser-sharp focus on better kidney transplant surveillance is being embraced by both patients and transplant centers.

At the end of the second quarter, 76 centers had provided AlloSure results to their transplant patients since launch, which is higher than our initial internal projections. These 76 centers represent roughly half of the kidney transplant volume in the US. CareDx provided 2,300 patient results in the second quarter to approximately 1,700 kidney transplantations.

Overall, reimbursement was consistent with previous quarters, with 70% to 80% of our AlloSure volume attributed to Medicare patients. Demand for AlloSure continues to be broad and includes both patients who recently received a kidney transplant as well as