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CareDx Q1 Revenues Up 21 Percent

NEW YORK (GenomeWeb) – CareDx reported after the close of the market on Thursday that its first quarter revenues rose 21 percent year over year, thanks to momentum from the recent launch of its kidney transplant test Allosure.

For the three months ended March 31, the diagnostics company said revenues rose to $14.1 million from $11.6 million in Q1 2017, beating analysts' average estimate of $13.3 million.

Testing revenues rose 34 percent year over year to $10.6 million from $7.9 million, while product revenues fell 11 percent to $3.3 million from $3.7 million in the year-ago period. License and other revenues rose to $142,000 from $15,000.

The firm said it provided 1,051 AlloSure tests results to 842 patients, and 3,847 AlloMap heart transplant test results during the quarter. On a conference call with analysts following the release of the earnings, CareDx President and CEO Peter Maag said AlloSure is now being provided in 52 transplant centers in the US, which exceeds the firm's projections. He also noted that AlloMap testing volumes were negatively impacted by inclement weather in parts of the US in Q1, but added that volume growth was still within the firm's target range, and that CareDx remains focused on its strategy for patient adherence to testing protocols.

Maag also said that revenues from CareDx's Olerup tissue typing products fell this quarter because of a decline in Olerup legacy products and a delay in 2017 in the development of the firm's new human leukocyte antigen (HLA) typing diagnostic Olerup QType. However, he added, the Qtype product received CE marking last month and is now available on the Roche LightCycler and Applied Biosystems' platforms. The firm is now scaling up manufacturing to meet demand from US and EU customers, Maag said.

CareDx also noted that it has signed a licensing and commercialization agreement with Illumina for the worldwide distribution, development, and commercialization rights to Illumina's next-generation sequencing transplant clinical application products. CareDx will be the exclusive worldwide distributor of Illumina's TruSight HLA v1 and v2 product lines, and associated Assign HLA software. The firm said it plans to use the Illumina products for bone marrow transplantation diagnostic testing and solid organ transplantation diagnostic testing. It has been granted exclusive rights to develop and commercialize the next generation, v3, of the HLA product lines for use in bone marrow and solid organ transplant testing, and as an NGS product for chimerism detection.

On the call, Maag gave some additional details for the individual products — which will be sold under the overall brand of AlloSeq — that CareDx plans to develop under the new agreement with Illumina. He said the AlloSeq HLA product will enhance the turnaround time and workflow of existing NGS HLA products. It will be an advancement to Illumina's hybrid capture technology, and will include proprietary CareDx software as well. The company anticipates launching it in the first half of 2019.

AlloSeq BMT for bone-marrow transplants will be an NGS solution to evaluate the amount of donor versus recipient cells in post-BMT transplant blood samples in patients who have undergone allogeneic hematopoietic stem cell transplantation, Maag said. He noted that the test will give CareDx an opportunity to expand outward from solid organ transplantation. The firm anticipates launching AlloSeq BMT at the beginning of 2019.

AlloSeq cfDNA will likely come in a kit format, he added, but the firm does not yet have a timeline for its launch.

CareDx's Q1 2018 net loss widened to $9.0 million, or $.30 per share, from $5.6 million, or $.26 per share, a year ago. On an adjusted basis, the firm reported a net loss of $.14 per share for the quarter.

The company's R&D expenses for the quarter rose 3 percent to $3.4 million from $3.3 million in Q1 2017, and its SG&A costs fell 3 percent to $9.4 million from $9.7 million in the year-ago period.

CareDx ended the quarter with $18.7 million in cash and cash equivalents.

For full-year 2018, CareDx expects revenues of $64 million to $66 million, which includes the anticipated contribution from the partnership agreement with Illumina. Analysts are expecting 2018 revenues of $61.4 million.

CareDx's shares fell more than 2 percent to $10.91 in Friday morning trading on the Nasdaq.