NEW YORK (GenomeWeb) – CareDx reported after the close of the market on Thursday that its second quarter revenues rose 12 percent, mostly due to a 16 percent increase in revenues from its non-invasive heart transplant rejection test AlloMap.
For the three months ended June 30, the firm reported total revenues of $12.0 million, up from $10.7 million in Q2 2016, and beating the average Wall Street estimate for revenues of $11.8 million.
Testing revenues from AlloMap rose to $8.4 million from $7.2 million a year earlier, offsetting a slight dip in product revenues from Olerup-branded HLA typing kits, which fell to $3.4 million from $3.5 million in the year-ago period. Collaboration and license revenues climbed to $250,000 from $11,000 the year before.
"With our core products performing well, we have a great platform in place to grow CareDx's business in 2018 and beyond. We are excited to be a few months in front of our October [launch of cfDNA-based organ transplant test] AlloSure, which provides a transformational business opportunity for us," CareDx CEO Peter Maag said in a statement. "We recently restructured the obligations with certain shareholders, which has increased our financial flexibility ahead of the launch and allows us to continue our drive toward profitability in 2018."
On a conference call with analysts following the release of the earnings, Maag added that CareDx returned 3,860 AlloMap test results during the quarter, a 7 percent increase from Q2 2016. He further noted that the company is anticipating PAMA pricing will go ahead next year, which will likely have a positive effect on CareDx as it will lead to pricing certainty for Medicare patients, who make up about 40 percent to 50 percent of AlloMap's users.
Maag also outlined some of CareDx's plans for the launch of AlloSure, including its near-term goal of securing Medicare coverage. Palmetto GBA issued a draft local coverage determination for the test in May, proposing limited coverage to measure the probability of allograft rejection in kidney transplant recipients for whom there is a clinical suspicion of rejection at least two weeks post-transplant.
Maag said CareDx has been participating in discussions with Palmetto to finalize the decision and begin pricing discussions with the Centers for Medicare and Medicaid Services. Once coverage with CMS is finalized, about 80 percent of potential AlloSure patients would be covered for the test, Maag said. Therefore, the company's primary focus right now is on getting that reimbursement decision, rather than negotiating for reimbursement with private payors.
Many diagnostic tests never get to or go beyond an 80 percent coverage rate, so getting this coverage would put CareDx ahead of the curve, he noted, adding that with a 10 percent larger market than AlloMap, AlloSure has the potential to bring in $200 million in revenues per year.
The company's Q2 net loss narrowed to $4.0 million, or $.19 per share, from $10.5 million, or $.77 per share, in Q2 2016. On an adjusted basis, CareDx reported a net loss of $.17 per share, beating analysts' consensus estimate for a loss of $.19 per share.
CareDx's Q2 R&D costs were flat year over year at $3.1 million, while its SG&A expenses for the quarter fell 16 percent to $7.4 million from $8.8 million a year earlier.
The company ended the quarter with $9.1 million in cash and cash equivalents.
For full-year 2017, CareDx expects revenues to be in the range of $46 million to $49 million, excluding any potential revenues from AlloSure. Analysts are expecting 2017 sales of $47.3 million.
The firm's shares rose 15 percent to $1.54 in after-hours trading on the Nasdaq.