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CareDx Q3 Revenues Up 60 Percent

NEW YORK – CareDx reported after the close of the market on Thursday that its third quarter revenues rose 60 percent year over year, thanks largely to a 68 percent increase in testing services revenues.

For the three months ended Sept. 30, the molecular diagnostics company reported total revenues of $33.8 million, up from $21.2 million during the same period a year earlier and beating the average Wall Street estimate of $33.1 million.

"Our third quarter results demonstrate continued strong execution," CareDx CEO Peter Maag said in a statement. "The CareDx team yet again delivered a record quarter, with revenue increasing 60 percent year over year and AlloSure being used to manage more patients this quarter than ever before. During the quarter, we also added to our digital transplantation platform with the acquisition of XynManagement. Each of these achievements contributes to our widening competitive advantage as the leading partner for the transplant community."

Testing services revenues rose to $28.2 million from $16.8 million in the prior-year quarter, and product revenues stayed flat at $4.2 million. Digital and other revenues rose to $1.4 million from $114,000 in Q3 2018.

CareDx also said it returned 8,524 results from its AlloSure blood-based, donor-derived, cell-free DNA test for organ transplant rejection to 6,597 kidney transplant patients during Q3, and that it provided 4,726 AlloMap heart transplant test results, an increase of 16 percent year over year.

On a conference call with analysts following the release of the earnings, Maag said that the company has returned almost 14,000 results since the launch of AlloSure, and that the test is now being used by about 7 percent of the total living kidney transplant patients in the US. Further, 124 transplant centers covering about 65 percent of the transplant volume in the US provided AlloSure to patients in Q3.

Maag also said that 5,700 surveillance patients were using AlloSure by the end of Q3. CareDx is also seeing continued adoption of its HeartCare test in the heart transplant community, he further noted.

The firm's Q3 net loss narrowed to $1.8 million, or $.04 per share, from $20.0 million, or $.54 per share, in Q3 2018. On an adjusted basis, the company reported earnings per share of $.02, beating analysts' consensus expectation for EPS of $.01.

CareDx's Q3 R&D costs rose 118 percent to $8.5 million from $3.9 million in the year-ago quarter, and its SG&A expenses rose 84 percent to $20.6 million from $11.2 million.

The company ended the quarter with $40.9 million in cash and cash equivalents, and $251,000 in restricted cash.

CareDx increased its revenue guidance for the full year and now expects revenues of $124 million to $125 million for 2019. The company had previously anticipated revenues of $123 million to $125 million. Analysts expect revenues of $125.5 million for 2019.

The guidance for 2019 implies that revenues in Q4 will be flat sequentially, but Maag noted that CareDx's Q4 is usually affected by the holidays. CFO Michael Bell also noted that the strong results the company saw in Q3 allowed it to raise the lower end of the guidance range for the year, and that CareDx expects to see some sequential growth from AlloSure in Q4.

CareDx's shares fell more than 7 percent to $24.33 in Friday morning trading on the Nasdaq.