NEW YORK – CareDx reported after the close of market Wednesday a year-over-year revenue increase of 31 percent for the second quarter of 2024. The Brisbane, California-based transplant diagnostics company also beat analyst estimates on the top and bottom lines and raised its full-year revenue guidance.
As a result, shares of CareDx spiked roughly 18 percent at midmorning Thursday on the Nasdaq, trading at $23.69 per share.
CareDx finished the three months ended June 30 with approximately $92.3 million in total revenues compared to $70.3 million for the same quarter in 2023. This beat analysts' average estimate of approximately $67.9 million.
Testing services provided the bulk of revenue for the quarter at $70.9 million, compared with $53.4 million in the same period in 2023. This included $13.2 million for tests performed over the past several years.
In an after-market call with investors, CareDx CFO Abhishek Jain said that improved collections operations and productive interactions with payors have helped the firm realize revenue in this area of the business and are expected to continue doing so going forward, although he cautioned that some collections continue to lag in dealing with Medicare Advantage.
The company achieved two firsts in realizing over $10 million in quarterly revenue in both patient and digital solutions and products. Patient and digital solutions revenue rose approximately 19 percent to $10.7 million from $9.0 million in Q2 2023, while product revenue rose approximately 35 percent to $10.6 million from $7.9 million a year ago.
"This strong growth was primarily driven by continued global adoption of our industry-leading AlloSeq Tx NGS-based HLA typing kits for use in bone marrow transplantation and solid organ transplantation," said President and CEO John Hanna.
Hanna singled out test adoption in "price-sensitive" markets such as Italy, where two HLA labs recently transitioned from real-time PCR-based HLA typing platforms to AlloSeq Tx.
"We believe this will continue," Hanna said.
Hanna also pointed to increasing surveillance testing by physicians as a steady growth driver. Last year, the Centers for Medicare and Medicaid Services (CMS) implemented billing article changes that limited reimbursement and redefined what constituted acceptable surveillance testing, causing widespread confusion and concern among stakeholders in the organ transplant space. CMS later clarified these changes, but usage of CareDx's HeartCare and KidneyCare products was impacted.
"We see that clinicians are using the tests and are being more comfortable with the scenarios in which they can be used for cause," Hanna said.
CareDx's Q2 net loss was approximately $1.4 million, or $.03 per share, compared to approximately $25 million, or $.46 per share, in the same quarter last year. Analysts on average had predicted an LPS of $.14.
CareDx's R&D spending dipped nearly 3 percent to $19.7 million from $20.2 million in the same quarter last year, while its SG&A expenses fell roughly 4 percent to approximately $48.7 million from $50.9 million in Q2 of last year.
CareDx ended the quarter with $95.8 million in cash and cash equivalents and $133.1 million in marketable securities.
The company said it now anticipates full-year revenue to be in the range of $320 million to $328 million, compared to a previous range of $274 million to $282 million.
"Our 2024 guidance assumes testing services [and] volume growth in the high teens and revenue growth in the mid-20s year over year for the second half of 2024," Jain said. "The difference in our assumptions between volume and revenue growth rate is driven by ASP [average selling price] expansion. We are assuming approximately $1,300 per test as our blended ASP for the second half of 2024."