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CareDx Q2 Revenues Up 51 Percent

NEW YORK (GenomeWeb) – CareDx reported after the close of the market on Wednesday that its second quarter revenues rose 51 percent year over year thanks to record volumes of its AlloMap non-invasive blood test for heart transplant patients.

For the three months ended June 30, the firm reported total revenues of $10.7 million, up from $7.1 million a year ago, and narrowly beating the consensus Wall Street estimate for revenues of $10.4 million.

AlloMap revenues rose to $7.2 million from $7.0 million in the year-ago period. Revenues from its Olerup HLA testing service, which CareDx acquired when it bought Swedish transplant diagnostics company Allenex in April, were $3.4 million for Q2. Collaboration and licensing revenues fell to $11,000 from $85,000 in Q2 2015.

"This quarter points to the successful execution of our strategy in building CareDx as a transplant-focused genomic information company. We are reporting for the first time consolidated financials for the Olerup pre-transplant and CareDx post-transplant operations," said President and CEO Peter Maag in a statement. "Along with the successful acquisition of Allenex, we achieved record core AlloMap test volumes."

AlloMap patient results volumes in the US rose 12 percent year over year, the firm added. On a conference call with analysts following the release of the results, Maag said 3,600 AlloMap patient results were returned in Q2, and that the number of centers with established AlloMap protocols grew by one to 65.

Maag also noted the company is currently having a problem with the price some local Medicare administrative contractors are recommending for AlloMap reimbursement in 2017. The prices being suggested are 24 percent less than reimbursement prices for the test in 2016.

"We have no insights into how they determined these price levels, and we find it unacceptable that these contractors refuse to meet with us to discuss these price proposals," Maag said. The company is looking to petition the Centers for Medicare and Medicaid Services for a reconsideration, and expects a final decision in November.

Inappropriate reimbursement rates injure patients, stifle innovation, and slow the adoption of precision medicine, Maag said. However, CareDx is confident it will prevail on 2017 prices, and is also confident that with the implementation of PAMA and market-based pricing for diagnostics, 2018 reimbursement levels will match current levels.

The firm reported its net loss for the quarter widened to $10.3 million, or $.76 per share, from $3.2 million, or $.27 per share, a year ago. On an adjusted basis, the company reported a loss per share of $.29, missing analysts' average estimate for a loss of $.28 per share.

Its R&D costs rose 24 percent to $3.1 million from $2.5 million in Q2 2015, and its SG&A costs rose 79 percent to $8.6 million from $4.8 million.

CareDx ended the quarter with $17.1 million in cash and cash equivalents.

For 2016, the company reiterated its previous guidance for revenues of $40 million to $42 million. Analysts, on average, expect revenues of $40.4 million for the year.