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CareDx Q3 Revenues Up 74 Percent

NEW YORK (GenomeWeb) – CareDx reported after the close of the market on Wednesday that its third quarter revenues rose 74 percent year over year, thanks largely to a 6 percent increase in test volume for its AlloMap non-invasive blood test for heart transplant patients.

For the three months ended Sept. 30, the diagnostics company said revenues rose to $12.5 million from $7.2 million a year earlier, beating the average Wall Street analyst estimate of $11.5 million.

AlloMap testing revenues rose to $8.6 million from $7.0 million in Q3 2015. The company also reported $3.8 million in product revenues from the Olerup product line obtained through its acquisition of Allenex in April. Revenues from collaboration and licensing fell to $108,000 from $144,000 a year ago.

"We continue to execute on our growth strategy, with a successful first full quarter of integration of the Olerup products and further development of our pipeline products, most importantly [solid organ transplant diagnostic] AlloSure," CareDx President and CEO Peter Maag said in a statement. "The reimbursement team has also made significant progress in catching up on collections."

On a call with analysts following the release of the earnings, Maag added that of the 1,000 transplant centers in the world, CareDx estimates that half of them use Olerup products. He noted that the company has already received commercial orders for the Olerup QType HLA testing kit in October, after launching the product in September. CareDx plans to do several demonstrations of the product at transplant centers in the US and Europe in the fourth quarter, he said.

Next, the company plans to get the test CE marked and further validated. Maag said he believes CareDx can achieve 30 percent market share within a few years with the Olerup product line.

The firm's Q3 net loss widened to $3.8 million from $3.5 million a year ago. However, its loss per share narrowed to $.26 in the recently completed quarter from $.29 in Q3 2015 as the number of weighted average shares used to compute net loss rose to 19.5 million in Q3 2016 from 11.9 million a year ago. On an adjusted basis, the company reported a loss per share of $.15, beating the average analyst estimate for a loss of $.25 per share.

CareDx's R&D expenses for the quarter rose 7 percent to $2.9 million from $2.7 million, while its SG&A costs ballooned 58 percent to $8.7 million from $5.5 million. CFO Charles Constanti said the R&D costs in Q3 2016 included expenses related to the development of AlloSure, and that the SG&A costs included expenses related to the acquisition of Allenex, consulting fees, professional fees, and other corporate costs.

The company ended the quarter with $22.3 million in cash and cash equivalents.

Constanti also highlighted the $7.8 million stock offering the company completed in September, noting that the proceeds have bolstered CareDx in its conversations with creditors.

For the full year 2016, CareDx narrowed its revenue guidance to the high end of its previously stated range. It now expects fiscal 2016 revenues of $41 million to $42 million. Analysts are expecting revenues of $40.7 million.