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CareDx Q4 Revenues Fall 18 Percent

NEW YORK (GenomeWeb) – CareDx reported after the close of the market on Thursday that its fourth quarter revenues fell 18 percent compared to Q4 2014.

For the quarter ended Dec. 31, 2015, the molecular diagnostics developer reported revenues fell to $6.6 million from $8.0 million in the year-ago quarter, and missed analysts' estimate for revenues of $7.4 million.

The company said the dip in revenues was due in part to flat sales of its AlloMap blood test for heart transplant patients. Revenues from the test increased less than 1 percent to $6.7 million in Q4, and were negatively affected by reduced collections from an external vendor as the company set up its own in-house collections team.

On a call with analysts, CFO Ken Ludlum said the company expects to recognize the revenues from the yet-to-be-collected tests in early 2016. He estimated they would bring in approximately $500,000.

CareDx also said the Q4 2014 period benefited from a one-time $1.1 million from LabCorp related to the termination of an agreement between the firms to develop a lupus flare test.

Net loss for the quarter widened significantly to $4.8 million, or $.40 per share, from a loss of $5,000, breaking even on an EPS basis, a year ago. The company also missed analyst estimates of a loss of $.34 per share.

SG&A expenses for the quarter rose 44 percent to $5.6 million from $3.9 million in Q4 2014, while R&D costs more than doubled to $2.7 million from $1.3 million due to the company's expenditures on developing the cell-free DNA diagnostic AlloSure, including clinical trials. On the analyst call, CEO Peter Maag said the company would initially focus on developing AlloSure for kidney transplants in 2016.

For the full year, CareDx reported revenues rose 3 percent to $28.1 million from $27.3 million in 2014, missing analysts' estimate for revenues of $28.9 million.

Revenues from AlloMap sales rose 8 percent to $27.9 million from $25.8 million in 2014. CareDx provided more than 13,000 patient results during the year, a 10 percent increase from 2014.

AlloMap continues to be widely reimbursed compared to other diagnostics, Maag added. The test received a CPT code in 2015, and the company expects reimbursement to remain steady at about $2,800 for each test.

Net loss for the year widened significantly to $13.7 million, or $1.16 per share, from a gain of $781,000, or $.13 per share in 2014. Analysts had expected a net loss of $1.14 per share for 2015.

SG&A expenses rose 38 percent to $20.5 million from $14.9 million in 2014. R&D expenses for the year almost tripled to $9.3 million from $3.8 million a year ago.

The company ended the year with cash and cash equivalents of $29.9 million, and restricted cash of $147,000.

For 2016, Maag said he anticipates CareDx will be able to close its acquisition of Swedish transplant diagnostics firm Allenex in mid-April. CareDx acquired a majority stake in Allenex in December, and planned to buy the remaining shares in the first quarter of 2016. Ludlum also said the company will not be providing any financial guidance for 2016 until after the Allenex deal closes in April.

CareDx also announced that Charles Constanti will become its new CFO in April, taking over for Ludlum, who will remain with CareDx through June for a transition period.

"During his two years at CareDx, Ken helped us complete our IPO, strengthen the financial organization and negotiate the transaction with Allenex," Maag said in a statement. "We are excited to announce Charles joining CareDx as CFO. Charles brings extensive international financial experience and will be instrumental in integrating the Allenex acquisition." Constanti most recently served as vice president and CFO of software company Procera Networks.