NEW YORK – CareDx reported after the close of market Monday a 23 percent year-over-year increase in third quarter revenues.
The Brisbane, California-based transplant diagnostics company finished the three months ending Sept. 30 with $82.9 million in total revenues, compared to $67.2 million for the same quarter in 2023 and beating analysts' average estimate of $80.5 million.
The firm attributed this rise largely to higher Q3 testing revenues of $60.8 million, up about 27 percent from $47.8 million in the same quarter last year, driven by sales of approximately 44,600 tests. This tally included $1.2 million from tests performed in prior periods.
The company's Q3 product revenue edged up 7 percent to $10.2 million from $9.5 million a year ago, while its patient and digital solutions revenue grew 20 percent to $11.9 million from $9.9 million.
In a conference call with investors, CareDx President and CEO John Hanna noted that during the quarter, the US Centers for Medicare and Medicaid Services reaffirmed their commitment to covering testing for solid organ transplant monitoring, including for surveillance, although he estimated that it may still take two to three quarters for kidney transplant centers across the country to re-adopt surveillance testing protocols.
"Establishing a protocol at a transplant center is a departmental consensus process that may take several months to agree upon, draft, document, and logistically implement the workflow," Hanna said.
Hanna added that since the beginning of September, 10 transplant centers that the company works with have established new protocols that include kidney surveillance testing, and the firm began to see a shift in testing workflow toward surveillance beginning in the second half of September and continuing through October.
Adoption of the AlloSeq Tx next-generation sequencing-based human leukocyte antigen (HLA) typing kits also buoyed test revenue growth in Q3, Hanna said. Late last month, the company announced a partnership with Dovetail Genomics on HLA genotyping for organ and stem cell transplant matching.
CareDx CFO Abhishek Jain said during the call that despite the strong growth, the firm experienced some drag from Hurricane Milton, which amounted to an estimated negative impact on test volume growth of 1 percent.
CareDx's Q3 net loss was $7.4 million, or $.14 per share, compared to a net loss of $23.5 million, or $.43 per share, for the same quarter last year. The company reported non-GAAP earnings per share of $.14, bettering analysts' average EPS estimate of $.01.
R&D spending at the company fell about 8 percent to $17.5 million in Q3 from $19 million in the same quarter last year, while SG&A expenses declined nearly 8 percent to $48.3 million from $52.5 million a year ago. The overall drop in operating expenses was largely driven by lower clinical trial and legal expenses, Jain said.
Over the past quarter, the US Department of Justice closed a False Claims Act investigation into the company's business practices, finding no wrongdoing and declining to take further action. This decision followed a similar determination from the US Securities and Exchange Commission last year.
CareDx ended the quarter with $95.4 million in cash and cash equivalents, and $145.5 million in marketable securities.
The firm raised its full-year 2024 financial guidance to between $327 million and $331 million in revenues compared to a previous guidance of $320 million to $326 million.