The Allo-Transplantation Company Focused on better outcomes through personalized transplant surveillance June 2020 Allo-transplant (allo- meaning "other" in Greek) is the transplantation of cells, tissues or organs to a recipient from a genetically non-identical donor of the same species
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The Allo-Transplantation Company · The Allo-Transplantation Company Focused on better outcomes through personalized transplant surveillance June 2020 Allo-transplant(allo-meaning
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The Allo-Transplantation CompanyFocused on better outcomes through personalized transplant surveillanceJune 2020
Allo-transplant (allo- meaning "other" in Greek) is the transplantation of cells, tissues or organs to a recipient from a genetically non-identical donor of the same species
These slides and the accompanying oral presentation contain forward-looking statements. All statements other than statements of historical fact contained in this presentation, including statements regarding future financial position of CareDx, Inc. (together with its subsidiaries, “CareDx” or the “Company”), including financial targets, business strategy, and plans and objectives for future operations, are forward-looking statements. CareDx has based these forward-looking statements on its estimates and assumptions and its current expectations and projections about future events. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those contained in the “Risk Factors” section of the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q that the Company has filed or may subsequently file with the U.S. Securities and Exchange Commission (the “SEC”). In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this presentation are inherently uncertain and may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Accordingly, you should not rely upon forward-looking statements as predictions of future events. CareDx undertakes no obligation to update publicly or revise any forward-looking statements for any reason after the date of this presentation or to conform these statements to actual results or to changes in CareDx’s expectations.
These slides and the accompanying oral presentation contain certain non-GAAP financial measures, which are provided to assist in an understanding of the business and performance of CareDx. These measures should always be considered only as a supplement to, and not as superior to, financial measures prepared in accordance with GAAP. Please refer to the Appendix included in these slides for a reconciliation of the non-GAAP financial measures included in these slides and the accompanying oral presentation to the most directly comparable financial measures prepared in accordance with GAAP.
Certain data in this presentation was obtained from various external sources, and neither the Company nor its affiliates, advisers or representatives has verified such data with independent sources. Accordingly, neither the Company nor any of its affiliates, advisers or representatives makes any representations as to the accuracy or completeness of that data or undertakes any obligation to update such data after the date of this presentation. Such data involves risks and uncertainties and is subject to change based on various factors.
The trademarks included herein are the property of the owners thereof and are used for reference purposes only. Such use should not be construed as an endorsement of the products or services of the Company.
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Safe Harbor Statement
Our MissionWe are committed to improving long-term outcomes by providing innovative solutions throughout the entire transplant patient journey
Our VisionThe leading partner for the transplant ecosystem
Industry Leadership Position and Continued Growth
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Expanding $10B+ market opportunity
IndustryLeading
Products & Services
LeadingMedicare
Reimbursement
Strong Clinical
Data
RobustEnd-stage Pipeline
Strong Financial Position
>75 Transplant CentersClinical Studies
Quality Management >30 Transplant Centers
Electronic Medical Records >60 Transplant Centers
“Liquid Biopsy”dd-cfDNA
cfDNA Cell Therapy
Augmented Intel Risk Prediction
Gene Expression Profiling
Waitlist Management
High Resolution HLA matching
Multiple Touchpoints Along Patient Journey
5New
Pre-Transplant Post-Transplant Surveillance
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Acqu
isiti
ons
Leveraging Business Development to Establish Leadership in Transplantation
New: Surveillance for Allogeneic Engineered Cell Transplantation
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Cell TherapyPatient Monitoring
Cell TherapyAddressable market
• Measures the amount of cell product relative to patient cells
• High sensitivity and reproducibility with minimal DNA amount
• Fast lab turn-around time• Based on analytically and clinically
validated workflow
• Monitors the level of engraftment and persistence of allogeneic cells
• Five years in-house development and experience with technology
• > 300,000 patients…• …receiving ~1.2 treatments
annually…• …with ~7 tests per
treatment
$5.5B+
C max
ContractionPersistence
Months/YearsInfusion
% C
ell P
rodu
ct
Note: Cell Therapy addressable markets assumes ~180,000 hematological cancer patients, 160,000 solid tumor patients (10% penetration, and reimbursement set at current AlloSure levels; excludes upside from clinical trial partnerships.
Expansion
AlloCell: Improving the Cell Transplant Treatment Paradigm
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• Therapies lack proactive, comprehensive matching and monitoring capabilities
– Opportunity to personalize cell therapy
• Different cell therapy approaches and variability in patients’ responses to therapy
– Need standardized measurement of cellular kinetics and persistence
• CareDx uniquely brings together all components necessary to serve the cell therapy ecosystem…
– Deep basic science and clinical expertise
– Infrastructure in leading hospitals
– Scale and existing business/service models
• Ability to leverage…
– Existing patient, provider and payor relationships
– Transplant data/digital capabilities
AlloCell: Potential to Set Standard of CareCurrent Short Falls
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Best-in-Class Sequencing Based Genetic Matching
Coverage includes classical and non-classical HLA
7.0MbDPB2
DPA2DPB1DPA1
DOA
DMADMB
Z
TAP1TAP2DOB
6.5MbDQB2DQA2DQB3
DQB1
DQA1 DRB1
DRB2
DRB3,DRB4,DRB5DRB8
DRB9DRA
6.0Mb
5.5Mb
5.0Mb
MICB
MICASB
C4.0Mb
3.5Mb
0MbHFE
Location unknown
Y
FVP
HG
TKUA
WJ
LN
EGene Resolution Coverage
HLA-A 4th field Full gene
HLA-B 4th field Full gene
HLA-C 4th field Full gene
HLA-E 4th field Full gene
HLA-F 4th field Full gene
HLA-G 4th field Full gene
HLA-H 4th field Full gene
DRB1 3rd field Full exon
DRB3/4/5 3rd field Full exon
DQA1 3rd field Full exon
DQB1 3rd field Full exon
DPA1 3rd field Full exon
DPB1 3rd field Full exon
MICA 2nd field Full exon
MICB 2nd field Full exon
Donor-Recipient Matching
17 genes enables more matching points for solid organ and stem cell transplant recipients
Hybrid Capture Technology enables addition of future gene content without workflow changes
Data analysis in less than 30 minutes per run
CE Mark May 2020
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Digital Offerings: Transplant EMR & Patient App
Support EMR integration and testing protocol adherence
Transplant dedicated EMR based on Cerner platform
Growth from OttrSAAS, Ottr Bone Marrow and Cerner/VA implementation
Leading Transplant Patient Engagement
AITraCClinical Decision Support
Ottr 3.xElectronic Medical Records
XynQAPIQuality Management
XynCareWaitlist Management
AlloCarePatient Engagement App
“Tracy”Virtual Transplant Assistant
Transplant Data PlatformFoundational functionality for data exploration and insights creation
Provider Solutions Patient Solutions
Record Growth in FY 2019 with Strong Quarterly Momentum
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13 14 16
28
49
2015 2016 2017 2018 2019
+77%
1015
Q1 2020
Q1 2019
+50%
$48$28
2015 20172016
$41
$127
$77
2018 2019
+66%
$38$26
Q1 2019
Q1 2020
+48%
Testing Services Patient Results(FYE-December; in Thousands)
Total Revenue(FYE-December; in Millions)
Testing Services Primarily Drives Revenue Growth
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21.5
4.4
26.031.4
4.7
38.4
TOTALDigital & OtherTesting Services Products2.2
+46%
+6%
+48%
20202019
Q1 Revenue (In $ Millions)
Strong Pathway to Margin Improvement
21
2017 2018 Q1 2020
68%
2019
60%
Q1 2019
67%61%
71%
-$12
-$3
$4
2017 2018 2019
-$14
-$4 -$3
2017 2018 2019
Non-GAAP Gross Margin(FYE-December; % of Revenue)
Adjusted EBITDA(FYE-December; in Millions)
Net Operating Cash Flow(FYE-December; in Millions)
GAAP Net Loss (55.5) (46.8) (22.0)Stock-based compensation expense 1.7 7.1 22.4 Acquisition related amortization of purchased intangibles 2.4 3.0 3.6 Acquisition related amortization of inventory valuation adjustment 0.5 0.3 -Acquisition related fees and expenses - - 0.7 Change in estimated fair value of contingent consideration 1.2 1.0 0.2 Change in estimated fair value of warrant & derivative liabilities 29.6 23.0 (0.3)Amortization of debt discount 2.1 2.1 -Debt extinguishment 0.3 3.0 -Loss on conversion from debt to equity 0.3 2.8 -Accretion of liability - - 0.3 Tax effect related to amortization of purchased intangibles (0.7) (0.8) (0.5)Impairment 2.0 - 0.2
Non–GAAP Net Income (Loss) (16.1) (5.3) 4.6 Interest income 3.8 1.6 (1.0)Income tax benefit (1.0) (0.6) (1.5)Depreciation expense 0.9 1.2 1.6 Other expense, net 0.9 0.2 0.4 Net loss attributable to noncontrolling interest (0.1) (0.0) -