March 2020 The Transplant Company Focused on better outcomes through personalized transplant surveillance.
March 2020
The Transplant Company
Focused on better outcomes through personalized transplant surveillance.
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.
Safe Harbor Statement
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Our MissionWe are committed to improving transplant patient outcomes by providing innovative and intelligent solutions throughout the entire patient journey.
Our VisionThe leading partner for transplant patients and the transplant ecosystem.
Multiple Touchpoints Along The Entire Patient Journey
ESRD Wait List
End State Disease Post Transplant Surveillance
OTTR EMR Longitudinal Patient Management (60 Transplant Centers)
Clinical Trials / Registry Studies (>50 Transplant Centers)
First in ClassLiquid BxAlloSure
InnovatorTissue GEPHistoMap
First in ClassAI Graft Survival
iBox
Clinical Trials
InnovatorBlood GEPAlloMap
Waitlist Management
Xyn
Best in ClassHLA matching
AlloSeq
5.500 Patients
80%Transplant Labs
8%US Patients
1st FPFVSept ‘19
XynQAPI Quality Management (30+ Transplant Centers)
1st FPFVSept ‘19
InDev
Transplant Surveillance
Pipeline expansion addresses $4.5B+ market opportunity
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CareDx Focused on Improving Transplant Patient Outcomes
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Transplantation is a Large and Growing Global Market
(1): https://journals.lww.com/transplantjournal/Abstract/2018/07001/Worldwide_distribution_of_solid_organ.119.aspxhttps://www.ncbi.nlm.nih.gov/pmc/articles/PMC4889523/
(2): Average survival for US-based transplant patients (kidney, heart, lung, liver)(3): Company estimates
200,000Global transplants per year1 ~10 years
Patient survival post transplant2
>8% growthKidney transplant growth 20193
$1B+
Business Lines Focused on $4.5B+ TAM Opportunity
*Kidney and Heart; ** Includes Kidney, Heart, HCTSource: company estimates
DIGITAL
U.S.
~300,000 Patients
150 Centers perform 90% of all transplants
Protocols & Surveillance
Global
1.5M Patients
1,000Labs & Centers
HLA Typing & Surveillance
Global
>3M Users
1,000 Centers & Ecosystem
EMR & Patient Engagement
SERVICES* PRODUCTS**
~$2.5B
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$1B+
8
Transplant Surveillance
Transplantation
End Stage Disease
Waitlist Management
Heart Transplant Patient Care
Transplant Patient Management & EMR SoftwareTransplant Quality Management Tools
HLA Typing Products
Organ Transplant Surveillance Products
Kidney Transplant Patient Care
Stem Cell Transplant Surveillance Products
Innovative Offerings Along the Transplant Patient Journey
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Multi-Modality Platform Drives Better Outcomes for Patients
Graft survival prognosis
Immune activity
Graft injury
Gene Expression Profiling(GEP)
Donor-derived cell-free DNA(dd-cfDNA)
Machine learning transplantdata analytics
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Both Kidney and Heart Services Are Significant Opportunities
1. Includes AlloMap Heart and AlloSure Heart2. Includes AlloSure Kidney, AlloMap Kidney and i-Box3. Based on Q4:19 services revenue
$3.1B
$0.9B
2
$0.5 B
$2.0 B
Total5% Penetration3
1
$2.5 B+
10% Penetration1
4% Penetration2
CareDx has created transplant surveillance market
…with multiple opportunities with new organ types
and entry into stem cell
transplant
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100% Dedicated Transplant Company Based on Clinical Science
14,000+Patients
9+Clinical Studies
25+Peer-reviewed publications
Landmark multi-center, prospective studies
Generated cutting edge & relevant clinical data
First to deliver GEPand cfDNA
First reimbursement with MolDx for transplant
Innovates on clinical experience with registries
Focused on transplant innovation & relationships
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Strategic Investment in Ongoing Large Multi-Center, Prospective Studies to Generate Future Data to Support Adoption
Impact
Long-term Heart Transplant Outcomes
Long-term Kidney Transplant Outcomes
Validation AlloSure Kidney Transplant
Validation of HeartCare
Clinical Utility of AlloMap – NEJM publication
AlloMap validation in Heart (EU)
AlloSure validation in Lung*
AlloMap validation in Heart (US)
Start
2018
2018
2015
2014
2005
2005
2004
2001
Study
SHORE
K-OAR
DART
D-OAR
IMAGE
CARGOII
LARGO
CARGO
Centers
>50
>50
14
28
12
13
14
8
Patients
> 3600
> 1000
400
>1,000
629
783
>2000
>700
Samples
> 20,000
> 8,000
2,100
> 3,000
2292
7,600
>8500
>4900
* Based on previously existing CareDx sample repository
Long-Term Kidney Outcomes2019 OKRA >50 > 4000 > 10,000
OKRA – Long-Term Kidney Outcomes
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Multicenter, prospective, observational registry, designed to measure outcomes of kidney transplant recipients managed with KidneyCare
Planned renal surveillance biopsies at 12 months post-transplantation managed with and without donor-derived cfDNA(AlloSure®) or KidneyCare
First OKRA patient enrolled 9/2019 Estimated primary endpoint: 12/2021 | Estimated completion: 12/2025
4,000Patients
1,500NEWLY TRANSPLANTED
1,500ENROLLED IN K-OAR
1,000CONTROL
SHORE – Surveillance HeartCare® Outcomes Registry
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Multicenter, prospective, observational registry of patients receiving HeartCare surveillance
A historical control group will be matched to the HeartCare group patients who complete at least two years of HeartCaresurveillance use
Year 3 post-transplant clinical follow-up for outcomeEstimated primary endpoint: 12/2024 | Estimated completion: 12/2027
3,600Patients
2,800NEWLY TRANSPLANTED
800CONTROL
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150Centers perform
90%of all transplants
Concentrated U.S. Market Enables Efficient Addition of New Services and Expansion into New Organs
Efficient commercial strategy
Leverageable model to include future offerings of1. New Organs2. Additional services3. Digital platform
Substantial transplant center overlap between organs
Fully staffed field organization
Further synergy with ecosystem and pre-transplant offerings
LONG-TERM ( >12mo)MID-TERM (H2)SHORT-TERM (H1)
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Testing Services Drives Adoption and Growth
• > 150 centers• > 50 centers in registries (KOAR and OKRA)• > 30 protocols in Top 50 centers
• NEW reimbursement for additional Organs
• New Service offerings
• New Market (HCT)
• NEW Centers (U.S.)
• NEW Community Program
• > 100 centers• > 90 centers with protocol• > 50 centers in SHORE
• NEW Centers (U.S.)
• NEW AlloSure Heart reimbursement
• NEW Comprehensive service solutions (Xyn/OTTR/ Services)
2020 AlloSeq Portfolio
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Products Business is Focused on Global Launches
• Ex-US launch (Sept 2019)• Achieved CE marking (Jan 2020) addressing the need of EU labs• Sales started/ Partnerships in new markets (e.g. China)
• Global Launch (Sept 2019), New and upgraded distributors • Sales started in all markets US, Europe and Asia• Expanded team for launch/ Partnerships in new markets (e.g. China)
• US Launch (Dec 2019) with global launch in Q1, 2020• Leverage of current field team and distributors• Service offerings in the future
Launch Execution
2020 FocusDigital Portfolio
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Digital Business Focused on Support Testing Services and Growth
• Integrate & support Testing Services EMR with EPIC / Cerner• Leverage XynCare (Waitlist Management team) for Services business• Implement AlloSure - OTTR offering
• Increase accounts for XynQAPI and OTTR Products (SAAS)• Grow patients being managed on the waitlist• Comprehensive Services offerings
• AiTrac / decision support tools• Direct to patient engagement / patient support tools• Transplant data platform
Support Testing Services
IncreaseDigital Growth
Introduce New Offerings
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Fourth Quarter 2019 Non-GAAP* Financials
Q4 2019 Q4 2018
Total Revenue $35.8m $23.5m
Gross Margin 68% 59%
Operating Expense $23.1m $13.5m
Adjusted EBITDA $1.5m $0.8m
Earnings per Share $0.04 $0.01
Net Operating Cash Flow $(1.1)m $2.0m
Ending Cash Balance $38.2m $64.6m
* See Appendix for non-GAAP reconciliation
52% Revenue Growth in Q4 2019
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Q4 Revenue (in Millions)
$1.6
$18.9
TOTAL
$29.1
$4.6 $5.1
$23.5
$35.8
+55%
+10%
+52%2018 2019
DIGITAL & OTHERPRODUCTSTESTING SERVICES
Record Growth in FY 2019
21
2016
$77
$41$28
20182015
$48
2017
$127
2019
+66%
Total Revenue(in Millions)
13 14 16
28
49
20162015 2017 2018 2019
+77%
Testing Services Patient Results(in Thousands)
22
2018 2019
+30%
2019A 2020E
Total Revenue(in Millions)
FY 2020 Revenue Guidance
127
165to
168
Testing Services• AlloSure adoption/penetration• HeartCare surveillance protocol• AlloSure Heart reimbursement
Products• AlloSeq Tx & AlloSeq cfDNA launch• Global expansion• Stem cell & cell therapy
Digital• Full year revenue of acquisitions• AlloCare launch• Center adoption of solutions
Growth Opportunities
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The Transplant CompanyFocused on better outcomes through personalized transplant surveillance.
Appendix
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Robert WoodwardVP, Research &Development
XDx, Gladstone Institute, UC San Francisco
Mike DonnellVP, TransplantDigital Business
United Resource Networks,Baylor and Keck Hospital
Reg SeetoPresident, CBO
Paul CiccolellaSenior Vice President,Operations
Pacific Biosciences, Affymetrix, ProtoGene Labs
David SayerVP, Global TransplantLaboratory Services
Experienced Management Team
Peter MaagChairman & CEO
McKinsey, Novartis Pharma, Novartis Diagnostics
Michael BellChief Financial Officer
Novartis Vaccines & Diagnostics, Ernst & Young, Deloitte
Sham DholakiaSVP, Medical Affairs& Clinical Operations
University of Oxford,GE Healthcare
Amitabh ShuklaSVP Technology
Persistent Systems, Life Technologies, Agilent, IBM
Sasha KingChief CommercialOfficer
Genentech, Ariosa Diagnostics,Fletcher Spaght
Marissa DixonVP, Human Resources
Metabiota, DuPont Bioscience, Genencor, WageWorks
Illumina, Conexio Genomics
Alex JohnsonVP, Transplant Products Business
BioGraph 55, Novartis,Celera
Ardelyx, AstraZeneca / Medimmune, Organon BioSciences, Boehringer
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Reconciliation of Non-GAAP Financial Measures
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GAAP Net Loss (4.8) (3.8)Stock-based compensation expense 5.4 2.1Acquisition-related amortization of purchased intangibles 1.2 0.8Change in estimated fair value of contingent consideration 0.2 -Change in estimated fair value of warrant & derivative liabilities (0.3) (1.6)Amortization of debt discount - 0.0Debt extinguishment - 3.0Accretion of Liability 0.1 -Tax effect related to amortization of purchased intangibles (0.1) (0.2)
Non–GAAP Net Income (Loss) 1.6 0.3Interest income (0.3) 0.1Income tax benefit (0.0) (0.1)Depreciation expense 0.4 0.4Other income (expense), net (0.2) 0.1
Adjusted EBITDA 1.5 0.8
in Millions Q4 2019 Q4 2018