Focused on improving care across the entire transplant patient journey The Transplant Company™ Corporate Presentation: January 2023 Exhibit 99.2
Safe Harbor Statement 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 the 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.
Our Mission We are committed to improving long-term outcomes by providing innovative solutions throughout the entire transplant patient journey Our Vision The leading partner for the transplant ecosystem Your Partner in Transplant Care
Vision: The Leading Partner Across Transplant Centers Example: US Centers Clinical Partnerships** Deep Center Penetration* Leadership Indicators** KIDNEY 70+ KOAR/OKRA Centers 75%+ Centers Using AlloSure 1 in 3 Newly Transplanted Patients HEART 60+ SHORE Centers 90%+ Centers Using HeartCare > 1 in 2 Newly Transplanted Patients * Center penetration based on UNOS listed transplant centers in 2022; does not include non-transplant hospitals: **Data on file. 15+ ALAMO Centers/ Investigator Initiated Trials >60% Centers Using AlloSure 1 in 4 Newly Transplanted Patients LUNG
Mission: Connecting the Transplant Patient Journey Example: Kidney Patient Pre-Transplant Dialysis Referral / Waitlist for Tx High Resolution HLA matching Digital Products Peri-Tx Products Post-Transplant Surveillance “Liquid Biopsy” dd-cfDNA “AI” Risk Prediction Gene Expression Profiling (GEP) In Development Testing Services Digital Offerings Electronic Medical Records Quality Management Patient Care Medication Key Products # of Centers >90 >40 >100 Digital Platform Source: Data on file.
Strategy 1: Build Deep Ecosystem Moat Around Transplant Centers TRANSPLANT CENTERS TRANSPLANT ECOSYSTEM RemoTraC® Phlebotomy Field Lab Service Team (FLSR) 3 Community Nephrology Team Transplant Account Specialists (TAS) 2 “We are 100% Transplant Focused. Always. ” Transplant Coordinator Assistants Patient Care Management Team 6 Transplant Account Manager (TAM) Medical Science Liaison (MSL) 1 1 5 Connecting with dialysis centers EMR Solutions 4
Post Transplant Biomarkers1 Strategy 2: Build Leadership in the Ecosystem Building Blocks Leadership across the patient journey Electronic Medical Records6 Quality & Analytics3 Transplant focused App4 Medication Discharge2 CareDx is #1 CareDx is #1 CareDx is #1 CareDx is #2 CareDx is #2 Over 100,000 transplant patients have received a CareDx post-transplant surveillance test NGS HLA Typing5 CareDx is #1 Transplant Patient Referrals7 CareDx is #1 1. 100K patients with CareDx biomarkers; 2. Based on number of centers with MAP; 3. Based on number of centers using XYN; 4. Based on number of downloads; 5. Data on file based on number of centers using NGS; 6. Based on number of centers with TransChart and OTTR EMRs; 7. Based on number of referrals in the system.
Grow Testing Services Business $4B+ (Kidney, Heart), $1B+ (Liver, Lung) ~$5B+ TAM* Expand Testing Products Business AlloSeq (cfDNA, Tx17, HCT) franchise ~$1B+ TAM* Establish the Digital Business AlloCare®, MedActionPlan®, Ottr®, XynQAPI®, XynCare®, TransChart®, Tx Access™, TxHero ~$1B+ TAM* $12B+ TAM* ~$5B+ TAM* Build Pharma Partner Business With AlloSeq, AlloCell™, AlloHeme™… Strategy 3: Build Across Multiple Transplants TAMs Long-Term Plan * Market sizing based on CareDx internal analysis
Grow Beyond AlloMap Be All Things Transplant Develop Multiple Innovation Platforms Solid Organ Stem Cell Cell Transplant Therapy 2016 - 2020 2021 - 2025 2026 - Beyond CareDx’s Overall Strategic Roadmap: Be All Things Transplant Expand from the Center Advance Next Wave of Innovations Build other business lines
COVID Impacted Recent Market Volume Trends Source: UNOS Monthly Extended time for Recovery
Kidney Transplant Recovery Driven by Deceased Donors Source: UNOS Weekly Pre-COVID up to Q1, 2020 COVID no Vaccines (Vx) Vx to Omicron Early Recovery Stages
Potential for Transplant Volume Expected to Double in 5-10 Years* Drivers of Market Growth in 5 years+ Return to historical high single digit growth post COVID Incremental drivers Increase use of high risk and marginal organs Increase organs with perfusion and improved transport and tracking Increase transplants and post transplant from new Government Kidney Initiatives across Tx Rebound in living donors which is still below pre-COVID levels in Kidney * Internal estimates based on drivers
Q4, 2022 Financial and Operational Highlights Common stock buy back started Up to $50M approved over 2 years Financial Strength 47,700 Tests Up 3% sequentially and 14% y/y Volume Growth $81.9-82.2M Up ~4% y/y Collections improving Revenues and collections ISHLT Guidelines published Support for AlloMap and AlloSure Heart Coverage AMK and ASL in MolDx process UroMap On track AI Pipeline Focus Catalysts
Continued Focus on Gross Margin Improvement Target GAAP Gross Margin: FY21 = 67%, and YTD Q3, 2022 =65% Non-GAAP Gross Margin* FY21 = 70%, and YTD Q3, 2022 =68% ~70% FY 2021 ~68% YTD Q3, 2022 75%+ Testing Volume Lab Automation Private Payer Reimbursement Multi-modality Reimbursement Tx Pharmacy Acquisition *Non-GAAP measures shown have been adjusted for certain items that are described in the Appendix
2023 Focus On The Three C’s - Catalysts, Coverage, Collections Drive Leadership into Solid Organ Transplants Pipeline Catalysts Leverage Best in Class Data and Clinical Utility and Guidelines Increasing Coverage Infrastructure built to address prior authorizations and denials/ appeals Improving Collections
Key Pipeline Catalysts Proven stable platform Signature has to be changed since discovery and NEJM. Other unstable approaches need to modify algorithm to fit current data Differentiated utility Rejection + BK Nephropathy Robust validation Clinical validation in multiple publications with NEJM as cornerstone Clinical value Complete solution for TCMR; early detection probability/ BKVN assessment Urine Tests Proven platform Built upon proven FDA cleared transplant gene-expression platform Differentiated utility Quantified result (versus yes/no) enables longitudinal use Robust validations Validated in multiple peer-reviewed publications Clinical value Results replicated in two independent large multi-center studies Immune status Gene-expression Source: Publications and data on file
Artificial Intelligence (AI) Core Part of Pipeline Development AlloView Adds Another layer of Utility to AlloSure Surveillance Prognostic algorithm (integrated >10 centers) Predictive algorithm (Integrated >10 centers) Incorporates Source: Publications and data on file
2023 Focus On The Three C’s - Catalysts, Coverage, Collections Drive Leadership into Solid Organ Transplants Pipeline Catalysts Leverage Best in Class Data and Clinical Utility and Guidelines Increasing Coverage Infrastructure built to address prior authorizations and denials/ appeals Improving Collections
Testing Services – ASP has not changed on Reimbursed Tests FLAT
Testing Services Payor Strategy to Increase Reimbursement Situation: Increasing mix of Commercial Patients from New Launches Strategy % Commercial Volume Increase in payer mix + CN expansion + AlloSure Lung (ASL) ASH MA 52% End 2020 62% End 2021 2023 Plan + AlloSure Heart (ASH) + Medicare Advantage (MA) 67% Q3, 2022 Coverage and Guidelines Discussions with MolDx Focus on ISHLT Guidelines Improve Collections
Significant Opportunity from Increased Coverage with Non-Reimbursed Tests (of > $180M*) *potential opportunity based on ASP of $2500 on all unpaid tests; ** Estimated >$180M
Strong Payor Coverage is Core Part of the Business Model Patient Coverage Total Launch CMS Commercial (inc. MA) Current Coverage Strong Payor Coverage AlloMap Heart 2005 ~25% >50% >75% AlloSure Kidney 2017 ~60% >10% >70% Early in Coverage Cycle AlloSure Heart 2020 ~25% 1-5% ~25-30% AlloSure Lung 2021 NA* 1-5% ~1-5% Upcoming Catalysts AlloMap Kidney Pipeline NA** NA NA UroMap Pipeline NA** NA NA *Projected patient pool if covered by MolDx of 25%; ** Projected patient pool if covered by MolDx of 60%; the remainder would be commercial pool
2023 Focus On The Three C’s - Catalysts, Coverage, Collections Drive Leadership into Solid Organ Transplants Pipeline Catalysts Leverage Best in Class Data and Clinical Utility and Guidelines Increasing Coverage Infrastructure built to address prior authorizations and denials/ appeals Improving Collections
Record Cash Collection in Q4,2022 Primarily driven by Commercial Payers H1, 2022 Investments in infrastructure scale are starting to show in the cash ramp collected esp. in Q4, 2022 2022 vs 2021 2022 Improving Qtr by Qtr Scaling infrastructure
2023 Summary Potential milestones Path to adjusted EBITDA profitability in H1 Ongoing adjusted EBITDA profitability in H2 Catalysts Potential launches: AlloMap Kidney and UroMap Coverage Lung: MolDx discussions Heart: Start ISHLT guidelines pull through (H1) and ramp in H2 Kidney: Work on Kidney Guidelines, publications, data for coverage and Continue ramp of regional Kidney plans Collections Commercial Collections key focus for pull through with new coverage Commercial Collection catch up with Medicare Advantage Collections
Appendix
Reconciliation of Non-GAAP Gross Margin FY 2018 FY 2019 FY 2020 FY 2021 Q1 2022 Q2 2022 Q3 2022 Revenue 76.6 127.1 192.2 296.4 79.4 80.6 79.4 GAAP Cost of Revenue 33.0 45.5 63.1 97.4 26.9 27.5 28.3 GAAP Gross Profit 43.6 81.6 129.1 199.0 52.5 53.1 51.1 GAAP Gross Margin % 57% 64% 67% 67% 66% 66% 64% Non-GAAP Expense: Stock-based compensation expense (0.8) (2.2) (2.3) (3.7) (0.4) (1.4) (1.1) Acquisition related amortization of purchased intangibles (2.2) (2.4) (3.3) (3.9) (1.0) (1.0) (1.0) Non-GAAP Cost of Revenue 30.0 40.9 57.5 89.8 25.5 25.2 26.2 Non-GAAP Gross Profit 46.6 86.3 134.7 206.6 53.9 55.5 53.1 Non-GAAP Gross Margin % 61% 68% 70% 70% 68% 69% 67% in Millions (except %)
