CDNA - Earnings call transcript Q2 2020

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Operator

Greetings. Welcome to CareDx, Incorporated Second Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Greg Chodaczek. begin. may you Sir,

Greg Chodaczek

on afternoon Chief CareDx you the released XXXX. afternoon’s Officer; currently June Good Peter at today. Chief call. Officer, Maag, quarter joining will Earlier XX, Executive available is release today, financial Michael The company’s and you. website for www.caredx.com. Bell, thank and us ended the Financial Thank results this for host

undue include to that be of financial pricing based assumptions. contained coverage forward-looking forward-looking matters, and limitation, get Reform statements expectations on uncertainties in statements Safe Accordingly, cause including These pursuant I statements. within which differ forward-looking should statements Private without future this statements would Act management that everyone regarding call Securities to you will results started, forward-looking anticipated that not remind fact and during examination by from of trends, and Laws, and be are those not All should we of the place Before Litigation call involve meaning Harbor to that provisions statements this and of the Securities the actual Any various enrollment to current of operating materially or deemed statements statements. XXXX. historical the estimates statements. could expectation these implied material historical results risks these reliance making decisions, be like our Federal our made are upon are

a information, obligation CareDx intention only speaks our today, the financial live broadcast and in of information financials financing with any update otherwise. business, The or to also be our our most This comparable calculated list will by with Reconciliation August or Peter. or the of of associated today’s accordance other Principles. XX, required call conference Securities descriptions disclaims financial me, XXXX. may measures excuse SEC. provided directly Accounting earnings as that please or financial are events For measure revise the not information, GAAP to risks the turn new in law Commission. to Accepted include over call discussion the because or now the projections uncertainties this release and filed of to a I whether with will in Exchange any future except Generally forward-looking -- see found filings certain with statements call

Peter Maag

to that talking call, and the every say new of Proud of Greg, devotion. results hard inspiring. Thanks, you good your and was and pleased about to grit, is CareDx's of your better have say, made our of truly want I has a CareDx proud team by The resiliency afternoon, I to theme can lives our I work quarter and response to for whole taken COVID team's and crisis. their you your of Today, dedication because of our I we thank to transplantations and level. caregivers CareDx began to second chose the how everyone. how member employees April's the our XXXX, on Back for review our I’m Transplant welcome call XXXX. as

You exemplify stand and in. for. what Thanks for essential leaning businesses workers

challenging results the year-over-year. these and are revenue Kidney XX,XXX environment. an $X.X and We services of primarily for of quarter. second second testing provided came reported added revenue $XX.X $X.X of of In increase to we digital quarter of million compared XXXX, an that the top for the results was our with turning results, of the a from to revenue in million. increase Growth quarter We revenue line. our Now million to Product over patient exceptional quarter Heart exceptional million, AlloSure XX% $XX.X XXXX. AlloMap the XX% believe

will that During of the care. this crisis, building areas accelerate strategically in our we have chosen in to transplant mode invest

are focused precision patient accelerate testing to especially our capabilities in. our and transplantation. in and our multimodality clinical These medicine those offering activity, direct all include investments on our will We leaning digital areas strategic solution. These

be than Our as rapid in tremendous quarter, offering, of us enabled have COVID-XX. cities transplant it cases to throughout the confirmed second digital asset part the our to in increases in latter pivot anyone a value. March newly out In has of proven the acquisition several building industry and experienced faster

phlebotomy. mobile came With physicians these for RemoTraC and more increases patients requests from and

As experienced a growth. continued result, services has our RemoTraC

our the XX% RemoTraC over an from of service originated has Seeto, and contracting heart their patient offices. X,XXX patients or just provided by of over clinicians patients has that leadership have proportion patients Under offering four results. from avoid to other to and peace a around now tremendous originates phlebotomy in offering giving months, enrolled. results RemoTraC of gone reducing physician To a over risk quarter, with them kidney, from of our COVID-XX. mind Reg lung ability gone to and the are transplant full the significant XXX conversations transplant For the RemoTrac centers mobile RemoTraC patients services. of transplant idea, That's centers date,

efforts also network has Virtual was communicate important included American have field position in our present clinical CareDx program the our of our for leaders edge content at XX,XXX. presented. having Not might the our our innovation which space. over recognizing quite the and of to our Cutting phlebotomist we team, virtual the mobile Having patients at to had an transplant honor for information at sessions, call annual way abstract for by Transplant clinicians, led way of customers, to our we the large pandemic the and only and and May, but to Our grown AlloMap, field Dholakia. virtual on meeting, clinical log on Congress AlloSure, i-BOX presentation session Sham event is on changed turnout was and we and over the has X,XXX is in delivering Others investors abstracts and In be office prominent care in virtual care aspects. leadership forefront And change kidney exceptional. is The XX ATC demonstrates virtual this transplantation. and accepted nationwide dedication. XX [indiscernible] late symposium, talking doing,

are these tools conferences We clinicians the patients to interactions during communicate community. with and new industry transplant also and to and using

We are feedback the positive by very board. encouraged about transplant from cardiologists, patients advisory nephrologists, virtual our and coordinators

We center and and have possible. and customers virtually every physician our extent will administrators support our call advocates continue to to transplant in to

best-in-class transplant through pivoted due our solution loci Europe HLA impacted we services been Fraction business by CE Despite restricted for and of While that donors typing across non-classical matching have U.S the for will and with exceptional negatively also success, launches point non providing Tx and side. in to to we pandemic. our COVID facility access for XX, personnel. product the AlloSeq May, the business the successfully has be have its and the many transplant our out we mark care COVID for testing better their pandemic. launch late outside HLA with extending for efforts recipients. range -- laboratories Hospitals our of patients Europe received by U.S In

from Dr. With leading for Terasaki Fisher. is to years. hoped Paul welcome product not chance leadership success Thermo been our for, over of group. talent Paul XX strong the had commercial revenue this into [indiscernible], exceptional had has Lambda we we with the added we what While one

operation. our Turning to

centers, and adapt within facility. own to in a to continue dynamic COVID environment hospitals, even our transplant We

report We solutions to across to family, States, affecting and pleased protect while have continued that operations I'm United to without our many COVID continuing cities established commitment patients. internal have our operating the employees our interruption. Despite their supporting large we

mission, and enrollment quarter. our With in as slow commitment expect, never firmly OKRA to the We our we from did would see we our clinical studies, during to down are respect prioritizing to committed patients. a second favored ongoing one

noninvasive However, we in surveillance. increase their many experienced biopsy have utilization care protocols SHORE and of centers switched an heart as to

strong solid our development the Our recorded elevating the talent. Valuables to next has as quarter technology and from cell strong first [indiscernible] precision medicine built AlloCell been revenue. our amount this, ever heart small To organs never been with in clearly franchise well we quarter, clear. as in second therapy. the of of our demonstrates we only exceptionally solution team proposition internal In has revenue. It business value pursue a second have an exceptional the expanding hires, step

in all sizes. phase, of biotech we we While the pharmaceutical from proof-of-concept have companies are and fielded many inquiries

excited are progress. in our We about very cell we will the therapy you update and opportunities continue on to

turning Finally, the to balance sheet.

of cash done following cash available the The advantage an to continue growth and now have to sheet sized the feel balance full have We Bell we We revenue successfully second accelerate executed opportunities million in of June. our to significantly a strength quarter us. quarter right take job. with team Mike exceptional in very public saw $XXX the offering closed and our position.

would call over Before to opportunity thank like take employees I turn this I again. to the Mike, to our

cylinders. our provide all services come. on every more is firing We are to the I'm confident to day. very yet best We transplantations

you I'm optimistic forward As on of and XXXX providing progress in remainder future the communication. about the to tell, look updates can

financials. hand Now to discuss Mike? I'll over Mike to our

Michael Bell

Peter. Thanks,

the revenue to AlloSure remotely. increased to able for the driven and the to a patients monitor be statement, for quarter first due RemoTraC was second success year-over-year that income Turning total primarily saw Growth was need revenue penetration Kidney XX%. We AlloMap by Heart. in and of of growth the $XX.X million, primarily [indiscernible] to

XX% increased to As revenue million. services year-over-year the quarter $XX.X second a result, testing in

second million. Revenue million Our outlined was quarter And revenue by to our $X.X issues earlier Peter. due to Digital related COVID decreased product the $X.X

was margin due in RemoTraC the second of rather of first quarter basis the was in the non-GAAP XXXX, tests quarter originating the gross Moving XXX the sequential of or gross to gross The mobile to a to to phlebotomy margins, the compared quarter. down same margin a from XX% our the gross On the gross services. non-GAAP primarily margin basis, XX% for approximately points margin quarter XXXX, increased of for compared period XX% is XX% prior to XXXX. compared number of

$XXX than can a more the reminder, of and a expensive a between lab draw. phlebotomy mobile $XXX, As draw cost be

the to of draws Although mobile are cost blood incremental ahead RemoTraC and stay.

margins still gross improve leverage due Brisbane. will continue in testing that operating time lab to our confident We to the of over are

For loss in the the second same million loss net of to quarter million net of was $X.X XXXX, a compared $X.X period of XXXX.

$X.XX in Non-GAAP compared to in per of quarter non-GAAP period per second $X.X of loss million loss share of income loss the second quarter for to in a of million XXXX. of the net quarter net was same XXXX net share was net the $X.X a the Our compared $X.XX XXXX.

net was compared income of share to loss share of $X.XX a XXXX. the same in the of $X.XX second per non-GAAP per period non-GAAP in net XXXX quarter Our

April. in in million Act income received other provider the Now include that quarter funding second $X.X both GAAP CARES of and to non-GAAP the that relief net income related we

we net a non-GAAP adjusted income and other depreciation, tax, As define EBITDA and before reminder, amortization as income interest, expense. income,

second EBITDA the recorded a quarter For second we to adjusted of million in EBITDA compared negative of $X.X quarter a million the of XXXX. adjusted of XXXX, $X.X positive

Our quarter adjusted as impacted in increased spending by second cost mobile EBITDA R&D blood of XXXX draws, RemoTraC as lines. in well G&A the in of was and the the

research related agreement to the study an due development, study, increased in our in expenses as Cornell For SHORE our -- in to development with and costs as clinical well signed May. uptake activity upfront

ongoing Our the second of to legal primarily our G&A efforts. costs because expenses litigation sequentially in increased the quarter, related higher

and reflect of in mentioned seizing during unusual expenses out increase this expenses quarter. We our operating related to employees had quarters expect [ph] Therefore this year. the build additional that the crisis. third we employee during in Peter fourth to our booked opportunities to remarkable are we performance highly leaning this moat and also

growth. develop continue pipeline to and continue top our line to focus will We on

stock our the and the X.X uncertainty crisis was cash to beyond at shares that and also offering by June expand utilized April efforts the will common when the XXX with we peak, of followed market million. our nephrologists. raise roughly In raising marketing of second its transplant going quarter, million a program approximately in significantly $XX million. to community We position. strengthened and We public approximately In direct we at successful sales patients centers, to our COVID

to the cash Net XXXX cash As the million. XX, equivalents up our execute earlier, June as on transplant Peter in build cash flow on this $XXX puts on strength and platform. $XX.X program. second to was million both And outlined a result, provider quarter XXXX. we operating funding well received opportunities of us includes $X.X its the a were accelerated in as position payment April through CMS Act received relief CARES expanded, of This we the in million million and as $XX.X advanced from

year. this recoup to the expect and August CMS between we advanced reminder, a payment As November

Once not couple to guidance still Turning as year impacts ongoing our I'll months, we there level the returned Peter. hand the last much uncertainties will COVID-XX we providing of guidance. and be of it seen over of currently centers to to have around is XXXX. some normality, And full many back transplant such, for business. now revenue over the

Peter Maag

are In States, Mike. the believe, COVID-XX the roll quarter solutions like our exceptional for positioned closing, bring Thank to shift you, medicine we United the call second patients was call the testing to the it. country clinicians and Thank advancement and from out open for all quarter experiencing transplant in way also joining overall. tectonic and biopsies RemoTraC to are hospitals the for movement happening of patients. well the limiting of I'll molecular CareDx. testing for surveillance and needed traditional you an the access questions. health But is in transplant continued for precision shift. across The centers and DNA the beginning team We the importantly, towards are reason much monitoring are to we we With the

Operator

Thank proceed. Please Our Couillard first with question is Instructions] you. from Jefferies. [Operator Brandon

Brandon Couillard

next to your kind there on Peter will of half of do six RemoTraC, is just mobile contributes in program portion the it some think to where program be can the to and of the that where afternoon. this just model you year won't back but phlebotomy the months. upper market, just you Good of convert go, goes curious level volume it prognostications Thanks. a just of be think of portion and speak you a sort remaining what think get

Peter Maag

Brandon, so and much, to you Nashville. the you Thank greetings Good on to phone. have

So thank you very joining. much for

convenient that embraced an They It's the draw is they’re by where sure patients. it. blood the have in home they used that service makes patient Now get that to amazing environment the the love of phlebotomist we to. RemoTraC going

embraced so this has are by centers across don’t And been country, And have transplant centers. patients now. they by service XXX the to go the to many using

X,XXX growing is what is Now centers platform. on but transplant every we’ve where That their number and patients day, stance on towards really depending the telehealth. are it's

have adopted telehealth centers in and jumped solutions. really Some

to back moving face are centers other up as now Some reopening visits. actually they're face to

to across there's country. hard that's the lot so it's service it's to of a why hard reasons is RemoTraC a of yet But Mike And to say says one guidance variability because give the as stay. due

in. are We all

are have into now many, this many on the care invested We are patients CareDX managers there and platform servicing that patient population.

growth So forward. drivers there is going significant

Matt Akers

later the what that it September. think and in some you withstand together, helps looks app year, of how capture talk to maybe those kind about I actually app talked direct lots Are marketing programs. volumes that by two Mike not like is, sort AlloCare patient tied about marketing more mentioned plan around of you this more initiative.

Peter Maag

reason with testing context very of transplant the our RemoTraC. are you solution broader so [indiscernible] in you modalities. The able here to pivoting digital our is This quickly encompassing CareDx having and we journey, why surveillance was patient the Thank much. managing were

to the a biggest maybe the even Now, patient with for patient able compliance we of and so can and standardized about to monitor medications are app offering. are individualize all community And a the transplant tackle post-transplant adherence schedule build issue With we prone to their care, in which AlloCare simple monitor patients. are standardization, protocol. one their AlloCare we that now to fully we to a be having allows is

CareDx that very for This -- that So another is there excited about journey. patient point is makes for this. we're touch patient sure the

that are AlloSure very about excited and launching September we AlloCare launch. is So -- in

Matt Akers

you. guys. Hey, Thank

Operator

proceed. Piper Sandler. Please question Our Rachel from is Vatnsdal with next

Rachel Vatnsdal

This nice Rachel for the on Hi. Steve quarter thanks Congrats today. question. and the taking on for is

Peter Maag

Well, you so thank much, Rachel.

Rachel Vatnsdal

you can off, first us So yes. just -- give an update

open pipeline So regions started started first, and us back to see donation give update on or you and just to has if pipeline an transplant you geographic up? the can the pandemic, impacts that to on return

Peter Maag

volume overall think year-to-date. transplant X% about is down I roughly

because transplant been to back at overcompensated many look now, stopped weeks. and back come very, the we of maybe donation very are wanting forefront living are around recovery right centers obviously because a nice as supporting. normal a centers or transplant we to few has even country really So for But the

is see up that will organs Now, of see volumes we other don't -- reallocated even the some further cities we and back being this the transplant so in country. in hotspots these because down, will be might parts COVID to

was overcompensating Cleveland, and when actually Michigan -- and the in in that Detroit, seen organs Cleveland go in transplantation issues over in we significant in the have had We were have Detroit. a down taking surge there

very is adoptable. So the system

And six think volumes come, the think next the up. be I transplant back to so will we that for months

Rachel Vatnsdal

awesome. That's Great.

So any more going and the this to you can so OKRA more is given those us clarity to then return, on earlier delays and give timing studies, [indiscernible] the it on SHORE COVID year?

Peter Maag

Sure.

and With AlloMap It's penetrated. well standard is of so now. AlloSure care kind the context of of

think now years AlloMap was into we from post seen procedures. really transplant away COVID in has I shift that have noninvasive. defined But this that noninvasive tectonic surveillance for CareDx many era, biopsies a

so, biopsy short to of AlloMap post-transplant demonstrated and moving the protocols power the from really combination our the AlloSure trial And surveillance. of over has driven platform away and

study by plus AlloSure scoring have with plus kidney research think, research a being events. more we the more where AlloMap, I driven OKRA coordinators that i-BOX sophisticated and is

activities coordinator we research so furloughed, these actually some aside And put transplant some kidney research in being have seen centers.

as we quarter has up recruitment. second OKRA as phenomenal the on we as well promising small seen But study. our supportive. of actually week have reopening even country delay had we say, being a And recruiting without last our OKRA the very the I on the been -- a kidney, on so will are that, OKRA

we proposition centers bring testimony overall. transplant speaks to really this the to So that value

Rachel Vatnsdal

all questions. you. Those Great. my were Thank

Peter Maag

Rachel. you, Thank

Operator

question Craig-Hallum next Alex is Group. from Please proceed. Nowak Our Capital with

Alexander Nowak

and guess more pandemic away Hey, all a into essentially heart another biopsy, benefit afternoon everyone. transplant agreement the said to centers on this way, these from goals back centers? going and good during I centers reopened this go In and accelerated have track of moved have from some those [indiscernible] penetration you try that the durable at AlloSure's to doing Has normal. of been your there that. has as do think pandemic AlloMap's and

Peter Maag

quarters, in I would in and we'll say see from that to of the is budding proof absolutely. the couple a need but

I true talked into many I've to to so from now away think to procedures. shift have that biopsy cardiologists we biopsy it's our wanted we time and the it. protocols retire noninvasive a maybe seen said always protocol do

are Now, of have them in are in procedures. see through don't that for see the if or more We'll less the be and to invasive biopsy. reality test. blood the But day cath lab now a a might from they back that patients past. the doing spend going some that this onto And you an feedback go

from true is convenient home think to a franchise able be notes wouldn't I in quarter I even heart shift receive and think much are right? many from extremely and better. how not there's this more so care, one do patient successful. positive is But, this to saying, that You think something entire the well, But I I I has and but been being is that believe mean, stay. yet patients this to seen, team the receives

Alexander Nowak

can in RemoTraC of you in general, if many increase. to X,XXX remember the the piece on to say a would compliance core say has new Because that RemoTraC patients, and CareDX that I you improved -- getting draw the of thesis clinic? blood would how brand And hear. a being compliance to the great That's actually are RemoTraC traditional compared RemoTraC just

Peter Maag

the story And a for Alex, time. of you followed long period have

a weeks out And it's question. surveillance been another some ourselves visit. asking a -- patients is number I'm wondering their quarter not I we are carefully. you of very, that have why RemoTraC come trend. a brand wonder So has for looking numbers been the franchise. new why are or think few onto probably We don't true -- for very at But this these that new There I patients pushed

areas think need demonstrate in guess in I'll will think sure enough RemoTraC just us adherence we're I give yet. some hit hard, patients. that extremely scheduling seeing But I think ourselves make need of what is stay, we significant New And involved we a again, a of now and really to patient like getting or Reg accelerating. York, been we'll where We But to how aggressive has that invested more surveillance? determine these being there RemoTraC on is adherent impact in long-term, We to COVID patient much exceptionally these rates. successful demonstrate our and group. I the to for time upside follow manage to what RemoTraC in you're to doing now much couple management maybe Florida is adherence. that. quarters uprise that we're is on if intimately one what's to and also quarter CareDx Seeto care not here at think, be with in really successful into And quarterly the ups ask Reg? actually RemoTraC significantly to what comment

Reginald Seeto

Very Yes. Peter -- up. patient Alex as is new a I I’ve stunning success as Thanks, much Peter. mentioned, we've obviously obviously and has hi, gone well adherence new this And think has centers, [indiscernible] added of month track the sort the period three thousand pull had are that along patients that those parameters those of in plus program. during full this from certainly full enrolled a that we've experience seeing [indiscernible] being seen

Alexander Nowak

any that. reimbursement there's All update me, EMS and last right. reimbursement. and heart then on request would Understood. for expect a Kidney Thanks And you with question Palmetto. care for [indiscernible] related when And care

Peter Maag

is give comment I'll care. too really for This Excellent us Alex. the Kidney early yet on to questions.

timelines Mike we care. Bell on and heart will heart clarity punt [ph] on care care. I reimbursement on have question to that We about will kidney this see communicating probably our Once over

Michael Bell

the year. spoke, of within public It's the really Yes, think Last back which time was of usually no to XX on comment final to period, the months coverage how decision up expecting still from I go from towards to the we last October end status. Alex, change -- year. the we're that

something So we're expecting that timing. around

Alexander Nowak

All right. you Understood. Thank everyone.

Peter Maag

the in doing right? quarter, So Alex, that. keep crossed thank us for the third fingers you for

Operator

Cooper next proceed. is from Andrew Raymond with James. Our question Please

Andrew Cooper

thanks the was Hi, of part the for just quarter. any I sense any at you Peter, questions. as But just there what it on delayed volume about that on might've of been adjusted should about from kind or of the the think RemoTraC of XQ that remainder amount through went sort do potentially year. based have for least available as we think think of Maybe we pacing first, becoming mentioned in you

Peter Maag

Excellent finished question, quarter. obviously that second quarter, -- see continue continue Andrew. the the we that trend and And into you very strong third

that I in carry franchise, think and are very, has throughout our the year. this strong heart we the Well, at very the the of rest on on looking second quarter. numbers been saying, momentum

question. So good that's I a think

the we volume, end are proposition, so On think I value the the overall. day, the low at kidney penetrated of

such So the are build this a franchise is big forward. opportunity here going we stay that and to

opportunity. so So in there's ample much sense, that

well, in did we nephrology. are we presence out as side in is comment the that on community notice Now our building

there's going CareDx, for So to grow expansion ongoing to going fields tremendous forward. be an

growth forward. So sense, see in continued we that going

Andrew Cooper

about settings to next actually of that was Thanks. the in or hospital lists. and should think the or which with should patients we coming that this community some that that presumably of leads on kind right when That as opportunity there ESRD direct settings, to you think the community way patients you about are trying to building we Is an -- on nephrology larger transplant with I one-by-one What's maybe are about think is into to that? question effort. address partner interacting wanted players that, ask,

Peter Maag

Andrew. No -- much, thank you so

and post-transplant. managing the actually is setting. care, into been also now masterminded we a nephrology Reg expanding franchise, progression we company as natural and continuity into community from the which our on transplant transplant has growing community Seeto our about we very [indiscernible] transplantation of managing study, wait list, presence the procedure center a the the the then journey. are them them managing We're about the well, all during You've are following patients and are

a it's natural So Over very, to you very, evolution. Reg.

Reginald Seeto

XXX years think with we've centers Peter. community three And have on, Thanks, the we doing obviously Yes. within mean moving SHORE, [indiscernible] we're one. and centers I had using actively our than penetration I deep more now [indiscernible]. quarter-on-quarter, patients,

SHORE. we've So strategically [indiscernible] plan, new patients been also a follow the the patients with and which world develop that allows to in into mind, to able us now bring of

something, that's to that there. we have expansion for that allow part that a cost as team up build So of

Andrew Cooper

stop I'll Great. the I appreciate question. there.

Operator

Our next HC Please Chen with question is from Yi proceed. Wainwright.

Yi Chen

do in [indiscernible] you Could you in compared taking as prior in please early third my quarter for the Thank those transplant to periods. second on volume questions. quarter transplant volume will levels and comment And continue cases due up extended new to the you remainder country. the time an period current go or remain for during at the of COVID-XX to XXXX of

Peter Maag

Excellent question.

and never deceased living organ back to level I actually has stopped. owner a think this One donation donation is really driven dynamics. previous is is by two

those is So yes. and I donation in question say, increase living continues a way, your to about organ would

crisis, I deal how off. that shell oh, centers said, during COVID-XX transplant And was think a shock reaction the they learned with many now, as backing have there to in are we actually and deaths availability, to we of believe are due increasing or these The of overdosing. it on cardiovascular numbers significantly organ actually because significant a latest not see because increase. COVID-XX

there's that increase more deaths, cardiovascular are a are availability. [indiscernible] which to patients leads are more overdosing. And experiencing home that So there are organ at lot in patients, that unfortunately, an

on With the hundred list thousand patients waiting need we kidney. the organ a because transplantation on need increasing have of

transplantation centers are which a which that are the releasing a is driven -- many that significant area okay. income. but more centers quality perfect transplantation these and that for also Chen, a initiative that a of from of profitable. last way is would do And tend are but releasing when activity profitable thing an that driven a X-year to increase, allows will drive taking within And many Transplantation by say little you hospital. kidneys, volume. kidneys financially year, not metric looking and is last on bit as to of also pretty are metric to might that kind graft low be And I see financial I institutions the CMS, have you are health kidney support key hospitals Yi and we a read in metric are really read be So these sources taking of as be only transplanting case transplant rates, easy we survival risk we because might for now, relatively have also take the

significant rest will think all I in throughout of a the increase these So transplantation things the to play year.

Yi Chen

which related increased simply expenses, spread? the that COVID-XX COVID Got at to and Was question in remain that of second related operating levels it. Thanks. a next in expect to solutions? such do as And quarter. have other RemoTraC to continues investment you is XX My result

Peter Maag

Mike I'd we'll that our about all we're is speak what expense, in. see operating to like but

invested especially we'll think Activities patient and some what really this taken out one stops I to see sticks. our we've and heavily, in direct

you think said, responsible we seen going a a we I was have all and but might extremely extremely building sustainable quarter another no, other model. company we companies focused in. being way, this -- as going are But us the business on go long-term where are

you give I'll detail. to which more turn can so And over Mike,

Michael Bell

from on our of each margin. the was in XXX the Yes, most earlier, gross I on call goods point impact cost in I impact RemoTraC saw actually a line. we on margin RemoTraC basis the talked impact An and the of about think side, that gross the

needed stay to see probably going and see we'll forward. those And -- so them costs we'll

and in patients. direct we On going out related RemoTraC touch patient in to care manager extent. the to Peter was we've quarters, to And patient capabilities more our that to that's continue there as mentioned, cost some built future more as in want OpEx and our side,

had the line. care. expense more Again, show COVID. some of upfront uptake as We side, related we this were related increases costs some also We heart COVID the of this on R&D saw of to those to to more had non-related Cornell. and on OpEx But

will the some pipeline that in drive overall, we change yes, a for but legal all forward, the mean, line model So additional Peter I think see top line that's also But have as mentioned, again, on I our that mean, expense, business G&A I it's and expense for on was the focused line. going -- bit growth. a increase we the and [indiscernible]. of some in developing in

Yi Chen

Thank you.

Michael Bell

Thank you, Yi Chen.

Operator

to the our session. of like call back turn I We comments. reached Peter the closing for over question-and-answer would end to have

Peter Maag

your CareDx. for much interest very you in thank Well,

you will bye forward into the updated of touch second now. in XXXX, so looking you. Thank half we are Bye, going continue much. and you to keep We as keep to with

Operator

This concludes you. Thank conference. today's

You have lines disconnect and evening. time, this a may at pleasant your

CareDx (CDNA) 4 Aug 202020 Q2 Earnings call transcript