CDNA - Earnings call transcript Q2 2022

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Operator

Good day, and welcome to the CareDx, Inc.

Second Quarter 2022 Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Ian Cooney, Vice President of Investor Relations. Please go ahead.

Ian Cooney

you us thank and afternoon, for today. joining Good results quarter ended today, CareDx XXth, the financial released Earlier June for XXXX. The the release Company’s on website at is www.caredx.com. currently available Jain, will Reg Chief and Executive Seeto, Abhishek Chief Financial this host Officer, afternoon’s call. Officer; Interim

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

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

Reg Seeto

to everyone, XXXX afternoon, CareDx’s highlights strong in call. to joining begin I’d Good for strategic focusing Through us want following and Ian. for thank discipline, second and financial, you execution earnings growth; demonstrated Thanks, highlight, by testing I on gross the no quarter financial operational we in X, one, QX. like over profitable growth. cash, position industry-leading have $XXX path to excellent debt, to return sequential our a with and to million continued volume mid-single-digit maintain with margins services

the in from scaled the delivering we on have our we opportunity vision. nadir our efficiently QX; saw capture mix increase in Advantage more mission Strategically, commercial of transplant long-term the in now Importantly, and Medicare revenue and collections which we and passed to infrastructure patients. X, volumes, we’re

that in progress, our of to a with And is intelligence AlloCare, is is and where long-term in artificial been ecosystem transplant transplant goal our the vision XX,XXX Our with than innovative patients. perfect a transplant app, mission of X post-transplant and connecting to patient modalities there’s leader and now AiKidney more by new be solutions intelligence patients. X pre a [AiHeart]. downloads exemplified improve by bringing outcomes our example

financial profile. Now on first the to topic, excellent our

balance maintaining is sheet and success. to Board management CareDx’s team a believe strong important Our that

need competitive for raising This as cash the position current of CareDx our recall And to particularly will increase to a peers, clear by we foreseeable environment, we in we to bolster is over year, that longer a have way shareholders. that positive be may the the a $XXX the Unlike market advantage took we investors for long-term on from capital a to near-term profitability. of this. market You raise in we in a last public future. flexibility will capital. deploy stock have our can value ensuring through have path million favorable We a our offering, advantage for we the that feedback term, condition QX very not self-funding received

were and on to adjusted automation margin, path for benefits driving quarters heavy our legal close of growth spend maintained XX be industry-leading our in scale. conference in expenses Our adjusted profitable prior and increased continue we breakeven, our of EBITDA Notably, on versus is efficiencies costs QX despite quarter. to similar EBITDA. adjusting would XX to and built QX, we non-recurring in gross We positive focus QX. a the After to lab margin through

targeting including by even we are positive to half forward, transplant adjusted and the to performance. of non-recurring legal XXXX. EBITDA expenses, volume be On first Looking

living the elective increases donation As we quarter, numbers levels. hope and even digit Transplant grew pleased year, We in by in will declined in as QX. in pre-COVID digit to an staffing see transplant last volume increase volume organ second mid-single towards predicted lead the to year-over-year. of we were an procedures but in volume mid-single half hospital QX returned further sequentially, increase

reminder, a XXXX transplant was the for QX, last highest quarter volumes. year, As ever

year-over-year to our services XX,XXX over X% XXXX, QX, and volume During deliver grew testing sequentially roughly tests. XX%

encouraged pushing kidney milestone, than across do We face heart, market, but even back also the the tests, CareDx XXX,XXX half to major the in has of better year. XX,XXX challenging QX patients. our where more these lung the are we patient transplant a performance and test by feel of With organization in results a delivered passed

Now looking at performance. CareDx’s

services. from $XX.X compared the of XXXX, of testing kidney the quarter, our year coming most with X% testing total increasing revenues million, For services, was the to ago second revenue quarter

adding community both have end AlloSure in centers with We Kidney adding name protocols more now further new we of XX the and formula our across winning AlloSure protocols, than continued At into community of June, centers and expanding nephrology. nephrology.

and had our best our quarter. force nice to starting field nephrology, see we’ve community are where We progress in ever expanded

progress in our encouraged underserved We’re population. by continued this reaching

attachment lung continuing HeartCare XX% the physicians. and multimodality on rate services, to Now and than greater patients highlight remains heart both to value of the to testing

with AlloSure in lung helping and test. X,XXX used the CMS We see look forward Lung with quarter over Lung We patients to receive momentum reimbursement centers. of are ordered discussions now over pleased to AlloSure for of [available] remain XX% in our in and for tests this continued reimbursement the

on rates Now priority. of major our increasing has collections/reimbursement, to been a collection

add parties Medicare We of added of infrastructure, continue horsepower to because to influx and now billing scale new commercial Advantage plans. have our internal third the extra

covered As major insurers pay as we achieved coverage part all in process, critical. that is AlloMap this than the coverage by XX% the reimbursement Medicare. of has standard, achieving where are greater used a We gold

was multiyear this conducting and with reminder, a incorporating process, of As studies randomized long-term control a guidelines. goal long including studies, completing the

the coverage, as Kidney, Heart similar in and achieving are We AlloSure working AlloMap Lung. This AlloSure opportunity. AlloSure upside level Heart significant represents towards a

in in were an would coverage if bottom the the line. testing Heart, captured levels AlloMap an As $XXX at tests additional million plus services reimbursed XXXX same example, then have been in

closely as guidelines. iteration We while Recently, we required payers, the continue considered work donor-derived the investing of to DNA of evidence producing and were being the next to cell-free see part ISHLT with to pleased receive reimbursement.

do guidelines. On everyone, reminder, price. already Medicare AlloMap we not the pricing, I set in has a to want the incorporated As ISHLT been remind

driver patients target increased mix. commercial with these changes in our The Lung has in commercial expand of or addition, increased of the with launches strategy ASPs progress fluctuations on at AlloSure new the Kidney payer Medicare receiving the AlloSure above community percentage the In we of success main nephrology contracts is and and the to Heart, [ISHLT]. rate, into AlloSure

Now innovation. moving on

from May, In AlloMap T-cell On for probability rejection make rejection. and the multicenter new mediated second in Kidney and progress [indiscernible]. demonstrating prospective validation published profiling represents pipeline, continue we AlloMap the UroMap. This data biomarkers expression predicts to the both uses notably Kidney independent Kidney of medicine and gene AlloMap allograft rejection antibody-mediated with of that data

of We half of AlloMap are our delivery this plan to validation of year. as laboratory track part the process on in UroMap plan and second Kidney, also XXXX for start our with

tool. transplant represents AiKidney care. into only ATC, major we’re We DNA as risk services patient’s solution that at algorithmic of survival allograft AiKidney patient features deliver additive regarding incorporating risk intelligence this rejection announced points. We prognosis now testing current assessment Additionally, donor-derived believe next as at the artificial will time move an the and our well different within cell-free AI-enabled portfolio. the information

franchise, the using United a States in have technology heart for CAV CAV We being chronic allograft the our angiograms. transplant and offering assessing the in this Sinai, reduction June first to is one need institution licensed at highlighted for innovation date. been our also the leading heart has that leading AI AI vasculopathy, technology Cedars of

business. digital on and solutions Now of patient the and the other to parts

strong and digital now a revenue, with business. driven recorded Patient Management This the XXX%, year-over-year performance portfolio. acquisitions Medication par increase quarter, in solutions by of across we our and $X.X on are products the million

and X critical we As a have years now last reminder, over progressing built at scale. this the

to we personalized now monitoring We the have than deep transplant to us into moat AlloHome, over transplant and centers across and with now and and XX-plus XX,XXX [emails] an recent administrative pretransplant, centers our have has of service. more over XX-plus transplant have enabled gone referrals quality XXX-plus This incredibly expand the XX-plus patient introduction the patient with and community moat services. efficient

the role journey We patient are fragmented. because highly a critical this focused on connecting transplant across remains patients playing ecosystem

more post-transplant both AiTraC MedActionPlan, us consolidation, patient enabling as transplant. This on the opportunity data transplant now connect this ecosystem focus a focus on now our and leader to TxAccess patients. of with and is develop pre known of the part As algorithmic-based is in future our unique being both represents to delivers connecting and app AlloCare integrated This and our is vision platform like solutions. build

products. to Moving

an chain looking recent momentum environment was driven exchange reported Cellar entire the line, pleased portfolio, for products IVDD by process and [indiscernible] therapy entry as quarter of our down revenue, the most promising business were to constraints. as foreign part exciting of Europe year-over-year, climates the normalizes. represents for of $X.X registration one clinical operating We in and operating million and medicine. the lab transplant complete who X% to of supply This this areas into reestablish

In pharma partnerships, AlloHeme also working with partnership with pharma end our and the very at we signed QX. addition partners to of first

Now moving on to guidance.

cover our this our full year million. the Abhishek revenue As release, press in now in more $XXX lowered expect his and to will million be we will section. saw $XXX of detail range you guidance our in in

As a and commitment we on patients. a transplant company, a focus made

has provides geopolitical short entered the organs commercial X and performance of access a our between confident community part new In this and I commitment, first longer closing, volumes, introduced of increased we new been the a of an complexity runway to Medicare the from growth. strong to in term, transplant a of months Medicare In in has I’m has Advantage. dynamics. mix been offerings patients challenging The year to As increase patients. everybody. concerns transplant, improvement to significantly an patients. reimbursement start the year the for see lag has the for Compounding COVID, patients have offerings, the nadir success half In second environment of the I term, month the expanded inflation, collections proud impacted been ASP in sustain believe shifting of what first our this transplant In the to commercial macro for and longer these headwinds volume in eventful in feel our we’ll continued has during uptake due strategy half.

we the Mid commercial We term, patients and collections, with near are as improved commercial mix the to opportunity organs. opportunity expand have realize infrastructure. our to we increase our coverage, focused to Xenotransplant. volumes government in and of through increases market new transplant as and launches to the conducted, new technologies the drivers term, alternative scale From long multiple donors, a to of dissected are initiatives, including place potential being supplies use organ organ like perfusion the of there of double increasing perspective, organs, living transport number on

proud the it ecosystem. of to turn that is over the to helping building across we’re transplant I’ll patients Finally, With focused products, offerings Abhishek. transplant being that, connection the Company services by on other and

Abhishek Jain

Thank you, Rich.

to the deliver being strong like of the with impressive transplant pleased following, second position gross highlight our to $XXX of the our moat would across on ability and are margin centers results the about million, performance. We ecosystem. the transplant our growth efficient in quarter, strong leader and incredibly the comments echo and I deep volume cash vision to and from the I would like

through X.X% Excluding ASP we change improved better QX to sequestration, in versus our X.X% collections. from

in ended Our strength. adjusted model We start half I where by growth, $XXX we EBITDA marketable including elevated profitable cash securities. financial our XXXX, the of first with for expect by highlighting million the cash, quarter legal even want positive and expenses. to equivalents

value. mainly towards focused cash to we on driven return future by allocation, a EBITDA, of uses increasing be we shareholder As breakeven capital adjusted decisions expect

We self-funding is are confident future. foreseeable that into the business the

by of $XX.X quarter, the $X.X revenue we of million. year-over-year Testing million, Product in quarter $XX.X to million services patient decreased digital $XX.X XXX% X% Moving transplant our XXXX. revenues quarter by to MedActionPlan. Pharmacy volume by XX% total Notably, the QX, was in for tough grew revenues revenue strong up our QX, increased recorded driven second that and compared and million, X% to X% from The a solutions year-over-year reminder to high volumes A quick ‘XX, Transplant and million, all-time $X.X our to XX,XXX grew acquisitions recent comparison to despite testing testing approximately tests. that growth came volumes. of an

XX% uptake organs, the AlloSure encouraging to X,XXX over growth strong for non-GAAP sequential to in gross of For in last compared grew rate quarter the is for Heart. AlloSure the and volumes quarter the our greater quarter The saw year the solid quarter, in tests where continued was and all QX. attach Lung, the we than of second particularly XX.X% for XX.X% margin XX.X%

between over margins reimbursed. testing maintain gross not our shift of despite our services that reimbursed to are versus the business We drives the of new test XX% adoption strong that healthy tests continue in mix

margin disciplined operating million, by and driven sales expenses ‘XX. as very to QX, plan remain for were lab our our heavy a in keep they flattish The half. chain profile Non-GAAP was our expenses the in $X from of pleased gross second conference the efficiencies. marketing We operating to teams, expenses drive proud our the durability are increase spend about in expenses of continue and with sequentially operating and $XX.X We quarter. million quarter up with and supply second

of to million the ‘XX, negative previous EBITDA $X.X adjusted adjusted quarter EBITDA in we negative second the million of quarter. compared recorded For of $X.X

and Reg our As first the half targeting are in XXXX mentioned, positive drive in be to continue of to growth. ability to we adjusted profitable EBITDA confident are

factors in change year to Now our investors the the driving the our better in like would the I add of half mix for second on assumptions business. the and to shift understand color some the help quarter ASP

on Firstly, there in is X% a of impact mandatory Medicare QX. sequestration ASP

Excluding over X.X% this, improved about the last XXX ASP points change basis the of quarter.

higher our of first, call, our expansion expand nephrology. driven discussed ASP impact new a is and As commercial patients, in our strategy we last into had to our by driving result community into mix of launches

the The To our second on Advantage. has complexity mix meant patients increase journey entire patients of part a to from the patients patient due Medicare serve ASP impact strategy increased of shifting to is further clarity, in in collections marked pay. the provide to due commercial to along Medicare

volumes strategy, leadership payers of was this XX% of AlloSure Lung. commercial and by the in incremental change Given ASP driven

patients. by The Medicare the of Advantage driven to other XX% ASP of in change was the Medicare shift

above. we the Our ASP the impact assumption a now for on discussed year as based mid-teens full factors includes

focus our significant the mid the to capture over opportunity long increased this on to term. have We reimbursement strategy

are infrastructure increased steps. to with collections administrative scaling our addition, we comply In

government, have any Regarding request the not from we to material the report. updates information do

the moving We responding continue in expeditiously to cooperate request. are and to

Turning to guidance.

including assumptions We guidance due to revised $XXX $XXX to are million million in primarily our of AlloSure This Medicare $XXX mix range million and by revising midpoint of patients, patients. the million change ASP from in growth to Medicare Lung from commercial driven our to $XXX full higher million is $XXX Advantage of year shift million test previously. $XXX to in

half year. we nadir of has industry that is of volumes, improvement, shortages the staffing the and will the dissipate see hit back transplant as belief Our in the

as advantage strength. for a CareDX, of cash business and solid in position Our places us position is a the it competitive model

coverage, drive promising for have untapped a We call sustainable that, to pipeline. profitability product through I’ll With increased large a opportunity reimbursement great questions. the have and open

Operator

[Operator will Instructions] Andrew James. question And come with first Raymond our Cooper from

Andrew Cooper

where just specifically Medicare for degree, mix just today, that, predict. like for to Thanks then like has to of tell is Advantage the It your [guide] mix want volumes just Maybe the the to think something actual each look in us And lastly, been terms questions. what us can a you for some sense volumes commercial. true I And been and first, on dynamic. you least that Medicare, transplant tied sounds that’s talk really directionally? why on through difficult that then to of at get you

And so sort the informs last year I changed just what prior? to learned this look like since what have of And might mix want relative to understand you time your what’s forward? expectations that going maybe

Reg Seeto

total question. in this we is growth. clear as Yes. our mix, we such quarter by of and in what’s increase volume think a as AlloSure and look build progression launches And reimbursement because to strong volume see Thanks commercial Thanks, who strategy excited here. had and coverage. and of to not we significant historically that’s a we we’re Reg Andrew. volume. series a in quarter, with and community continue percent the -- And new patient for this in patients, had AlloSure at added nephrologist, of It’s And Heart, we’ve of the where that terms have that earn expand we now Lung, instituted the where I started bringing

commercial increase. XX% we’re so but now increase is seeing see percentage, And has used what continue, that commercial commercial you to continued greatest And be of the which mix where at can this or terms of evolution you to the is been look under the that, in change in if above our XX%, patients.

range, year, was around XX%. time the probably now about So this at the XX% we’re of start it and last

we’ve delta we’ve change X% a that got So seen.

same the Medicare amount that side, Advantage, that’s through On of decline made the that we’re and mix. up about the rest a by Medicare seeing

place. see, a can taking bit you shift dynamic quite a as that’s of So

Andrew Cooper

to and build just payers kind to similar with the continue topics, maybe conversations clinical. agencies sets out then of there, continue sticking the data but And build to

of can you you to efforts as well. make us get sure updates any give paid commercial So conversations with some payers Medicare Advantage on those on

Reg Seeto

Yes. mean, I standard. the have Heart why well, there, the every regionals We but mentioned is most process. excess gold Absolutely. [are of and major that’s I thing I payer in this you -- as coverage. of mean, you reference, good AlloMap a the as the XX%. as And have you about well XX% And X]. used have national it’s there

over sent studies, in process, [indiscernible] So guidelines. a include studies that getting long-term England included New being into time, excellent multi-stage control period of began and included was randomized standard with published which phase, also

we And new the have multicenter as the journals. same, is started we’ve right, so both prospective And in excellent we’ve The doing studies, goal our And seen in offerings, and the controlled across the these guidelines. incorporating excellent from in next is thing approach studies. now kidney. also get to studies, long-term heart which done is randomized ultimately

quarter and is last you that of As also see the considered that we iteration this is AlloSure quarter, next ISHLT. the of can donor-derived from DNA being cell-free part mentioned as

that because This into a and obviously kidney. AlloMap, really AlloSure into it’s process, is payer those conversations annual for It’s to it’s this AlloSure ad we’ve well. Lung one but the now as with with a isn’t I we’re can applying is you process AlloSure a the it’s but space, at which and process. have have you is discussions, think seen Heart, hoc where into continuing majors, who But new mystery it one So the we’re also have precedented.

Operator

from Nowak our with Group. Capital Alex next We’ll question Craig-Hallum take

Alex Nowak

that commercial to there I ASP amount is to Shouldn’t at test the and quarter-on-quarter. consistent do than if and volumes the lap obviously there from volumes you look why hope that obviously curious you lung, start you test out QX, I’m ASP There’s leads looking QX wanted comments coverage follow some higher at decline the think less heart newer to as point, going Medicare. at that X those test -- from then But here quarters. to from of to has commercial when pretty mix up in a here year-on-year on clarify.

let’s So say, a I what specifically figure led out decline specifically guess in for I’m QX. price, to sequential trying to

Reg Seeto

going detail. give let to I’ll some in more [come] I Yes. Abhishek comments, am and

there sequestration, what part commercial then I see was a change, by was mix X%, think mentioned we Abhishek. the And it these the firstly, and new broke Medicare. actually was up QX of larger a think, is was which into I can I And was what commercial mandatory increase of patients which and QX. is, you between in which there think

So I know, want to add you Abhishek, some don’t there. if more commentary

Abhishek Jain

Reg. you, Thank No.

part driven as that it most the was by here the continue of the we volume start provide commercial strategy the XX% about of the to community covered change, test at can our I primarily and volume, similarly commercial actually increased that And that AlloSure more of we so and when have look into see side, most payers AlloSure key to as getting was increased we Lung And ASP move that it’s mentioned, actually But driven by You space. Lung because it. on the here side. over is nephrology, in are we since on you the XX%. so our separately, number

-- collections. those the that from that comes driving the is of like from part And the sequestration rest the then a coming X almost your small are and Medicare So X% are change. ASP factors

Alex Nowak

then does into new added to the are the remind growth embedded sales And first, When about us, just guidance, in the acquisitions you how assume for compared can guide XXXX? second looks volumes? thinking the were we much implies guidance like flat the growth a if half almost half. for you It growth first to here testing take it in the and what

-- understand I’m there? the volume trends trying to in So just I’m

Reg Seeto

Yes. Sure.

make So your just that all, fully to get I here. questions right sure of first

into So our we the is primarily as as are when at I ASP, look today. guidance, look where guidance of change coming the we

the now the to of the now. revising second that million. the reason shifting we that year the previous mid-teens from and the will $XXX new around midpoint And midpoint the are to guidance continue the mix assumptions we of are that’s $XXX the million we ASP this the shift the guidance in of had assuming is single So high half that digits

there assumptions, [Technical related and and not volume that I would add the rate medium it only Now high the been any assumptions change in same. were the growth as to Difficulty] has our low the other

I Difficulty]. [Technical think the is here what we’re the change communicating in

Alex Nowak

Okay.

you on we but up offline. I broke end, can think follow guys my up Thanks.

Reg Seeto

repeat or drop So [speaker question? is out]. Hello? out the Alex the Did [Technical you can Difficulty]

Operator

Alex, are the line? you still on

Reg Seeto

Yes. I’m like text is getting a message line out. cut the phone

So if I can us. know hear don’t you

Operator

This operator. hear able on my is the I to am you end.

Reg Seeto

Well, out, know Great. Okay. couldn’t hear his we don’t Alex if question. dropped I

Operator

Alex, are you still on the still line? open. Your is line

Reg Seeto

Yes. we We to Alex maybe hear rejoins. back come when can to go -- [indiscernible]. we don’t come next Maybe to him. back Alex, the can Yes. Alex he

Operator

We’ll question from take Couillard with our Jefferies. next Brandon

Brandon Couillard

continue, of should the in the may of the I of step And phasing fourth just Abhishek, assume you little quarter. initial that think preliminary, perhaps quarter likely third Or down as back be stabilize, this it’s do and in view ASPs half but at know we rate. the mix to it into your a would be move sequentially that we shift a both to actually ‘XX? terms year, slower this but begins

Abhishek Jain

Sure.

Brandon, is a great So this question.

ASP half of the into now. much seeing the right the year, look I as my So we how trends as are pretty of are second assumptions

are the half so assuming in we So this that of next the what year. far, mix have we will that shift are continue seen the

piece. first the So that’s

second The is sequestration. Medicare around piece the

know, you go up will Medicare as to that QX. X% sequestration cut So in

QX. the had will it in So away have the impact in go quarter, it it current will but same way the

part. So second that’s the

And we -- at assuming. for but other the than from will half pieces continue same that, of second standpoint our that those X year. So the the assumption midpoint way are in the it least are

Brandon Couillard

far as as… And

Reg Seeto

in in But just ‘XX, just that that quarters I largest sequestration from terms is And you build guided commercial, as of see -- But yet. just also the think I haven’t coming mean, away. we commentary, is -- of commercial. [piece we X] go more what can Brandon Yes. terms will

comes work bit there for we So AlloSure multimodality, through. commercial were on is in contracts, reversed Lung, a event and example, also when causes as reimbursement little

they is assumes improved this XXXX the that in what and it but is what additional also these So building come progression, during factor collections. then has doesn’t contracts through in been this

well. to wanted that as add just I So

-- there we’re be Although, show just that to not will there is guiding improvement. ‘XX,

Brandon Couillard

Well, by I And I in it of mean, that about would just in are top that stronger [XX] the general, kind key mean line you actually indicated first of XXXX now? why half. spending, give adjusted as OpEx EBITDA like moderation talking positive terms or growth be driver what’s target kind the in a second for Is case profitability? of half? the of shift you to the right

Reg Seeto

the Yes. Brandon, I we, our and it’s using as have thought investors was to adjusted this -- path that but spoke important our again, really to to investors, model, understanding because we also business it we and EBITDA long-term a proxy. good think profitability,

is this non-recurring will what in the last And so quarters example, we of incremental we’ve call, as And past. which away, say, expenses. leak spend, the mentioned in we [XX few but eventually had the for the go XX] in incurred

So a to we that’s absorb we’ve had that. for if million assume year, example, quarter, $X this $XX that million,

top move EBITDA. we OpEx into is line And go adjusted model growth and will that so that what into we want to then we’ll positive back absorb is including and we including had operational that the say this XXXX

we’ll as assurance these I we trying X after the we’re And that’s our again, that want provide. to So return what say to costs, here we a And that to for do think non-recurring just [legal]. to incremental model is reminder, know example, well. absorbing

Brandon Couillard

submission? for what are as the commercializing as And time just KidneyCare, could line that be next last you far test? chance MolDx specific more any on towards the And milestones question,

Reg Seeto

launch. part MolDx. about that, good training, think as have in second study. here No, major the any the of We’ve their think second be completed I good education And obviously will with this will, Yes. our Kidney. I But we completed have mean the part as I thought their process independent started our really feel AlloMap about validation part started of CLIA is We team mentioned, Kidney. progress year [CLIA] in process, we of good validation. before half the we AlloMap

validation, as CLIA UroMap, half well of We year to this as UroMap start also is in mentioned the second also well. [yet]

particularly So opportunities both for space. in the organization, the kidney exciting

Operator

Mason next our from with take will Stephens. Carrico We question

Jacob Johnson

It’s Jacob for Mason. on

Medicare the in know been out on the of switch impact, you kind part ASP a negative the of So guys patients, bit to a building that’s little call about talked on this Medicare I Advantage of for big infrastructure headwind. combating kind the

Just maybe collection improving. any you are are that to about building could there rates infrastructure maybe you to the out shows you going point guys and start could talk metrics

Reg Seeto

obviously XX% described I Yes. but Medicaid in think higher I shift obviously as commercial prior Advantage in Medicaid on the infrastructure, was being That the and can also much on with a Medicare, shift. the well Advantage what quarters. being XX% Medicare, describe with

things, in in So year has looking second put the the continue actually, third to excluding infrastructure resolves we’ve place which at X.X%, people, been that. is on versus of so the during [have] sequestration, improvement third parties. can QX. first it the that improvements the of part is as And X one we by around that half said, now actually process, That the well and an is see you some there as side was collection

for initiative you point easy, of example, the process, call, needs information third when so the a people. in. during as often engaged And the you have submit it’s some verification on parties There’s often now plans, from This any You different, increased helping different a [roth] right? and When of you for we’ve There’s so go Medicare, you as you such appeal obviously When we’ve is those the phone. the medical number provide. prior cetera. different heard required. process, put et Medicare us during Advantage go it’s for you submit commercial paperwork, like, or

more because people part process the of we shift have this thirdly, it’s secondly, commercial just again, organization, that to as It’s that. plans a up and has And the building process. in then required well. we longer more as So

up and So third-party front a we’re end again, a back also scaled process support. has this people and as process in mission with here and end,

Jacob Johnson

a in time line AlloSure the maybe on DNA one, inclusion moving And would on guidelines. on provide the about from to for for coverage have an talk then next us donor-derived of perspective commercial the you impact, Heart. expanding inclusion cell-free update ISHLT Maybe just just could

Reg Seeto

pivotal presentation incorporate guidelines be was comment with of of by guideline. and a developed the on didn’t and ISHLT draft timing, the is we able shared in as We terms the national committees that the it that’s wouldn’t because And the part to is any subcommittees moment. Yes.

we assume is ongoing. process that So

on dialogue we’d of the because terms that change because then as have AlloMap, with actually love payers we don’t of seen that, to proof those as with the engage good it So in us comment discussions. would fairly as saw well commercial payers don’t discussion is well those a obviously, impact, as that part helping we the point committees. run well it as instrumental would but in those we But validation in to we

be bit say one proof and I’d point that point. of [indiscernible] So it’s could inflection -- important create a a an

Operator

[Operator question Instructions] next We’ll take Chen Wainwright. our from H.C. with

Yi Chen

the you on shortage comment in relatively transplant the volume result what a staff? mentioned at shortage created is you low remarks, staff. prepared Could of In that a of

Reg Seeto

across the healthcare Yes. The seeing documented. you’re well pretty network shortages is that

I [indiscernible] of institutions to there roles were lot the going nurse COVID, during firstly and traveling staff, think other was who leaving concept. process of a

And a that. so of there were shortages, as result staffing

Secondly, COVID pretty shortages play lot landscape donor that hospital this for the to the during as institutions there the] that were when there and though, saw during of during Where done actually really of living Those in left were being role, people across short procedures staffing [part on various played this. catch-up, pivotal QX XXXX a has and being nursing of as part example, transplants. a roles weekends, leaving roles we so roles is elective other those X permanently. have to left is course and significant who COVID of were creation been in

even for example, is on if more, or out ORs to to in weekends, not to seeing there a so desire sort And same example, do hours availability, for you’re of of or for willingness example. schedule that transplant, schedule

it not still So returned has something it pre-COVID back And been exists. levels. that donors living to have

Yi Chen

that make half? situation in improve to you could observed believe evidence you the the second What have

Reg Seeto

Yes.

of be been now of there’s I people general in I recover. we’re landscape normalcy. COVID, staffing to sense there is But to shortages, across that get for the also to centers will it’s an been think has of back able think trying acceptance say for us acceptance harder [indiscernible] more seeing to what

where shift with the see on payment change nurses, actual around factor, there coming rates you’ll well, first desire will and down. So on moving of payments the a as the traveling a bit probably to the trend keep

So that -- that will be one difference.

The second that less of is, probably attrition you’ll has already see retire people wanting to [indiscernible] happened. because

into lower a the for Yes. also the dependent States. comment now -- think So United harder It’s there folks on being I situations, us macro of but those attrition. really to make back more coming entire into it’s

Yi Chen

declared which aims shortage? round Monkeypox staff public federal of of So speed the distribution. you vesting think as a new that creates to could government another the possibly Do health just emergency,

Reg Seeto

sure Yes. question. I’m with that not -- too sure

area still an is fairly that’s early. Monkeypox think I

see one But thinking probably that I I quo, on to back think think question, primary to I if probably, I expert now of where really of again, shortage not QX staffing for comment QX. that’s sorry, if don’t it’s more that relate the it’s you’ll to -- airborne. return QX the your -- I’d it’s area. in status hopefully, and about the believe

Operator

We from go Koslosky Sachs. next our question to with E.V. Goldman

E.V. Koslosky

it’s seeing far recovering trends a sequentially. bit you’ve volumes great Could so us July? transplant color around to give been see in more So you

Reg Seeto

versus are only with Yes. so The in present what these which trends and are data days, weekly complete monthly sets. July, the monthly, we more

we in to the to mid-single are what July, to seems very similar be which weekly saw similar in [indiscernible] On digits. trends June probably directionally

E.V. Koslosky

if grow last take happen or able obviously, -- versus still to testing to down you’ve but last year, transplant you’ve we’re transplant being you get volumes back are year’s volumes when to talk even despite proven longer levels? up for sequentially, been quarters, volumes last through then down. what down few And the would Could still

Reg Seeto

Yes.

seen nadir the I us, we’ve that. think for we in and QX, predicted

I in also recovery that’s out sequentially, a nice rebound played but in think year-over-year. with QX

I the given being XXXX think of in see peak probably QX. QX QX, and think point, the we’ll improvements I year-over-year comparator

volumes. may transplant helping which the pre-COVID, in driven improvement with was is be below volumes. And drivers, some are well, other of forget sequentially, an side are there think to see bit population, of we as we where a which will assess which drivers, to the forms increase not still kidney, heart on I but about by let’s it donor leading the living talked

we’ve example, used hearts as seen patient versus being the For DBD well. DCD

market that hopefully So back overall, I of this And the ability to the the long think come half we’ll in the think year. of of second see term strong. is I very start

Operator

remarks. to for any questions or no turn are further call time. I’ll Reg closing additional back this the There at

Reg Seeto

thank Actually many a all being been on well, to shareholders want investors, look, I months, operations the analysts, I today. tough companies for and X It’s think, and organizations.

of momentum excited end we thank us, each by and of -- QX, the in of think the unique It’s really for day, transplant. what on at And the think second I such support proud for XXX% year. come out can space, I [everybody] we’re a that’s the we be half we’re do to the just and of and need and these focused you supporting transplant. patients really

every follow-up with and one look forward again Thank thank your of support each you, for to discussions commitment. we And you. you. So and

Operator

Thank for call. you participation. today’s Difficulty] [Technical your

now may You disconnect.

CareDx (CDNA) 7 Aug 222022 Q2 Earnings call transcript