CareDx (CDNA) Goldman Sachs 45th Annual Global Healthcare Conference summary

Leadership background and strategic vision

• New CEO brings experience from insurance, oncology diagnostics, and life sciences tools, emphasizing payer policy and commercial growth.

• Focus on leveraging a captive transplant center market and a broad portfolio in testing, products, and software.

• Strategic planning centers on sustainable, profitable growth and maintaining a strong cash position.

• No immediate plans for acquisitions; priority is organic growth and pipeline execution.

• Emphasis on supporting the transplant ecosystem and fostering strong community relationships.

Financial performance and outlook

• Business reset in 2023, with sequential quarter-over-quarter growth in testing volumes since Q2 last year.

• Adjusted EBITDA losses under $2 million in Q1, with a clear path to profitability targeted for 2025.

• Gross margins in testing services expected to return to early-to-mid-70% as volumes and coverage improve.

• Cash collections improving, with ongoing opportunities in Medicare Advantage and revenue cycle management.

• Digital solutions business is profitable, with 70% of centers using at least one offering; pharmacy margins remain low.

Market trends and growth drivers

• Transplant market shows low double-digit growth in heart and high single-digit in kidney; waitlists remain high.

• CMS IOTA Model incentivizes increased kidney transplantation, supporting market expansion.

• Testing services revenue guided to grow low double digits, with volume growth in high single digits and ASP improvements.

• Heart testing franchise outpacing kidney in growth, driven by new clinical data and adoption.

• AlloSure Lung expected to become a significant revenue contributor as adoption increases.