CareDx, Inc.

Greetings and welcome to the CARE DX, Inc. fourth quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Greg Hadachek, Managing Director.

Good afternoon and thank you for joining us today. Earlier today, CareDx released financial results for the quarter and year ended December 31st, 2020. The release is currently available on the company's website at www.caredx.com. Reg Cito, Chief Executive Officer, and Marcel Conrad, Chief Financial Officer, will host this afternoon's call. Before we get started, I would like to remind everyone that management will be making statements during this call that include forward-looking statements within the meaning of the federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements. All forward-looking statements, including without limitation, are examination of historical operating trends, expectations regarding coverage decisions, pricing and enrollment matters, and our future financial expectations and results are based upon current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results to differ materially from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and descriptions of the risks and uncertainties associated with our business, please see our filings with the Securities and Exchange Commission. The information provided in this conference call speaks only to the live broadcast today, February 24, 2021. CARE-DX disclaims any intention or obligation except as required by law to update or revise any information financial projections, or other forward-looking statements, whether because of new information, future events, or otherwise. This call will also include a discussion of certain financial measures that are not calculated in accordance with generally accepted accounting principles. Reconciliation to the most directly comparable GAAP financial measure can be found in today's earnings release filed with the SEC. I will now turn the call over to Reg.

Thanks, Greg. Good afternoon, everyone, and thank you for joining us. Welcome to CareDx's fourth quarter and full year 2020 earnings conference call. Before getting into our results, I wanted to thank all of our CareDx employees and partners. Despite the many challenges of 2020 with COVID-19, all of us at CareDx rallied together and worked tirelessly to develop and deliver new and unique solutions to improve transplant patient lives. Transplant has been our 100% focus for more than 20 years, and we're expressly proud that 2020 was a year we continued to serve TransLand patients and the TransLand community. Now turning to results. 2020 was an exceptional year for CareDx, as demand continued unabated for our innovative first-in-class suite of high-value healthcare solutions to TransLand patients and caregivers. Our four-year revenue was $192.2 million, representing over a 51% growth over the prior year. For the fourth quarter, of 2020, total revenue was 58.6 million, increasing 64% compared to the year-ago quarter. The majority of the growth in the quarter was driven by our testing services revenue, which increased 73%. Product revenue for the quarter was 5.9 million, and digital and the other revenue was 2.4 million, to the top line. Net loss for the fourth quarter and full year was 3.5 million and 18.7 million, respectively. Adjusted EBITDA for the fourth quarter and full year 2020 was 4.9 and 8 million, respectively. Digging deeper into our testing services for the fourth quarter, CareDx provided over 25,000 AlloShore and Allomat results to the transplant patients in this quarter, growing approximately 78% from Q4 2019. Approximately 40% of our testing volume originated from mobile subotomy. As of the end of December, over 55 transplant centers in the United States have adopted an AlloSure testing protocol in their standard of care. In the fourth quarter, product revenue increased 17% compared to the year-ago quarter. While our AlloSeq self-regenerating AlloSeq TX17 did generate revenue in 2020, we expect both products will begin to produce stronger growth as more COVID-19 vaccines are rolled out in 2021. Revenue from our digital solutions was $2.4 million for the fourth quarter. In 2021, we expect our software solutions will continue our direct-to-center strategy to improve the order workflow as we expand our digital offerings and more U.S.-based transplant centers adopt our solutions. Again, 2020 was a transformational year for CareDX, and I would like to highlight several significant product and service offerings we announced last year. Firstly, In March, as COVID-19 infections began to accelerate, we announced the launch of RemoTrack, our solution enabling remote home-based monitoring of transplant patients. This offering was in response to a need from transplant centers and patients, and we're very proud to be able to put this together within a week. By early April, we established a nationwide network of more than 10,000 mobile phlebotomists, and by the end of April, close to 50% of all our daily testing volume originated from mobile phlebotomy. As of the end of December, approximately 6,000 kidney, heart, and lung transplant patients have enrolled in our RemoTrack offering. Today, more than 150 centers use RemoTrack. Secondly, in April, we introduced AlloCell, our surveillance solution for patients who received engineered cell transplants for allogeneic cell therapy. With allogeneic cell therapy being a rapidly growing clinical development area in oncology, cardiovascular, neurological, autoimmune infectious diseases, we believe our surveillance solution is a perfect partner for companies developing allogeneic cellular therapies. Early this month at the annual transplantation and cellular therapy meeting, four abstracts were presented showcasing our cellular transplant therapy portfolio, including with our partner Atara Biotherapeutics. This is just the beginning of our also offerings as we will continue to develop our products and partner with other companies developing transformative cell therapies. Thirdly, in October, data from our pivotal clinical study for Alloshore lung was published in Transplantation Direct. The LIGO study demonstrated that Alloshore lung could identify patients with acute cellular rejection. A critical need for lung transplant patients whose only option to detect rejection is an invasive bronchoscopy. With lung transplant patients having one of the lowest survival rates for solid organ transplants, We believe Allishaw Lung is a powerful, non-invasive tool in monitoring the health of the transplanted organ. As a reminder, Allishaw for Lung Transplant Patients has been available under compassionate use since February 2019, and in June 2020, we submitted our Allishaw Lung dossier to Palmetto Moldex for Medicare reimbursement. And finally, in November, we received final reimbursement pricing from Palmetto Moldex for Allishaw Heart. As we look to 2021 and beyond, we remain very excited about our prospects. Our Allashore testing volumes continue to impress. Our decision to focus first on the transplant centers with our direct-to-center strategy has allowed Allashore to be used in greater than 70% of transplant centers, and more than 55 transplant centers have adopted an Allashore name protocol as of the end of December. As we continue to add more transplant centers and protocols, we can now start our direct-to-community strategy. Our tumor nephrology team was hired at the end of last year, and we're very encouraged about the job our team is doing. Combined with our direct-to-patient strategy, we have now started that last mile with the patient. We recently launched Allocare, an app designed by transplant patients and physicians. This app was designed to make managing patients' day-to-day health easier by allowing them to easily track progress and health activities, manage medications, and set reminders and communicate with our patient care managers for scheduling labs. Moving to the heart franchise. LMAP heart testing experienced strong double-digit growth. We were thrilled with the approval of AlloShore Heart when used in combination with LMAP, known as HeartCare. As I previously mentioned, we received Medicare reimbursement for AlloShore Heart at the end of last year. While our growth in heart this past quarter stemmed from an increase in LMAP testing, in December, we began submitting our sure-hard tests for reimbursement for our Medicare patients. Regarding reimbursement for our non-Medicare patients, we are working with healthcare providers to procure commercial reimbursement. Regarding our digital offerings, we recently announced the acquisition of TransChart, a provider of electronic health records software supporting the needs of U.S. transplant centers. The TransChart acquisition is another cog in our digital offerings, including auto-transplant electronic medical record software and Zincopi transplant quality management solutions. With this acquisition, our EMR coverage now extends to over 90 centers in total. As part of the transplant acquisition, we also acquired TxConnect, a leading provider of human biologics donation and transplantation software. TxConnect allows us now to move upstream in the patient journey and connect the centers with the dialysis centers. Last, but certainly not least, our Allocel offering is beginning to bear fruit. Earlier this month, along with our partner, Atara Biotherapeutics, we announced we were presenting data on Allocel in a poster titled, A Sensitive and Precise Universal Surveillance Solution for Pharmacokinetic Monitoring of Off-the-Shelf Cell Therapies. This was presented at the transplantation and cell therapy meeting and described the potential use of Allocel for standardized pharmacokinetic assessment in clinical trials, and highlighted data on AllerHeim and LCKCT for chimerism and recurrent surveillance of stem cell transplant patients. We're very excited about the potential of AllerCell, though we're in very early stages of this significant greenfield opportunity. 2020 was an exceptional year for KDX as we continued to build out our product offerings while driving robust growth in our market of products. That being said, we believe we're just getting started. Everything we do at CareDx has one focus, and that is to be the leading partner for transplant patients and the transplant ecosystem. This focus and commitment to the transplant community are the driving forces behind our growth. And I expect 2021 to be another exciting year for CareDx. In summary, for 2021, the key growth drivers and milestones are to accelerate our direct-to-center strategy continue our wedding formula by adding allocial kidney and heart care protocols and continue EMR integration, build our direct-to-patient strategy with Rheumatrack, Allocare, as well as through our patient care managers, start the direct-to-community strategy with community virology field team, which was hired at the end of last year, and create the new businesses in cell therapy and stem cell transplant. A few key milestones to highlight over the coming quarters include, in Q1, the launch of our new digital offering, TxConnect, this really provides an opportunity for us now to build a connection with the dialysis centers. This is something that is truly exciting as we continue along that patient journey continuum. In Q2, we'll provide the KL1000 readout at ATC, the largest transplant conference held annually. In Q3, we expect to share Alishaw Lung Medicare reimbursement update, as we hear back from Moldex. And in Q4, We expect to continue the exciting multi-modality work first shown in heart care, but now starting with kidney care as we get clear validation of Alimap kidney. With that, I'm going to turn the call over to Marcel to discuss our financials and 2021 guidance.