CareDx, Inc.

Greetings and welcome to the CareDx, Inc. first quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Should anyone 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 Hadacek from Gilmartin Group. Please go ahead.

Thank you. Good afternoon, and thank you for joining us today. Earlier today, CareDx released financial results for the quarter ended March 31st, 2021. The release is currently available on the company's website at www.caredx.com. Red Seto, Chief Executive Officer, and Ankur Dhingra, 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 our 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 these 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 May 5, 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 the generally accepted accounting principles. Reconciliation to the most directly comparable GAAP financial measure may 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 CADEX's first quarter 2021 earnings conference call. We had a very strong start to the year with a record first quarter result. Our vision of being the leader in the transplant ecosystem continues to resonate as we remain focused on the transplant patient. As the largest transplant-focused company in the US, we are proud to be the leader in innovation by bringing the first and best-in-class transplant-specific technologies through Allomap gene expression profiling and AlloShore donor-derived cell-free DNA. Notably, we're again first in driving new transplant innovation. We recently introduced the first and only recognized multimodality approach with heart care, which lays the foundation for kidney care and future use in other organs. I'm proud to be leading a company that continues to invest to bring innovation, especially in the field of transplant, which is often overlooked. As the CEO of KDX, I'm continually being told, or should I say reminded, that we are the transplant company. On behalf of KDX, I'm proud to accept that title and association. For our record first quarter, total revenue was 67.4 million, increasing 76% compared to the year-ago quarter. The driver of the quarter's growth was our testing services revenue, which increased 89% to 59.3 million, and we also saw the products revenue increase 23% to 5.8 million. Digital and other revenues added 2.3 million to the top line. GAAP net loss for the first quarter was $0.07 million and adjusted EBITDA was positive $7.7 million. We remain focused on driving top line growth through increased adoption of our offerings and continue to invest in a rich pipeline across the TransLand journey. During the first quarter, we made significant progress along the following three fronts. One, advancing our testing services model. two, expanding our direct-to-patient strategy, and three, building our future pipeline through investing in specific scientific data and innovation. I'll tackle the first one, advancing our testing services model. In the first quarter, CareDx provided approximately 33,200 AlloShore and Allomap test results to transplant patients, growing approximately 121% from the first quarter of 2020. Of these, approximately 5,900 tests were part of heart care. Our focus has always been on our direct-to-center strategy, with more than 150 kidney and more than 100 heart centers using our offerings during the first quarter. We feel very good about our strategic focus on building a moat around the center. As of the end of March, over 60 kidney transplant centers in the United States have now adopted an Allishaw name testing protocol into their standard of care. We've also continued to expand our Moten Centers. With the prior acquisition of Otter, we've seen the benefit of offering transplant-specific software to improve US-based transplant centers' order workflow. In January, we announced the acquisition of TransChart LLC, an electronic health record software provider supporting US transplant center needs. This acquisition added over 20 centers using TransChart. We believe offering an efficient end-to-end solution for transplant centers will lead to further adoption of our high-value healthcare solutions. Our strategy, this strategy, the focus on the transplant centers to build adoption and protocols has been very successful. In addition, we recently started expansion to community nephrology settings. During this quarter, and now with a full team for the first time, we had more than 100 community practices start using AlloSure in the last quarter. with several already starting protocols. Our community dedicated team is doing a great job. Although early, we've been very pleased with the ability to continue our patient care from the center of the community with our patient care managers and through our AlliCare app. This focus on innovation was evident firsthand as the recently announced Universal Solid Organ Transplant LCD by Palmetto Moldex now provides a pathway for our future pipeline and multi-modality surveillance approach to be introduced. We are proud to be leading the way, especially with multi-center and prospective data sets to generate the clinical ability and utility for patients, physicians, and payers. It takes a leader to invoke change, and we are grateful as leaders to all the patients, physicians, coordinators, caregivers who have worked with us as leaders in leading change and bringing much-needed innovation to the Transplant journey. We talked about our shoreline update in Q3 at our last earnings call, but the recent universal LCD now includes the path for lung. The universal LCD can accelerate adoption for lung surveillance and our pipeline. We previously submitted our technical assessment for our shoreline, and we look forward now to a review of this submission within Q2 2021. This model also provides a path for future comprehensive multimodality pipeline development, and which we're very excited about. because this model provides how we develop kidney care and lung care and other solid organs in bridging and bringing this incremental utility as high value to physicians and centers. Our studies have been designed and developed this way. We look forward to updates on kidney care during the course of the year. On the second topic, on expanding direct-to-patient strategy. During our last learning score, I mentioned that 2021 would be a direct-to-patient theme, which makes CareDx an open-ended store in precision medicine. During the first quarter, we expanded into the pre-transplant patient journey and acquired TX Services, the provider of TX Connect. TX Connect is a cloud-based service that allows nephrologists and dialysis centers to electronically submit referrals to transplant programs, closely follow these patients, and assist these patients through the transplant waitlist process and ultimately the goal being transplantation. TX Connect now manages more than 20,000 referred dialysis patients and is fully integrated within TransShark. More than 30 transplant centers and over 500 dialysis centers are now involved with this offering. This offering will allow us to better serve transplant centers as dialysis centers refer end-stage kidney disease patients to be assessed for transplant. Adding TxConnect to our robust digital platform will help us provide more integrated care at every critical step of that transplant patient journey. On the post-transplant patient journey, Our decision for the rapid implementation of Remotrack last year as COVID is beginning to spread through the U.S. has given transplant patients the option of having their blood drawn outside the confines of a hospital or a transplant center and at the safety of their homes. Despite the number of new COVID infections decreasing in the U.S., transplant patients are still at higher risk of getting severely sick from COVID, and we believe Remotrack is the appropriate solution to limit a transplant patient from potential exposure. Our patient care managers are doing a great job and supporting patients and transplants with valuable support. With the continued impact of COVID-19, we saw the use of Rheumatrack and mobile phlebotomy above 40% for the soil. As of March 31, 2021, we had over 7,000 patients on Rheumatrack. Now on the third topic, on building a future pipeline through, again, investing in scientific data and innovation. This is the hallmark that sets us apart. Throughout 2021, We will continue to build upon our industry-leading clinical data and help to present at multiple industry events as we continue to drive innovation and be the leader in high-value op-ed solutions for transplant patients and caregivers. Our clinical team, under the leadership of Dr. Sham Dhalakia, has been exceptional. They've been very busy over the last few months as new data sets were presented and showcased at multiple industry events. We continue to generate the highest number of abstracts and presentations for a transplant company, And this centers around our focus in innovation, which is what really continues to set us apart from opportunistic entry. The testing services, we presented new transplant data in January at the ASTS conference, the American Society of Transplant Surgeons. During this conference, we sponsored two symposiums with key clinical leaders discussing real-world experiences, including AlloShore to optimize care for their transplant patients, with initial data from the ADMAL study and the rollout of the MAPLE study for AlloShore liver. For this year's ATC conference, we will have over already 30 accepted abstracts and so continue to lead with science innovation. Combining what we presented last week with over 20 abstracts at the ISHLT conference and with the 30 from ATC that will be coming up, that's more than 50 abstracts at two major conferences from CareDx. More than 50 abstracts from one company. Again, we're very proud of this. Back to Admiral. is a multicenter two-year follow-up study using patients who have had AlloSure as part of their standard of care, while CAEL1000, a study setting, is an early snapshot at the one-year mark for the first thousand patients in the CAEL study. We're really excited and proud to be bringing the first long-term and only multicenter prospective data set to the transplant community and the clinical utility they show as we cement AlloSure into the standard of care of transplant patients. In addition, During last month's National Kidney Foundation spring meetings, we hosted two well-attended programs featuring the latest kidney transplant surveillance data. The pipeline for new offerings continues to strengthen with the addition of our development program for AlloID. Early in 2021, we announced a partnership with ID by DNA to develop metagenomic infectious disease testing specific to transplant patients. AlloID will identify more than 100 pathogens and drug resistance in viruses and bacteria. Our customers have indicated a very strong interest in adding the value of this testing for managing the health of their immunocompromised, immunosuppressed patients. For the products business, we saw continued transition to our Aliceq franchise, represented by hybrid capture technology. Over half the product revenue now comes from this NGS technology. During the first quarter, we also acquired BFS Molecular, a software company focused on next-generation sequencing-based testing solutions. The addition of BFS molecular software and algorithm development will further enhance our offering of world-class bioinformatics and transplant surveillance software. And for new areas, such as AlloCell, we showcased the CareDX cellular transplant therapies portfolio at the recent TCT conference, the Transplantation and Cellular Therapy Conference in February. Included in those presentations was a poster we presented with our partner, Atara Biotherapeutics, on the potential use of Allocell to standardize pharmacokinetic assessment in a clinical trial. While this data is early, we're very excited about the value Allocell can bring to ATARA's clinical trial development of allogeneic cell therapy. Our offerings are making a significant difference in the transplant patient journey setting. We're building capabilities required to scale this business and realize the tremendous potential in front of us. During this quarter, we enhanced our leadership team with key appointments and also further strengthened our financial position. Starting with the former, we announced new senior leadership appointments to create meaningful impact across these key growth areas to build for that future and to enhance that patient journey. Included in these announcements was the hiring of Ankur Dhingra, our new Chief Financial Officer. Ankur brings extensive experience to CareDX of over 25 years of finance and accounting experience achieved in the life sciences sector. We're really excited to have Ankur join the CareDX family, and I hope you all have the opportunity to meet him during the course of this year. In the first quarter, we also significantly strengthened our cash position. We closed the quarter with 374.3 million in cash following a very successful executed public offering in January. Our balance sheet allows us to continue to drive revenue growth and take full advantage of opportunities available to us. Our capital deployment strategy remains focused on making meaningful impact in that transplant patient journey. As you look to the rest of 2021, there is lots to be excited about. With that, I will turn it over to Ang to discuss our financials and our updated 2021 revenue guidance.