Abhishek Jain: Sure. And let me take the second part of your question around the one-timers in Q3. I called out a couple of those pieces. The first one is after the Noridian adopted the billing article on the heart care, we are not recognizing that revenue of post that adoption. So that means going into Q4, the revenue that we recognize for those heart care tests prior to the Noridian adoption, that will not be available into Q4. And the second event is this onetime claim settlement and the number is about $4 million for these two events. So that’s the piece that I would call out on the onetime. But other than that, there isn’t a material that would need to be modeled from the numbers standpoint.
Unidentified Analyst: Okay. Perfect. Understood. And then I guess, any updates to provide on when we might see a readout on the Sure study. Can you just remind us what studies we’ve completed or underway that support these of heart care and just how you’re thinking about additional evidence generation on that front?
Robert Woodward: Sure. We’re actively in analysis on the Sure data, including data monitoring. This is an ongoing study but we’re looking at an interim readout and so working on putting that together with the goal of getting some publication — one or two publications out in 2024. And just a reminder that AlloSure Heart and AlloMap Heart are both already covered without restriction on time. The question earlier about extending beyond 12 months is only for the combined heart care results. And in many cases, when docs have a specific need and resend desire for the best management of patients to order heart care will work with them to submit for payments for those from Medicare and to appeal any demands.
Operator: Our next question comes from Alex Nowak, Craig-Hallum Capital Group.
Alex Nowak: I want to go back around the CEO transition. Maybe just expand on the departure of Reg. There’s obviously a lot of moving parts here with the story. I think the Company needs a leader out there to navigate through all of those moving parts. Why the departure now? And just how important is to the Board to name this successor fairly quickly here to guide the Company during the challenging time?
Michael Goldberg: Yes. Alex, this is Michael. These are complex situations and there’s elements of it that are personal in nature. So I’m not going to provide much more on that other than to say it was mutual and the time was right. In part, the time was right because the Company at Board wanted to set themselves up for success in 2024, and we’re into the planning process for establishing that budget and operating plan now. So, we wanted to make sure that extraordinarily capable group of senior leaders that Reg had cultivated. We’re in a position to be 100% responsible for constructing that plan because they’re going to be 100% responsible for its execution. Now we think that the executive team here is stable. We think there extraordinarily capable and well qualified and experienced in this business.
And by virtue of the structure that we’ve set up an office of the CEO with Abhishek, Alex and myself, we meet on a daily basis. There is no missed beats or decisions deferred we’re operating the business as a functional CEO. So we’re prepared to operate in that fashion until the Board is comfortable that we’ve got a CEO identified and installed. So I wouldn’t worry. In fact, I would be cautiously excited.
Alex Nowak: Okay. Understood. I appreciate all the information there. And then again, on the revenue and the cash burn, we can kind of go into little pieces there. But just to kind of level set us, if we take the revenue from this quarter, call it, $270 million on an annualized basis, is that going to be a floor that we can then grow off of for 2024? And then same thing on the cash burn, if you just look at the cash change, about $60 million of cash burn annualized this quarter. I assume that’s got to be the low point here, and we’re only going to get better on the go forward. Is that all correct?
Abhishek Jain: Yes, Alex, maybe a couple of changes there in those assumptions. But firstly, on the cash, for example, so the overall reduction of about $14.5 million, that includes your investing activities we called out the acquisitions there. If you look at our operating cash, that’s about $10 million. So that probably would be the first piece that I will call out. And maybe the second piece that I would suggest on the cash burn to have a look because we were impacted by the billing articles in Q2. So look at the testing services impact of the billing article in the last two quarters and how much cash burn did we really have on the operating side in the last two quarters. So to give you some sense as to the cash burn would probably be in that range going forward without company taking any actions.
And then I called out that, okay, how do I reduce that cash burn. So the reduction in the cash burn, again, comes from the multiple levers that we are currently assessing. We brought down the impact of the billing article from, say, $100 million to now the adjusted EBITDA losses of, say, $11 million in the current quarter. Now we need to bridge this remaining gap. And revenue growth, the secular growth that could be out there in the market, the transplant volume market has been growing in the high single digits and how we continue to kind of grow our testing services volume alongside that. That would be our first lever. The second lever, of course, is going to be that how do we continue to work with our commercial payers to improve the coverage and continue to expand our collection program to be able to get paid, how we have been paid in the last few quarters to reduce the cash burn.
And of course, the third lever that is definitely on the table is looking into our cost structure, specifically all the legal expenses. If you were to pay down the SG&A, be it the G&A spend back to the levels where we were in the second half of last year prior to the billing article impact that will give you another sense as to how much higher the G&A spend has been because of the billing article. So, we have the levers here to be able to reduce that cash burn. I’ll basically make certain assumptions, so that I’m in the ballpark. And I’ll provide more color on most of these in our next earnings call. But the $15 million is not the cash burn in my mind for third quarter.
Alex Nowak: Excellent. Very helpful. And then just a final question here. I was looking through the 10-Q during the prepared remarks and I know reimbursement is always was a tricky item. And I’m just trying to understand the interpretation on some of the heart care language in the 10-Q, the 10-Q talks about letters being submitted to Noridian claiming why heart care should be covered. And so the question is really, is Noridian actually reimbursing for heart care right now and the Company is getting paid for that? Or is more CareDx interpretation that Noridian should be getting paid for heart care?
Abhishek Jain: So Andrew, this has been a year where things have been so very complicated, and we want to be more transparent in our 10-Q, and we have provided the disclosures in a lot more detail. But let me unravel that for you. On the heart care basically after the Noridian adoption, which was 816, post that, we have not revenue recognized any test on the heart care, which is, say, not for surveillance and greater than one year. So that’s completely out. So that’s exactly what it says, nothing more than that are in compliance with what Noridian adopted on 816 is as simple as that. So the baseline has already been set based on everything which is out there from the billing article standpoint and what we’ve been asked to do on the coverage standpoint.
