CareDx, Inc (NASDAQ:CDNA) Q4 2022 Earnings Call Transcript

Mason Carrico: Got it. Thanks guys.

Operator: Our next question is from Alex Nowak with Craig-Hallum Capital Group. Please proceed.

Alexander Nowak: Okay great, good afternoon everyone. Just first of all, how much revenue does the HLA digital systems add that acquisition? How much does that add in 2023?

Abhishek Jain: Not material, Alex. So I wouldn’t call it out as one of the reconciling items to the guidance.

Alexander Nowak: Okay. And then I just want to understand the testing volume growth that you’re expecting in 2023. So 2% to 5% top line growth, digital products are growing, call it, mid-teens, so that’s going to push the testing piece down a little bit. The market is indicating down to start the year on the testing volume side. So do you expect, I guess, at the end of the day, testing volumes to decline in 2023? Or how do we think about that growth in that business when you strip out all the ASP dynamics?

Abhishek Jain: Yes. So I still feel there will be a positive growth because when I build the guide, I’m looking at mid-teens volume growth, right? And yes, of course, the start of the quarter has been relatively slow, but I expect that the market growth will pick up. And at least it will play out very similar to how it has played out last year. So that’s the first part. And the second part is that when I talk about the payer mix change, our ASPs are going to be better as compared to how it failed last year by about five percentage points, the mid-single digit is what I’m calling because of our collection efforts. And the delta between those two will basically provide us the increase in the testing services revenue growth. That’s how I see it.

Alexander Nowak: Okay. That is helpful. And then kind of a 2-part question here kind of on the regulatory side. Just any update from the multi-CAC meeting, any discussions with Medicare KOLs when should we expect the conclusion there? And then the second part is the inquiry that was settled. Was that with the DOJ or the SEC inquiry? Or was that a state inquiry? And then if it’s just the state, what’s the status of the DOJ, SEC of the state inquiries? Thanks.

Reginald Seeto: Yes. I think with the recent CAC meetings, and these are things that are initiated for a regular review. And I think there hasn’t been any recent or further updates from that. I think as we’ve talked in the past like in terms of benchmark tiling was that happens typically around a 15-month past sort of time line includes a period of public comments as well as part of that. I think we’ve received extensive support across all organs from KOLs that we’ve talked about, the different biomarkers we have brought to the space and what they represent in terms of clinical practice across kidney, heart and lung. So for us, it’s even as recent as this weekend at the importance of what we do as an organization in bringing this breakthrough innovation is this something that all KOLs to have spoken about.

So we really feel thrilled about that level of support. It’s important for us. And again, we have this obligation is to innovate in the space to continue to drive that innovation and it’s gratifying to see that consistency come across from KOLs. It’s also; I think the timing of that meeting had just preceded the guidelines as well, which should come out from ISHLT. So it’s always good to get that reinforcement from an international organization.