Caredx, Inc. · NASDAQ:CDNA
Caredx — Investor Day (October 2024)
60 slides from Caredx's investor day presentation, Oct 15, 2024
Slide 1: 2024 Investor Day
2024 INVESTOR DAY OCTOBER 15, 2024
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT These slides, and the accompanying oral presentation, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of hist
Slide 3: Establishing CareDx as the Most Innovative Company in Diagnostics
Establishing CareDx as the Most Innovative Company in Diagnostics John Hanna President and CEO
Slide 4: Today's Agenda
TODAY’S AGENDA John Hanna Jessica Meng President & CEO Chief Commercial Officer 8:00-8:25 Establishing CareDx as the Most Innovative Company in Diagnostics John Hanna 8:25-8:45 Unlocking Building Blocks of Growth Jessica Meng 8:45-9:00 Securing Coverage & Adoption Through Evidence Robert Woodward 9:
Slide 5: Observations Over First 100 Days
OBSERVATIONS OVER FIRST 100 DAYS TEAM MARKET PRODUCTS 5
Slide 6: Team Passionate About Innovation & Patient Care
TEAM TEAM PASSIONATE ABOUT INNOVATION John Hanna President & CEO Keith Kennedy Chief Operating Officer Jessica Meng Chief Commercial Officer Abhishek Jain Chief Financial Officer & PATIENT CARE 650 CareDx Employees Globally 180 Commercial Employees Marica Grskovic, PhD Chief Strategy Officer Robert
Slide 7: Large Transplant Market $50B
M A R KE T LARGE TRANSPLANT MARKET $50B Transplant Services Market 250 US Transplant Centers 46K Transplants Annually Cardiothoracic & Abdominal 6% Annual Growth in Transplants Sources: CareDx Data on File; Transplant Services Market: Bentley, S. 2020 U.S. Organ and Tissue Transplants: Cost Estimate
Slide 8: CareDx Is the Established Solutions Provider to Transplant Centers
P R O D UCT S CAREDX IS THE ESTABLISHED SOLUTIONS PROVIDER TO TRANSPLANT CENTERS ~1M ~200K Rejection Monitoring HLA Typing 70% Centers Use One Or More 150K Rx Filled Annually by Tests Performed Kits Sold Annually Software Products Transplant Pharmacy 8 Source: CareDx Data On File.
Slide 9: Preliminary Results for Q3 2024
Third Quarter Revenue Expected to be in the range of $82M to $83M, an increase of approximately 23% year-over-year PRELIMINARY Testing Services Revenue RESULTS Expected to be in the range of $60M to $61M, an increase of approximately 26% year-over-year. Testing Services volume expected to be 44.6K,
Slide 10: Guiding Principles
GUIDING PRINCIPLES B UIL DIN G A SUC CE SSFU L & E NDUR ING H EA LTH CARE SE RV ICE S B USIN ES S Strong execution starts We must put our Investing in product and with a strong team customer at the center of business innovation will deliver everything we do breakthrough growth 10
Slide 11: Unique Position in Molecular Diagnostics
UNIQUE POSITION IN MOLECULAR DIAGNOSTICS M OL E CU LA R D I AG N O ST I C P R OF I TA B IL I T Y FO R M UL A Most Molecular Diagnostic Companies CareDx Multiple Large Disease Indications Concentrated Transplant Market Potential Revenue Growth Customer Acquisition Cost Operational Scale Cross-Sell Pr
Slide 12: Unique Position in Molecular Diagnostics
UNIQUE POSITION IN MOLECULAR DIAGNOSTICS M OL E CU LA R D I AG N O ST I C P R OF I TA B IL I T Y FO R M UL A Most Molecular Diagnostic Companies CareDx Multiple Large Disease Indications Concentrated Transplant Market Potential Revenue Growth Customer Acquisition Cost Operational Scale Cross-Sell Pr
Slide 13: CareDx Strategic Priorities
CAREDX STRATEGIC PRIORITIES 1 PROFITABLE GROWTH 2 OPERATIONAL EXCELLENCE 3 DEFINE TRANSPLANT+ 4 ELEVATE PERFORMANCE CULTURE 13
Slide 14: Unlocking Building Blocks of Growth
Unlocking Building Blocks of Growth Jessica Meng Chief Commercial Officer
Slide 15: Unlocking Our Patient Impact
UNLOCKING 46K 400K 100K+ OUR PATIENT Transplants in 2023 Organ Transplant Patients in the U.S. Transplant Wait List IMPACT 15 Sources: OPTN National Transplant Data. Accessed Oct. 8, 2024. https://optn.transplant.hrsa.gov/data/view-data-reports/national-data/.; Pullen BLC. Am J Transplant. 2023;23(1
Slide 16: Unlocking the Transplant Market TAM: $8B
UNLOCKING THE TRANSPLANT MARKET TAM: $8B LO N G -T E R M P LA N $ 8 B + TA M DIGITAL SOLUTIONS ~$1B+ TAM LAB PRODUCTS ~$1B+ TAM TESTING SERVICES ~$6B+ TAM 16 Source: Data on file. Market sizing based on CareDx internal analysis.
Slide 17: Building Blocks of Growth
BUILDING BLOCKS OF GROWTH 4 PRO DUCT PIPELINE 3 PATIENT ADHE RENCE 2 CUSTOMER ADOPTIO N 1 TRANSPLANT VOLUME 17
Slide 18: Forces Driving Transplant Volume Growth
1 T R A N S P L AN T VO LU ME FORCES DRIVING TRANSPLANT VOLUME GROWTH Growing government efforts Technological advances are working to expand transplantation access are improving organ viability IOTA Model Increasing Organ Transplant Access OPTN Organ Procurement and Transplantation Network 18
Slide 19: Synergistic Portfolio Drives Customer Adoption
2 C US TO M ER A D O PT I ON SYNERGISTIC PORTFOLIO DRIVES CUSTOMER ADOPTION ORGAN MATCHING/WAIT LISTING CARE QUALITY/SYSTEM EFFICACY GRAFT HEALTH S O L U T I O N S A C R O S S P AT I E N T JO U R N E Y L AB P RODU C TS TR A NS P L AN T C ENT ER PAT I E N T D X & S O LU T I O N S ▪ HLA Typing ▪ Trans
Slide 20: Customer Adoption Example
2 C US TO M ER A D O PT I ON CUSTOMER ADOPTION EXAMPLE TESTING SERVICES LAB PRODUCTS DIGITAL SOLUTIONS E M R IN T E G R AT I O N 20
Slide 21: Multi-Solution Accounts Generate 2x Testing Services Revenue
2 C US TO M ER A D O PT I ON MULTI-SOLUTION ACCOUNTS GENERATE 2x TESTING SERVICES REVENUE <3 S OLU TIONS Accounts that have 3 or more CareDx 29% Average new transplant $600K Average transplant center solutions have higher average patient acquisition, 2x the absolute testing patient acquisition for t
Slide 22: Opportunity to Improve Patient Adherence
3 PAT IE N T A D H ER E N CE OPPORTUNITY TO IMPROVE PATIENT ADHERENCE Number of tests/patient per Current number of tests/patient center protocol in first 3 years in first 3 years 15 7 K ID NE YS 38 24 HE ART 20 10 L UN GS Sources: Protocol calculations based on: Heart HARTS protocol is11, 4, 4; Kid
Slide 23: Example: Leverage Portfolio to Improve Patient Adherence
3 PAT IE N T A D H ER E N CE EXAMPLE: LEVERAGE PORTFOLIO TO IMPROVE PATIENT ADHERENCE T ESTING SER V ICES DI GITAL SO LUT IONS K ID NE YS HE ART + Better Adherence L UN GS 23
Slide 24: Pipeline Fuels Additional Growth
4 P R O D UCT P IP E LI N E PIPELINE FUELS ADDITIONAL GROWTH 2025 2026 Expanded Indications AlloSure SPK AlloSure Heart PEDS Simultaneous pancreas and kidney Validated for patients (SPK) transplantation <15 years old Launch New Dx AlloMap Kidney HistoMap UroMap Gene-expression profiling Provides mol
Slide 25: Building Blocks of Growth
BUILDING BLOCKS OF GROWTH 4 PRO DUCT PIPELINE 3 PATIENT ADHERENCE 2 CUSTOMER ADOPTIO N 1 TRANSPLANT VOLUME 25
Slide 26: Securing Coverage and Adoption Through Evidence
Securing Coverage and Adoption Through Evidence Robert Woodward, PhD Chief Scientific Officer
Slide 27: Evidence Generation Increases Coverage and Adoption
EVIDENCE GENERATION Meta-analysis of Clinical Studies INCREASES COVERAGE AND ADOPTION Outcomes Clinical Utility Decision Impact Clinical Utility Physician Adoption Clinical Validation 27
Slide 28: SHORE Results Demonstrate the Value of HeartCare
SHORE RESULTS DEMONSTRATE THE VALUE OF HEARTCARE Dual Positive HeartCare Results Associated with Highest Incidence of Acute Cellular Rejection (ACR) KE Y FIN DINGS 10% N = 565 9.2% % of EMBs with ACR 8% HeartCare outperforms dd-cfDNA alone in 6% N = 461 detecting rejection 4% N = 3130 N = 2207 4.3%
Slide 29: Landmark Nature Medicine Publication Demonstrates Utility of AlloSure Kidney
LANDMARK NATURE MEDICINE PUBLICATION DEMONSTRATES UTILITY OF ALLOSURE KIDNEY KE Y FIN DINGS Variable # of biopsies Odds ratio P Surveillance monitoring with AlloSure independently AlloSure 1911 2.32 <0.001 (2.08, 2.59) predicts allograft rejection Variable # of biopsies Odds ratio P AlloSure detecte
Slide 30: Coverage Grows with Intentional Approach
COVERAGE GROWS WITH INTENTIONAL APPROACH B CB S FEDE RA L EM P LOYE ES ~90% AlloMap Heart ~40% AlloSure Heart POLICY: Positive coverage for AlloSure Heart Covered Lives Covered Lives STUDY: HeartCare SHORE data, J Heart Lung Launched 2006 / Medicare Coverage 2006 Launched 2018 / Medicare Coverage 20
Slide 31: Addressing Unmet Needs in Transplant Care
ADDRESSING UNMET NEEDS IN TRANSPLANT CARE GENERATING EVIDENCE PR IMARY STUDY STUDY COMPOSITION ▪ Pediatrics Validation ▪ >2,700 patients ▪ 5-year Survival SHORE ▪ 5-year follow-up HEA R T ▪ Directing Therapeutic Treatment ▪ 67 sites, HARTS protocol ▪ Procedure Decision Making KOAR ▪ >3,600 patients
Slide 32: Driving Operational Leverage
Driving Operational Leverage Keith Kennedy Chief Operating Officer
Slide 33: Driving Operational Leverage
DRIVING OPERATIONAL LEVERAGE DRIVE SCALE LEVERAGE ACCELERATE 1 VOLUME 2 OPERATIONS 3 TECHNOLOGY 4 PROFITABILITY Make it easy for physicians Scale operations to drive Deploy best-in-class Leverage evidence and and patients to order long-term predictability technology to drive efficient clinical utili
Slide 34: Driving Operational Leverage
DRIVING OPERATIONAL LEVERAGE DRIVE SCALE LEVERAGE ACCELERATE 1 VOLUME 2 OPERATIONS 3 TECHNOLOGY 4 PROFITABILITY Make it easy for physicians Scale operations to drive Deploy best-in-class Leverage evidence and and patients to order long-term predictability technology to drive efficient clinical utili
Slide 35: Driving Operational Leverage
DRIVING OPERATIONAL LEVERAGE DRIVE SCALE LEVERAGE ACCELERATE 1 VOLUME 2 OPERATIONS 3 TECHNOLOGY 4 PROFITABILITY Make it easy for physicians Scale operations to drive Deploy best-in-class Leverage evidence and and patients to order long-term predictability technology to drive efficient clinical utili
Slide 36: Driving Operational Leverage
DRIVING OPERATIONAL LEVERAGE DRIVE SCALE LEVERAGE ACCELERATE 1 VOLUME 2 OPERATIONS 3 TECHNOLOGY 4 PROFITABILITY Make it easy for physicians Scale operations to drive Deploy best-in-class Leverage evidence and and patients to order long-term predictability technology to drive efficient clinical utili
Slide 37: Driving Operational Leverage
DRIVING OPERATIONAL LEVERAGE DRIVE SCALE LEVERAGE ACCELERATE 1 VOLUME 2 OPERATIONS 3 TECHNOLOGY 4 PROFITABILITY Make it easy for physicians Scale operations to drive Deploy best-in-class Leverage evidence and and patients to order long-term predictability technology to drive efficient clinical utili
Slide 38: Driving Operational Leverage
DRIVING OPERATIONAL LEVERAGE DRIVE SCALE LEVERAGE ACCELERATE 1 VOLUME 2 OPERATIONS 3 TECHNOLOGY 4 PROFITABILITY Make it easy for physicians Scale operations to drive Deploy best-in-class Leverage evidence and and patients to order long-term predictability technology to drive efficient clinical utili
Slide 39: Driving Shareholder Value Through KPIs
DRIVING SHAREHOLDER VALUE THROUGH KPIs STRATEGIES KPIs Drive Volume Scale Operations Leverage Technology Accelerate Profitability Volume ▲ ▲ ▲ Revenue ▲ ▲ ▲ Gross Margin ▲ ▲ ▲ OpEx ▼ ▼ ▼ EBITDA ▲ ▲ ▲ ▲ 39
Slide 40: Impact over the Next 24 Months
Best-in-Class Scalable operations IMPACT OVER THE NEXT Industry Leading Operating metrics 24 MONTHS Driving Shareholder value 40
Slide 41: Charting a Clear Path to Profitable Growth
Charting a Clear Path to Profitable Growth Abhishek Jain Chief Financial Officer
Slide 42: Charting a Path to Profitable Growth and Strategic Capital Allocation
CHARTING A PATH TO PROFITABLE GROWTH AND STRATEGIC CAPITAL ALLOCATION PROFITABLE GROWTH PROFITS AND CASH CAPITAL ALLOCATION ▪ Compounded ▪ Adjusted EBITDA ▪ M&A Annual Growth ▪ Cash Generation ▪ Invest in Core Rate (CAGR) Business ▪ Gross Margin ▪ Share Buyback 42
Slide 43: Driving Profitable Growth
DRIVING PROFITABLE GROWTH 15% >70% 3-Year Revenue 2027 Gross Margin CAGR Target Target 43 Compounded annual growth rate based on 2024 revenue guidance at the mid -point.
Slide 44: Driving Profits and Cash
DRIVING PROFITS AND CASH 20% +$100M 2027 Adjusted 3-Year Incremental EBITDA Target Cash Target 44
Slide 45: Strategic Capital Allocation
STRATEGIC CAPITAL ALLOCATION BUSINESS DEVELOPMENT AND M&A CORE BUSINESS SHARE BUY BACK 45
Slide 46: Expanding Our Footprint Beyond $8B TAM
Expanding Our Footprint Beyond $8B TAM Marica Grskovic, PhD Chief Strategy Officer
Slide 47: Strategy to Expand Beyond $8B TAM
STRATEGY TO EXPAND BEYOND $8B TAM New Indications for Transplant Biomarkers Extending Beyond Solid Organ Transplant Monitoring Capitalizing on Our Expansive Multidimensional Transplant Data 47
Slide 48: New Indications for Transplant Biomarkers
NEW INDICATIONS FOR TRANSPLANT BIOMARKERS IMMUNOSUPPRESSION XENOTRANSPLANTATION/ ORGAN PERFUSION DRUGS BIOENGINEERED 48
Slide 49: Extending Beyond Solid Organ Transplant Monitoring
EXTENDING BEYOND SOLID ORGAN TRANSPLANT MONITORING Blood Solid â Autoimmune Cancer Cancer Disorders 49
Slide 50: CAR-T Cell Therapy Patient Monitoring
CAR-T CELL THERAPY PATIENT MONITORING ALLOCELL SURVEILLANCE EARLY CLINICAL DATA Universal assay based on DNA differences Demonstrated AlloCell clinical between cell therapy product and patient performance in cell therapy trials Analyzes cells in blood Contraction 10 % Cell Product % Cell Product Exp
Slide 51: Early Detection of Cancer Relapse
EARLY DETECTION OF CANCER RELAPSE ALLOHEME DETECTS CANCER RELAPSE POST-STEM CELL TRANSPLANT EARLY CLINICAL DATA AlloHeme correlates with risk of relapse in blood cancer patients Standard of Care SOC Relapse Detection Number of Cancer Cells non-iMC 1.00 Non-Relapse Probability 0.75 0.50 iMC AlloHeme
Slide 52: Capitalizing on Our Expansive Multidimensional Transplant Data Repository
P AT I E N T S REC ORDS CAPITALIZING PRE-TRANSPLANT/WAIT LIST 185K >9M ON OUR EXPANSIVE MULTIDIMENSIONAL PERI-TRANSPLANT/QUALITY 735K >220M TRANSPLANT DATA REPOSITORY POST-TRANSPLANT/ DX TESTING 150K >920k POST-TRANSPLANT/ MEDICATION MANAGEMENT 130K >20M POST-TRANSPLANT/ REMOTE MONITORING 1K >1M 52
Slide 53: Power of Applying AI to Our Expansive Multidimensional Data-Set
POWER OF APPLYING AI OUTCOME PREDICTION TO OUR EXPANSIVE MULTIDIMENSIONAL DATA-SET CLINICAL TREATMENT TRIALS EFFECTIVENESS 53
Slide 54: Strategy to Expand Beyond $8B TAM
STRATEGY TO EXPAND BEYOND $8B TAM New Indications for Transplant Biomarkers Extending Beyond Solid Organ Transplant Monitoring Capitalizing on Our Expansive Multidimensional Transplant Data 54
Slide 55: Activating Our Strategy
Activating Our Strategy John Hanna President and CEO
Slide 56: CareDx Strategic Priorities
CAREDX STRATEGIC PRIORITIES 1 PROFITABLE GROWTH 2 OPERATIONAL EXCELLENCE 3 DEFINE TRANSPLANT+ 4 ELEVATE PERFORMANCE CULTURE 56
Slide 57: Building Blocks for Growth
BUILDING BLOCKS FOR GROWTH $500M+ $324M Net Revenue 2024 TRANSPLANT CUSTOMER PATIENT AVERAGE SELLING PRODUCT 2027 TOTAL REVENUE VOLUME ADOPTION ADHERENCE PRICE (ASP) PIPELINE TOTAL REVENUE 57 Source: CareDx internal estimates. Data on file. Testing frequency per patient is always subject to the trea
Slide 58: 2027 Financial Targets
2027 FINANCIAL TARGETS $500M 2027 Revenue 20% 2027 Adjusted EBITDA +$100M 3-Year Incremental Target Target Cash Target 58
Slide 59: Activating Our Strategy
ACTIVATING OUR STRATEGY PUT IN PLACE THE RIGHT TEAM IDENTIFIED THE MARKET OPPORTUNITIES LAUNCHING INNOVATIVE SOLUTIONS TO RESOLVE UNMET MEDICAL NEEDS 59
Slide 60: The Most Innovative Company in Diagnostics
THE MOST INNOVATIVE COMPANY IN DIAGNOSTICS 60