CareDx Inc
For the period ended Sep 30, 2024. Filed Nov 4, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 4, 2024
CDNA$78.56+2.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0001217234-24-000083
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-04.
0001217234-24-000103
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 205 previous paragraphs and 196 current paragraphs.
144 unchanged; 40 reworded; 11 added; 17 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
•Testing Services volume of 44,600 tests increased 16% year-over-year
Current report
On August 10, 2023, MolDX and Noridian released a draft proposed revision to the LCD (DL38568, Palmetto; DL38629, Noridian) that, if adopted, would have revised the existing foundational LCD, MolDX: Molecular Testing for Solid Organ Allograft Rejection (L38568 and L38629). On August 16, 2024, CMS issued a press release entitled “MolDX Local Coverage Determination Statement,” announcing that after careful consideration of the feedback received from interested parties, as well as the public comments and further review of evidence, the MACs decided not to finalize the proposed LCD issued on August 10, 2023. CMS further stated that due to the importance of identifying solid organ allograft rejection early and to ensure the public has additional opportunities to comment on the policy, the MACs intend to issue a new LCD in the coming months. CMS stated that neither it nor the MACs have changed coverage for the blood tests that monitor for organ transplantation rejection when ordered by their physicians in medically appropriate circumstances, and explained that transplant patients would continue to have access to these blood tests, including: when there are signs or symptoms of rejection; after a physician-assessed pretest, including for surveillance testing; after an indeterminate biopsy; as a replacement for a biopsy when deemed clinically appropriate by the patient’s qualified physician; and for evaluation of the adequacy of immunosuppression.
Current report
Cost of testing services increased by $0.2 million, or 2%, for the three months ended September 30, 2024, compared to the same period in 2023. The increase is primarily driven by volume increase partially offset by improved laboratory operations driving lower expenses.
Current report
Research and development expenses decreased by $1.5 million, or (8)%, for the three months ended September 30, 2024, compared to the same period in 2023. The decrease is primarily due to a decrease in consulting expenses of $0.7 million and a decrease in clinical trials expenses of $1.3 million, offset by an increase in personnel-related costs of $0.7 million.
Current report
Other income, net
Current report
Other income, net decreased by $1.8 million for the three months ended September 30, 2024, compared to the same period in 2023. The decrease is primarily due to the following events that occurred during the third quarter of 2023: a $1.0 million gain from settlement of an obligation and a $1.1 million gain from the recovery of an impaired loan that was already written-off, offset by a decrease in unrealized investment loss of $0.3 million.
Current report
Income tax (expense) benefit
Current report
Comparison of the Nine Months Ended September 30, 2024 and 2023
Current report
Income tax (expense) benefit
Current report
Income tax benefit decreased by $0.2 million for the nine months ended September 30, 2024, compared to the same period in 2023. The decrease is primarily attributable to a change in mixed profit (loss) across jurisdictions, tax benefits recognized on change in estimates related to prior year tax expenses and change in valuation allowance.
Current report
On August 10, 2023, MolDX and Noridian released a draft proposed revision to the LCD (DL38568, Palmetto; DL38629, Noridian) that, if adopted, would revise the existing foundational LCD, MolDX: Molecular Testing for Solid Organ Allograft Rejection (L38568 and L38629). On August 16, 2024, CMS issued a press release entitled “MolDX Local Coverage Determination Statement,” announcing that after careful consideration of the feedback received from interested parties, as well as the public comments and further review of evidence, the MACs decided not to finalize the proposed LCD issued on August 10, 2023. CMS further stated that due to the importance of identifying solid organ allograft rejection early and to ensure the public has additional opportunities to comment on the policy, the MACs intend to issue a new LCD in the coming months. CMS stated that neither it nor the MACs have changed coverage for the blood tests that monitor for organ transplantation rejection when ordered by their physicians in medically appropriate circumstances, and explained that transplant patients would continue to have access to these blood tests, including: when there are signs or symptoms of rejection; after a physician-assessed pretest, including for surveillance testing; after an indeterminate biopsy; as a replacement for a biopsy when deemed clinically appropriate by the patient’s qualified physician; and for evaluation of the adequacy of immunosuppression.
Removed paragraphs (17)
Previous report
•Grew Testing Services volume to 43,700 tests, an increase of 17% year-over-year.
Previous report
•Reported GAAP net loss of $1.4 million, a significant improvement from the second quarter 2023.
Previous report
•In the first half of 2024, expanded coverage by 27 million lives nationwide.
Previous report
•Published SHORE study data demonstrating that HeartCare® outperforms dd-cfDNA alone in identifying allograft rejection.
Previous report
•Nature Medicine publication validates CareDx AlloView™ AI-enabled risk prediction model and demonstrates AlloSure® Kidney detects subclinical rejection in stable patients.
Previous report
In March and May 2023, MolDX issued new billing articles related to the LCD entitled Molecular Testing for Solid Organ Allograft Rejection. The billing article issued in May 2023, or the Revised Billing Article, and together with the billing article issued in March 2023, the Billing Articles, impacted Medicare coverage for AlloSure Kidney, AlloSure Heart, AlloMap Heart and AlloSure Lung, and required certain companies, including us, to implement new processes to address the requirements related to Medicare claim submissions. Noridian adopted the Revised Billing Article on August 17, 2023, with a retroactive effective date of March 31, 2023.
Previous report
On August 10, 2023, MolDX and Noridian released a draft proposed revision to the LCD (DL38568, Palmetto; DL38629, Noridian) that, if adopted, would revise the existing foundational LCD, MolDX: Molecular Testing for Solid Organ Allograft Rejection (L38568 and L38629). On August 14, 2023, MolDX released a draft billing article (DA58019) to accompany the proposed draft LCD, which generally reflected the changes in coverage included in the Revised Billing Article. The comment period end date for this proposed LCD was September 23, 2023. We presented at public meetings regarding the proposed draft LCD held on September 18, 2023 and September 20, 2023, with MolDX and Noridian, respectively. We also submitted written comments on the proposed draft LCD.
Previous report
Research and development expenses decreased by $0.6 million, or (3)%, for the three months ended June 30, 2024, compared to the same period in 2023. The decrease is primarily due to a decrease in equipment maintenance expenses of $0.3 million and software costs of $0.2 million.
Previous report
Other expense, net
Previous report
Comparison of the Six Months Ended June 30, 2024 and 2023
Previous report
Restructuring costs
Previous report
Interest income, net increased by $0.2 million for the six months ended June 30, 2024, compared to the same period in 2023. The increase is primarily due to interest income earned on U.S. agency securities and corporate debt securities.
Previous report
Other expense, net
Previous report
Other expense, net decreased by $1.9 million for the six months ended June 30, 2024, compared to the same period in 2023, primarily due to $1.0 million in investment write-off and $0.9 million in unrealized loss on the investment in Miromatrix in the six months ended June 30, 2023.
Previous report
Income tax benefit (expense)
Previous report
In March and May 2023, MolDX issued new billing articles related to the LCD entitled Molecular Testing for Solid Organ Allograft Rejection, or the Billing Articles. The Revised Billing Article impacted Medicare coverage for AlloSure Kidney, AlloSure Heart, AlloMap Heart and AlloSure Lung, and required certain companies, including us, to implement new processes to address the requirements related to Medicare claim submissions. Noridian adopted the Revised Billing Article on August 17, 2023, with a retroactive effective date of March 31, 2023.
Previous report
On August 10, 2023, MolDX and Noridian released a draft proposed revision to the LCD (DL38568, Palmetto; DL38629, Noridian) that, if adopted, would revise the existing foundational LCD, MolDX: Molecular Testing for Solid Organ Allograft Rejection (L38568 and L38629). On August 14, 2023, MolDX released a draft billing article (DA58019) to accompany the proposed draft LCD, which generally reflected the changes in coverage included in the Revised Billing Article. The comment period end date for this proposed LCD was September 23, 2023. We presented at public meetings regarding the proposed draft LCD held on September 18, 2023 and September 20, 2023, with MolDX and Noridian, respectively. We also submitted written comments on the proposed draft LCD.
Reworded paragraphs (40)
Previous wording
•Reported total revenue of $92.3 million, an increase of 31% year-over-year.
Current wording
•Total revenue of $82.9 million increased 23% year-over-year
Previous wording
•Generated $18.9 million cash from operations. Ended the quarter with cash, cash equivalents, and marketable securities of approximately $228.9 million, with no debt.
Current wording
•Cash flow from operations of $12.5 million. Cash, cash equivalents, and marketable securities of $241 million, with no debt
Previous wording
The prospective multicenter trial, or the K-OAR study, completed with over 1,900 patients enrolled, monitors patients with AlloSure Kidney for 3 years with the objective of providing further evidence of clinical utility of AlloSure Kidney in the surveillance of kidney transplant recipients. Preliminary results from the K-OAR study were presented at the CareDx Symposium at the American Transplant Congress held in June 2021. Data from the study are being analyzed and data for contemporary control patients are being collected to enable robust final analyses.
Current wording
The prospective multicenter trial, or the K-OAR study, completed with over 1,900 patients enrolled, monitors patients with AlloSure Kidney for 3 years with the objective of providing further evidence of clinical utility of AlloSure Kidney in the surveillance of kidney transplant recipients. Preliminary results from the K-OAR study have been part of at least 12 oral or poster presentations from conferences including the American Society of Nephrology and American Transplant Congress over the past few years. Data from the study, including contemporary control patients, are being analyzed for publication.
Previous wording
KidneyCare combines the dd-cfDNA analysis of AlloSure Kidney with the gene expression profiling technology of AlloMap Kidney and the predictive artificial intelligence technology of iBox in one surveillance solution. We have yet to submit any applications to private payers for reimbursement coverage of AlloMap Kidney or iBox.
Current wording
KidneyCare combines the dd-cfDNA analysis of AlloSure Kidney with the gene expression profiling technology of AlloMap Kidney and the predictive artificial intelligence technology of iBox in one surveillance solution. We have yet to submit any applications to private payers for reimbursement coverage of AlloMap Kidney or iBox. In September 2019, we announced the enrollment of the first patient in the OKRA study, which is an extension of the K-OAR study. OKRA is a prospective, multi-center, observational registry of patients receiving KidneyCare for surveillance. There have been more than 1,900 patients enrolled in OKRA.
Previous wording
Clinical validation data from the Donor-Derived Cell-Free DNA-Outcomes AlloMap Registry (NCT02178943), or D-OAR, was published in the American Journal of Transplant, or AJT, in 2019. D-OAR was an observational, prospective, multicenter study to characterize the AlloSure Heart dd-cfDNA in a routine, clinical surveillance setting with heart transplant recipients. The D-OAR study validated that plasma levels of AlloSure Heart dd-cfDNA can discriminate acute rejection from no rejection, as determined by endomyocardial biopsy criteria.
Current wording
Clinical validation data from the Donor-Derived Cell-Free DNA-Outcomes AlloMap Registry (NCT02178943), or D-OAR, was published in the American Journal of Transplantation, or AJT, in 2019. D-OAR was an observational, prospective, multicenter study to characterize the AlloSure Heart dd-cfDNA in a routine, clinical surveillance setting with heart transplant recipients. The D-OAR study validated that plasma levels of AlloSure Heart dd-cfDNA can discriminate acute rejection from no rejection, as determined by endomyocardial biopsy criteria.
Previous wording
In February 2019, AlloSure Lung became available for lung transplant patients through a compassionate use program while the test was undergoing further studies. One of these studies, launched in April 2020, was the ALARM study, or AlloSure Lung Allograft Remote Monitoring, with Johns Hopkins University, where the impact of AlloSure Lung combined with RemoTraC was measured. AlloSure Lung applies proprietary next generation sequencing, or NGS, technology to measure dd-cfDNA from the donor lung in the recipient bloodstream to monitor graft injury. In October 2021, we launched AlloSure Lung. We have gained early coverage with some commercial payers. Effective May 9, 2023, AlloSure Lung is covered for Medicare beneficiaries through the MolDX LCD (Noridian L38629). The Medicare reimbursement rate for AlloSure Lung is $2,753.
Current wording
In February 2019, AlloSure Lung became available for lung transplant patients through a compassionate use program while the test was undergoing further studies. One of these studies, launched in April 2020, was led by clinicians at Johns Hopkins University and also included INOVA, University of Maryland, and UT San Antonio lung transplant programs. In this study, the impact of AlloSure Lung combined with RemoTraC was measured. AlloSure Lung applies proprietary next generation sequencing, or NGS, technology to measure dd-cfDNA from the donor lung in the recipient bloodstream to monitor graft injury. In October 2021, we launched AlloSure Lung. We have gained early coverage with some commercial payers. Effective May 9, 2023, AlloSure Lung is covered for Medicare beneficiaries through the MolDX LCD (Noridian L38629). The Medicare reimbursement rate for AlloSure Lung is $2,753.
Previous wording
In July 2021, we launched the Assessing Chimerism and Relapse of Bone marrow/HCT transplant using AlloHeme Testing study, or the ACROBAT study. The ACROBAT study is a prospective, multicenter, observational cohort study to evaluate the use of AlloHeme, a microchimerism NGS tool to predict post-transplant relapse in patients with allogeneic hematopoietic cell transplants, or HCT. This study is currently enrolling patients.
Current wording
In July 2021, we launched the Assessing Chimerism and Relapse of Bone marrow/HCT transplant using AlloHeme Testing study, or the ACROBAT study. The ACROBAT study is a prospective, multicenter, observational cohort study to evaluate the use of AlloHeme, a microchimerism NGS tool to predict post-transplant relapse in patients with allogeneic hematopoietic cell transplants, or HCT. This study is fully enrolled with over 300 patients.
Previous wording
Our testing services revenue is primarily derived from AlloSure Kidney, AlloMap Heart, AlloSure Heart and AlloSure Lung tests, which represented 77% and 76% of our total revenue for the three and six months ended June 30, 2024, respectively, and 76% and 78% of our total revenue for the three and six months ended June 30, 2023, respectively. Our testing services revenue depends on a number of factors, including (i) the number of tests performed; (ii) establishment of coverage policies by third-party insurers and government payers; (iii) our ability to collect from payers with whom we do not have positive coverage determination, which often requires that we pursue a case-by-case appeals process; (iv) our ability to recognize revenues on tests billed prior to the establishment of reimbursement policies, contracts or payment histories; and (v) how quickly we can successfully commercialize new product offerings.
Current wording
Our testing services revenue is primarily derived from AlloSure Kidney, AlloMap Heart, AlloSure Heart and AlloSure Lung tests, which represented 73% and 75% of our total revenue for the three and nine months ended September 30, 2024, respectively, and 71% and 76% of our total revenue for the three and nine months ended September 30, 2023, respectively. Our testing services revenue depends on a number of factors, including (i) the number of tests performed; (ii) establishment of coverage policies by third-party insurers and government payers; (iii) our ability to collect from payers with whom we do not have positive coverage determination, which often requires that we pursue a case-by-case appeals process; (iv) our ability to recognize revenues on tests billed prior to the establishment of reimbursement policies, contracts or payment histories; and (v) how quickly we can successfully commercialize new product offerings.
Previous wording
Our product revenue is primarily derived from sales of AlloSeq Tx, Olerup SSP and QTYPE products. Product revenue represented 11% and 12% of our total revenue for the three and six months ended June 30, 2024, respectively, and 11% and 10% of our total revenue for the three and six months ended June 30, 2023. We recognize product revenue from the sale of products to end-users, distributors and strategic partners when all revenue recognition criteria are satisfied. We generally have a contract or a purchase order from a customer with the specified required terms of order, including the number of products ordered. Transaction prices are determinable in the contract. The products are delivered and risk of loss passed to the customer upon either shipping or delivery, as per the terms of the agreement. There are no further performance obligations related to a contract and revenue is recognized at the point of delivery consistent with the terms of the contract or purchase order.
Current wording
Our product revenue is primarily derived from sales of AlloSeq Tx, Olerup SSP and QTYPE products. Product revenue represented 12% of our total revenue for each of the three and nine months ended September 30, 2024, respectively, and 14% and 11% of our total revenue for the three and nine months ended September 30, 2023, respectively. We recognize product revenue from the sale of products to end-users, distributors and strategic partners when all revenue recognition criteria are satisfied. We generally have a contract or a purchase order from a customer with the specified required terms of order, including the number of products ordered. Transaction prices are determinable in the contract. The products are delivered and risk of loss passed to the customer upon either shipping or delivery, as per the terms of the agreement. There are no further performance obligations related to a contract and revenue is recognized at the point of delivery consistent with the terms of the contract or purchase order.
Previous wording
Our patient and digital solutions revenue is primarily derived from sales of our Ottr software, XynQAPI, MedActionPlan, mTilda (HLA Data Systems), MediGO, TransChart and Tx Access licenses, services and SaaS agreements across the digital portfolio, as well as our pharmacy sales at TTP. Patient and digital solutions revenue represented 12% of total revenue for each of the three and six months ended June 30, 2024, and 13% and 12% of our total revenue for the three and six months ended June 30, 2023.
Current wording
Our patient and digital solutions revenue is primarily derived from sales of our Ottr software, XynQAPI, MedActionPlan, mTilda (HLA Data Systems), MediGO, TransChart and Tx Access licenses, services and SaaS agreements across the digital portfolio, as well as our pharmacy sales at TTP. Patient and digital solutions revenue represented 14% and 13% of our total revenue for the three and nine months ended September 30, 2024, respectively, and 15% and 13% of our total revenue for the three and nine months ended September 30, 2023, respectively.
Previous wording
There were no material changes in the matters for which we make critical accounting estimates in the preparation of our unaudited condensed consolidated financial statements during the three and six months ended June 30, 2024, respectively, as compared to those disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 28, 2024.
Current wording
There were no material changes in the matters for which we make critical accounting estimates in the preparation of our unaudited condensed consolidated financial statements during the three and nine months ended September 30, 2024, respectively, as compared to those disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 28, 2024.
Previous wording
Testing services revenue increased by $17.5 million, or 33%, for the three months ended June 30, 2024, compared to the same period in 2023. The increase is primarily driven by testing services volume growth of 17%. The difference between revenue and volume growth is primarily driven by increased collections related to tests performed in prior periods and revenue recognition for specific tests performed in prior periods as per ASC 606.
Current wording
Testing services revenue increased by $13.0 million, or 27%, for the three months ended September 30, 2024, compared to the same period in 2023. The increase is primarily driven by testing services volume growth of 16% and an average selling price increase related to increased coverage and collections.
Previous wording
Product revenue increased by $2.7 million, or 35%, for the three months ended June 30, 2024, compared to the same period in 2023. The increase is primarily due to higher sales of our commercial NGS-based kitted solutions.
Current wording
Product revenue increased by $0.7 million, or 7%, for the three months ended September 30, 2024, compared to the same period in 2023. The increase is primarily due to higher sales of our commercial NGS-based kitted solutions.
Previous wording
Patient and digital solutions revenue increased by $1.7 million, or 19%, for the three months ended June 30, 2024, compared to the same period in 2023. The increase was mainly driven by revenue generated from the acquired businesses of HLA Data Systems and MediGO.
Current wording
Patient and digital solutions revenue increased by $2.0 million, or 20%, for the three months ended September 30, 2024, compared to the same period in 2023. The increase was mainly driven by revenue generated from the Pharmacy and the acquired business of HLA Data Systems.
Previous wording
Cost of product increased by $2.3 million, or 59%, for the three months ended June 30, 2024, compared to the same period in 2023. The increase is primarily due to increased sales of our commercial NGS-based kitted solutions.
Current wording
Cost of product increased by $1.5 million, or 31%, for the three months ended September 30, 2024, compared to the same period in 2023. The increase is primarily due to increased sales of our commercial NGS-based kitted solutions.
Previous wording
Cost of patient and digital solutions increased by $0.8 million, or 11%, for the three months ended June 30, 2024, compared to the same period in 2023. The increase is primarily associated with the revenue growth in the patient and digital solution business.
Current wording
Cost of patient and digital solutions increased by $1.3 million, or 21%, for the three months ended September 30, 2024, compared to the same period in 2023. The increase is primarily associated with the revenue growth in the patient and digital solution.
Previous wording
Sales and marketing expenses decreased by $0.6 million, or (3)%, for the three months ended June 30, 2024, compared to the same period in 2023. The decrease is primarily due to a decrease in marketing and tradeshow expenses.
Current wording
Sales and marketing expenses increased by $1.3 million, or 7%, for the three months ended September 30, 2024, compared to the same period in 2023. The increase is primarily due to an increase in personnel-related costs of $1.0 million and an increase in marketing and trade show expenses of $0.5 million, offset by a decrease in stock-based compensation expense of $0.3 million.
Previous wording
General and administrative expenses decreased by $2.8 million, or (5)%, for the six months ended June 30, 2024, compared to the same period in 2023. The decrease is primarily due to a decrease in legal expenses of $8.0 million, a decrease in consulting expenses of $0.8 million and a decrease in office and corporate related expenses of $1.0 million, offset by an increase in personnel-related costs of $4.9 million, an increase in software expenses of $0.9 million and an increase in stock-based compensation expense of $1.2 million.
Current wording
General and administrative expenses decreased by $5.5 million, or (16)%, for the three months ended September 30, 2024, compared to the same period in 2023. The decrease is primarily due to a decrease in legal expenses of $8.2 million, offset by an increase in personnel-related costs of $2.8 million.
Previous wording
Other expense, net decreased by $0.2 million for the three months ended June 30, 2024, compared to the same period in 2023. The decrease is primarily due to a reduction of foreign exchange loss of $0.2 million.
Current wording
Interest income, net decreased by $0.2 million for the three months ended September 30, 2024, compared to the same period in 2023. The decrease is primarily due to a decrease in interest rates.
Previous wording
Income tax benefit (expense) increased by $0.1 million for the six months ended June 30, 2024, compared to the same period in 2023. The increase is primarily attributable to a change in mixed profit (loss) across jurisdictions.
Current wording
Income tax benefit decreased by $0.3 million for the three months ended September 30, 2024, compared to the same period in 2023. The decrease is primarily attributable to a change in mixed profit (loss) across jurisdictions, tax benefits recognized on change in estimates related to prior year tax expenses and change in valuation allowance.
Previous wording
Testing services revenue increased by $9.6 million, or 8%, for the six months ended June 30, 2024, compared to the same period in 2023. Revenue increase is primarily driven by increased collections related to tests performed in prior periods and revenue recognition for specific tests performed in prior periods as per ASC 606.
Current wording
Testing services revenue increased by $22.6 million, or 14%, for the nine months ended September 30, 2024, compared to the same period in 2023. Revenue increase is primarily driven by testing services volume growth of 4%, increased collections related to tests performed in prior periods and revenue recognized during the second quarter of 2024 for specific tests performed in prior periods as per ASC 606.
Previous wording
Product revenue increased by $4.5 million, or 30%, for the six months ended June 30, 2024, compared to the same period in 2023. The increase is primarily due to higher sales of our commercial NGS-based kitted solutions.
Current wording
Product revenue increased by $5.1 million, or 21%, for the nine months ended September 30, 2024, compared to the same period in 2023. The increase is primarily due to higher sales of our commercial NGS-based kitted solutions.
Previous wording
Patient and digital solutions revenue increased by $2.7 million, or 16%, for the six months ended June 30, 2024, compared to the same period in 2023. The increase was mainly driven by revenue generated from the acquired businesses of HLA Data Systems and MediGO.
Current wording
Patient and digital solutions revenue increased by $4.7 million, or 17%, for the nine months ended September 30, 2024, compared to the same period in 2023. The increase was mainly driven by revenue generated from HLA Data Systems, MediGO, Transplant Pharmacy and other core digital offerings.
Previous wording
Cost of testing services decreased by $1.0 million, or (7)%, for the three months ended June 30, 2024, compared to the same period in 2023. The decrease is primarily driven by efficiency measures to lower laboratory expenses.
Current wording
Cost of testing services decreased by $2.5 million, or (6)%, for the nine months ended September 30, 2024, compared to the same period in 2023. The decrease is primarily driven by efficiency measures to lower laboratory expenses.
Previous wording
Cost of product increased by $3.6 million, or 45%, for the six months ended June 30, 2024, compared to the same period in 2023. The increase is primarily due to increased sales of our commercial NGS-based kitted solutions.
Current wording
Cost of product increased by $5.1 million, or 40%, for the nine months ended September 30, 2024, compared to the same period in 2023. The increase is primarily due to increased sales of our commercial NGS-based kitted solutions.
Previous wording
Cost of patient and digital solutions increased by $1.1 million, or 8%, for the six months ended June 30, 2024, compared to the same period in 2023. The increase is primarily associated with the revenue growth in the patient and digital solution business.
Current wording
Cost of patient and digital solutions increased by $2.5 million, or 12%, for the nine months ended September 30, 2024, compared to the same period in 2023. The increase is primarily associated with the revenue growth in the patient and digital solution.
Previous wording
Research and development expenses decreased by $6.2 million, or (14)%, for the six months ended June 30, 2024, compared to the same period in 2023. The decrease is primarily due to a decrease in clinical trials expenses of $2.9 million, a decrease in personnel-related costs of $1.9 million, a decrease in consulting expenses of $0.8 million and a decrease in software costs of $0.6 million.
Current wording
Research and development expenses decreased by $7.7 million, or (12)%, for the nine months ended September 30, 2024, compared to the same period in 2023. The decrease is primarily due to a decrease in clinical trials expenses of $4.2 million, a decrease in consulting expenses of $1.4 million, a decrease in equipment expenses of $0.5 million, a decrease in reagents and consumables expenses of $0.2 million and a decrease in software costs of $0.7 million.
Previous wording
Sales and marketing expenses decreased by $4.0 million, or (9)%, for the six months ended June 30, 2024, compared to the same period in 2023. The decrease is primarily due to a decrease in personnel-related costs of $1.7 million, a decrease in stock-based compensation expense of $0.5 million, a decrease in marketing and tradeshow expenses of $1.0 million and a decrease in sponsorship expenses of $0.8 million.
Current wording
Sales and marketing expenses decreased by $2.7 million, or (4)%, for the nine months ended September 30, 2024, compared to the same period in 2023. The decrease is primarily due to a decrease in personnel-related costs of $0.5 million, a decrease in stock-based compensation expense of $0.8 million and a decrease in marketing and tradeshow expenses of $1.4 million.
Previous wording
General and administrative expenses decreased by $1.6 million, or (6)%, for the three months ended June 30, 2024, compared to the same period in 2023. The decrease is primarily due to a decrease in legal expenses of $5.8 million and a decrease in consulting expenses of $0.2 million, offset by an increase in personnel-related costs of $4.1 million and an increase in stock-based compensation expense of $0.6 million.
Current wording
General and administrative expenses decreased by $8.2 million, or (9)%, for the nine months ended September 30, 2024, compared to the same period in 2023. The decrease is primarily due to a decrease in legal expenses of $16.1 million and a decrease in office related expenses of $0.7 million, offset by an increase in personnel-related costs of $6.9 million and an increase in stock-based compensation expense of $2.3 million.
Previous wording
The restructuring costs decreased by $0.8 million for the three months ended June 30, 2024, compared to the same period in 2023. The decrease is due to the $0.8 million restructuring charges during the three months ended June 30, 2023, which related to employee severance pay and related costs.
Current wording
The restructuring costs decreased by $0.8 million for the nine months ended September 30, 2024, compared to the same period in 2023. The decrease is due to the $0.8 million restructuring charges during the second quarter of 2023, which related to employee severance pay and related costs.
Previous wording
Cash Flows for the Six Months Ended June 30, 2024 and 2023
Current wording
Cash Flows for the Nine Months Ended September 30, 2024 and 2023
Previous wording
Cash provided by operating activities for the six months ended June 30, 2024 was $3.6 million. Net operating assets decreased by $16.4 million. Our noncash items included $26.5 million in stock-based compensation expense, $7.4 million of depreciation and amortization expense, $2.8 million of amortization of right-of-use assets, $0.5 million of revaluation of contingent consideration to estimated fair value, and $0.8 million of amortization of premium on short-term marketable securities, net.
Current wording
Cash provided by operating activities for the nine months ended September 30, 2024 was $16.2 million. Net operating assets decreased by $15.6 million. Our noncash items included $40.2 million in stock-based compensation expense, $10.8 million of depreciation and amortization expense, $4.2 million of amortization of right-of-use assets, $0.8 million of revaluation of contingent consideration to estimated fair value, and $1.2 million of amortization of premium on short-term marketable securities, net.
Previous wording
Cash provided by operating activities for the six months ended June 30, 2023 was $0.2 million. Net operating assets increased $12.4 million. Our noncash items included $26.5 million in stock-based compensation expense, $7.1 million of depreciation and amortization expense, $2.7 million of amortization of right-of-use assets, $0.9 million of unrealized loss on long-term marketable equity securities, $1.0 million of asset impairment and write-downs, $0.5 million of revaluation of contingent consideration to estimated fair value and $2.1 million of amortization of premium on short-term marketable securities, net.
Current wording
Cash used in operating activities for the nine months ended September 30, 2023 was $10.0 million. Net operating assets increased $9.9 million. Our noncash items included $39.1 million in stock-based compensation expense, $10.8 million of depreciation and amortization expense, $4.0 million of amortization of right-of-use assets, $1.2 million of unrealized loss on long-term marketable equity securities, $1.0 million of asset impairment and write-downs, $1.7 million of revaluation of contingent consideration to estimated fair value, $3.4 million of amortization of premium on short-term marketable securities, net, and $2.1 million of other gains.
Previous wording
For the six months ended June 30, 2024, net cash provided by investing activities of $16.0 million was primarily related to proceeds from maturities of marketable securities of $112.5 million, offset by purchases of marketable securities of $93.2 million, and $3.3 million related to additions of capital expenditures, net.
Current wording
For the nine months ended September 30, 2024, net cash provided by investing activities of $1.6 million was primarily related to proceeds from maturities of marketable securities of $149.8 million, offset by purchases of marketable securities of $143.2 million, and $5.0 million related to additions of capital expenditures, net.
Previous wording
For the six months ended June 30, 2023, net cash provided by investing activities of $0.6 million was primarily related to maturities of marketable securities of $145.6 million, offset by the purchases of marketable securities of $135.3 million, $5.1 million related to additions of capital expenditures, net and $4.6 million acquisition of business, net of cash acquired.
Current wording
For the nine months ended September 30, 2023, net cash used in investing activities of $0.9 million was primarily related to purchases of marketable securities of $192.1 million, $6.8 million related to additions of capital expenditures, net and $6.7 million related to acquisition of business, net of cash acquired, offset by proceeds from maturities of marketable securities of $206.5 million.
Previous wording
Net cash used in financing activities for the six months ended June 30, 2024 of $6.1 million was primarily due to taxes paid related to net share settlements of restricted stock units of $4.3 million, repurchase and retirement of common stock of $0.5 million and payments of contingent consideration of $2.0 million. These payments were offset by proceeds from issuances of common stock under our employee stock purchase plan of $0.5 million.
Current wording
Net cash used in financing activities for the nine months ended September 30, 2024 of $4.7 million was primarily due to taxes paid related to net share settlements of restricted stock units of $6.5 million, repurchase and retirement of common stock of $0.5 million and payments of contingent consideration of $2.4 million. These payments were offset by proceeds from issuances of common stock under our employee stock purchase plan of $1.4 million and proceeds from exercise of stock options of $3.3 million.
Previous wording
Net cash used in financing activities for the six months ended June 30, 2023 of $2.7 million was primarily due to taxes paid related to net share settlements of restricted stock units of $2.2 million, repurchase and retirement of common stock of $0.8 million and payments of contingent consideration $0.3 million. These payments were partially offset by proceeds from issuances of common stock under our employee stock purchase plan of $0.5 million.
Current wording
Net cash used in financing activities for the nine months ended September 30, 2023 of $2.7 million was primarily due to taxes paid related to net share settlements of restricted stock units of $2.5 million, repurchase and retirement of common stock of $1.6 million and payments of contingent consideration of $0.2 million. These payments were offset by proceeds from issuances of common stock under our employee stock purchase plan of $1.5 million and proceeds from exercises of stock options of $0.1 million.
Previous wording
We have incurred significant losses and negative cash flows from operations since our inception and had an accumulated deficit of $696.8 million at June 30, 2024. As of June 30, 2024, we had cash, cash equivalents and marketable securities of $228.9 million and no debt outstanding.
Current wording
We have incurred significant losses and negative cash flows from operations since our inception and had an accumulated deficit of $704.3 million at September 30, 2024. As of September 30, 2024, we had cash, cash equivalents and marketable securities of $240.9 million and no debt outstanding.
Previous wording
The Repurchase Program may be carried out at the discretion of a committee of our Board of Directors through open market purchases, one or more Rule 10b5-1 trading plans and block trades and in privately negotiated transactions. During the six months ended June 30, 2024, we purchased an aggregate of 55,500 shares of our common stock, under the Repurchase Program for an aggregate purchase price of $0.5 million. There were no repurchases during the three months ended June 30, 2024. As of June 30, 2024, $21.4 million remained available for future share repurchases under the Repurchase Program.
Current wording
On December 3, 2022, our Board of Directors approved a stock repurchase program (the “Repurchase Program”), whereby we may purchase up to $50 million in shares of our common stock over a period of up to two years, commencing on December 8, 2022. The Repurchase Program may be carried out at the discretion of a committee of our Board of Directors through open market purchases, one or more Rule 10b5-1 trading plans and block trades and in privately negotiated transactions. During the nine months ended September 30, 2024, we purchased an aggregate of 55,500 shares of our common stock, under the Repurchase Program for an aggregate purchase price of $0.5 million. There were no repurchases during the three months ended
Previous wording
The growth of our testing services business is tied to the number of AlloSure Kidney, AlloSure Lung, AlloMap Heart and AlloSure Heart patient samples we receive and patient results we report. We incur costs in connection with collecting and shipping all samples and a portion of the costs when we cannot ultimately issue a report. As a result, the number of patient samples received largely correlates directly to the number of patient results reported.
Current wording
The growth of our testing services is tied to the number of AlloSure Kidney, AlloSure Lung, AlloMap Heart and AlloSure Heart patient samples we receive and patient results we report. We incur costs in connection with collecting and shipping all samples and a portion of the costs when we cannot ultimately issue a report. As a result, the number of patient samples received largely correlates directly to the number of patient results reported.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
September 30, 2024. As of September 30, 2024, $21.4 million remained available for future share repurchases under the Repurchase Program.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
In September 2019, we announced the enrollment of the first patient in the OKRA study, which is an extension of the K-OAR study. OKRA is a prospective, multi-center, observational registry of patients receiving KidneyCare for surveillance. Combined with the K-OAR study, more than 3,000 patients have been enrolled.
Previous report — wording carried elsewhere
Cost of testing services decreased by $2.7 million, or (9)%, for the six months ended June 30, 2024, compared to the same period in 2023. The decrease is primarily driven by efficiency measures to lower laboratory expenses.
Previous report — wording carried elsewhere
The restructuring costs decreased by $0.8 million for the six months ended June 30, 2024, compared to the same period in 2023. The decrease is due to the $0.8 million restructuring charges during the six months ended June 30, 2023, which related to employee severance pay and related costs.
Previous report — wording carried elsewhere
On December 3, 2022, our Board of Directors approved a stock repurchase program (the “Repurchase Program”), whereby we may purchase up to $50 million in shares of our common stock over a period of up to two years, commencing on December 8,