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CareDx, Inc.

CDNA
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Business Summary

CareDx, Inc. is a precision medicine company dedicated to improving outcomes for transplant patients and advancing organ health, operating as a single reportable segment. The company delivers integrated solutions including non-invasive molecular testing for heart, kidney, and lung transplants; laboratory products; digital health technologies; and patient solutions that support care before and after transplant. CareDx is the leading provider of genomics-based information for transplant patients, with substantially all revenues coming from the United States and Europe, and substantially all assets and operations located in the United States and Sweden.

CareDx faces competition in testing services principally from clinical reference laboratories, hospital laboratories, and companies focused on molecular diagnostic tests, including Natera, Inc., Eurofins Transplant Genomics, Inc., Devyser Diagnostics AB, and Insight Molecular Diagnostics, Inc. In the HLA tissue typing market, competitors include Thermo Fisher through its One Lambda business, Omixon, GenDx, BAG, Qiagen, and Immucor. For patient and digital solutions, the primary competitor for the patient management EMR solution is Phoenix, Epic's transplant application, while the referral application has two known competitors: T-REX and MedSleuth. The company believes it competes favorably on factors including quality and strength of clinical and analytical validation data, confidence in diagnostic results, technical performance, reputation, extent of reimbursement, inclusion in practice guidelines, cost-effectiveness, and ease of use.

CareDx generates revenue through three primary streams: testing services revenue from non-invasive molecular diagnostic tests (AlloSure Kidney, AlloMap Heart, AlloSure Heart, HeartCare, and AlloSure Lung), product revenue from laboratory products including QTYPE, Olerup SSP, SBT, AlloSeq Tx, AlloSeq HCT, and AlloSeq cfDNA, and patient and digital solutions revenue from software solutions (Ottr, TxAccess, XynQAPI, XynCare, MedActionPlan), pharmacy services, and HLA Data Systems software. The company's go-to-market model focuses on solutions-selling into a concentrated market of transplant centers, aiming to increase adoption and adherence to diagnostic products while lowering revenue acquisition costs over time through cross-selling and commercial channel leverage.

Testing services revenue for the year ended December 31, 2025 was $274.5 million , representing 10% growth year-over-year. The company performed approximately 200,000 commercial tests from its Brisbane, California laboratory during 2025. The testing services portfolio includes AlloSure Kidney, a dd-cfDNA solution for kidney transplant patients; AlloMap Heart, a gene expression profiling test with 510(k) clearance from the FDA for heart transplant recipients; AlloSure Heart, a dd-cfDNA heart transplant solution; HeartCare, which combines AlloMap Heart and AlloSure Heart in one surveillance solution; and AlloSure Lung, a dd-cfDNA solution for lung transplant patients. AlloSure Kidney has been a covered service for Medicare beneficiaries since October 2017 through a Local Coverage Determination, with a Medicare reimbursement rate of $2,753 effective January 1, 2026. AlloMap Heart has been covered since January 2006 with a current Medicare reimbursement rate of $3,240 . AlloSure Heart has been covered since December 2020 with a current Medicare reimbursement rate of $2,753 . HeartCare has been covered since April 1, 2023 with a Medicare reimbursement rate of $5,993 . AlloSure Lung has been covered since May 9, 2023 with a Medicare reimbursement rate of $2,753 . The company also offers AlloHeme, a monitoring test for patients with AML and MDS following allogeneic HCT, and AlloCell for cell therapy monitoring, which is currently being utilized in research partnerships with biopharma companies.

Product revenue for the year ended December 31, 2025 was $48.4 million , representing 19% growth year-over-year. The laboratory product portfolio includes QTYPE for HLA typing using real-time PCR methodology, Olerup SSP with close to 170 different typing products, and distributed NGS kits including AlloSeq Tx (high-resolution HLA typing), AlloSeq cfDNA (surveillance solution for measuring dd-cfDNA), and AlloSeq HCT (chimerism testing for stem cell transplant recipients). AlloSeq Tx received CE mark authorization in May 2020, AlloSeq Tx9 received CE mark authorization in August 2022, AlloSeq cfDNA received CE mark authorization in January 2020, and AlloSeq HCT received CE mark authorization in May 2022. Patient and digital solutions revenue for the year ended December 31, 2025 was $56.9 million , representing 31% growth year-over-year. The digital solutions portfolio includes Ottr Organ and Ottr Cellular software for transplant patient management, TxAccess for referral management, XynQAPI for transplant quality tracking, XynCare for patient waitlist management, MedActionPlan for medication adherence, AlloHome for remote patient monitoring, and HLA Data Systems software including mTilda, VxMatch and VECTR. The company's software solutions are currently used in over 170 transplant centers in the U.S.

During the year ended December 31, 2025, the company purchased an aggregate of 5.8 million shares of its common stock under the February 2025 and May 2025 Repurchase Programs for a total purchase price of $87.8 million . On February 20, 2025, the Board of Directors approved the February 2025 Repurchase Program authorizing up to $50.0 million in share repurchases over two years, and during the three months ended June 30, 2025, the company purchased an aggregate of 3.0 million shares for $50.0 million . On May 30, 2025, the Board authorized a new share repurchase program of up to $50.0 million over two years, and during the year ended December 31, 2025, the company purchased an aggregate of 2.8 million shares under this program for $37.8 million , with $12.2 million available for future repurchases as of December 31, 2025. On April 22, 2025, the parties in the Securities Class Action reached an agreement-in-principle under which the company would pay approximately $20.25 million in settlement. On July 17, 2025, MolDX and Noridian released a new Proposed Draft foundational LCD (DL40058, DL40060) for Solid Organ Allograft Rejection testing with a revised accompanying billing article, introducing new coverage criteria, utilization limitations, and a new bundled payment concept for certain CareDx testing. On November 25, 2025, CMS issued a final determination to cross-walk AlloSure (0540U) to CPT code 0493U, with the new reimbursement rate representing an $88 decrease to the previous pricing for the AlloSure Kidney test and no change to pricing for AlloSure Heart and AlloSure Lung tests.

Total revenue for the year ended December 31, 2025 was $379.8 million , an increase of 14% from $333.8 million in 2024. Net loss for 2025 was $21.4 million , compared to net income of $52.5 million in 2024. Basic and diluted net loss per share for 2025 was $(0.40) , compared to basic net income per share of $1.00 and diluted net income per share of $0.93 in 2024. The company had an accumulated deficit of $735.4 million as of December 31, 2025. Cash, cash equivalents and marketable securities totaled $201.4 million as of December 31, 2025. Cash flow from operations for 2025 was $42.0 million .

Business Outlook

A key growth vector is the TRANSPLANT+ initiative, which aims to expand the total addressable market by recognizing a broader definition of transplant, including adjacencies to the core solid organ transplant business such as pre- and peri-transplant areas of organ assessment, precursor disease areas that often lead to organ failure (autoimmune disorders, renal, hepatic, cardiovascular and lung diseases, and hematologic disorders), and cancer or other medical conditions that could require cell therapy or bone marrow transplant. The company intends to leverage its core scientific and technological expertise in organ transplantation to enable expansion into these adjacent markets. Additionally, the company plans to accelerate profitable growth by focusing on solutions-selling at transplant centers to increase acquisition of new patients and improve patient adherence to testing protocols, fully integrating digital and patient solutions and laboratory products teams into a single go-to-market model, focusing on generating clinical evidence to gain optimal payer coverage and reimbursement leading to revenue per test appreciation, and executing on the existing research and development pipeline to generate incremental revenues from both in-line and new products.

Another growth vector involves the company's development pipeline, which includes other solutions to help clinicians and transplant centers make personalized treatment decisions throughout a transplant patient's lifetime. The company expects to invest in research and development to develop additional services and products. Specific pipeline products include AlloHeme, a minimally-invasive, NGS-based, AI-powered monitoring test designed to predict relapse in patients with AML and MDS following allogeneic HCT, with the ACROBAT study generating pivotal clinical validation data presented at the Tandem Meeting in 2025. AlloCell, a solution for cell therapy such as CAR-T therapy, monitors the pharmacokinetics of engraftment and persistence of cells for patients who have received allogeneic cell therapy and is currently being utilized in research partnerships with biopharma companies, with multiple agreements executed to date. The company also has a license and collaboration agreement with a private entity for iBox, a proprietary software for predictive analysis of post-transplantation kidney allograft loss, granted for a period of four years with exclusive rights in the United States.

The company's strategy includes driving operational excellence as a key objective to achieve profitable growth and margin expansion. This approach includes continual process improvement and strategic investments in enterprise applications, remote process automation, artificial intelligence, and business intelligence tools, along with investments in data security, privacy and secure communications with patients, providers and the payer community. The company believes that operational excellence is critical to achieving profitable growth and margin expansion. Research and development expenses decreased by $1.1 million , or 1% , for the year ended December 31, 2025 compared to 2024, primarily attributable to decreases of $4.7 million in clinical trial expenses, $2.0 million in consulting and licensing expense, and $1.5 million in stock-based compensation expense, partially offset by increases of $5.5 million in personnel-related costs and $1.6 million in software-related expenses.

The company's manufacturing facility in Stockholm, Sweden supports production, packaging and labeling of proprietary test kits including Olerup SSP, QTYPE, AlloSeq Tx, AlloSeq cfDNA and HCT. The facility has a certified Quality Management System to the ISO 13485:2016 standard and country specific MDSAP requirements. In 2023, the company added contract manufacturing in the U.S. and Europe to global manufacturing capabilities to support growth. In 2024, the company decided to migrate manufacturing from Australia to the U.S. and Europe. The company relies solely on certain suppliers for laboratory instruments and key reagents, including Thermo Fisher Scientific, Roche Molecular Systems, Hamilton Robotics, Illumina, Becton, Dickinson and Company, Streck, Beckman Coulter, and Qiagen N.V. As of December 31, 2025, the company had 765 employees, of which 761 were full-time employees, with 145 in manufacturing operations and support, 186 in research and development, 252 in sales and marketing, and 182 in general and administrative positions.

Capital allocation priorities include research and development spending, capital expenditures, and share repurchases. Research and development expenses for the year ended December 31, 2025 were $71.4 million . Capital expenditures for the year ended December 31, 2025 were $5.9 million . The company has a universal shelf registration statement effective May 23, 2024, allowing sale of up to $250.0 million of securities. As of December 31, 2025, $12.2 million was available for future share repurchases under the May 2025 Repurchase Program. The company has never declared or paid cash dividends on its common stock and currently does not have any plans to do so in the foreseeable future.

A significant headwind is the potential impact of the Proposed LCD released on July 17, 2025 by MolDX and Noridian, which introduced new coverage criteria, utilization limitations, and a new bundled payment concept for certain CareDx testing in a surveillance setting, which could lead to fewer surveillance tests being reimbursed. MolDX and Noridian have 365 days from the date of issuance to finalize the Proposed LCD, and the company cannot predict the ultimate outcome. Additionally, the company faces risks related to Medicare reimbursement, as revenue from Medicare represented 46% of testing services revenue for the year ended December 31, 2025. The Protecting Access to Medicare Act of 2014 requires laboratories to report private payor rates, and the volume-weighted median of reported rates would set Medicare Clinical Laboratory Fee Schedule rates for certain tests in calendar years 2027 to 2029. The company also faces risks from the ongoing conflict between Ukraine and Russia, the global impact of restrictions and sanctions imposed on Russia, tariffs imposed on global trade, and the ongoing conflicts in the Middle East, which could affect suppliers and international operations.

Structural constraints flagged by management include the company's history of losses, with an accumulated deficit of $735.4 million as of December 31, 2025, and expectations to incur net losses for the next several years. The company's financial results are largely dependent on sales of AlloSure Kidney, AlloMap Heart, AlloSure Heart, HeartCare and AlloSure Lung tests and products. The company faces billing complexities associated with obtaining payment or reimbursement, including disputes with payers, prior authorization requirements, and audits under the CMS Recovery Audit Contractor program, the CMS Targeted Probe and Educate program, and the Unified Program Integrity Contractors program. The company also faces risks from healthcare reform measures, including the Affordable Care Act and the One Big Beautiful Bill Act, which reduces funding to federal healthcare programs and imposes additional requirements to be eligible for healthcare.

Risk Factors

The company receives a substantial portion of revenues from Medicare, with revenue from Medicare representing 46% of testing services revenue for the year ended December 31, 2025, and the loss of or significant reduction in Medicare reimbursement would severely and adversely affect financial performance. The company faces ongoing risk from the Proposed LCD released on July 17, 2025, which could introduce new coverage criteria, utilization limitations, and a bundled payment concept that could lead to lower rates of reimbursement. The company has a history of losses with an accumulated deficit of $735.4 million as of December 31, 2025, and expects to incur net losses for the next several years. The company is subject to ongoing litigation, including a qui tam action filed by a former employee where the DOJ declined to intervene, and a patent infringement case where Natera was awarded approximately $96.3 million in damages by a jury in January 2024, though the Court later overturned the verdict and Natera has appealed. The company faces billing complexities and is subject to audits under the CMS Recovery Audit Contractor program, the CMS Targeted Probe and Educate program, and the Unified Program Integrity Contractors program, with a UPIC records request received in the first quarter of 2025. The company relies solely on certain suppliers for laboratory instruments and key reagents, including Thermo Fisher, Roche Molecular Systems, Illumina, Becton, Dickinson and Company, and Qiagen N.V., and does not have guaranteed supply agreements with some of these suppliers.

Management Priorities

Management's message emphasizes a differentiated approach in the molecular diagnostics market, focusing on serving a concentrated market of transplant centers with a portfolio of solutions to improve health outcomes, believing that solutions selling into the same transplant center increases adoption and adherence to diagnostic products and allows the company to lower revenue acquisition costs over time. The company has four strategic priorities: accelerate profitable growth, drive operational excellence, define TRANSPLANT+ and expand the total addressable market, and elevate performance culture. Management highlights fourth quarter business highlights including revenue of $108 million , an increase of 25% year-over-year, testing services revenue of $78 million with 23% year-over-year growth and testing services volume of approximately 53,000 with 17% year-over-year growth, patient and digital solutions revenue of $16.8 million and product revenue of $13.3 million representing year-over-year growth of 47% and 17% respectively, average revenue per test of approximately $1,480 including approximately $5 million in prior period revenue, net loss of $4 million compared to net income of $88 million for the fourth quarter of 2024, cash flow from operations of $21.4 million , and share repurchases of $12 million during the quarter of 773,000 shares at an average price of $15.79 per share. Full year 2025 financial highlights include revenue of $380 million with 14% year-over-year growth, testing services revenue of $275 million with 10% year-over-year growth and testing services volume of approximately 200,000 with 14% year-over-year growth, patient and digital solutions revenue of $57 million and product revenue of $48 million representing year-over-year growth of 31% and 19% respectively, net loss of $21 million , cash flow from operations of $42 million , cash, cash equivalents and marketable securities of approximately $200 million as of December 31, 2025, and share repurchases of $88 million during the year of 5.8 million shares at an average price of $15.16 per share.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 7, MD&A — Results of Operations
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  3. [3] Item 1, Business — Testing Services
  4. [4] Item 1, Business — Reimbursement
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  11. [11] Item 1, Business — Laboratory Products
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  14. [14] Item 1, Business — Patient and Digital Solutions
  15. [15] Item 7, MD&A — Liquidity and Capital Resources
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  24. [24] Item 8, Note 8 — Commitments and Contingencies
  25. [25] Item 1, Business — Reimbursement
  26. [26] Item 7, MD&A — Results of Operations
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  31. [31] Item 8, Note 3 — Net (Loss) Income Per Share
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  34. [34] Item 7, MD&A — Liquidity and Capital Resources
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  36. [36] Item 7, MD&A — Cash Flows
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  44. [44] Item 1, Business — Employees and Human Capital Resources
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  50. [50] Item 7, MD&A — Results of Operations
  51. [51] Item 7, MD&A — Cash Flows
  52. [52] Item 8, Note 9 — Stockholders' Equity
  53. [53] Item 7, MD&A — Liquidity and Capital Resources
  54. [54] Item 1A, Risk Factors
  55. [55] Item 7, MD&A — Liquidity and Capital Resources
  56. [56] Item 1A, Risk Factors
  57. [57] Item 7, MD&A — Liquidity and Capital Resources
  58. [58] Item 8, Note 8 — Commitments and Contingencies
  59. [59] Item 7, MD&A — Fourth Quarter Business Highlights
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  77. [77] Item 7, MD&A — Full Year 2025 Financial Highlights
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  93. [93] Item 8, Consolidated Statements of Operations
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  99. [99] Item 8, Note 3 — Net (Loss) Income Per Share
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  103. [103] Item 8, Consolidated Statements of Operations
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  123. [123] Item 8, Note 11 — Stock Incentive Plans
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  129. [129] Item 7, MD&A — Results of Operations
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Analysis on 6/22/2026