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TRANSCRIPT
Corporate Overview
CareDx, Inc.
June 2015
1
Safe Harbor Statement
These slides and the accompanying oral presentation contain forward-looking statements. All statements other than statements of
historical fact contained in this presentation, including statements regarding future financial position of CareDx, Inc. (“CareDx” or the
“Company”), including financial targets, business strategy, and plans and objectives for future operations, are forward-looking
statements. CareDx has based these forward-looking statements on its estimates and assumptions and its current expectations and
projections about future events. These forward-looking statements are subject to a number of risks, uncertainties and assumptions,
including those that may be described in greater detail in a registration statement (including a prospectus) that the Company may
subsequently file with the U.S. Securities and Exchange Commission (the “SEC”) for the transaction to which this communication relates.
In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this presentation are
inherently uncertain and may not occur, and actual results could differ materially and adversely from those anticipated or implied in the
forward-looking statements. Accordingly, you should not rely upon forward-looking statements as predictions of future events. CareDx
undertakes no obligation to update publicly or revise any forward-looking statements for any reason after the date of this presentation, to
conform these statements to actual results or to changes in CareDx’s expectations.
CareDx is an “emerging growth company” as defined under the Securities Act of 1933, as amended (the “Act”). These slides and the
accompanying oral presentation are intended to qualify as communications permitted pursuant to Section 5(d) of the Act. The Company
may file a registration statement (including a prospectus) under the Act with the SEC for the transaction to which this communication
relates. In the event the Company conducts an offering, before you invest you should read the prospectus in the registration statement and
other documents that the Company files with the SEC for more complete information about the Company and the offering. When available,
you may obtain those documents for free by visiting EDGAR on the SEC Web site at www.sec.gov.
Certain data in this presentation was obtained from various external sources, and neither the Company nor its affiliates, advisers or
representatives has verified such data with independent sources. Accordingly, neither the Company nor any of its affiliates, advisers or
representatives makes any representations as to the accuracy or completeness of that data or to update such data after the date of this
presentation. Such data involves risks and uncertainties and is subject to change based on various factors.
The trademarks included herein are the property of the owners thereof and are used for reference purposes only. Such use should not be
construed as an endorsement of the products or services of the Company or the proposed offering.
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CareDx Overview
Markets Standard for Heart Transplant Surveillance - AlloMap
> 50% new transplant patient adoption
> 80% penetration of US Transplant Centers
Further growth from number of tests per patient
Commercial Stage Company with Strong Financial Profile
2014 Revenue of $27M, Gross Margins of ~65%
Platform for partnerships and menu expansion
Commercial Stage Growth Company in
Clinical Diagnostics Focused on Organ Transplantation
3
Expands into Kidney Transplant Opportunity - Cell-Free DNA
> $800 M Kidney Transplant Surveillance Opportunity
Adoption of Clinical Sequencing Technology to outcomes and costs
Outcomes for transplant recipients have not improved over the past decade
CareDx focuses on long-term Outcomes
4
TOO LITTLE
Increased risk of:
■ Rejection
Leading to failure
of the organ
TOO MUCH
Increased risk of:
■ Infections
■ Kidney failure
■ Cancer
■ Onset of Diabetes
Transplant Recipients are high value patients in the Health Care System
Median survival: Heart/Kidney 10-12 years
Established Standard for Surveillance of Heart
Transplant Rejection Risk
Clinically Useful and Actionable
Established in Transplantation
Recommended in Guidelines
FDA-cleared
Broadly Reimbursed
■ Used in 110 of the 129
U.S. heart transplant centers
■ Highly reproducible and quantitative;
99% Negative Predictive Value
■ FDA 510(k)-cleared to assess risk
of heart transplant rejection
■ 175 million covered lives and
> 79% overall tests reimbursed
■ Placed in ISHLT guidelines in 2010
AlloMap is a non-invasive, molecular diagnostic surveillance solution
5
Extensive Clinical Expertise with Landmark Trials
Year Study Impact Patients Samples
2004 CARGO ■ Validation of AlloMap – Gene Expression Test 722 14,200
2010 IMAGE ■ AlloMap surveillance non-inferior to biopsy 602 5,900
2011 CARGO II■ AlloMap performance in Acute Cellular Rejection
■ Long term outcomes and AlloMap variability741 22,900
2013 eIMAGE■ Early Use of AlloMap (≥ 55 days post-Tx)
■ AlloMap may be used guiding Medication60 500
2013 OAR ■ AlloMap Registry focused on Clinical Outcomes> 2,000
planned
> 8,000-
16,000
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Reinvigorated Sales Growth for AlloMap
AlloMap Quarterly Unit Volume
■ Leadership change in late 2012
■ AlloMap repositioned as a surveillance solution 2013
■ Improved commercial focus reigniting growth & adoption
Regular Surveillance Tool
Immunosuppression
Longitudinal Data
Patient Stratification
Center by Center Approach
Actionable Data
Focus on Execution
Growth Plan
7
+11.4%
2042 2,087 2,225
2,488 2,600 2,751 2,792
3,019 3,024 3,103 3,111
Avg Avg Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2011 2012 2013 2014 2015
Post-Transplant Surveillance Market Opportunity
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Total Addressable Market
First Year Patients 16.900 x 80% x 8 x $ 1500 = $ 0.2 Bn
Maintenance Patients 180.000 x 70% x 4 x $ 1500 = $ 0.8 Bn
Donor-derived cell-free DNA
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New Biomarker for surveillance of transplanted Organ
Non-rejection
(Quiescent)
Rejection
(cell injury)
cfDNA in
plasmaOrgan
Transplant
% of dd-cfDNA can be measured in plasma and increases as cells
from the transplanted organ are injured (aptosis, necrosis)
Growing Evidence for Utility of cfDNA
Author Year Description Technology
Macher, Rubio
(Seville)2014
• Monitoring in Liver
PLOS One 9(12):e113987
PCR
gender mis-match
DeVlaminck, Quake
(Stanford)2014
• Diagnosis of acute rejection in Heart
Sci Transl Med. 6(241):241
NGS shotgun/SNP
dual genotyping
Hidestrand
(Wisconsin)2014
• Used to detect rejection in Heart
JACC 63:1224
Targeted NGS
dual genotyping
Beck, Schutz
(Chronix)2013
• Methods to quantify in Heart, Kidney, Liver
Clin Chem 59:12
Digital PCR/SNP,
dual genotyping
Snyder, Quake
(Stanford)2011
• Elevated during rejection in Heart
PNAS 108(15):6229
NGS shotgun/SNP
dual genotyping
Gadi et al
(U Wash)2006
• Correlates with rejection of Pancreas-Kidney
Clin Chem 52:379
HLA qPCR
dual HLA typing
Lo et al
(Hong Kong)1998
• Present in Kidney & Liver
Lancet 351 (9112):1329
PCR
gender mis-match
Surveillance of Organ Health and Treatment Response
11
Time post transplant
%d
d-c
fDN
A
Rejection
Data recently presented at ISHLT, April 2015 and ATC, May 2015:
• dd-cfDNA increases with rejection and decreases following successful treatment
• Data generated for heart and kidney suggesting universal applicability (liver, lung)
• Approach doesn’t require genotyping of the donor or recipient
• For heart, dd-cfDNA provides value independent of AlloMap
1
2
3
41
Non-rejection
Rejection
1
2 Onset of Rejection
3
Post-Rejection4
Optimization of
Immunosuppression
Coverage Data
Development
PayorReimbursement
R&D assay AnalyticalValidation
CLIA Clinical ValidationAssay
Clinical
Reimbursement
DART 2
Clinical utilityInterimreview
DART 1 clinical validation
Development Building Blocks
12
MedicareReimbursement
In Progress
04/15
H1/16
04/15 12/15
cfDNA Test Development in Heart and Kidney
13
April 2015
Initiate DART (Observational Study)
Start Clinical Validation Process
April 2015
Completed Analytical
Performance Characterization
Q4 2015
Release Analytically
Validated Test
Q2 2016
Launch clinically Validated
cfDNA Test
Completed Clinical
Validation
H2 2016
Initiate DART 2 (Interventional Study)
Start Clinical Utility Study
cfDNA – Heart
AlloSure
cfDNA – Kidney
RenaSureDART IKARGO
CARGO II D-OAR
Clinical studies
DART 2
Archived samples
Open study
Development timeline
Today
Q2 2014Concept studies
Q3-4 2014Feasibility studies
Q4 2015
Analytical
manuscript
submission
H1 2016
Interim DART 1
Analysis
DART Trial runs in 2 Phases
Trial Sites
DART II
14
DART I
>6
Single Arm Multicenter Trial
Enrollment: n ~ 200
Interim analyses at 6, 12 & 18 m
Clinical validity
Correlate with clinical status
>10
Multicenter Interventional Trial
Enrollment: n ~ 600
Interim analyses at 6, 12 & 18 m
Clinical utility
Reduction in renal biopsies
Individualized Tacrolimus dose
Serum creatinine
Glomerular Filtration Rate
(Onset of need of dialysis)
Design
Endpoints
Objective
Note: Work in progress and subject to change
AlloMap
(FDA)
AlloMap
Variability
cfDNA
Heart
(RUO)
RenAsure
Kidney
(LDT)
cfDNA
Lung & Liver
Anellovirus
Pipeline
Metastatic
melanoma
Gene Expression
Profiling
Clinical Sequencing:
Cell injury
Clinical Sequencing:
Infections
Clinical Sequencing:
Malignancies
Kidney
GEP
Active
BD&L
effort
to
leverage
fully
operational
CliA lab
presence
Organic In-organic
Experienced Team with a Track Record of Success
Key Management Previous
Employment
Peter MaagPresident, CEO and Director
James P. YeeChief Medical Officer
Matthew MeyerChief Business Officer
Ken LudlumChief Financial Officer
Mitchell J. NellesChief Operating Officer
Partners
16
John Sninsky
Chief Scientific Officer
Josh DeFonzoChief Commercial Officer
(Strategic)
(Logistics)
(Europe)
Financial Summary
$20$22
$27
2012 2013 2014
$M
illio
ns
$-2.3 $-0.9
$1.2
Op
era
tin
g P
rofi
t
Close to Operating
Profitability in Core Business
59% 58%67%
2012 2013 2014
Gro
ss
Ma
rgin
Operating Profit
25-30%
Cost of Sales 20%
R&D 15%
G&A 10%
Cost of Revenue
25%
Gross Margin of ~75%
Operating Profit ~25%
Steady Sales Growth
Year Over Year
Achievable Financial Performance
Gross Margin
Already Good on Early Revenue
2012 2013 2014*
17
*includes one time revenue
$Millions
Financial Summary
Upcoming Events
Q2 Earnings Release – August 11th
Steady ASP since Launch
Quarterly Highlights
Strong Balance Sheet (3/31/15)
Jefferies Conference New York June 1st
Annual Shareholders Meeting June 16th
JMP Conference New York June 23rd
HFSA Baltimore Sept 26th
18
$500
$1,000
$1,500
$2,000
$2,500
$3,000
ASSETS ($ Millions)
Current Assets
Cash & cash equivalents 39.0
Other Current Assets 3.3
Total current assets 42.3
Long Term Assets 21.0
TOTAL ASSETS $63.3
Current Liabilities 5.2
Long Term Debt 15.7
Other Liability 2.9
Shareholders Equity 39.5
TOTAL LIABILITIES $63.3
CareDx – Growth Story
Build on the Foundation
- Drive AlloMap
- Develop cfDNA
- Add external growth
Leverage Platform
- Enter Kidney Tx Market
- Innovate Tx Offerings
- Infection/Virome
- Malignancies
- Expand capabilities/technologies
2015
2016
2017
19
Move from rejection risk
to long-term outcomes
for Heart Tx Patients
Improve long-term
outcomes for
Transplant Patients
Personalize
Care for
Chronically-ill Patients
Expand outside Transplant
- Enter Adjacencies
- Partner on solutions
- Drive Patient Engagement