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

Reginald Seeto: Sure. And let me take the second part of your question on the state regulatory update that I provided this time around. So it wasn’t the DOJ SEC matter. This was basically a state regulatory agency. So that’s the first part. And the second part of your question was if there is any other update that whole CID DOJ investigation. And the answer is that there are no material updates to report on that particular matter. We continue to cooperate with the request that we are receiving from these guys. And of course, there hasn’t been any questions raised around the safety, efficacy of our products.

Alexander Nowak: And the other end quarter that happened late 2022, that was related to the DOJPs , just so I’m clear?

Reginald Seeto: No. This was a completely different inquiry. I think we should have some.

Alexander Nowak: Yes. Any comment, I guess, around — if it’s a separate one, then any comment around that, just to make sure we’re all clear.

Reginald Seeto: So I didn’t quite get the question, but I think in October 2021, we disclosed what was in the filings of time point, and this is one that’s been finished and completed from the feedback receipt.

Alexander Nowak: Yes. — it just looks like late 2022, it looked like in the 10-Q, there’s another in quarter that came, but we can talk about it later, yes.

Reginald Seeto: Late 2022, there was another state in query that we have received. This is basically recent fund, yes, and it’s an isolated case state from a single vendor in a state. That’s what we have disclosed. We are a single vendor in a state that we have disclosed.

Alexander Nowak: Okay. Understood. Thank you.

Operator: Our next question is from Mark Massaro with BTIG. Please proceed.

Mark Massaro: Hey guys. Thank you for taking the question. Just kind of parsing through the guidance. I appreciate all the color, low teens volume growth in test services low double-digit decline in ASPs. That kind of nets me out at around 3% or so, call it, low to mid-single on testing services revenue, but for the full year, you’re guiding 2% to 5%. When I look at last year, and I add up the buckets for products, digital and products, I think you grew about 7% last year. It represented 18% to 20% of revenue. So really strong growth in products last year, but I’m not seeing a really strong outlook for products in 2023. And — so can you just give me a sense if there are any one-timers in 2022 that aren’t likely to repeat just to give us a sense for what the different scenarios are with respect to the range?

Reginald Seeto: Sure, Mark. I think the 1 piece on the non-testing services side that I’ve been calling out is around the digital and patient solutions because that business grew like 180% year-over-year and that was primarily because of our acquisition of the Transplant Pharmacy. So that’s not going to happen again in 2023. So that is a bit that probably you need to bake in.

Mark Massaro: That’s super helpful. I guess, can you give us a sense for what the underlying growth of the transplant pharmacy is?

Reginald Seeto: Instead of transplant pharmacy, let me provide you color on the testing services and let me call the other two businesses as the non-testing services. I’m expecting the testing services revenue growth to be very similar to what you called out from the low single digit to the mid-single digit, and our non-testing services would be high single digit, pretty similar to what you have seen last year.

Abhishek Jain: Yes, I think the question that Mark was asking, what is the transplant. So the transplant farm is essentially a white glove service business that we have and it essentially serves transplant centers in patients. And so it’s really built a reputation on this white glove service. And focused on just on transplant patients, pretty similar with our mission and our vision to lead the transplant ecosystem. So that’s one area that has grown or had grown through that acquisition last year.