CareDx, Inc. Q4 FY2020 Earnings Call

Greetings, and welcome to the CareDX, Inc. Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Greg Chodaczek, Managing Director.

Good afternoon and thank you for joining us today. Earlier today, CareDx released financial results for the quarter and year ended December 31, 2020. The release is currently available on the company's website. Reg Seeto, Chief Executive Officer; and Marcel Konrad, Chief Financial Officer, will host this afternoon's call. Before we get started, I would like to remind everyone that management will be making statements during this call that include forward-looking statements within the meaning of the federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements. All forward-looking statements including without limitation, our examination of historical operating trends, expectations regarding coverage decisions, pricing and enrollment matters and our future financial expectations and results are based upon current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results to differ materially from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and descriptions of the risks and uncertainties associated with our business, please see our filings with the Securities and Exchange Commission. The information provided in this conference call speaks only to the live broadcast today, February 24, 2021. CareDx disclaims any intention or obligation, except as required by law, to update or revise any information, financial projections or other forward-looking statements whether because of new information, future events, or otherwise. This call will also include a discussion of certain financial measures that are not calculated in accordance with generally accepted accounting principles. Reconciliation to the most directly comparable GAAP financial measure may be found in today's earnings release filed with the SEC. I will now turn the call over to Reg.

Thanks, Greg. Good afternoon everyone and thank you for joining us. Welcome to CareDx’s fourth quarter and full year 2020 earnings conference call. Before getting into our results, I want to thank all of our CareDx employees and partners. Despite the many challenges of 2020 with COVID-19, all of us at CareDx rallied together and worked tirelessly to develop and deliver new and unique solutions to improve transplant patient lives. Transplant has been our 100% focus for more than 20 years, and we're extremely proud that 2020 was a year we continued to serve transplant patients and the transplant community. Now turning to results. 2020 was an exceptional year for CareDx as demand continued unabated across our innovative first-in-class suite of high-value healthcare solutions to transplant patients and caregivers. Our full year revenue was $192.2 million, representing over a 51% growth over the prior year. For the fourth quarter of 2020, total revenue was $58.6 million, increasing 64% compared to the year-ago quarter. The majority of the growth in the quarter was driven by our testing services revenue, which increased 73%. Product revenue for the quarter was $5.9 million, and digital and the other revenue was $2.4 million to the top line. GAAP net loss for the fourth quarter and full year was $3.5 million and $18.7 million, respectively. Adjusted EBITDA for the fourth quarter and full year 2020 was $4.9 million and $8 million, respectively. Digging deeper into our testing services for the fourth quarter, CareDx provided over $25,000 AlloSure and AlloMap results to the transplantations in this quarter, growing approximately 78% from Q4 2019. Approximately 40% of our testing volume originated from mobile phlebotomy. As of the end of December, over 55 transplant centers in the United States have adopted AlloSure testing protocols in their standard of care. In the fourth quarter, product revenue increased 17% compared to the year-ago quarter. While our AlloSeq cell-free DNA and AlloSeq Tx 17 did generate revenue in 2020, we expect both products will begin to produce stronger growth as more COVID-19 vaccines are rolled out in 2021. Revenue from our digital solutions was $2.4 million for the fourth quarter. In 2021, we expect our software solutions will continue our direct to center strategies to improve the order workflow as we expand our digital offerings and more U.S.-based transplant centers adopt our solutions. Again, 2020 was a transformational year for CareDx, and I would like to highlight several significant products and service offerings we announced last year. Firstly, in March, as COVID-19 infections began to accelerate, we announced the launch of RemoTraC, our solutions enabling remote home-based monitoring of transplant patients. This was an offering made in response to requests from transplant centers and patients, and we are incredibly proud to be able to put this together within a week. By early April, we established a nationwide network of more than 10,000 mobile phlebotomists, and by the end of April, close to 50% of all our daily testing volume originated from mobile phlebotomy. As of the end of December, approximately 6,000 kidney, heart and lung transplant patients have enrolled in our RemoTraC offering. Today, more than 150 centers use RemoTraC. Separately, in April, we introduced AlloCell, our surveillance solution for patients who received engineered cell transplants to allogeneic cell therapy. With allogeneic cell therapy being a rapidly growing clinical development area in oncology, cardiovascular, neurological, autoimmune, and infectious diseases, we believe our surveillance solution is a perfect partner for companies developing allogeneic cellular therapies. Early this month, at the annual Transplantation and Cellular Therapy meeting, four abstracts were presented showcasing our Cellular Transplant Therapy portfolio, including our Atara Biotherapeutics partnership. This is just the beginning of our AlloCell offerings, as we will continue to develop our products and partner with other companies developing transformative cell therapies. Thirdly, in October, data from our pivotal clinical study AlloSure Lung was published in Transplantation Direct. The LARGO study demonstrated that AlloSure Lung could identify patients with acute cellular rejection, a critical need for lung transplant patients whose only option to detect rejection is an invasive bronchoscopy. With lung transplant patients having one of the lowest survival rates of solid organ transplant, we believe AlloSure is a powerful non-invasive tool in monitoring the health of the transplanted organ. As a reminder, AlloSure for lung transplant patients has been available under compassionate use since February 2019, and in June 2020, we submitted our AlloSure Lung dossier to Palmetto MolDx for Medicare reimbursement. Finally, in November, we received final reimbursement pricing from Palmetto MolDx for AlloSure Heart. As we look to 2021 and beyond, we remain very excited about our prospects. Our AlloSure testing volumes continue to impress. Our decision to focus first on the transplant centers with our direct to center strategy has allowed AlloSure to be used in greater than 70% of transplant centers, and more than 55 transplant centers have adopted AlloSure as a named protocol as of the end of December. As we continue to add more transplant centers and protocols, we can now start our direct to community strategy. Our community nephrology team was hired at the end of last year and we're very encouraged about the job our team is doing. Combined with our direct to patient strategy, we have now started the last mile with the patient. We recently launched AlloCare, designed by transplant patients and physicians, which aims to make managing patients’ day-to-day health easier by allowing them to easily track progress and health activities, manage medications, set reminders, and communicate with our patient care managers to schedule labs. Moving to the heart franchise, AlloMap Heart testing experienced strong double-digit growth. We were thrilled with the approval of AlloSure Heart when used in combination with AlloMap, known as HeartCare. As I previously mentioned, we received Medicare reimbursement for AlloSure Heart at the end of last year. While our growth in heart is likely to stem from an increase in AlloMap testing, in December, we began submitting AlloSure Heart tests for reimbursement from Medicare patients. Regarding reimbursement for non-Medicare patients, we are working with healthcare providers to secure commercial reimbursement. Regarding our digital offerings, we recently announced the acquisition of TransChart, a provider of electronic health records software, supporting the needs of U.S. transplant centers. The TransChart acquisition is another cog in our digital offerings, including Ottr transplant electronic medical record software and XynQAPI transplant quality management solutions. With this acquisition, our EMR coverage now extends to over 90 centers in total. As part of the TransChart acquisition, we also acquired TXConnect, a leading provider of human biologics donation and transplantation software. TXConnect allows us to move upstream in the patient journey and connect the centers with the dialysis centers. Last, but certainly not least, our AlloCell offering is beginning to bear fruit. Earlier this month, along with our partner, Atara Biotherapeutics, we announced we were presenting data on AlloCell in a poster titled, A Sensitive and Precise Universal Surveillance Solution for Pharmacokinetic Monitoring of Off-the-Shelf Cell Therapies. This was presented at the Transplantation and Cellular Therapy meeting, and describes the potential use of AlloCell for standardized pharmacokinetic assessment in clinical trials and highlights data on AlloHeme and AlloSeq HCT for chimerism and recurrence surveillance of stem cell transplant patients. We're very excited about the potential of AlloCell, though we're in the very early stages of this significant greenfield opportunity. 2020 was an exceptional year for CareDx as we continued to build out our product offerings while driving robust growth in our market of products. That being said, we believe we're just getting started. Everything we do at CareDx has one focus, and that is to be the leading partner for transplant patients and the transplant ecosystem. This focus and commitment to the transplant community are the driving forces behind our growth, and I expect 2021 to be another exciting year for CareDx. In summary, for 2021, the key growth drivers and milestones are to accelerate our direct to center strategy, continue our winning formula by adding AlloSure Kidney and HeartCare protocols, continue EMR integration, build our direct-to-patient strategy with RemoTraC, AlloCare, as well as for our patient care managers, start the direct to community strategy with the community nephrology field team which was hired at the end of last year, and create new businesses in cell therapy and stem cell transplant. A few key milestones to highlight of the coming quarters include in Q1, the launch of our new digital offering TXConnect. This really provides an opportunity for us to build a connection with the dialysis centers. This is something that is truly exciting as we continue along that patient journey continuum. In Q2, we’ll provide the KO1000 readout at ACC, the largest transplant conference held annually. In Q3, we expect to share AlloSure Lung Medicare reimbursement update as we hear back from MolDx. And in Q4, we expect to continue the exciting multi-modality work first shown in HeartCare, but now starting with KidneyCare as we get clear validation in AlloMap Kidney. With that, I'm going to turn the call over to Marcel to discuss our financials and 2021 guidance.

Thank you, Reg. Turning first to the income statement, our fourth quarter of 2020 testing service revenue increased 73% year-over-year to $50.3 million. The growth in the fourth quarter testing services revenue was driven by AlloSure Kidney and AlloMap Heart patient results. Our fourth quarter product revenue increased 17% year-over-year to $5.9 million, and our digital and other revenue was $2.4 million. Our gross margins continue to improve year-over-year. For the fourth quarter of 2020, the GAAP gross margin was 68% compared to a gross margin of 65% in the same period of 2019. The non-GAAP gross margin for the quarter was 70% compared to 68% in the prior year quarter. For the fourth quarter of 2020, net loss was $3.5 million compared to a net loss of $4.8 million in the same quarter of 2019. Our net loss per share was $0.07 for the quarter compared to a net loss per share of $0.11 in the fourth quarter of 2019. For the fourth quarter of 2020, our non-GAAP net income was $4.3 million compared to a non-GAAP net income of $1.6 million in the same period of 2019. We are making good progress with our earnings per share. Our basic and diluted non-GAAP net income per share in the fourth quarter of 2020 was $0.09 and $0.08, respectively, compared to a basic and diluted non-GAAP net income of $0.04 in the same period of 2019. As a reminder, we define adjusted EBITDA as a non-GAAP net income before interest, income tax, depreciation, amortization and other expenses. For the fourth quarter of 2020, we recorded positive adjusted EBITDA of $4.9 million compared to an adjusted EBITDA gain of $1.5 million in the fourth quarter of 2019. Cash, cash equivalents and marketable securities at December 31, 2020, were $224.7 million. We continue to strengthen our balance sheet, particularly our cash position. Earlier this month, we successfully completed a public offering of approximately 2.2 million shares of common stock, raising roughly $189 million after deducting underwriting discounts and commissions and estimated offering expenses. In January, we also repaid the CMS advance payment of approximately $20.5 million to CMS in full. On an operating basis in the fourth quarter, we generated record cash from operating activities of $7.2 million. Now turning to guidance. We are providing our initial 2021 revenue expectations to reflect the continued growth of AlloSure as well as the other growth drivers outlined by Reg, and as such, anticipate $255 million to $265 million revenue for the year. Our guidance balances the continued uncertainties around the COVID pandemic but emphasizes further market penetration. We feel well positioned to continue to lead the field in bringing novel solutions to the transplant clinic. With that, I'll open the call for questions.

At this time, we will be conducting a question-and-answer session. Our first question is from Brandon Couillard with Jefferies. Please proceed with your question.

Hi, guys. This is Matt on for Brandon. Good afternoon. Thanks for taking the questions. To start off with guidance, 2020 results came in well ahead of your initial guidance, a pretty impressive feat given the backdrop last year; part of it tied to your quick turnaround with RemoTraC, but there are a number of other positive growth developments as well. So as we look out to 2021, Reg, can you perhaps talk about some of the key growth drivers for this year and where you see the greatest potential for upside as well? Thanks.

Yes. Thanks, Matt. So we actually built a really nice engine of growth and I think testing service is the area that we have focused on. We have a really great winning formula and we will continue to win protocols within centers and add new centers, so that's sort of the winning formula we established. I think secondly what's really exciting is we built out the community nephrology team at the end of last year. The ability now to expand in community will be an area of incremental opportunity and growth for us as an organization. The third is if we look at AlloSure Heart and the recent approval of reimbursement with multi-modality, this will be another area of incremental growth in reimbursement for us as well. So, certainly some really strong potential growth drivers as we move into 2021, and we look really forward to continuing what we do for patients every day.

Thanks. And then on AlloCell, as you mentioned in your prepared remarks, you presented some pretty interesting data with your partner Atara at the Transplantation Cell Therapy meeting earlier this month. The opportunity is clearly still in pretty early innings. But curious if you could elaborate on how, if at all, conversations have evolved here. Clearly being out there with the known cell therapy entity that has multiple programs in its pipeline is impressive validation for you guys. So just curious how conversations with other partners are progressing from here? Thanks.

Yes. AlloCell is really an exciting opportunity and part of the future longer-term growth as we see it replicating what we did with AlloSure by creating a new market with universal surveillance for allogeneic cell therapies. With Atara, we're really proud to be able to share that partnership, because the way our agreement is written is that we can't disclose what we're working on, or who we're working with. I think with the relationship we built there, they feel comfortable sharing information about what we're doing. In terms of all the partners that we've spoken to, particularly those in the clinic, there's a lot of excitement about working with a new standard, one which we're helping to create. I think the importance for us is, it's not about driving meaningful revenue; it's about building partnerships with as many of these allogeneic cell therapy companies as we can. This is a wonderful opportunity as more of these get approved in the future. As a reminder, there aren't any allogeneic cell therapies approved today, but we believe that is the way of the future.

Thanks. And then just one last quick one on RemoTraC. I think you said it was 40% of volumes here in the fourth quarter. Any thoughts on how you're thinking about that in the first quarter here, full year '21? And then any tweaks or improvements you've made to the program as you get more data and feedback as we approach the one-year launch coming up next month? Thanks, guys.

I think with RemoTraC, this was something that was probably the highlight of last year what we did as an organization as we rallied around supporting patients and transplant centers. It was such an unmet need and we were able to put it together so quickly and had such a fantastic response that now more than 150 centers are using it. In terms of margin, we have 40% were used in Q2 and then in Q3 that went down to about 30%. And in Q4, we went back up to the higher end of the 40%. We expect to have RemoTraC as the core part of our business. It's really something which patients want, with 9 out of 10 patients highly satisfied, and now that transplant centers have had the service, they want us to keep it as well. It will be a core part of our business moving forward. I think in terms of additional learnings, it’s really just the ability to directly connect with the patient which has been extremely valuable. Having a direct conversation with 6,000-plus patients has been important as now we can interact on many time points. The other thing is it's really helped with the introduction of AlloCare, because now we can start bringing additional offerings to these patients. AlloCare is one, and others that we have planned during the course of this year. Thank you again.

Our next question is with Rachel Vatnsdal with Piper Sandler. Please proceed with your question.

Hi, everyone. This is Rachel on for Steve. Thanks for taking the questions and congrats on a really nice year. So first off, you've had some success with HeartCare since the launch in mid-November. Can you talk about the attachment rate for HeartCare to the number of AlloMap Heart tests that you're seeing currently running alongside those AlloSure Heart? And where do you think that attachment rate could go over the next one to two years?

Yes. HeartCare was truly exceptional, as we validated multi-modality, which had never been done before. Having this combination diagnostic adds clinical utility space. Before the approval, the attachment rate was around 60% to 70%. It's only at the end of last year that we were able to start talking about HeartCare directly. The attachment rate increased to around 70% to 80%. We see this as something where you bring additional clinical utility to increase usage from clinicians and centers. We expect to continue to see this attachment rate progress throughout the course of this year now that we've started the ability to discuss it actively.

Great. And going after that clinical utility, especially given the uptick that you've seen in such a short time since launch, can you give us more color on your conversations that you're having with commercial payers about reimbursement? Obviously, you guys have a really high reimbursement rate on AlloSure Heart which is great. So tell us about some of those conversations you're having. Do you think you'll hit that high number with them as well? And what's the feedback been so far?

Well, with AlloMap, we have 80% commercial coverage across all the major payers. I think with the addition of AlloSure Heart, we anticipated building out the team for this, which we have specifically done. We’ve had some initial wins largely because of our preparation. Both Kaiser and another payer have started looking at AlloSure Heart in commercial pay. This is an area we continue to work on, having built a lot of experience and a new team as we look at how we drive this commercial pay adoption.

Great. So last question from me. Recently, you talked a lot about getting closer to the patient and how that's driving further adoption. Can you talk about the success you've had with patient care managers deploying tools like RemoTraC and AlloCare and really how much that has driven that additional adoption? And how much room do you have to grow via tools like that?

Patient care managers are something that we've invested heavily in, because we believe they're the way of the future. We believe it's important as we manage the patient from pre-transplant, peri-transplant, and post-transplant. Our patient care managers play a critical role, and we have already started that process. We already have patient care managers looking after the patient pre-transplant and some are calling the patients into the post-transplant space as well. So that continuum is really important. What I've found is that these patient care managers have had a significant impact on the business and the way that we operate. For instance, when we have the ability to call patients at a transplant center, the adherence rate achieved by our patient care managers is double that compared to when a center, for example, calls up the patients to schedule. By offering this premium service, the patient care managers have been successful in driving and maintaining adherence. I would also say, if you look at add-on opportunities, we saw that with AlloCare, that was something that was introduced and added to patients that we already had interaction with, and it was administered through our patient care managers. We see this as a strategic asset. Our goal is to get that last mile to the patient and that's what we're ready to do at the start of last year. I would also remind you that early engagement, for example, with our TXConnect offering, is an opportunity to be involved in the patient journey earlier.

Great. Congrats again on the year. Thanks.

Thank you.

Our next question is with Alex Nowak with Craig-Hallum Capital Group. Please proceed with your question.

Great. Good afternoon, everyone. Just curious what the latest AlloSure penetration numbers are given all the new data that you're seeing? And then in the 55 centers where you do have AlloSure and the protocol, does that mean you're mostly fully penetrated within those accounts or are there still opportunities for growth in those centers? And then just where do the remaining 200 transplant centers sit in the pipeline for protocol?

Yes. Thanks, Alex. I think our focus is on our direct-to-center strategy. So you're right. Of the 200-plus centers in the U.S., that has been our built-out model, focusing not just on account managers and clinical staff but also on improving operational workflows, which is really important for us. We have 70% of the centers mentioned in the release that we cover. In terms of the protocols, some are higher than the heart schedule, some are at the heart schedule, and some are below the heart schedule, so there is continued opportunity with the protocols. More importantly, based on 2020 data, one in three patients have started on AlloSure. We see there is continued opportunity to grow at a much faster rate than what we've done with AlloMap, which took 15 years to reach one in two patients. We continue to focus on that point of initiation, which is critically important for us. Not only do we have penetration within the 70% of centers using AlloSure, but we also have more than 90 centers with this EMR interface. Thinking about what we're doing, Alex, in developing this competitive moat is how do we get deeper within these centers, and that's why we did the recent TransChart acquisition.

Okay, very helpful. And then could you just preview the KOAR data that you do have coming up in the middle of this year? How should we gauge or look for success comparing AlloSure to creatinine? What sort of data do you need to show to Medicare regarding the original coverage with average development?

We're really excited by KOAR. It's a large dataset built across more than 50 centers and over 1,000 patients. So KOAR 1,000 with the time of one year will allow us to share some really large datasets, which I think are important for the community. KOAR was an observational study looking at correlation with eGFR and how it did with some of the biopsy cohorts. We'll be sharing information there at ATC, but we're excited by this dataset. It will also be noted that at CEoT there will be another dataset, the ADMIRAL dataset, which shows the commercial experience of patients. I think the key is by the time we reach the middle of the year, there will be large sets of data showing experience with AlloSure and how we can continue to bring insights and innovation into this space. I'm looking forward to those coming forward. Regarding your question about the study, originally this was part of the CDD when we set up the KOAR study, and that's something we've met as part of our commitment with the study design and follow-up.

Okay, got it. And then you mentioned at the end of your prepared remarks regarding AlloMap Kidney. Was that Q4 milestone when you expect to submit for reimbursement or what was that milestone?

Yes. The milestone was to share when we got CLIA validation. CLIA is one of the gating steps for commercial application and approval. It was really just to share a key milestone for us because it means that it's now being validated in a CLIA lab.

I see. Got it. And then submit probably in 2022. Okay, understood. Thank you.

Thanks, Alex.

Our next question is with Andrew Cooper from Raymond James. Please proceed with your question.

Hi. Thanks for the questions. First, thinking about the community nephrology opportunity. I know we've talked about it a little bit before, but as you get deeper there, clearly there are a lot more surviving patients than there are patients moving through a transplant center in any given year. But you've got a lot more nephrologists as well. What sort of tools can you add and continue to leverage in that space to attack this larger market compared to a couple of hundred transplant centers? Just how should we think about strategically the way you're going after that?

Yes. Thanks, Andrew. We have an efficient threefold process. The first is we have patients that transitioned from the center to the community, which we maintain and manage through our patient care managers. So that’s one aspect. The second is at the end of last year, we built out our community nephrology team, managing 1,000 community nephrologists who are actively involved with transplant patients. There is a subset identified to take a more active role in the setting. Lastly, there are another 8,000-plus community nephrologists who don't play such an active role in transplant but may be interested, particularly with some changes in the executive order. We have an indirect approach reaching out to this group via our sales team. We have the necessary reach and it's fairly efficient, and we've experienced good insights and success in that space.

Okay, that's helpful. And just one more on AlloCell, you're early on in building momentum in the market. Is it reasonable to expect that over a couple of years this could become a factor that pharma companies see as a must-have component of clinical trials? From that perspective, as they assess their trials, what else is out there that competes with what AlloCell is trying to do?

That's why we are so excited about AlloCell. There is no standard out there, and some companies are trying their own internal approaches in terms of how they can do the monitoring. What we’re doing is creating a universal standard that can be applied to any therapeutic that comes as we measure the therapeutic cell concentration. We think this is why it's exciting, as we use clinical studies and correlate to outcomes. This opens the initial discussion and represents the future. As these companies start to learn with us and collaborate, we will have opportunities to assess how to use us more proactively, either in decision-making or as part of their processes. So far, the feedback has been positive from developing this space.

Great. I'll stop there. I appreciate the time.

Thanks again.

Our next question is with Sung-Ji Nam with BTIG. Please proceed with your question.

Hi. Thanks for taking the questions. I have a couple of quick ones. The ADMIRAL study that you guys are presenting at the cutting edge of transplantation meeting in a few days. Just kind of curious, is this the first study where you'll be showing long-term outcomes data? Obviously, you have the KOAR coming up in the second quarter.

Yes. This is really exciting because it's another large dataset, collected across multiple centers, representing real commercial experience and not just a study setting. We're looking at 1,000 patients over a multi-year period. It's exciting to have this and to time it with what will come with KOAR as well. I might also mention that we have Sham on, our Head of Medical. Sham, do you want to make any comments?

Yes. We're very excited about ADMIRAL because it really sets the stage for what KOAR potentially will show us. We're not only validating the performance of AlloSure and AlloCare projections but also looking at clinically indicated and subclinical outcomes and the sequelae disease in transplant patients. Monitoring patients with AlloSure opens the path for their outcomes and has the potential to shape future interventions.

Got you. Fantastic. That's great. And then on AlloCell, I'm not sure if I should know this already, but how does it measure cellular kinetics? Is this also a multi-modality testing solution? I think you talked about AlloHeme and AlloSeq being performed as well. I'm just trying to get a better sense of the composition of the AlloCell platform.

Yes. AlloCell is specific to allogeneic cell therapeutics, looking at pharmacokinetics including what you described as we assess different C max and persistence, but it's not part of multi-modality. It's not being done as with kidney care or heart care, for instance. AlloCell is designed just to measure cell concentrations and see if any clinical interventions or decisions are needed as we collaborate with partners on this.

Got you. That makes sense. Thank you so much.

Thank you.

Our next question is with Yi Chen with H.C. Wainwright. Please proceed with your question.

Hi. This is Boobalan dialing in for Yi Chen. I have a couple of questions. The first one, how much more do you think you need to spend on operating expenses to support growth in 2021?

Hi. This is Marcel. So we came out in Q4 with over $58 million of revenue. We had 8% EBITDA margins. We continue to invest in the business and want to grow sustainably. Over the year, we'll update on specific expense line items.

All right, that's helpful. Is the 2021 revenue guidance leaning toward the conservative side? Thanks so much.

Yes. We think it's the best number we have at this time. We do have a history of meeting and exceeding guidance, but I do think it's early with a lot of different opportunities like community nephrology we mentioned. We will gain more insight as the year progresses. But there are some uncertainties with COVID as we go through the course of this year. We feel good about our numbers and look forward to continued growth.

That's it from me. Thank you.

Thank you.

Ladies and gentlemen, we have reached the end of our question-and-answer session. I would like to turn the call back to Reg Seeto for closing remarks.

Well, thank you again to all those listening in. It's great to be able to share the great year that CareDx had during 2020. More importantly, we're excited about what 2021 will bring. We look forward to more interactions throughout the year. Stay safe and be well. We will continue our mission as a company, which is putting transplant patients first. Thank you again.

This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.