CareDx Inc (NASDAQ:CDNA)
Shares of CareDx Inc (NASDAQ:CDNA) rallied 33.022% as investors reacted to the approval of the company’s transplant surveillance solution, AlloSure, for Medicare coverage. The Center for Medicare and Medicaid Services have already released the final version of the coverage policy that paves way for the solution to be made available in hospitals starting October.
Medicare approval of AlloSure continues to fuel renewed investor interest on CareDx Inc (NASDAQ:CDNA), which has been under immense selling pressure for the better part of the year. However, Wednesday’s rally reaffirmed a bullish rally that began early in the month. The stock faces immediate resistance at the $3.07 mark above which it could rise to the $4 mark.
CareDx Inc (NASDAQ:CDNA) is a molecular diagnostic company focused on the development of solutions for monitoring transplant patients. Its lead product is the AlloMap heart transplant molecular test, designed to help clinicians monitor and identify heart transplant recipients. AlloSure, on the other hand, is a transplant surveillance solution that applies next generation sequencing to detect genetic differences between donors and recipients.
AlloSure Medicare Coverage
CareDx Inc. (NASDAQ:CDNA) has already hit the ground running in its bid to make AlloSure available on all transplant centers across the U.S, following the Medicare milestone. The company expects increased interest on AlloSure given that Medicare usually covers about 80% of kidney transplant patients.
“We are hearing great interest from transplant nephrologists who want to begin using AlloSure as soon as CMS approval is finalized. We see the coverage decision by the MolDX team as a great signal for the support of kidney transplant patients and an acknowledgment of the unmet medical need,” said Peter Maag, Chief Executive Officer.
Medicare coverage should go a long way in strengthening CareDx Inc (NASDAQ:CDNA) high-value diagnostic solutions portfolio that already boasts of AlloMap in use in heart transplant centers. AlloMap is slowly becoming a standard care for monitoring heart transplant patients for the probability of rejection.
Q2 Earning Report
Medicare approval marks yet another milestone in CareDx Inc. (NASDAQ:CDNA) growth trajectory that became clear with the posting of stellar second quarter earnings. During the quarter, the company generated revenues of $12 million up from $10.7 million reported in Q2 2016. Net loss in the quarter more than halved to $4 million compared to $10.5 million reported last year.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.