CareDx reimbursement uncertainty remains, says Raymond James

Raymond James analyst Andrew Cooper keeps a Market Perform rating on CareDx after the company announced that AlloSure Lung donor-derived cell-free DNA molecular testing service has received Medicare coverage. With Medicare patients representing 25% of lung transplant recipients, this coverage represents $8.0M-$8.5M of annual revenue at 2023 volumes with high margin drop-through since the tests are already being run without coverage, the analyst tells investors in a research note. However, the firm’s model already contemplated a positive coverage decision at the start of 2024, which it believes limits the potential change to out-year estimates. Raymond James continues to view CareDx’s path forward amid reimbursement uncertainty as challenging from an equity standpoint.