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Item 1. Business

2025-02-28 compared with 2024-02-28 · 239 added, 454 removed, 261 unchanged (73% of the section changed)

Company Overview

CareDx, Inc., or “CareDx” or the “Company” or “we” or “us” and “our”, together with our subsidiaries, is a leading precision medicine company focused on the discovery, development and commercialization of clinically differentiated, high-value diagnostic solutions for transplant patients and caregivers.

CareDx is a leading precision medicine company focused on the discovery, development and commercialization of clinically differentiated, high-value diagnostic solutions for transplant patients and caregivers.

We offer testing services, products, and patient and digital solutions along the pre- and post-transplant patient journey, and we are a leading provider of genomics-based information for transplant patients.

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Our primary operations are in Brisbane, California;

Omaha, Nebraska;

Fremantle, Australia and Stockholm, Sweden.

Our commercially available testing services consist of AlloSure® Kidney, a donor-derived cell-free DNA, or dd-cfDNA, solution for kidney transplant patients, AlloMap® Heart, a gene expression solution for heart transplant patients, AlloSure® Heart, a dd-cfDNA solution for heart transplant patients, and AlloSure® Lung, a dd-cfDNA solution for lung transplant patients.

Omaha, Nebraska and Stockholm, Sweden.

We were originally incorporated in Delaware in December 1998 under the name Hippocratic Engineering, Inc.

In April 1999, we changed our name to BioCardia, Inc., and in June 2002, we changed our name to Expression Diagnostics, Inc.

In July 2007, we changed our name to XDx, Inc.

and in March 2014, we changed our name to CareDx, Inc.

Our principal executive offices are located at 8000 Marina Boulevard, Brisbane, California and our telephone number is (415) 287-2300.

As of December 31, 2024, substantially all of our revenues came from the United States and Europe, and substantially all of our assets and operations were located in the United States and Sweden.

We are organized and operate as a single reportable segment.

Refer to Note 15, Segment Reporting, of the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Our Differentiated Approach

We aim to create life changing solutions that enable transplant patients to thrive.

Over the past 25 years, we have made considerable investments, bringing to market a portfolio of solutions that have significantly impacted the lives of hundreds of thousands of transplant patients globally.

At CareDx, we are incredibly passionate about the care of transplant patients and are deeply connected to this market, the patients we help, and the clinicians we serve.

However, we still have a tremendous opportunity to unlock growth and innovation by driving greater value for transplant patients, clinicians, our employees, and shareholders.

CareDx is differentiated in the molecular diagnostics market because we innovated the go-to-market model for a lab developed test (LDT) business.

Many LDT genomic products, like other medical technologies, fail to achieve a significant rate of adoption because clinicians use the products selectively.

The cost of switching to a new diagnostic provider is low for clinicians, making it difficult for molecular diagnostic companies to grow in competitive markets.

That market dynamic makes the cost of revenue acquisition high which coupled with high research and development spend on new products, makes the pursuit of profitability challenging.

In fact, very few LDT lab companies have reached cash flow break even or become profitable enterprises.

In contrast, we are taking the approach of serving a concentrated market of transplant centers with a portfolio of solutions to improve health outcomes.

We believe solutions selling into the same transplant center increases the adoption and adherence to our diagnostic products and allows us to lower our revenue acquisition costs over time.

As we launch new products, we can cross-sell them to the same center, gaining leverage on our commercial channel.

We also deeply understand the operational needs of these organizations.

Our teams across the country provide staff augmentation services inside transplant centers, helping them operate efficiently.

Additionally, through our digital business, we generate multiple terabytes of data on how transplant centers operate, which we expect will drive the next wave of innovation for the company by building new products and solutions to help transplant centers operate more efficiently, do more transplants, and grow profitably.

We believe that this combination - remaining focused on a concentrated number of transplant centers, lowering our cost of revenue acquisition by cross-selling more solutions into the same institutions, and gaining leverage on our commercial channel – forms a clear and differentiated formula for profitable growth in the molecular diagnostics market.

This is how CareDx intends to differentiate itself from other molecular diagnostic companies and competitors in the field.

Our Growth Strategy

CareDx has four strategic priorities:

(1) accelerate profitable growth;

(2) drive operational excellence;

(3) define TRANSPLANT+ and expand our total addressable market;

and (4) elevate performance culture.

Accelerate Profitable Growth

We plan to accelerate profitable growth by first focusing on cross-selling at transplant centers, with the goal of increasing the acquisition of new patients and improving patient adherence to our testing protocols.

Second, we intend to fully integrate our digital and patient solutions and lab products teams into a single go-to-market model designed to deliver comprehensive

solutions that drive loyalty and maximize customer value.

Third, we intend to focus on generating clinical evidence to gain optimal payer coverage and reimbursement for our products leading to average selling price (ASP) appreciation.

Finally, we intend to execute on our existing research and development pipeline, with the goal of generating incremental revenues from both in-line and new products that provide solutions to unmet medical needs in transplantation.

Drive Operational Excellence

A key objective of our growth strategy is to drive operational excellence to scale our organization by being more efficient rather than simply adding more resources.

This requires a review of our operational systems and processes and an investment in tools and infrastructure so that we can scale efficiently while better servicing our customers in the pursuit of growth opportunities.

Our operational effectiveness is highly dependent on having efficient processes, effective decision-making and project management, rigorous prioritization, and having the right tools to do our work efficiently.

We have four operational excellence priorities:

(1) make it easier for physicians and patients to order our tests and support our commercial go-to-market strategy;

(2) scale global operations to drive long-term, predictable margins;

(3) deploy best-in-class technology to drive operational efficiencies;

and (4) leverage clinical evidence, coding and contracting with payers to improve revenue realization per test.

Define TRANSPLANT+ and expand our total addressable market

There are many adjacencies to our core solid organ transplant business that we could enter to grow our total addressable market.

We collectively refer to these opportunities as a key strategic initiative called TRANSPLANT+.

TRANSPLANT+ is an initiative to expand our market by recognizing a broader definition of transplant that we believe unlocks significant long-term growth potential.

By focusing on this initiative, we aim to pave the way to develop novel solutions that lie at the intersection of transplantation and immunology.

We believe leveraging our core scientific and technological expertise in organ transplantation will enable an expansion into adjacent markets, such as pre- and peri-transplant areas of organ assessment, precursor disease areas that often lead to organ failure (such as autoimmune disorders, renal, hepatic, cardiovascular and lung diseases, and hematologic disorders), and cancer or other medical conditions that could require cell therapy or cell transplant.

Elevate Performance Culture

We recognize that our people are the driving force behind our success, and we cannot unlock our full growth potential without engaging and inspiring the employees that deliver value to our patients and customers.

Our Products and Services

Our commercially available post-transplant testing services consist of AlloSure® Kidney, a donor-derived cell-free DNA, or dd-cfDNA, solution for kidney transplant patients, AlloMap® Heart, a gene expression profiling solution for heart transplant patients, AlloSure® Heart, a dd-cfDNA solution for heart transplant patients, and AlloSure® Lung, a dd-cfDNA solution for lung transplant patients.

We have initiated several clinical studies to generate data on our existing and planned future testing services.

We have signed multiple biopharma research partnerships for AlloCell, a surveillance solution that monitors the level of engraftment and persistence of allogeneic cells for patients who have received cell therapy.

We also offer high-quality products that increase the chance of successful transplants by facilitating a better match between a donor and a recipient of stem cells and organs.

We provide digital solutions to transplant centers following the acquisitions of Ottr Complete Transplant Management, or Ottr, and XynManagement, Inc., or XynManagement.

We have since increased our offerings in patient and digital solutions with the acquisitions of TransChart LLC, or TransChart, MedActionPlan.com, LLC, or MedActionPlan, and The Transplant Pharmacy, LLC, or TTP, in 2021, HLA Data Systems, LLC, or HLA Data Systems, in January 2023 and MediGO, Inc., or MediGO in July 2023.

During 2023, we performed more than 165,000 commercial tests from our Brisbane, California, laboratory.

According to the U.S.

Department of Health and Human Services’ Organ Procurement and Transplantation Network, there are approximately 256 and 149 centers performing kidney, heart and lung transplants, respectively, in the United States.

We also offer high-quality products in the pre-transplant space that increase the chance of successful transplants by facilitating a better match between a donor and a recipient of stem cells and organs.

We also provide digital transplant solutions and various offerings that help transplant centers with patient management, outcomes quality and operational support.

Our software solutions are currently used in over 170 transplant centers in the U.S.

We also offer specialized pharmacy services for transplant patients.

The pharmacy helps patients and caregivers access lifesaving medications by managing complex medication regimens, addressing side effects, and navigating the billing process.

Testing Services

We develop and provide diagnostic surveillance testing services for solid organ transplant recipients, hematopoietic stem cell transplant recipients and recipients of cell therapies.

AlloSure Kidney, our transplant surveillance solution, was commercially launched in October 2017 and is our dd-cfDNA offering.

In transplantation there is well-established literature from studies around the world demonstrating the value of dd-cfDNA in the management of solid organ transplantation.

AlloSure Kidney is able to discriminate dd-cfDNA from recipient-cell-free DNA targeting polymorphisms in the DNA with an approach specifically designed for transplantation to differentiate dd-cfDNA.

AlloSure Kidney has been a covered service for Medicare beneficiaries since October 2017 through a Local Coverage Determination, or LCD, first issued by Palmetto MolDX, or MolDX, which was formed to identify and establish coverage and reimbursement for molecular diagnostics tests, and then adopted by Noridian Healthcare Solutions, our Medicare Administrative Contractor, or Noridian.

The Medicare reimbursement rate for AlloSure Kidney is currently $2,841.

In March and May 2023 , MolDX issued new billing articles related to the LCD entitled Molecular Testing for Solid Organ Allograft Rejection.

The billing article issued in May 2023, or the Revised Billing Article, and together with the billing article issued in March 2023, the Billing Articles, impacted Medicare coverage for AlloSure Kidney, AlloSure Heart, AlloMap Heart and AlloSure Lung, and required certain companies, including CareDx, to implement new processes to address the requirements related to Medicare claim submissions.

Noridian adopted the Revised Billing Article on August 17, 2023, with a retroactive effective date of March 31, 2023.

Although we believe the Billing Articles are inconsistent with the LCDs, Noridian’s and MolDX’s responses to public comments explaining the intended scope of various LCDs, and medical necessity, we determined to pause our Medicare reimbursement submissions for AlloSure Kidney commencing on March 7, 2023 to allow us further time to evaluate the implications of the Billing Article and update our billing processes for AlloSure Kidney tests by educating clinicians and working with centers to update our test order forms to capture the new information required under the Billing Articles.

Accordingly, we did not submit claims for approximately 3,200 AlloSure Kidney tests for Medicare reimbursement for the period from March 7, 2023 through March 31, 2023 and did not recognize revenue on these claims in the first quarter of 2023 aggregating to approximately $8.9 million, or the Impacted March Tests.

On May 18, 2023, we submitted a letter to Noridian explaining, among other things, (i) our belief that the Billing Articles impose new restrictions on Medicare coverage for the CareDx tests from those contained in the existing LCDs, (ii) that we planned to submit claims for reimbursement for the Impacted March Tests for which we had not obtained additional information from the ordering physicians to be able to specifically determine whether these tests meet the new coverage restrictions contained in the Billing Articles, and (iii) that AlloSure Kidney orders with a date of service on or after March 31, 2023 for other indications outside the parameters of the Revised Billing Article, or where the reason for testing is not specified by the ordering physician, will either not be billed pending the receipt of additional information regarding whether the orders meet the coverage restrictions contained in the Revised Billing Article or be submitted with a test description that is intended to identify those tests as falling outside the parameters of the Revised Billing Article.

Following the submission of this letter to Noridian on May 18, 2023, we submitted claims for reimbursement for the Impacted March Tests for which we subsequently received payment from Noridian and recognized revenue totaling approximately $7.8 million in the second quarter of 2023 .

On August 10, 2023, MolDX and Noridian released a draft proposed revision to the LCD (DL38568, Palmetto;

DL38629, Noridian) that, if adopted, would revise the existing foundational LCD, MolDX:

Molecular Testing for Solid Organ Allograft Rejection (L38568 and L38629).

On August 14, 2023, MolDX released a draft billing article (DA58019) to accompany the proposed draft LCD, which generally reflected the changes in coverage included in the Revised Billing Article.

The comment period end date for this proposed LCD was September 23, 2023.

We presented at public meetings regarding the proposed draft LCD held on September 18, 2023 and September 20, 2023, with MolDX and Noridian, respectively.

We also submitted written comments on the proposed draft LCD.

AlloSure Kidney has received positive coverage decisions from several commercial payers, and is reimbursed by other private payers on a case-by-case basis.

Multiple studies have demonstrated that significant allograft injury can occur in the absence of changes in serum creatinine.

Thus, clinicians have limited ability to detect injury early and intervene to prevent long-term damage using this marker.

While histologic analysis of the allograft biopsy specimen remains the standard method used to assess injury and differentiate rejection from other injury in kidney transplants, as an invasive test with complications, repetitive biopsies are not well tolerated.

AlloSure Kidney enables more frequent, quantitative and safer assessment of allograft rejection and injury status.

Monitoring of graft injury through AlloSure Kidney allows clinicians to optimize allograft biopsies, identify allograft injury and guide immunosuppression management more accurately.

Since the analytical validation paper in the Journal of Molecular Diagnostics in 2016, there has been an increasing body of evidence supporting the use of AlloSure Kidney dd-cfDNA in the assessment and surveillance of kidney transplants.

Most recently, its utility in the assessment of clinical and sub-clinical rejection was evaluated in over 1,000 patients and published in Kidney International.

The prospective multicenter trial K-OAR study, completed with over 1,900 patients enrolled, monitors patients with AlloSure Kidney for 3 years with the objective of providing further evidence of clinical utility of AlloSure Kidney in the surveillance of kidney transplant recipients.

Preliminary results from the K-OAR study were presented at the CareDx Symposium at the American Transplant Congress held in June 2021.

Data from the study are being analyzed and data for contemporary control patients are being collected to enable robust final analyses.

KidneyCare combines the dd-cfDNA analysis of AlloSure Kidney with the gene expression profiling technology of AlloMap Kidney and the predictive artificial intelligence technology of iBox in one surveillance solution.

We have yet to submit any applications to private payers for reimbursement coverage of AlloMap Kidney or iBox.

In September 2019, we announced the enrollment of the first patient in the OKRA study, which is an extension of the K-OAR study.

OKRA is a prospective, multi-center, observational registry of patients receiving KidneyCare for surveillance.

Combined with the K-OAR study, more than 3,000 patients have been enrolled.

AlloMap Heart is a gene expression test that helps clinicians monitor and identify heart transplant recipients with stable graft function who have a low probability of moderate-to-severe acute cellular rejection.

Since 2008, we have sought to expand the adoption and utilization of our AlloMap Heart solution through ongoing studies to substantiate the clinical utility and actionability of AlloMap Heart, secure positive reimbursement decisions from large private and public payers, develop and enhance our relationships with key members of the transplant community, including opinion leaders at major transplant centers, and explore opportunities and technologies for the development of additional solutions for post-transplant surveillance.

avoid the use of unnecessary, invasive surveillance biopsies and may help to determine the appropriate dosage levels of immunosuppressants.

In 2008, AlloMap Heart received 510(k) clearance from the U.S.

Food and Drug Administration for marketing and sale as a test in heart transplant recipients who have stable graft function at the time of testing, to aid in the identification of those who have a low probability of moderate/severe acute cellular rejection at the time of testing, in conjunction with standard clinical assessment.

AlloMap Heart has been a covered service for Medicare beneficiaries since January 1, 2006.

The Medicare reimbursement rate for AlloMap Heart is currently $3,240.

In October 2020, we received a final MolDX Medicare coverage decision for AlloSure Heart.

Noridian issued a parallel coverage policy granting coverage for AlloSure Heart when used in conjunction with AlloMap Heart, which became effective in December 2020.

In 2021, Palmetto and Noridian issued coverage policies written by MolDX to replace the former product-specific policies.

The common policy LCD is titled “MolDX:

Molecular Testing for Solid Organ Allograft Rejection” and the associated LCD numbers are L38568 (MolDX) and L38629 (Noridian).

The Medicare reimbursement rate for AlloSure Heart is currently $2,753.

The Revised Billing Article requires certain companies, including CareDx, to implement new processes to address the requirements related to Medicare claim submissions.

MolDX has acknowledged that the Billing Article is a change as to its previous billing article, which provided coverage only where AlloSure Heart was used in conjunction with AlloMap Heart.

We continued the Medicare reimbursement submissions for AlloMap Heart and AlloSure Heart following the issuance of the new Billing Articles by MolDX.

In addition, we informed Noridian on May 18, 2023 that until Noridian adopts the Revised Billing Article, we would continue to submit AlloMap Heart tests for reimbursement only when used in conjunction with AlloSure Heart as required by the billing article in effect at Noridian.

We also informed Noridian on May 18, 2023 of overall plans to comply with the Billing Articles to the best of our ability.

On August 28, 2023, we further informed Noridian that beginning on August 17, 2023, when it publicized the adoption of the Revised Billing Article, we would submit AlloSure Heart and AlloMap Heart testing claims in compliance with the Revised Billing Article, including submitting AlloSure Heart claims when not used in conjunction with AlloMap Heart, and submitting HeartCare (AlloSure Heart and AlloMap Heart used together in a single patient encounter) claims for surveillance testing in lieu of a biopsy from 55 days to 370 days post-transplant.

AlloMap Heart has received positive coverage decisions for reimbursement from many of the largest U.S.

private payers.

Clinical validation data from the Donor-Derived Cell-Free DNA-Outcomes AlloMap Registry (NCT02178943), or D-OAR, was published in the American Journal of Transplant, or AJT, in 2019.

D-OAR was an observational, prospective, multicenter study to characterize the AlloSure Heart dd-cfDNA in a routine, clinical surveillance setting with heart transplant recipients.

The D-OAR study validated that plasma levels of AlloSure Heart dd-cfDNA can discriminate acute rejection from no rejection, as determined by endomyocardial biopsy criteria.

We have also successfully completed several landmark clinical trials in the transplant field demonstrating the clinical utility of AlloMap Heart for surveillance of heart transplant recipients.

We initially established the analytical and clinical validity of AlloMap Heart based on our Cardiac Allograft Rejection Gene Expression Observational (Deng, M.

Transplantation 2006) study, which was published in the AJT.

A subsequent clinical utility trial, Invasive Monitoring Attenuation through Gene Expression (Pham MX et al., N.

Med., 2010), published in The New England Journal of Medicine, demonstrated that clinical outcomes in recipients managed with AlloMap Heart surveillance were equivalent (non-inferior) to outcomes in recipients managed with biopsies.

The results of our clinical trials have also been presented at major medical society congresses.

AlloMap Heart is now recommended as part of the International Society for Heart and Lung Transplantation, or ISHLT, guidelines.

HeartCare includes the gene expression profiling technology of AlloMap Heart with the dd-cfDNA analysis of AlloSure Heart in one surveillance solution.

We develop and provide diagnostic testing services for solid organ transplant recipients, hematopoietic stem cell transplant recipients and recipients of cell therapies.

During 2024, we performed more than 175,000 commercial tests from our Brisbane, California laboratory.

The care of organ transplant recipients is an intense and costly effort and requires life-long surveillance and management by highly specialized clinicians and other healthcare providers.

Unsuccessful treatment of rejection can result in an additional transplant or worse, death of the patient.

The historical standard for transplant surveillance has been through functional tests and with invasive biopsies to identify histopathological signs of rejection.

Both types of testing had (and have) significant limitations:

• Functional tests are recognized to be late indicators.

Rejection is well known to occur even in the absence of clinical signs or symptoms and damage may occur before organ function is impacted to the extent it is measurable by a functional test;

• Biopsies are invasive and risk damage to the organ and infection from exposure to a medical setting for the procedure itself.

They also present risk of mechanical problems, pain, and anxiety to the patient.

These risks present an impediment to the usage of biopsies on a routine basis.

In addition, biopsies may be difficult to access for patients in more rural settings distant from a transplant center where the procedure would be performed.

Importantly, diagnostic precision of biopsies is limited by sampling issues and interobserver variability.

Finally, the interpretation of a biopsy relies on descriptive, empirically driven consensus classifications that change over time and frequently lack an etiologic basis.

Improved post-transplant diagnostics are necessary to achieve further gains in the long-term care and health outcomes of heart, kidney and other organ transplant recipients.

More effective solutions for the surveillance and risk assessment of recipients would improve the clinician’s ability to individualize immunosuppression therapy and to detect and treat rejection earlier when the treatment is most effective.

AlloMap Heart

Our first product launched in 2005, AlloMap Heart is an innovative gene expression profiling test that is intended to aid clinicians in identification of heart transplant recipients with stable graft function who have a low probability of moderate-to-severe acute cellular rejection at the time of testing in conjunction with standard clinical assessment.

We believe the use of AlloMap Heart, in conjunction with other clinical indicators, can help healthcare providers and their patients better manage long-term care following a heart transplant, can improve patient care by helping healthcare providers avoid the use of unnecessary invasive surveillance biopsies, and may help to determine the appropriate dosage levels of immunosuppressants by measuring activity of the immune system.

AlloMap Heart has 510(k) clearance from the U.S.

Food and Drug Administration for marketing and sales as a test in heart transplant recipients who have stable graft function at the time of testing, to aid in the identification of those who have a low probability of moderate/severe acute cellular rejection at the time of testing, in conjunction with standard clinical assessment.

AlloSure Heart

AlloSure Heart, our dd-cfDNA heart transplant solution, is a molecular diagnostic test intended for the early detection of heart allograft injury and rejection.

AlloSure Heart helps provide peace-of-mind that injury is unlikely when dd-cfDNA levels are low.

AlloSure Heart is validated to detect all types of clinical rejection including antibody mediated rejection (AMR) and acute cellular mediated rejection (ACR).

AlloSure Heart was developed specifically for transplant patients and is a non-invasive blood test that analyzes SNPs selected across all 22 somatic chromosomes to detect DNA released from a patient’s heart allograft, known as donor-derived cell-free DNA (dd-cfDNA).

HeartCare combines the gene expression profiling technology of AlloMap Heart with the dd-cfDNA technology of AlloSure Heart in one surveillance solution.

An approach to surveillance using HeartCare provides information from two complementary measures:

(i) AlloMap Heart – a measure of immune activation, and (ii) AlloSure Heart – a measure of graft injury.

(i) AlloMap Heart – a measure of immune system status, and (ii) AlloSure Heart – a measure of graft injury.

HeartCare provides robust information about distinct biological processes, such as immune quiescence, active injury, acute cellular rejection and antibody mediated rejection.

In September 2018, we initiated the SHORE study, a prospective, multi-center, observational, registry of patients receiving HeartCare for surveillance.

Patients enrolled in SHORE will be followed for 5 years with collection of clinical data and assessment of 5-year outcomes.

The ISHLT guidelines published online in 2022 reinforced the use of AlloMap Heart and referenced the combined use of AlloSure Heart and AlloMap Heart for surveillance purposes.

Effective April 1, 2023, HeartCare, a multimodality testing service that includes both AlloMap Heart and AlloSure Heart provided in a single patient encounter for heart transplant surveillance is covered for Medicare beneficiaries through the MolDX LCD (Noridian L38629).

The Medicare reimbursement rate for HeartCare is $5,993.

In February 2019, AlloSure Lung became available for lung transplant patients through a compassionate use program while the test was undergoing further studies.

One of these studies, launched in April 2020, was the ALARM study, or AlloSure Lung Allograft Remote Monitoring, with Johns Hopkins University, where the impact of AlloSure Lung combined with RemoTraC was measured.

AlloSure Lung applies proprietary next generation sequencing, or NGS, technology to measure dd-cfDNA from the donor lung in the recipient bloodstream to monitor graft injury.

In October 2021, we launched AlloSure Lung.

We have gained early coverage with some commercial payers.

Effective May 9, 2023, AlloSure Lung is covered for Medicare beneficiaries through the MolDX LCD (Noridian L38629) .

The Medicare reimbursement rate for AlloSure Lung is $2,753.

Cellular Therapy

In April 2020, we initiated a research partnership for AlloCell, a surveillance solution that monitors the level of engraftment and persistence of allogeneic cells for patients who have received cell therapy.

AlloCell is being commercialized through research agreements with biopharma companies developing cell therapies.

In 2021, we executed multiple additional agreements with biopharma therapeutics companies to use AlloCell in research and clinical studies.

In July 2021, we launched the Assessing Chimerism and Relapse of Bone marrow/HCT transplant using AlloHeme Testing study, or the ACROBAT study.

The ACROBAT study is a prospective, multicenter, observational cohort study to evaluate the use of AlloHeme, a microchimerism NGS tool to predict post-transplant relapse in patients with allogeneic hematopoietic cell transplants, or HCT.

This study is currently enrolling patients.

We develop, manufacture, market and sell products that increase the chance of successful transplants by facilitating a better match between a solid organ or stem cell donor and a recipient, and help to provide post-transplant surveillance of these recipients.

Our product portfolio includes AlloSeq Tx, QTYPE, Olerup SSP, AlloSeq HCT, and AlloSeq cfDNA.

The International Society for Heart and Lung Transplantation, or ISHLT guidelines published online in 2022 reinforced the use of AlloMap Heart and referenced the combined use of AlloSure Heart and AlloMap Heart for surveillance purposes.

A 2024 study of the SHORE Registry published in the Journal of Heart and Lung Transplant demonstrated that patients with a dual positive HeartCare result had a statistically significantly higher odds of acute cellular rejection on biopsy than if either test alone was positive.

AlloSure Kidney

AlloSure Kidney, our kidney transplant solution, is a molecular diagnostic test intended for the early detection of kidney allograft injury and rejection.

AlloSure Kidney is validated to detect all types of clinical rejection including antibody mediated rejection (ABMR) and T-cell mediated rejection (TCMR).

AlloSure testing is reported as continuous score, and the relative change value (RCV) between two independent longitudinal AlloSure tests has been validated to inform clinical decision making when indicating a high likelihood of rejection.

In June 2024, a publication in the high-impact journal Nature Medicine described the ability of AlloSure to predict rejection in numerous scenarios including subclinical rejection in stable patients.

This same publication demonstrated that elevated levels of dd-cfDNA were highly associated with the presence, activity, and severity of all types of rejection and showed its added value beyond standard of care monitoring in predicting rejection.

AlloSure Kidney was developed specifically for transplant patients and is a non-invasive blood test that analyzes SNPs selected across all 22 somatic chromosomes to detect DNA released from a patient’s kidney allograft, known as donor-derived cell-free DNA (dd-cfDNA).

HistoMap Kidney

HistoMap Kidney, our solution for kidney rejection identification and typing, is a gene expression profiling test intended to identify allograft rejection and type of rejection in kidney transplant biopsy tissue.

Biopsy is the standard of care for kidney transplant patients suspected of rejection either through molecular methods, like AlloSure Kidney, or due to signs and symptoms of rejection.

HistoMap Kidney is being developed for use on formalin-fixed tissue samples from kidney biopsy to identify rejection and rejection type to enable clinical decision-making and appropriate therapy selection.

In 2023, a HistoMap validation study was published in the journal Laboratory Investigation , demonstrating its ability to accurately identify rejection and type as antibody mediated rejection, cellular rejection, mixed rejection, or no rejection.

AlloSure Lung

AlloSure Lung, our solution for lung transplant patients, is a leading indicator of injury and early rejection identification.

AlloSure Lung may help guide physicians as to whether bronchoscopy and biopsy may be necessary.

AlloSure Lung helps provide peace-of-mind that injury is unlikely when dd-cfDNA levels are low.

In April of 2022, a multicenter study of 175 patients published in the Journal of Heart and Lung Transplantation demonstrated that AlloSure Lung reduced surveillance bronchoscopies by 82%, and that AlloSure Lung can identify subclinical acute lung allograft dysfunction in stable patients without clinical signs and symptoms.

AlloSure Lung was developed specifically for transplant patients and is a non-invasive blood test that analyzes SNPs selected across all 22 somatic chromosomes to detect DNA released from a patient’s lung allograft, known as donor-derived cell-free DNA (dd-cfDNA).

AlloHeme, our solution for stem cell transplantation, is an accurate and sensitive test for monitoring and early relapse detection for hematologic malignancies after allogeneic hematopoetic stem cell transplantation.

By measuring small changes in mixed chimerism, AlloHeme may detect relapse a clinically meaningful time ahead of standard methods.

In July 2021, we launched the Assessing Chimerism and Relapse of Bone marrow/HCT transplant using AlloHeme Testing (ACROBAT) study.

The ACROBAT study is a prospective, multicenter, observational cohort study to evaluate the use of AlloHeme, an NGS tool to predict post-transplant relapse in patients with allogeneic hematopoietic cell transplants, or HCT.

AlloCell, our solution for cell therapy such as CAR-T therapy, monitors the pharmacokinetics of engraftment and persistence of cells for patients who have received allogeneic cell therapy.

AlloCell is currently being utilized in research partnerships with biopharma companies developing cell therapies.

To date, we have executed multiple agreements with biopharma therapeutics companies to use AlloCell in research and clinical studies.

We access global markets through our RUO and CE-marked Lab Products.

Our Lab Product portfolio includes QTYPE, Olerup SSP and SBT, AlloSeq Tx, AlloSeq HCT, and AlloSeq cfDNA.

Distributed PCR Kits for HLA Typing

QTYPE enables Human Leukocyte Antigen, or HLA, typing at a low to intermediate resolution for samples that require a fast turnaround time and uses real-time polymerase chain reaction, or PCR, methodology.

QTYPE primarily focuses on typing where rapid typing results are required, such as for deceased donor typing.

Typing with QTYPE requires one hour compared to the up to 2-3 hours that it takes to do traditional SSP typing and the 5-7 hours that it takes with sequence-specific oligonucleotides, or SSO.

Olerup SSP is used to type HLA alleles based on the sequence specific primer, or SSP, technology.

Our NGS products include:

The Olerup SSP product line comprises products for low to high-resolution HLA typing.

The product line includes close to 170 different typing products.

We offer one of the most up-to-date and comprehensive libraries of HLA typing kits based on SSP technology.

Distributed NGS Kits for HLA Typing and Transplant Monitoring

Our distributed NGS products include:

AlloSeq Tx, a high-resolution HLA typing solution;

AlloSeq cfDNA, our surveillance solution designed to measure dd-cfDNA in blood to detect active rejection in transplant recipients;

AlloSeq cfDNA, our surveillance solution designed to measure dd-cfDNA in blood to detect injury and active rejection in transplant recipients;

and AlloSeq HCT, an NGS solution for chimerism testing for stem cell transplant recipients.

We received CE mark authorization for AlloSeq cfDNA in January 2020.

Our ability to increase the clinical uptake for AlloSeq cfDNA will be a result of multiple factors, including local clinical education, customer lab technical proficiency and levels of country-specific reimbursement.

In September 2019, we launched AlloSeq Tx, the first of its kind NGS high-resolution HLA typing solution utilizing hybrid capture technology.

This technology enables the most comprehensive sequencing, covering more of the HLA genes than other solutions on the market and adding coverage of non-HLA genes that may impact transplant patient matching and management.

AlloSeq Tx is the first of its kind NGS high-resolution HLA typing solution utilizing hybrid capture technology.

This technology enables the most comprehensive sequencing, covering more of the HLA genes than other solutions on the market as well as non-HLA genes that may impact transplant patient matching and management.

AlloSeq Tx17 received CE mark authorization in May 2020.

In June 2020, we launched AlloSeq HCT, an NGS solution for chimerism testing for stem cell transplant recipients.

AlloSeq Tx9 is a high throughput version of AlloSeq Tx17 for HLA typing in high volume laboratories.

AlloSeq Tx9 received CE mark authorization in August 2022.

We received CE mark authorization for AlloSeq cfDNA in January 2020.

Clinical uptake for AlloSeq cfDNA will be a result of multiple factors, including product-specific evidence publications, local clinical education, customer lab technical proficiency, and levels of country-specific reimbursement.

AlloSeq HCT is an NGS solution for chimerism testing for stem cell transplant recipients.

This technology has the potential to provide better sensitivity and data analysis compared to current solutions on the market.

AlloSeq HCT received CE mark authorization in May 2022.

In May 2022, we commercially launched AlloSeq Tx9, a high throughput version of AlloSeq Tx17 for HLA typing in high volume laboratories.

AlloSeq Tx9 received CE mark authorization in August 2022.

In 2023, we continued to develop and progress our NGS product lines and software through exclusive and non-exclusive collaborations.

Patient and Digital Solutions

In 2019, we began providing digital solutions to transplant centers following the acquisitions of Ottr and XynManagement.

In May 2019, we acquired 100% of the outstanding common stock of Ottr.

Ottr was formed in 1993 and is a leading provider of transplant patient management software, or the Ottr software, which provides comprehensive solutions for transplant patient management.

The Ottr software enables integration with electronic medical records, or EMR, systems, including Cerner and Epic, providing patient surveillance management tools and outcomes data to transplant centers.

In August 2019, we acquired 100% of the outstanding common stock of XynManagement.

XynManagement provides two unique solutions, XynQAPI software, or XynQAPI, and XynCare.

XynQAPI simplifies transplant quality tracking and

Scientific Registry of Transplant Recipients reporting.

Our XynCare offering includes a team of transplant assistants who maintain regular contact with patients on the waitlist to help prepare for their transplant and maintain eligibility.

In September 2020, we launched AlloCare, a mobile app that provides a patient-centric resource for transplant recipients to manage medication adherence, coordinate with Patient Care Managers for AlloSure scheduling and measure health metrics.

In January 2021, we acquired TransChart.

TransChart provides EMR software to hospitals throughout the United States to care for patients who have or may need an organ transplant.

As part of our acquisition of TransChart in January 2021, we acquired Tx Access, a cloud-based service that allows nephrologists and dialysis centers to electronically submit referrals to transplant programs and closely follow and assist patients through the transplant waitlist process, and ultimately, through transplantation.

In June 2021, we acquired the Transplant Hero patient application.

The application helps patients manage their medications through alarms and interactive logging of medication events.

In June 2021, we entered into a strategic agreement, which was amended in April 2022, with OrganX to develop clinical decision support tools across the transplant patient journey.

Together, we and OrganX will develop advanced analytics that integrate AlloSure with large transplant databases to provide clinical data solutions.

This partnership delivers the next level of innovation by incorporating a variety of clinical inputs to create a universal composite scoring system.

In November 2021, we acquired MedActionPlan, a New Jersey-based provider of medication safety, medication adherence and patient education.

We provide a diverse portfolio of digital solutions to transplant centers including Ottr software, XynQAPI software, XynCare, AlloCare, AlloHome, TxAccess, MedAction Plan, The Transplant Pharmacy, or TTP, HLA Data Systems and MediGO.

Our Ottr software consists of two unique offerings, Ottr Organ and Ottr Cellular, which provide comprehensive solutions for transplant patient management and enable integration with electronic medical records, or EMR, systems, including Cerner and Epic, providing patient surveillance management tools and outcomes data to transplant centers.

Our XynQAPI software simplifies transplant quality tracking and Scientific Registry of Transplant Recipients reporting, and our XynCare offering includes a team of transplant assistants who maintain regular contact with patients on the waitlist to help prepare for their transplant and maintain eligibility.

AlloCare is a mobile app that provides a patient-centric resource for transplant recipients to manage medication adherence, coordinate with Patient Care Managers for AlloSure scheduling, and measure health metrics.

AlloHome is a remote patient monitoring solution designed to drive patient engagement and timely interventions for patients pre- and post-transplant.

TxAccess is a cloud-based service that allows nephrologists and dialysis centers to electronically submit referrals to transplant programs and closely follow and assist patients through the transplant waitlist process, and ultimately through transplantation.

MedActionPlan provides medication safety, medication adherence and patient education.

MedActionPlan is a leader in patient medication management for transplant patients and beyond.

In December 2021, we acquired TTP, a transplant focused pharmacy located in Mississippi.

Our HLA Data Systems software solutions, which include mTilda, VxMatch and VECTR, provide software and interoperability solutions for the histocompatibility and immunogenetics community.

Our MediGO solution provides access to donated organs by digitally transforming donation and transplantation workflows to increase organ utilization.

TTP consists of transplant-focused pharmacies located in Mississippi.

TTP provides individualized transplant pharmacy services for patients at multiple transplant centers located throughout the U.S.

In January 2023, we acquired HLA Data Systems, a Texas-based company that provides software and interoperability solutions for the histocompatibility and immunogenetics community.

HLA Data Systems is a leader in the laboratory information management industry for human leukocyte antigen laboratories.

In July 2023, we acquired MediGO, an organ transplant supply chain and logistics company.

MediGO provides access to donated organs by digitally transforming donation and transplantation workflows to increase organ utilization.

We were originally incorporated in Delaware in December 1998 under the name Hippocratic Engineering, Inc.

In April 1999, we changed our name to BioCardia, Inc., and in June 2002, we changed our name to Expression Diagnostics, Inc.

In July 2007, we changed our name to XDx, Inc.

and in March 2014, we changed our name to CareDx, Inc.

Our principal executive offices are located at 8000 Marina Boulevard, Brisbane, California and our telephone number is (415) 287-2300.

Our software solutions are currently used in over 170 transplant centers in the U.S.

As of December 31, 2023, substantially all of our revenues came from the United States and Europe, and substantially all of our assets and operations were located in the United States, Sweden and Australia.

We are organized and operate as a single reportable segment.

Refer to Note 15 of the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Limitations of Existing Approaches for Surveillance of Transplant Recipients

The care of organ transplant recipients is an intense and costly effort and requires life-long surveillance and management by highly specialized clinicians and other healthcare providers.

In 2020, the estimated average charges in the U.S.

for a heart transplant were $1.66 million and for a kidney transplant were $0.44 million for the period 30 days before the transplant and 180 days after the transplant.

The lifetime cost for transplant recipients varies significantly depending on each individual patient's circumstances.

Unsuccessful treatment of rejection can result in an additional transplant.

In the case of a kidney transplant, the median annual Medicare cost of care for a recipient whose kidney fails and is on dialysis is 500% more than the median annual cost of care for a recipient with a functioning transplant.

The historical standard for heart transplant surveillance has been the microscopic examination of heart tissue obtained through an invasive endomyocardial biopsy.

In the biopsy procedure, a catheter is inserted into the right internal jugular vein in the recipient’s neck and threaded into the right ventricle of the heart.

Four pieces of tissue are cut from the wall of the heart and sent to the laboratory for examination by a pathologist who uses a microscope to look for evidence of cellular rejection.

Limitations of biopsies include:

(i) the pathologist evaluations, which are subjective and dependent upon visual assessment and qualitative interpretation, (ii) tissue sampling errors, and (iii) the potential for procedure-related complications such as damage to the valve structures in the heart.

The typical schedule of biopsy surveillance may involve eight to ten biopsies within the first six months after transplant and up to fifteen biopsies within the first year post-transplant.

Because repeated biopsies can cause cumulative risk and trauma to the heart, the frequency of biopsy surveillance after one year is low, despite the fact that recipients would benefit from continued monitoring for rejection and management of their immunosuppressive drugs for the rest of their lives.

With less biopsy data collected after the first year post-transplant, clinicians have less information upon which to tailor immunosuppression treatment for their recipients.

The use of renal biopsies for surveillance of kidney transplants is similarly limited due to the costs and risks associated with the invasive procedure.

Therefore, the main clinical test of transplanted kidney surveillance is serum creatinine levels.

An increase in serum creatinine levels is an indicator of diminished kidney function, and although this test is widely used, changes in serum creatinine are nonspecific as to cause and not sensitive, as serum creatinine may only be detected after significant and irreversible renal function loss has occurred.

The prevention and treatment of rejection in heart and kidney transplant recipients is managed primarily through the use of immunosuppressive drugs.

Surveillance biopsies are infrequent after the first year because of procedural risks, discomfort, inconvenience, expense and the low rate of finding silent rejection.

As a result, clinicians have limited and infrequent information about an individual recipient’s risk of rejection over the months and years following transplant.

In the average recipient, the immune system gradually adapts to the organ graft, and the need for immunosuppression declines over time.

However, there is meaningful variation in the level of rejection activity and need for immunosuppression among transplant recipients.

Limited insight into the immune status of the individual recipient often causes clinicians to adopt a “one-size-fits-all” approach to immunosuppression to help protect against the severe consequences of rejection.

Although typical doses of immunosuppressants result in a low rate of rejection in the transplant population as a whole, many individuals may receive more intense immunosuppressants than they actually need.

The Need for a Better Surveillance Solution

Improved post-transplant diagnostics are necessary to achieve further gains in the long-term care and health outcomes of heart, kidney and other organ transplant recipients.

More effective solutions for the surveillance and risk assessment of recipients would improve the clinician’s ability to individualize immunosuppression therapy and to reduce the use of invasive biopsies.

We believe that core elements of effective surveillance solutions include:

• highly accurate and quantitative results differentiating rejection from non-rejection status;

• non-invasive procedures that do not create risks to the recipient;

• ease of implementation;

• earlier detection of rejection;

• the ability to provide results with timing and at a frequency that allows for informed and effective treatment decisions.

Clinical Studies for our Testing Services

In March 2017, the Journal of the American Society of Nephrology published the article Cell-Free DNA and Active Rejection in Kidney Allografts .

The article reported that increased levels of dd-cfDNA detected using AlloSure Kidney are associated with active rejection of the kidney allograft.

The data for this article came from the Diagnosing Acute Rejection in Kidney Transplant Recipients, or DART, study sponsored by CareDx.

Evidence from this study suggests that AlloSure Kidney, a non-invasive blood test, may enable more frequent, quantitative, and safer assessment of allograft rejection and injury.

As part of a surveillance strategy, AlloSure Kidney can help identify patients with new or ongoing organ injury.

In the DART study, to investigate the use of AlloSure Kidney as a surveillance tool, the investigators prospectively collected blood specimens from renal transplant patients at scheduled intervals and at the time of clinically indicated biopsies.

Key findings of the study were as follows:

• AlloSure Kidney provides clear stratification of patients for probability of rejection;

• Active rejection patients showed median AlloSure Kidney levels at 1.6%;

• Antibody-mediated rejection, or ABMR, patients showed median AlloSure Kidney levels at 2.9%;

• Non-rejection patients showed median AlloSure Kidney levels of 0.21%;

• AlloSure Kidney was superior to serum creatinine in identifying which patients had active rejection.

This was the first report to establish clinical performance characteristics for dd-cfDNA in renal transplant patients with an analytically validated assay of dd-cfDNA in a large, multicenter observational study of dd-cfDNA.

This progress was made possible by collaboration with 14 major renal transplant centers and their patients who volunteered to participate in the study.

A publication in the Journal of Applied Laboratory Medicine in March 2017 described the biological variation and clinical reference intervals of dd-cfDNA in stable healthy renal transplant recipients.

These results indicated levels and amount of change in dd-cfDNA that would not be likely associated with stable kidney transplant recipients.

In January 2018, we initiated the "K-OAR" study to develop additional data on the clinical utility of AlloSure Kidney for surveillance of kidney transplant recipients.

Publications based on the analyses of the accumulated DART database results were used as a guide to design K-OAR.

K-OAR is a multicenter, non-blinded, prospective observational cohort study which has enrolled more than 1,900 renal transplant recipients who received AlloSure Kidney as part of long-term surveillance.

The clinical outcomes of these patients were entered into a registry database as the patients were surveilled for three years.

The study cohort was designed to include a minimum of 300 patients from centers that use renal surveillance biopsies to show the value of AlloSure Kidney in subclinical rejection.

The remaining patients were to be from centers that had not performed protocol surveillance biopsies prior to K-OAR, but for cause biopsies, which is the more common practice.

A prospective propensity matched control cohort from up to 2,000 patients will be retrospectively analyzed from the subset of centers to show the value of AlloSure Kidney compared to its non-use.

The primary safety endpoint of this study is the amount of kidney tissue scarring and atrophy at one-year post-transplant, quantified by biopsy-based histopathology grade(s).

The primary efficacy endpoint is the change in estimated glomerular filtration rate, or eGFR, with the number of renal allograft biopsies performed during the first year being a secondary outcome.

Other endpoints include patient survival, graft survival, change and serum creatinine, evaluated at years 1, 2 and 3 post-transplantation.

In September 2019, we announced the commencement of the “OKRA” study, which is an extension of K-OAR.

OKRA is a prospective, multi-center, observational registry of patients receiving KidneyCare for surveillance.

KidneyCare combines the dd-cfDNA analysis of AlloSure Kidney with the gene expression profiling technology of AlloMap Kidney and the prognostic artificial intelligence technology of iBox for a multimodality surveillance solution.

We have yet to submit any applications to private payers for reimbursement coverage of KidneyCare.

In December 2021, Kidney International published the article Clinical outcomes from the Assessing AlloSure Dd-cfDNA Monitoring Insights of Renal Allografts With Longitudinal Surveillance (ADMIRAL).

The article reports that increased levels of dd-cfDNA detected using AlloSure Kidney are associated with active rejection of the kidney allograft.

ADMIRAL supports the work of DART further clinically validating the utility in a cohort of 1,092 patients.

The high-level summary of the manuscript shows:

• Use in both subclinical and clinical rejection:

Elevated AlloSure (≥ 0.5%) strongly correlated with clinical and subclinical allograft rejection (p<0.001);

• Predictor of de novo donor-specific antibody (dnDSA):

AlloSure associated with a 271% increased risk of development of dnDSA (p=0.001);

• AlloSure as a leading indicator:

AlloSure was elevated 91 days (median) ahead of donor-specific antibody identification;

• AlloSure is superior to serum creatinine (AUC of 80% v 49%, respectively);

• Identifies eGFR decline:

Persistently elevated AlloSure (>1 result above 0.5%) predicted a > 25% decline in eGFR over 3 years (HR 1.97, p=0.041), while persistently low levels identify allograft quiescence;

• AlloSure d ifferentiates rejections that are going to cause long-term damage vs short-term rejection, which has treatment implications:

oral outpatient treatment vs inpatient, expensive and potentially harmful therapies.

The clinical validation and utility of AlloMap Heart is supported by a number of major clinical trials involving more than 2,000 heart transplant recipients and published in leading peer-reviewed medical journals.

Our trials are designed to evaluate the clinical utility of our solutions and are an integral part of our business strategy, clinical development and marketing programs.

In heart transplantation, two major observational trials, CARGO and CARGO II, enabled the initial development, validation and further validation of AlloMap Heart to detect and monitor acute cellular rejection in heart transplant recipients.

In addition to preserving blood samples and clinical data from these two trials, we have sponsored a multi-year, 34-center registry named OAR, which focused on long-term outcomes of patients.

These repositories contain over 37,000 samples obtained from individual recipients who were typically followed for 10 serial visits and over one year or more, and who in many cases have associated biopsy-based rejection grades and other clinical outcome endpoints.

We believe this extensive biorepository and database will be useful for new product development derived from analyses, correlative studies and validation efforts.

Additional clinical utility trials, including IMAGE and the Early Invasive Monitoring Attenuation through Gene Expression , or EIMAGE, have demonstrated that clinical outcomes in recipients managed with AlloMap Heart surveillance were equivalent to outcomes in recipients managed with biopsies.

We have also published two reports of retrospective analyses from IMAGE and CARGO II trials that demonstrate that the variability in AlloMap Heart scores over time in an individual patient may be useful in predicting the risk for the patient of a future event of rejection and graft dysfunction.

In September 2018, we initiated SHORE.

SHORE is a prospective, multi-center, observational registry of patients receiving HeartCare for surveillance.

HeartCare combines the gene expression profiling technology of Al loMap Heart with the dd-cfDNA analysis of AlloSure ® Heart in one surveillance solution.

The ALAMO multicenter observational study is enrolling towards a 500-patient target following initiation in December 2021.

The study focuses on surveillance in lung transplant recipients within the first year post-transplant.

Beyond demonstrating the clinical validity of AlloSure in detecting Acute Lung Allograft Dysfunction, a composite outcome of acute rejection and clinically meaningful infections, the study explores its clinical utility by capturing clinician decision-making processes to further demonstrate the practical clinical application of AlloSure.

In addition, the study will collect samples to enable development of AlloMap Lung.

Our s uite of AlloSeq products are commercial “NGS”-based kitted solutions.

These products include:

AlloSeq ™ Tx, a high-resolution “HLA” typing solution;

AlloSeq ™ cfDNA, a surveillance solution designed to measure dd-cfDNA in blood to detect active rejection in transplant recipients;

and AlloSeq ™ HCT, a solution for chimerism testing for stem cell transplant recipients.

Our ot her HLA typing products include:

Olerup SSP, based on the “SSP” technology;

and QTYPE, which uses real-time “PCR” methodology to perform HLA typing.

QTYPE was commercially launched at the end of September 2016.

QTYPE enables HLA typing at a low to intermediate resolution for samples that require a fast turnaround time and uses real-time PCR methodology.

QTYPE primarily focuses on low to intermediate resolution typing where high-resolution typing is not a requirement but even more rapid typing results are required, such as for deceased donor typing.

Typing with QTYPE requires approximately one hour compared to the up to 2-3 hours that it takes to do traditional SSP typing and the 5-7 hours that it takes with sequence-specific oligonucleotides, or SSO.

Olerup SSP is used to type HLA alleles based on the SSP technology.

The Olerup SSP product line comprises products for low to high-resolution HLA typing.

The product line includes close to 150 different typing products.

We offer one of the most up-to-date and comprehensive libraries of HLA typing kits based on SSP technology.

TruSight HLA was discontinued in December 2021 and we have progressively converted existing customers to AlloSeq.

In addition, we were granted the exclusive right to develop and commercialize other NGS product lines in the field of bone marrow and solid organ transplantation on diagnostic testing.

These products include:

AlloSeq Tx, a high-resolution HLA typing solution;

AlloSeq cfDNA, our surveillance solution designed to measure dd-cfDNA in blood to detect active rejection in transplant recipients;

and AlloSeq HCT, an NGS solution for chimerism testing for stem cell transplant recipients.

Our AlloSeq products are designed to run on Illumina’s NGS instrumentation.

Research and Development

Our research and development activities focus on developing cutting-edge organ transplant surveillance solutions, further expanding on our pre-transplant matching solutions and seeking to continuously explore and develop new clinically relevant approaches to our products.

Clinical operations dedicated to the design and implementation of high quality studies and registries for data collection to develop evidence to address unmet clinical needs of transplant recipients are included in research and development.

One area of focus for research and development activities has been to integrate acquired technology from the acquisitions of Ottr, XynManagement, TransChart, MedActionPlan, HLA Data Systems and MediGO, and pursuant to our license and collaboration agreements with OrganX and with a private entity.

Integration of such technology with our current service offerings aligns a rich data set with augmented intelligence tools to better assess risk and help physicians better manage their daily patient care.

Research and development expenses of $81.9 million, $90.4 million and $76.5 million were incurred during the years ended December 31, 2023, 2022 and 2021, respectively.

Our ongoing efforts include:

• increasing understanding of biological processes of transplant rejection through analysis of immune system gene expression and dd-cfDNA in ongoing clinical trials such as K-OAR and OKRA, and commercial laboratory testing to further improve clinical utility of AlloSure Kidney and KidneyCare;

• validation and clinical utility studies of AlloSure for other organs such as pancreas and liver;

• increasing understanding of biological processes of transplant rejection through analysis of genes/metagenes in archived and ongoing clinical trials, OAR registry, SHORE registry and commercial laboratory testing to further improve clinical utility of AlloMap Heart, AlloSure Heart and HeartCare;

• technology platform and procedure optimization as well as further advances of laboratory information management to increase efficiency and lower costs in our testing and laboratory operations;

• validation and clinical utility studies of dd-cfDNA reagents and software distributed outside the United States;

• developing solutions for monitoring the success of hematopoietic stem cell transplantation;

• developing solutions to identify allograft rejection in transplant biopsy tissue;

• further development of QTYPE to expand its addressable market by including additional genetic content;

• further development of NGS product lines such as AlloSeq Tx, AlloSeq cfDNA and AlloSeq HCT;

• merging and analyzing internal and public clinical data sets to better understand factors that impact short- and long-term outcomes;

• designing a multi-stakeholder transplant innovation ecosystem to accelerate improved patient management;

• integrating real world data to confirm and extend results from other clinical data sets;

• developing and deploying smart analytics and machine learning artificial intelligence that provide clinical utility with respect to patient health;

• developing solutions for assessment of infection in transplant recipients.

Testing Services Advancement and Development

Our research and development efforts are not limited to specific technology platforms, biomarkers or methodologies.

Instead, we aim to leverage current and future innovations in biomarker identification and measurement, study design and data integration in developing future solutions.

dd-cfDNA for Kidney Transplants

Our published DART and Assessing AlloSure Dd-cfDNA Monitoring Insights of Renal Allografts With Longitudinal Surveillance (ADMIRAL) clinical studies have established the clinical validity of AlloSure Kidney for kidney transplant patients.

DART was the first report to establish clinical performance characteristics for dd-cfDNA in renal transplant patients and was based on a prospective, multicenter observational study.

Elevations in AlloSure Kidney were found to be strongly correlated with active rejection, especially with ABMR.

The K-OAR study is the next step in developing data to support the clinical utility of AlloSure Kidney.

K-OAR commenced in January 2018 and is a post-transplant clinical outcomes study in approximately 1,900 patients managed with AlloSure Kidney surveillance compared to a contemporary control group managed without AlloSure Kidney.

OKRA is a multicenter, prospective, observational registry, designed to measure outcomes of kidney transplant recipients managed with KidneyCare.

KidneyCare complements AlloSure Kidney by including multimodality testing with the addition of AlloMap Kidney Gene Expression Profiling and prognostic graft assessment using iBox.

OKRA targets more than 50 transplant centers and will enroll over 1,500 newly transplanted patients.

The ADMIRAL article reports that increased levels of dd-cfDNA detected using AlloSure Kidney are associated with allograft rejection.

The long-term utility shown in a cohort of 1,092 patients supports the work of all of the publications prior to this.

Data from the 1,092 kidney transplant recipients monitored for dd-cfDNA over a three-year period was analyzed to assess the association of dd-cfDNA with histologic evidence of allograft rejection.

Elevation of dd-cfDNA was significantly correlated with clinical and subclinical allograft rejection.

dd-cfDNA values of 0.5% or more were associated with a nearly three-fold increase in risk of development of de novo donor-specific antibodies and were determined to be elevated a median of 91 days ahead of donor specific antibody identification.

Persistently elevated dd-cfDNA (more than one result above 0.5%) predicted over a 25% decline in the estimated glomerular filtration rate over three years (hazard ratio 1.97).

Therefore, routine monitoring of dd-cfDNA allowed early identification of clinically important graft injury.

Biomarker monitoring complemented histology and traditional laboratory surveillance strategies as a prognostic marker and risk-stratification tool post-transplant.

AlloMap Kidney Gene Expression Tool

The AlloMap Kidney test is a gene expression profile that quantifies immune quiescence in kidney transplant patients.

AlloMap Kidney has exhibited robust performance characteristics with an accuracy correlation coefficient of 0.997 and a precision coefficient of variation of 0.049 across testing.

Clinical validation using samples from prospective, multi-center studies demonstrated a sensitivity of 70% and specificity of 66% for allograft rejection, while the negative predictive value to AlloSure Kidney was 95% to discriminate rejection from quiescence at 10% prevalence of rejection.

Two publications describe the performance of AlloMap Kidney:

Clinical Validation of an Immune Quiescence Gene Expression Signature in Kidney Transplantation in Kidney360 in 2021 and Validation of a gene expression signature to measure immune quiescence in kidney transplant recipients in the CLIA setting in Biomarkers in Medicine in 2022.

dd-cfDNA for Heart Transplants

AlloSure Heart dd-cfDNA provides additional value for heart patient monitoring in addition to AlloMap Heart.

The use of both together constitutes HeartCare.

Studies have reported that a higher percentage of dd-cfDNA in the bloodstream of patients is found with moderate or severe heart rejection compared to patients without rejection.

A dd-cfDNA solution such as AlloSure for the heart helps clinicians identify recipients with a higher probability of rejection and determine which patients warrant a subsequent biopsy, because the likelihood of detecting rejection in the biopsy specimen would be enhanced.

Accordingly, we offer HeartCare.

HeartCare combines the gene expression profiling technology of AlloMap Heart with the dd-cfDNA analysis of AlloSure Heart in one surveillance solution.

An approach to surveillance using HeartCare provides information from the two complementary measures:

(i) AlloMap Heart – a measure of immune activation;

and (ii) AlloSure Heart – which measures graft injury.

HeartCare provides complementary information about distinct biological processes, such as immune quiescence, active injury, ACR and AMR in heart transplant recipients.

We have established our proprietary strategy for quantification of donor specific dd-cfDNA and published a validation study of AlloSure Heart in 2019.

We offer AlloSure Heart as a laboratory-developed test for management of heart transplant recipients.

HeartCare is offered for clinical use and HeartCare is included as the primary studied test in our SHORE registry of dd-cfDNA in association with gene-expression profiling (AlloMap Heart) in heart transplant recipients.

The ISHLT guidelines published in 2023 note the growing adoption of dd-cfDNA testing among heart transplant recipients.

These guidelines advocate for lifelong surveillance of the transplanted heart for rejection and acknowledge the utility and evidence underlying the use of dd-cfDNA in surveillance for rejection in a framework of clinical surveillance.

The guidelines also speak to the use of multimodality testing using gene expression profiling and dd-cfDNA in the surveilling the transplanted heart for rejection.

In May 2020, we established a partnership with Veracyte, Inc., pursuant to which we have certain exclusive worldwide field rights to develop and commercialize products, such as HistoMap using the nCounter technology from NatoString.

In 2021, we entered into a collaboration with Arkana Laboratories, a leading kidney pathology laboratory, to develop HistoMap Kidney, a gene expression profiling, or GEP, solution to identify allograft rejection types in transplant biopsy tissue.

The partnership will combine our clinical and test development expertise with the deep biorepositories of Arkana.

The first article from this partnership was published in the journal Laboratory Investigation in 2023, Development and Validation of a Multi-Class Model Defining Molecular Archetypes of Kidney Transplant Rejection:

A Large Cohort Study of the Banff Human Organ Transplant Gene Expression Panel.

Product Advancement and Development

Our ongoing research and development for our lab products business is focused on kitted products for pre-transplant and post-transplant patient testing.

In the last decade, the ubiquity of sequencing has unveiled significant additional sequence diversity in the HLA region on chromosome 6 of the human genome.

While the clinical impact of some of the sequence diversity is unclear, many newly identified HLA alleles need to be integrated into ongoing updates of the QTYPE and AlloSeq Tx kits.

We also introduced AlloSeq Tx at the 2019 ASHI Annual Meeting and continue to improve the product.

We are developing further improved versions of NGS HLA testing that will provide full gene coverage while streamlining the laboratory workflow.

AlloSeq Tx is the first of its kind next-generation sequencing HLA typing solution, utilizing hybrid capture technology.

This technology enables the most comprehensive sequencing available, covering more of the HLA genes than current solutions and adding coverage of non-HLA genes that may impact transplant patient matching and patient management.

We expanded our market-leading portfolio of NGS transplantation offerings with the global launch of AlloSeq cfDNA and AlloSeq HCT.

These post-transplant surveillance products enable access to our dd-cfDNA technology to laboratories and patients outside the United States.

Updated versions of these tests were introduced in 2023.

Finally, our research and development staff are collaborating to advance the synergies of products across the pre- and post-transplant continuum.

Patient and Digital Solutions Business Development

We develop, deploy and promote a rational set of software tools and data-driven services that provide clinical utility with respect to medication adherence and overall patient health.

Our vision is to add smart analytics and machine learning to artificial intelligence in transplantation.

Going forward, we will strive to bring our multi-modality testing solutions and machine learning algorithms to the transplant clinic under our AiTraC umbrella.

AiTraC will utilize the large amounts of clinical data that are collected through our registry studies to provide caregivers with point of care decision-making support tools that allow them to stratify the patient population.

We acquired Ottr and XynManagement in 2019.

In 2021, we acquired TransChart, MedActionPlan and TTP.

In 2023, we acquired HLA Data Systems and MediGO.

These acquisitions have strengthened our growing portfolio of transplant software solutions across the transplant patients' journey.

We are committed to continue evolving these software programs, including medication adherence management, and further integrating them into transplant center electronic health record systems with the CareDx Pro Platform for a unified digital user experience.

Our testing service offerings will also be integrated via the CareDx Pro Platform to offer clinicians a great experience.

We are actively working on additional partnerships and patient-focused service offerings.

Reimbursement

We have been successful in achieving reimbursement for our testing services.

Reimbursement for AlloSure Kidney comes primarily from Medicare.

Reimbursement for AlloMap Heart comes primarily from Medicare and private third-party payers such as insurance companies and managed care organizations.

We are reimbursed by Medicare for AlloSure Kidney, AlloMap Heart, AlloSure Heart and AlloSure Lung tests performed on patients covered by Medicare.

We are reimbursed by Medicare for AlloSure Kidney, AlloMap Heart, AlloSure Heart, HeartCare and AlloSure Lung tests.

Tests performed on patients covered by Medicare represented 26%, 27% and 34% of all tests in 2024, 2023 and 2022, respectively.

Approximately 50%, 53% and 64% of all testing services revenue was derived from Medicare for the years ended December 31, 2024, 2023 and 2022, respectively.

AlloSure Kidney has been a covered service for Medicare beneficiaries since October 2017.

The Medicare reimbursement rate for AlloSure Kidney is currently $2,841.

AlloSure Kidney has received positive coverage decisions from several commercial payers, and is reimbursed by other private payers on a case-by-case basis.

On August 10, 2023, MolDX and Noridian released a draft proposed revision to the LCD (DL38568, Palmetto;

DL38629, Noridian) that, if adopted, would have revised the existing foundational LCD, MolDX:

Molecular Testing for Solid Organ Allograft Rejection (L38568 and L38629).

On August 16, 2024, the Centers for Medicare and Medicaid Services, or CMS, issued a press release entitled “MolDX Local Coverage Determination Statement,” announcing that after careful consideration of the feedback received from interested parties, as well as the public comments and further review of evidence, the MACs decided not to finalize the proposed LCD issued on August 10, 2023.

CMS further stated that due to the importance of identifying solid organ allograft rejection early and to ensure the public has additional opportunities to comment on the policy, the MACs intend to issue a new LCD in the coming months.

CMS stated that neither it nor the MACs have changed coverage for the blood tests that monitor for organ transplantation rejection when ordered by their physicians in medically appropriate circumstances, and explained that transplant patients would continue to have access to these blood tests, including:

when there are signs or symptoms of rejection;

after a physician-assessed pretest, including for surveillance testing;

after an indeterminate biopsy;

as a replacement for a biopsy when deemed clinically appropriate by the patient’s qualified physician;

and for evaluation of the adequacy of immunosuppression.

AlloMap Heart has been a covered service for Medicare beneficiaries since January 2006.

The Medicare reimbursement rate for AlloMap Heart is currently $3,240.

Al loMap Heart has also received positive coverage decisions for reimbursement from many of the largest U.S.

private payers.

AlloSure Heart has been a covered service for Medicare beneficiaries since December 2020.

In October 2020, we received a final MolDX Medicare coverage decision for AlloSure Heart.

Noridian issued a parallel coverage policy granting coverage for AlloSure Heart when used in conjunction with AlloMap Heart, which became effective in December 2020.

In 2021, Palmetto and Noridian issued coverage policies written by MolDX to replace the former product-specific policies.

The common policy LCD is titled “MolDX:

Molecular Testing for Solid Organ Allograft Rejection” and the associated LCD numbers are L38568 (MolDX) and L38629 (Noridian).

The Medicare reimbursement rate for AlloSure Heart is currently $2,753.

AlloSure Heart has received a positive coverage decision from Geisinger Health and is covered for use throughout Kaiser.

Effective May 9, 2023, AlloSure Lung is covered for Medicare beneficiaries.

The Medicare reimbursement rate for AlloSure L ung is $2,753.

Effective April 1, 2023, HeartCare, a multimodality testing service that includes both AlloMap Heart and AlloSure Heart provided in a single patient encounter for heart transplant surveillance, is covered for Medicare beneficiaries through the MolDX LCD (Noridian L38629).

The Medicare reimbursement rate for HeartCare is $5,993.

Effective May 9, 2023, AlloSure Lung is covered for Medicare beneficiaries through the MolDX LCD (Noridian L38629).

The Medicare reimbursement rate for AlloSure L ung is $2,753.

Private Payers and Medicaid Payers

Due to End Stage Renal Disease, or ESRD, regulations by Medicare, most ESRD patients are covered by Medicare and Medicare Advantage plans and have access to AlloSure Kidney.

Private payers that have adopted a positive coverage policy include BCBS payers as well as other national payers.

However, other private payers and Medicaid payers have not yet adopted positive coverage policies for AlloSure Kidney.

Private payers that have adopted a positive coverage policy include BCBS payers as well as other regional payers.

Most Medicaid payers have not yet adopted positive coverage policies for AlloSure Kidney.

AlloSure Heart and AlloSure Lung are covered by Medicare Advantage plans for beneficiaries who meet the coverage criteria.

AlloSure Heart and AlloSure Lung are covered by several commercial payers.

We are reimbursed for a substantial portion of the AlloMap Heart tests we perform on patients covered by private payers.

Coverage policies approving AlloMap Heart have approached nearly 90% of all covered lives and are published by many of the largest private payers, including several BCBS plans and UnitedHealthcare.

Many other payers have positive coverage policies for AlloMap Heart.

AlloSure Heart and AlloSure Kidney are covered by several commercial payers.

Coverage policies approving AlloMap Heart have approached nearly 90% of all covered lives and are published by many of the largest private payers, including Blue Cross Blue Shield, or BCBS payers as well as national payers.

For all tests performed outside the scope of the payer’s policy, and for tests performed where the payer has not adopted a coverage policy, we pursue reimbursement on a case-by-case basis.

If a reimbursement claim is denied, we generally pursue payment through the particular payer’s appeal process.

International

Our lab products have a broad international presence.

We sell directly to customers in many regions and also sell through third-party distributors and sub-distributors throughout Europe and the rest of the world.

Testing and Laboratory Operations

AlloSure Kidney, AlloSure Lung, AlloMap Heart and AlloSure Heart testing is performed in our clinical laboratory, which is located in our Brisbane, California location.

Testing Services Laboratory Operations

AlloSure Kidney, AlloMap Heart, AlloSure Heart, HeartCare and AlloSure Lung testing is performed in our clinical laboratory, which is located in our Brisbane, California location.

Our laboratory holds a certificate of accreditation under the Clinical Laboratory Improvement Amendments of 1988, or CLIA, and is accredited by the College of American Pathologists, or CAP.

We believe that our laboratory capacity will be adequate to meet demand for AlloSure Kidney, AlloSure Lung, AlloMap Heart, AlloSure Heart and other tests in the development pipeline for the next few years.

When a clinician orders AlloMap Heart, a blood sample is drawn and processed and sent via overnight courier to our laboratory.

The test results are typically reported to the ordering clinician within two business days of receipt of the sample.

Test samples that fail to meet quality control criteria are immediately re-tested and the ordering clinician is notified of the need to re-test if turnaround time will be affected.

We believe that our laboratory capacity will be adequate to meet demand for AlloSure Kidney, AlloMap Heart and AlloSure Heart, HeartCare and AlloSure Lung and other tests in the development pipeline for the next few years.

There are two types of samples received at the laboratory.

When AlloSure Kidney, AlloSure Heart or AlloSure Lung is ordered by a clinician, a blood sample is drawn and sent overnight to our laboratory.

Results are typically reported to the ordering clinician by fax or electronically via EMR or WebPortal within two business days of receipt of the sample.

Test samples that fail to meet quality control criteria are immediately re-tested and the ordering clinician is notified of the need to re-test if turnaround time will be affected.

We rely solely on certain suppliers to provide some of the laboratory instruments and key reagents that we use to perform AlloSure Kidney, AlloSure Lung, AlloMap Heart, and AlloSure Heart testing.

When a clinician orders AlloMap Heart, a blood sample is drawn, processed, and then sent via overnight courier to our laboratory.

Regardless of the test requested, the test results are typically reported to the ordering clinician within two business days from receipt of the sample.

Test samples that fail to meet quality control criteria and have enough remaining material are re-tested on the next available batch of samples, which may extend the turnaround time.

We rely solely on certain suppliers to provide some of the laboratory instruments and key reagents that we use to perform AlloSure Kidney, AlloMap Heart, AlloSure Heart, HeartCare and AlloSure Lung testing.

These sole source suppliers include Thermo Fisher Scientific, Inc., or Thermo Fisher, which supplies us with instruments, laboratory reagents and consumables;

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and Qiagen N.V., which supplies us with a proprietary buffer reagent.

Manufacturing

Lab Products Manufacturing

We have historically purchased many of the components and raw materials used in our product kits from numerous suppliers worldwide.

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Our manufacturing facility in Stockholm, Sweden is used to support the production, packaging and labeling of our proprietary test kits:

Olerup SSP and QTYPE.

Olerup SSP, QTYPE, AlloSeq cfDNA and HCT.

The facility has a certified Quality Management System, or QMS, to the ISO 13485:

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Annual surveillance audits are also conducted by the site’s notified body to ensure ongoing compliance.

Additionally, we seek to manufacture to current Good Manufacturing Practice requirements and our QMS is implemented in accordance with FDA Quality System Regulations.

Our manufacturing facility in Fremantle, Australia, is used to support the production, packaging and labeling of our proprietary AlloSeq brand kits.

The facility maintains a valid EC certificate for compliance to Directive 98/79/EC Annex IV, excluding Sections 4 and 6, Full Quality Assurance System In Vitro Diagnostic Medical Devices, and is certified to standards ISO 13485:

2016 and the Canadian Medical Devices Conformity Assessment System, or CMDCAS, for Medical Devices, undergoing the same certification and surveillance audit requirements.

In 2023, we added contract manufacturing in the U.S.

and Europe to our global manufacturing capabilities to support our growth.

Additionally, we seek to manufacture to current Good Manufacturing Practice requirements and our QMS is implemented in accordance with FDA Quality System Regulations.

Our manufacturing facility in Fremantle, Australia, was used to support the production, packaging and labeling of our proprietary AlloSeq brand kits.

In 2024, we decided to migrate manufacturing from Australia to the U.S.

Sales and Marketing

Testing Services Sales and Marketing Team

We have a direct field team in the United States that interacts with all aspects of the testing services channel, including sales, marketing, medical science liaison, managed care, and patient care management representatives.

Our marketing strategy focuses on the clinical benefits of AlloSure Kidney, AlloSure Lung, AlloSure Heart and AlloMap Heart, and the scientific validation that supports our tests.

Our strategy includes education to clinicians and the care team at transplant centers, assistance with scheduling ordered tests for patients, and working with centers to adopt formal protocols.

Product Sales and Marketing Team

The product business has sales offices in Stockholm, Sweden;

West Chester, Pennsylvania, United States;

and Fremantle, Australia, which manage direct sales to customers and sales through third-party distributors.

Patient and Digital Solutions Sales and Marketing Team

Our sales teams are located in the United States.

They manage customer sales for Ottr software, XynQAPI, Tx Access and MedActionPlan software.

Our strategy includes educating clinicians and care teams at transplant centers through software demos.

Our marketing team supporting the product marketing for Ottr, XynQAPI, AlloCare and other digital offerings is based in Brisbane, California.

Our pharmacy sales support team is located in Flowood, Mississippi.

We have organized our commercial sales and marketing teams to be customer-centric in a functional structure that is intended to unlock the potential of our synergistic portfolio of solutions and deliver the best experience for clinicians, patients, and administrators.

In the U.S., the organization and delivery of healthcare, including for transplantation, is highly local.

To first and foremost empower local teams to devise effective tactical strategies for selling our solutions into each transplant center, we have created a regional structure.

Each region consists of multiple territory account managers responsible for specific transplant centers.

Each region is also supported by the dedicated expertise of individuals that specialize in our digital products, lab products, and clinical experts in medical science liaisons.

This model establishes accountability at the transplant center and regional level for the total revenue generated from our transplant solutions.

The territory account manager serves as the primary point of contact for each transplant center and has a deep understanding the center’s transplant program objectives.

And by deeply understand each center’s objectives we are able to deploy the right resources and solutions to support our customers.

Outside of the U.S.

we similarly have regional structure that includes country managers in Western Europe, and distributors we work with outside of Western Europe to service the needs of our transplant center customers globally.

With our comprehensive portfolio of surveillance testing services, diagnostic products and patient and digital solutions business offerings, we face many different types of competition.

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Our competitors also include companies that are focused on the development and commercialization of molecular diagnostic tests.

In the field of post-transplant surveillance, Natera Inc., or Natera, and Eurofins Transplant Genomics, Inc., or Eurofins, and Oncocyte Inc., or Oncocyte, have commercially available molecular diagnostics tests .

We expect the competition for post-transplant surveillance to increase as there are several established and early-stage companies in the process of developing products and services for the transplant market that may directly or indirectly compete with AlloSure Kidney, AlloSure Lung, AlloMap Heart, AlloSure Heart or our development pipeline.

In the field of post-transplant surveillance, Natera, Inc., or Natera, and Eurofins Transplant Genomics, Inc., or Eurofins, Devyser Diagnostics AB, or Devyser, and Oncocyte Corporation, or Oncocyte, have commercially available molecular diagnostics tests .

We expect the competition for post-transplant surveillance to increase as there are several established and early-stage companies in the process of developing products and services for the transplant market that may directly or indirectly compete with AlloSure Kidney, AlloMap Heart, AlloSure Heart, HeartCare, AlloSure Lung, or our development pipeline.

In addition, companies that have not historically focused on transplantation, but have knowledge of dd-cfDNA technology, have indicated they are considering this market.

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We also face competition from hospital and commercial reference labs that develop their own in-house testing solutions.

We believe that our product line competes favorably with Thermo Fisher as a leading supplier of HLA test kits based on performance, reputation and service.

believe that our product line competes favorably with Thermo Fisher as a leading supplier of HLA test kits based on performance, reputation and service.

We expect future competition for post-transplant surveillance kitted solutions for AlloSeq cfDNA and AlloSeq HCT.

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Patient and Digital Solutions

Our competition for patient solutions includes hospital-affiliated pharmacies located on-site at the transplant center and specialty pharmacies that provide transplant-specific care and dispensing services.

Competition for our digital solutions includes various companies that develop application software and operate in the healthcare field.

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In addition, other established and emerging healthcare, information technology and service companies may commercialize competitive products, including informatics, analysis, integrated genetic tools and services for health and wellness.

Competition for patient pharmacy solutions includes hospital-affiliated pharmacies located on-site at the transplant center and specialty pharmacies that provide transplant-specific care and dispensing services.

Intellectual Property

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We generally protect this information with confidentiality agreements and reasonable security measures.

As of December 31, 2023, we had 10 issued U.S.

patents related to transplant rejection and autoimmunity.

Among those, we have one issued U.S.

patent covering methods of diagnosing transplant rejection using all 11 informative genes measured in AlloMap Heart, which will expire in March 2024.

We have four additional patents covering additional genes or gene variants for diagnosing transplant rejection or autoimmune disease, which will expire between April 2024 and September 2029.

As of December 31, 2024, we had seven U.S.

patents related to diagnosing transplant rejection and autoimmune disease, which will expire between October 2025 and May 2035.

In addition, we had three U.S.

patents related to organ function recovery and allograft preservation, which will expire between July 2038 and June 2041.

We have developed trade secrets and know-how since our inception.

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We may in the future rely, at least in part, upon licensing agreements with third parties to obtain patent rights and transfers of technology, information and know-how that enable us to further our development of additional solutions for post-transplant surveillance.

Of the 10 existing U.S.

patents related to transplant rejection and autoimmunity, four are the product of an exclusive licensing agreement.

In May 2018, we entered into the License Agreement with Illumina, which provides us with worldwide distribution, development and commercialization rights to Illumina’s next generation sequencing product line for use in transplantation diagnostic testing.

Six issued patents for HLA genotyping are licensed as part of this agreement.

In April 2020, we entered into a license agreement with Cornell University pursuant to which we were granted exclusive rights to four patents covering methods and technology for measurement of gene expression in urine to diagnose kidney transplant rejection.

Of the seven existing U.S.

patents related to transplant rejection and autoimmunity, four are exclusively licensed.

In May 2018, we entered into a license and commercialization agreement with Illumina, which provides us with worldwide distribution, development and commercialization rights to Illumina’s next generation sequencing product line for use in transplantation diagnostic testing.

Six issued U.S.

patents for HLA genotyping are licensed as part of this agreement.

In April 2020, we entered into a license agreement with Cornell University pursuant to which we were granted exclusive rights to four U.S.

patents covering methods and technology for the measurement of gene expression in urine to diagnose kidney transplant rejection.

In June 2021, we entered into a strategic agreement, which was amended in April 2022, with OrganX to develop clinical decision support tools across the transplant patient journey.

Together, we and OrganX will develop advanced analytics that integrate AlloSure with large transplant databases to provide clinical data solutions.

Together, we and OrganX are developing advanced analytics that integrate AlloSure testing with large transplant databases to provide clinical data solutions.

This partnership delivers the next level of innovation by incorporating a variety of clinical inputs to create a universal composite scoring system.

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These laws and regulations include regulations particular to our business and laws and regulations relating to conducting business generally (e.g., U.S.

Foreign Corrupt Practices Act, Sarbanes-Oxley Act, and similar laws of other jurisdictions).

Foreign Corrupt Practices Act, Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and similar laws of other jurisdictions).

We also are subject to inspections and audits by governmental agencies.

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Having a clinical laboratory in California, we are required to hold certain federal, state and local licenses, certifications and permits to conduct our business.

Under the CLIA, administered by CMS, we are required to hold a certificate applicable to the type of work we perform and to comply with standards covering personnel, facilities administration, quality systems, proficiency testing and performance.

Under the CLIA, administered by the Centers for Medical and Medicaid Services (CMS), we are required to hold a certificate applicable to the type of work we perform and to comply with standards covering personnel, facilities administration, quality systems, proficiency testing and performance.

Most clinical laboratories are subject to regulation under the CLIA, which is designed to ensure that laboratory testing services performed on materials derived from the human body are accurate and reliable.

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Laboratories performing high complexity testing are required to meet more stringent personnel and quality system requirements than laboratories performing less complex tests.

To renew our CLIA certificate, we are subject to survey and inspection every two years to assess compliance with program standards.

We were inspected as part of the customary College of American Pathologists audit and recertified in March 2022 as a result of passing that inspection.

To renew our CLIA certificate, we are subject to inspection every two years to assess compliance with program standards.

We were inspected as part of the customary College of American Pathologists audit and recertified in 2024 as a result of passing that inspection.

We expect the next regular inspection under the CLIA to occur in 2026.

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In addition, California laws mandate proficiency testing, which involves testing of specimens that have been specifically prepared for the laboratory.

We are required to maintain compliance with California standards as a condition to continued operation of our laboratory in California.

We are required to maintain compliance with California standards as a condition to continue operation of our laboratory in California.

Other States’ Laboratory Testing

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The FDA has also asserted that it has the authority to regulate laboratory-developed tests, or LDTs, as medical devices under the FFDCA.

An LDT is a test developed by a single laboratory for use only in that laboratory, such as our testing services, AlloMap Heart, AlloSure Kidney, AlloSure Lung and AlloSure Heart.

An LDT is a test developed by a single laboratory for use only in that laboratory, such as our testing services, AlloSure Kidney, AlloMap Heart, AlloSure Heart, HeartCare and AlloSure Lung.

The FDA has traditionally chosen not to exercise its authority to regulate LDTs because it regulates the primary components in most laboratory-developed tests and because laboratories, such as ours, certified as high complexity under the CLIA are regulated and reviewed by CMS to ensure that lab expertise and test procedures and correct analyses are followed.

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In connection with this, the FDA proposed a rule that would amend its regulations to make explicit that in vitro diagnostic products are devices under the Federal Food, Drug and Cosmetic Act.

There is no assurance whether, or when, this proposed policy and/or rule will be adopted or as to the content of any policies or rules eventually adopted.

Any future rulemaking, guidance, or other oversight of LDTs and clinical laboratories that develop and perform them, if and when finalized, may affect the sales of our products and how customers use our products, and may require us to change our business model in order to maintain compliance with these laws.

A similar situation may occur if Congress decides to enable newly proposed regulations, such as the updated Verifying Accurate Leading-edge IVCT Development Act of 2021.

There is no assurance whether, or when, this proposed policy and/or rule will be adopted or as to the content of any policies or rule that may eventually be adopted.

For AlloSure Kidney and other similar testing solutions, if required by the FDA or if new laws are enacted, we may be required to conduct additional analytical studies and clinical trials to demonstrate clinical validity and safety and effectiveness of our tests, and submit to the FDA a premarket approval application, or PMA, or 510(k) premarket notification application.

We would need to obtain FDA approval or clearance for any existing tests currently offered as LDTs, and subsequent to commercialization of any new tests.

There can be no assurance that any of our tests or additional uses of our tests for which we seek clearance or approval in the future will be cleared or approved on a timely basis, or at all, and there can be no assurance that labeling claims will be consistent with our current claims or adequate to support continued adoption of and reimbursement for our current and future tests.

Moreover, any new FDA or regulatory requirements could complicate our compliance efforts.

Health Insurance Portability and Accountability Act

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Finally, other states have self-referral restrictions with which we have to comply that differ from those imposed by federal and California law.

Federal and State Fraud and Abuse and Privacy Laws

Federal and State Fraud, Abuse and Privacy Laws

Because of the significant federal funding involved in Medicare and Medicaid, Congress and the states have enacted, and actively enforce, a number of laws to eliminate fraud and abuse in federal healthcare programs and across the healthcare system.

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In March 2010, the Patient Protection and Affordable Care Act, as amended by the Healthcare and Education Affordability Reconciliation Act, or collectively, the Affordable Care Act, was enacted in the United States.

The Affordable Care Act expands the government’s investigative and enforcement authority and increases the penalties for fraud and abuse, including amendments to both the Anti-Kickback Statute and the False Claims Act, to make it easier to bring suit under these statutes.

The Affordable Care Act also allocates additional resources and tools for the government to police healthcare fraud, with expanded subpoena power for HHS, additional funding to investigate fraud and abuse across the healthcare system and expanded use of recovery audit contractors for enforcement.

There have previously been public announcements by members of the U.S.

Congress regarding their plans to repeal and replace the Affordable Care Act, and the Biden administration has announced plans to expand federal healthcare programs, such as Medicare and Medicaid.

There have previously been public announcements by President Trump and members of the U.S.

Congress regarding their plans to repeal and replace the Affordable Care Act.

We cannot predict whether future healthcare initiatives, including at the federal level, will be initiated or the effect any such initiatives could have on our business, financial condition or results of operations.

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Anti-Kickback Statutes

The federal healthcare programs’ Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, offering, receiving or paying any remuneration, directly or indirectly, overtly or covertly, in cash or in kind in return for referring an individual for the furnishing of or arranging for the furnishing of any good or service, for which payment may be made under a federal healthcare program, such as Medicare or Medicaid, or the purchasing, leasing, ordering or arranging for or recommending purchasing, leasing, or ordering any good, facility, services, or item payable under such programs.

The definition of “remuneration” has been broadly interpreted to include anything of value, including, for example, gifts, certain discounts, the furnishing of free supplies, equipment or services, credit arrangements, payment of cash and waivers of payments.

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Penalties for violations include criminal penalties and civil sanctions such as fines, imprisonment and possible exclusion from Medicare, Medicaid and other federal healthcare programs.

Violations of the Anti-Kickback Statute also are actionable under the federal False Claims Act.

Violations of the Anti-Kickback Statute are also actionable under the federal False Claims Act.

Many states have adopted laws similar to the Anti-Kickback Statute.

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State Privacy Laws

state privacy laws, such as the California Consumer Privacy Act, or the CCPA, which took effect in January 2020, and was amended by the California Privacy Rights Act effective January 2023, secure new privacy rights for consumers and impose new obligations on us.

Other states have similarly adopted privacy laws which took effect in 2023, including Virginia, Colorado, Utah and Connecticut.

state privacy laws, such as the California Consumer Privacy Act, or the CCPA, which took effect in January 2020, and was amended by the California Privacy Rights Act, or the CPRA, effective January 2023, secure new privacy rights for consumers and impose new obligations on us.

Other states have similarly adopted privacy laws which took effect in 2023, including

Virginia, Colorado, Utah and Connecticut.

Additionally, Delaware, Indiana, Iowa, Montana, Oregon, Tennessee and Texas also adopted privacy laws, which take effect from July 1, 2024 through 2026.

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Laws and regulations outside of the United States also apply to our products.

The number and scope of these requirements continues to grow, and there can be no assurance that we will be able to maintain any approvals that may be required to market our pre-transplant line of products outside the United States.

Further, there may be significant expense and effort required to comply with these approvals for new products as they become ready for the commercial marketplace or for our existing products that we wish to sell abroad.

We currently produce products, which are CE labeled and subject to the In Vitro Diagnostic Medical Devices Directive (98/79/EC), or IVDD, a European Union, or EU, directive.

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No in vitro device or accessory may be placed on the market or put into service unless it satisfies the essential requirements set forth in the IVDD.

Devices considered to meet the essential requirements must bear the CE marking of conformity, placed by the manufacturer, when introduced on the market.

Devices considered to meet the essential requirements must bear the CE marking of conformity, placed by the manufacturer, when introduced to the market.

A manufacturer placing devices on the market in its name must notify its national competent authorities.

These CE labeled products are also falling under requirements of the In Vitro Diagnostic Regulation (2017/746) (IVDR).

The IVDR requirements are applied starting May 26, 2022.

The European Commission recently confirmed adoption of a proposal

for a progressive rollout of the IVDR to prevent disruption in the supply of in vitro diagnostic products to the market.

These CE-labeled products are also falling under the requirements of the In Vitro Diagnostic Regulation (2017/746) (IVDR).

The IVDR requirements were applied starting May 26, 2022.

The European Commission recently confirmed adoption of a proposal for a progressive rollout of the IVDR to prevent disruption in the supply of in vitro diagnostic products to the market.

The proposal does not change any requirements of the IVDR or the implementation date but changes the transitional provisions to allow a progressive rollout based on the risk level of the device.

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We offer our employees various training opportunities free of charge and during working hours.

For example, in 2022, we launched the LinkedIn

Learning platform, a learning library and repository for self-guided personal and professional learning opportunities for our employees.

In addition, we dedicated time on a quarterly basis for all employees to explore learning and development topics.

We call this Care4U Time.

For example, we use the LinkedIn Learning platform, a learning library and repository for self-guided personal and professional learning opportunities for our employees.

In addition, we believe it is important to have regular engagement with our employees to understand their needs.

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We have never experienced a work stoppage and believe that our relations with our employees are good.

We have a zero-tolerance policy for discrimination.

In 2021, we established a Diversity, Equity, and Inclusion committee to engage, retain and develop talent from diverse backgrounds by facilitating diversity, equity and inclusion advocacy through event sponsorship, learning and client engagement.

We have increased the diversity of our Board and leadership teams and continue to focus on maintaining a diverse organization.

See “ Risk Factors - General Risk Factors - Disputes with labor unions may adversely affect our ability to operate in our Sweden facility and may impact our financial results .”

We have a zero-tolerance policy for discrimination and have a Diversity, Equity, and Inclusion committee to engage, retain and develop talent from diverse backgrounds by facilitating diversity, equity and inclusion advocacy through event sponsorship, learning and client engagement.

We have increased the diversity of our Board of Directors and leadership teams and continue to focus on maintaining a diverse organization.

Our senior leadership team includes leaders with diverse skills, experience, racial backgrounds and genders.

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In addition, we look for ways to minimize our impact on the environment.

Our main buildings headquartered in California are energy efficiency certified and meet stringent San Francisco Bay Area requirements for environmental impact, and several of our offices are in new energy efficient buildings.

Our main buildings headquartered in California are energy efficiency certified and meet stringent San Francisco Bay Area requirements for environmental impact, and several of

our offices are in new energy efficient buildings.

Our offices also provide recycling and use low flow fixtures to conserve water, and we take additional measures to conserve energy through LED fixtures, light timers/sensors, and thermostat regulation.

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Information contained on, or that can be accessed through, our website is not part of this Annual Report on Form 10-K, and you should not consider information on our website to be part of this report unless specifically incorporated herein by reference.

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on our investor relations website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act, are available free of charge on our investor relations website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

The SEC also maintains a website that contains our SEC filings.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business