CareDx (CDNA) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01We have a history of losses, and we expect to incur net losses for the next several years
2. 02We receive a substantial portion of our revenues from Medicare, and the loss of, or a significant reduction in, reimbursement from Medicare would severely and adversely affect our financial performance27% rewritten
3. 03received a CPT code for our AlloSure Kidney, AlloSure Heart and AlloSure Lung tests (PLA Code 0540U), which subjects such tests to a repricing processNew
4. 04The Protecting Access to Medicare Act of 2014, or PAMA, included a substantial new payment system for clinical laboratory tests under the Clinical Laboratory Fee Schedule, or CLFS34% rewritten
5. 05Our financial results currently are largely dependent on sales of AlloSure Kidney, AlloMap Heart, AlloSure Heart, HeartCare and AlloSure Lung tests and products, and we will need to generate sufficient revenues from these and other solutions and tests we develop to grow our business24% rewritten
6. 06Health insurers and other third-party payers may decide to revoke coverage of our existing tests, decide not to cover our future solutions or may provide inadequate reimbursement, which could jeopardize our commercial prospects20% rewritten
7. 07The development and commercialization of additional diagnostic solutions are key to our growth strategy. New test or product development involves a lengthy and complex process, and we may not be successful in our efforts to develop and commercialize additional diagnostic solutions
8. 08The field of diagnostic testing in transplantation is evolving and is subject to rapid technological change. If we are unable to develop solutions to keep pace with rapid medical and scientific change, our operating results could be harmed
9. 09If clinicians, hospital administrators, medical centers and laboratories do not adopt our diagnostic solutions, we will not achieve future sales growth
10. 10Our quarterly operating results may fluctuate significantly or may fall below the expectations of investors or securities analysts, each of which may cause our stock price to fluctuate or decline
11. 11Transplant centers may not adopt AlloSure Kidney, AlloMap Heart, AlloSure Heart, HeartCare, AlloSure Lung or our other solutions due to historical practices or due to more favorable reimbursement policies associated with other means of monitoring transplants
12. 12If we are unable to successfully compete with established players in the clinical surveillance of the transplantation field, we may be unable to increase or sustain our revenues or achieve profitability25% rewritten
13. 13If we are unable to successfully and continually update our products on a timely basis, our ability to attract and retain customers could be impaired and our competitive position could be harmed
14. 14Our research and development efforts will be hindered if we are not able to acquire or contract with third parties for access to tissue and blood samples
15. 15If we cannot maintain existing clinical collaborations and enter into new ones, our efforts to commercialize and develop products could be delayed65% rewritten
16. 16If we are unable to successfully manage our growth and support demand for our tests, our business may suffer
17. 17Our past revenue growth rates may not be indicative of future growth, and we may not grow at all, and revenue may decline
18. 18If our laboratory facility in the United States becomes inoperable, we will be unable to perform AlloSure Kidney, AlloMap Heart, AlloSure Heart, HeartCare, AlloSure Lung and future testing solutions, if any, and our business will be harmed
19. 19Investors’ expectations of our performance relating to environmental, social and governance factors may impose additional costs and expose us to new risks41% rewritten
20. 20Performance issues, service interruptions or price increases by our shipping carriers could adversely affect our business and harm our reputation and ability to provide our services on a timely basis
21. 21Our ability to commercialize our testing solutions that we develop is dependent on our relationships with laboratory services providers and their willingness to support our current and future solutions
22. 22If we seek to and are unable to raise additional capital on acceptable terms in the future, it may limit our ability to develop and commercialize new diagnostic solutions and technologies, and we may have to curtail or cease operations33% rewritten
23. 23The loss of key members of our senior management team or our inability to attract and retain highly skilled scientists, clinicians and laboratory and field personnel could adversely affect our business
24. 24International expansion of our business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States23% rewritten
25. 25We are incorporating, and may in the future further incorporate, AI technologies into some of our internal processes. These technologies may present business, compliance and reputational risksNew
26. 26Disputes with labor unions may adversely affect our ability to operate in our Sweden facility and may impact our financial results
27. 27Many of the countries in which we operate, including the U.S. and several of the members of the European Union, have experienced and continue to experience uncertain economic conditions resulting from global as well as local factorsNew
28. 28Our effective tax rate may fluctuate and we may incur obligations in tax jurisdictions in excess of amounts that have been accrued27% rewritten
29. 29If we use hazardous materials in a manner that causes injury, we could be liable for damages
30. 30Changes in, or interpretations of, accounting rules and regulations could result in unfavorable accounting changes or require us to change our compensation policies

Risks Related to Acquisitions, Partnerships and Investments

1. 31Intangibles, including goodwill, acquired in connection with acquisitions may subsequently be impaired and, if so, could increase our net accumulated deficit
2. 32Recent and future acquisitions and investments could disrupt our business, harm our financial condition and operating results, dilute your ownership of us and increase our debt or cause us to incur significant expense
3. 33Our failure to address these risks or other problems encountered in connection with our past or future acquisitions and investments could cause us to fail to realize the anticipated benefits of these acquisitions or investments, cause us to incur unanticipated liabilities, and harm our business generally
4. 34We may not be able to achieve the anticipated strategic benefits from our acquisition of Ottr, XynManagement, TransChart, MedActionPlan, TTP, HLA Data Systems, or any other businesses or assets that we may acquire
5. 35Our License and Commercialization Agreement with Illumina may not result in material benefits to our business

Risks Related to Billing and Reimbursement

1. 36Billing complexities associated with obtaining payment or reimbursement for our current and future solutions may negatively affect our revenue, cash flows and profitability34% rewritten
2. 37Healthcare reform measures could hinder or prevent the commercial success of AlloSure Kidney, AlloMap Heart, AlloSure Heart, HeartCare and AlloSure Lung38% rewritten
3. 38their tests. The PAMA rules use the rates and volumes reported by laboratories to develop Medicare payment rates for the tests equal to the volume-weighted median of the private payer payment rates for the testsNew
4. 39While in general it is difficult to predict specifically what effects the Affordable Care Act or any future healthcare reform legislation or policies will have on our business, current and future healthcare reform legislation and policies could have a material adverse effect on our business and financial condition42% rewritten

Risks Related to the Healthcare Regulatory Environment

1. 40To operate our laboratory, we have to comply with the CLIA and federal and state laws and regulations governing clinical laboratories and laboratory-developed tests, including FDA regulations25% rewritten
2. 41If we are required to conduct additional analytical studies and clinical trials prior to marketing our solutions under development, those trials could lead to delays or a failure to obtain necessary regulatory approvals and harm our ability to be profitable
3. 42Any test for which we obtain regulatory clearance will be subject to extensive ongoing regulatory requirements, and we may be subject to penalties if we or our contractors or commercial partners fail to comply with regulatory requirements or if we experience unanticipated problems with our products
4. 43We are subject to numerous fraud and abuse and other laws and regulations pertaining to our business, the violation of any one of which could harm our business
5. 44Foreign governments may impose reimbursement standards, which may adversely affect our future profitability

Risks Related to Our Intellectual Property

1. 45Our competitive position depends on maintaining intellectual property protection37% rewritten
2. 46license, we or our licensors may have to participate in an interference or other proceeding in the U.S. Patent and Trademark Office or a court to determine priority of invention in the United States for pre-AIA applications and patentsNew
3. 47Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for noncompliance with these requirementsNew
4. 48We may face intellectual property infringement claims that could be time-consuming and costly to defend and could result in our loss of significant rights and the assessment of treble damages
5. 49We may be required to take further action to maintain and protect our intellectual property rights against third parties44% rewritten
6. 50Changes in U.S. patent law or the patent law of other countries or jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our productsNew
7. 51If we are unable to protect or enforce our intellectual property rights effectively in all major markets, our business would be harmed
8. 52If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
9. 53If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest, and our business may be adversely affected
10. 54We may be subject to claims by third parties that we or our employees have wrongfully used or disclosed alleged trade secrets or misappropriated intellectual property, or claiming ownership of what we view as our own intellectual property
11. 55Our business is dependent on licenses from third parties
12. 56In April 2020, we entered into a license agreement with Cornell University pursuant to which we were granted exclusive rights to three patents and two patent applications covering methods and technology for measurement of gene expression in urine to diagnose kidney transplant rejection
13. 57Our rights to use these and other licensed technologies, data and materials and to employ the inventions claimed in licensed patents are subject to the continuation of and our compliance with the terms of the applicable licenses

Risks Related to Information Technology, Cybersecurity, and Data Privacy

1. 58Security breaches, loss of data, or other disruptions could compromise sensitive information, prevent access to critical information, expose us to liability, and adversely affect our business and our reputation66% rewritten

Risks Related to Our Common Stock

1. 59Our operating results may fluctuate, which could cause our stock price to decrease
2. 60The market price of our common stock has been and will likely continue to be volatile, and you could lose all or part of your investment
3. 61If our principal stockholders, executive officers and directors choose to act together, they may be able to control our management and operations, which may prevent us from taking actions that may be favorable to you
4. 62Sales of a substantial number of shares of our common stock in the public market, or the perception that such sales could occur, could adversely affect the market price of our common stock and may make it more difficult for you to sell your common stock at a time and price that you deem appropriate
5. 63We do not expect to pay dividends in the foreseeable future. As a result, you must rely on stock appreciation for any return on your investment
6. 64We may elect to repurchase shares of our common stock, which might limit our ability to pursue other growth opportunities56% rewritten
7. 65During the year ended December 31, 2025, we purchased an aggregate of 5.8 million shares of our common stock under the February 2025 and May 2025 Repurchase Programs, for a total purchase price of $87.8 millionNew
8. 66If we are unable to substantially utilize our net operating loss carryforwards, our financial results could be harmed75% rewritten
9. 67utilization of our NOLs due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisionsNew
10. 68Our organizational documents and Delaware law make a takeover of our company more difficult, which may prevent certain changes in control and limit the market price of our common stock
11. 69We incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies in the United States, which may adversely affect our operating results
12. 70If equity research analysts do not publish research or reports about our business, or if they issue unfavorable commentary or downgrade our common stock, the price of our common stock could decline
13. 71If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impairedNew
14. 72If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion on the effectiveness of our internal control, we could lose investor confidence in the accuracy and completeness of our financial reportsNew
15. 73Techniques employed by short sellers may drive down the market price of our common stock