Sahm Adrangi's Kerrisdale Capital Issues Negative Report on CareDx, Inc. and Announces Conference Call Schedule
- Recent clinical studies reveal that CareDx's kidney rejection test, AlloSure, is ineffective and misses over 40% of rejections compared to the current standard of care
- Kerrisdale believes that CareDx's success with AlloSure is illusory, built on frequent and repeated usage in clinical studies that is unsustainable
- Medicare coverage of AlloSure is provisional and is likely to be scaled back as it becomes clear that the test cannot be used as a screening tool
- CareDx is vulnerable to competing tests, two of which will begin commercialization in the next three months
NEW YORK, July 16, 2019 /PRNewswire/ -- Kerrisdale Capital, a private investment manager, has published a new report explaining its short position in CareDx, Inc. (NASDAQ: CDNA), a $1.7bn diagnostics company that develops tests for transplant recipients and whose market value is based primarily on AlloSure, a non-invasive test meant to detect kidney rejection. CareDx's share price has increased by 30x over the last two years amid the commercialization of AlloSure. Kerrisdale believes that numerous study results released over the last year demonstrate that AlloSure is inferior to the current standard of care in detecting rejection, even as it costs about 300 times as much.
"CareDx has gamed the Medicare approval process for diagnostic tests, effectively getting taxpayers to subsidize large scale trials that are powering AlloSure revenue growth," said Sahm Adrangi, chief investment officer of Kerrisdale Capital. "But the trial results are poor and the patient attrition rates are staggering. We don't expect CareDx to be able to outpace those attrition rates for much longer."
Kerrisdale also believes that CareDx is vulnerable to both new entrants in the rejection diagnostics arena, as well as scaled back Medicare coverage.
The full report can be found at https://kerr.co/cdna.
Kerrisdale has a short position in shares of CareDx, Inc. and stands to benefit if its share price falls.
Conference Call Schedule
Kerrisdale will host a conference call on Tuesday, July 16 at 1:00pm ET to discuss the report on CareDx.
To participate in the conference call, dial 866-834-3313 (domestic) or 409-981-0700 (international) and reference conference ID 2995924.
About Kerrisdale Capital
Kerrisdale Capital Management, LLC, is a fundamentally-oriented investment manager that focuses on long-term value investments and event-driven special situations.
Contact
Agnes Cao
Kerrisdale Capital
[email protected]
212-257-4385
Sahm Adrangi
Kerrisdale Capital
[email protected]
212-792-9148
Kerrisdale Capital Management, LLC is a member of the Financial Industry Regulatory Authority, CRD number 160804.
SOURCE Kerrisdale Capital Management, LLC
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