CareDx, Inc. CDNA
CareDx is a $1.7bn story built on AllSure, a cfDNA kidney-rejection test that misses 40% of rejections and faces 70% annual patient attrition, competition and Medicare reset — ~70% downside.
Thesis
CareDx trades at 18.4x trailing revenue on the back of AllSure, a dd-cfDNA kidney-transplant rejection test launched under provisional Medicare coverage in late 2017. Kerrisdale argues AllSure is clinically ineffective: the pivotal Bloom study shows it misses roughly 40% of rejection episodes and is structurally incapable of identifying T-cell-mediated rejection, the most common form. Revenue is overwhelmingly driven by protocol usage inside large, Medicare-reimbursed clinical studies, yet surveillance patients are churning at 20-30% per quarter (~70% annually), signaling that physicians are not finding the test useful. Natera's Prospera and Transplant Genomics' TruGraf are poised to take share just as MolDX revisits coverage tied to the KOAR trial. Valuing CareDx like Natera yields ~$11/share versus $37, implying ~70% downside.
SCQA
CareDx is a $1.7bn diagnostics company whose stock has risen 30x in two years on enthusiasm for AllSure, a dd-cfDNA blood test intended to detect kidney-transplant rejection earlier than serum creatinine.
AllSure misses ~40% of rejections in the pivotal Bloom study, cannot detect T-cell-mediated rejection, and surveillance patients are attriting at 20-30% per quarter, with Medicare coverage conditional on the still-running KOAR trial.
Short CDNA: competing cfDNA (Natera Prospera) and GEP (TruGraf) tests are entering the market, MolDX will scale coverage back to narrow AMR use cases, and AllSure's inflated TAM will collapse.
Valuing CareDx like Natera yields an implied share value of $11.22 against a ~$37 market price, roughly 70% downside from current levels.
The three reasons
- 1
AllSure misses ~40% of kidney rejections, a fatal diagnostic flaw
- 2
Surveillance patients attriting at 20-30% per quarter, ~70% annually
- 3
Competing cfDNA and GEP tests plus Medicare review threaten coverage
Primary demands
- Short CareDx shares ahead of deteriorating AllSure economics
- Reassess Medicare coverage risk and TAM assumptions
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Precedents cited
- ImmuMetrix sale to CareDx (2014, $17m)
- Natera Prospera cfDNA development and MolDX draft LCD
- TruGraf (Transplant Genomics) prospective validation
Notable slides (4)
Notes
Text-heavy short-seller research note with Kerrisdale letterhead; no charts, only a handful of tables (capitalization p.8, historical AllSure patient data p.22, valuation p.27). Cover page carries the full SCQA. Thesis rests on clinical-literature critique (Bloom/DART/KOAR) plus sum-of-parts valuation benchmarked to Natera. Author is 'Kerrisdale Capital Management'; no named signatory on cover or closing. Quotes CEO Peter Maag and CareDx marketing materials to expose over-claims ('precise, actionable results', 'reduce invasive biopsies'). Uses footnoted references to JASN, Am J Transplant, UCSF cost studies; tone is clinically technical rather than theatrical.