- Raymond James downgraded CareDx Inc CDNA to Market Perform from Strong Buy after MolDX issued a billing and coding article severely limiting coverage of the company’s tests in multiple areas.
- The article removes current Medicare coverage for multimodality in the heart. It indicates that surveillance testing is only covered when a patient would otherwise have received a surveillance biopsy, limiting the frequency of testing primarily in the kidney.
- Raymond James estimates that 30% of overall revenues are at risk.
- Management is optimistic that coverage will resume for multimodality is plausible near-term thanks to data it intends to submit as soon as this month. It is pleased that AlloSure Heart will be covered on a standalone basis.
- The analyst is cautious about the new data resulting in an immediate reversal.
- The stock is unlikely to outperform in the near- and intermediate term. Despite general reticence to issue reactionary downgrades, the analyst writes that it is appropriate.
- Price Action: CDNA shares are down 15.6% at $9.09 on the last check Friday.
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