Health Care Sector Update for 03/16/2017: CDNA,SKLN,TROV

Top Health Care Stocks

JNJ -0.57%

PFE -0.85%

MRK -1.05%

ABT -0.99%

AMGN -2.29%

Health care stocks were mostly underwater Thursday afternoon, with the NYSE Health Care Index dropping almost 0.7% while shares of health care companies in the SP 500 were down 1.1% as a group.

In company news, CareDx Inc ( CDNA ) plunged to a record low on Thursday after the molecular diagnostics company last night reported preliminary Q4 financial results, including revenue for the final three months of 2016 trailing Wall Street estimates.

The company is expecting to report Q4 revenue in a range of $10.6 million to $10.9 million, up at least 60.6% over the prior-year market but lagging the Capital IQ consensus looking for $11.7 million in revenue for the three months ended Dec. 31.

CareDx also is forecasting a Q4 net loss between $17.9 million to $15.3 million, expanding on a year-ago $4.8-million net loss. For FY 2017, the company sees revenue to be in the range of $45 million to $50 million, excluding any potential revenue from its AlloSure test for patients ahead of planned organ transplants. The Street’s view is $52.3 million.

Separately, CareDx last night said it has negotiated a new, $25 million long-term debt agreement with an unnamed institutional, with all $25 million funded upfront. It plans to use proceeds from the new facility to repay the $11.2 million due on its current facility with East West Bank as well as funding growth initiatives, including the likely AlloSure launch later this year.

CDNA shares were down over 22% at $1.68, earlier dropping to a worst-ever $1.55 a share.

In other sector news,

(+) SKLN, (+4.1%) Narrows Q4 net loss to $733,000, or $0.16 per share, compared with a $2.26 mln net loss, or $10.87 per share, in year-ago period. No analyst estimates were available for comparison.

(-) TROV, (-%) Q4 net loss widen to $0.34 a share from $0.26 per share last year and missing three-analyst consensus by $0.02 per share. Revenue declines 14% to $68,000. Cutting 30 employees and reducing RD spending. Piper Jaffray downgrade to Underweight; Maxim Group lowers rating to Hold.


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