CareDx Inc. (NASDAQ:CDNA) Rebounds After an Unexpected Reversal
[[tagnumber 0]]Yesterday the shares of CareDx Inc. (NASDAQ:CDNA) recovered a large portion of the value lost a few months ago on an event that would have extinguished most of the company‘s revenues. Now, a sudden and unexpected change of the game could make the stock attractive for trading again.[[tagnumber 1]] [[tagnumber 0]][[tagnumber 3]][[tagnumber 1]] [[tagnumber 0]]CDNA opened with a huge gap up the last trading session on Wednesday and then closed with a doji chart pattern at $6.14 for a share, or 26.6% above the previous day close. Though the bearish crossover of Slow Stochastics right at the level of 80, it looks like the stock could gain more in the upcoming trading session.[[tagnumber 1]] [[tagnumber 7]]CDNA dropped massively to around $4 per share at the end of September when the Centers for Medicare and Medicaid Services (CMS) announced a proposal to change the reimbursement schedule for certain molecular diagnostic tests, including the AlloMap which is CDNA‘s only significant source of revenue. The initial proposal was to reduce payments by 77%.[[tagnumber 8]][[tagnumber 1]] [[tagnumber 0]]As the management states in the last quarterly report, such a reduction of payments would have caused CDNA to discontinue testing for Medicare patients, and possibly put the further existence of the company under question. On Tuesday this week, the company said the issue has been resolved – the CMS has revised the proposal and the reimbursement rate for AlloMap will remain unchanged.[[tagnumber 1]] [[tagnumber 0]]For now, the news sounds good, yet the stock‘s growth potential still looks limited for now. In August this year,CDNA filed a shelf registration statement with the SEC that will allow the company to raise more cash by issuing common stock, preferred stock and/or debt instruments for up to $75 million. The first sales agreement was signed the same day and it is for common shares for a total amount of $19 million.[[tagnumber 1]] [[tagnumber 14]] [[tagnumber 1]]
