What happened Shares of CareDx (NASDAQ: CDNA), a diagnostics company, are falling in response to allegations in a short-seller report from Kerrisdale Capital Management. Concern that the AlloSure test isn't nearly as popular as it seems has pressed the stock 13% lower as of 3:47 p.m. EDT on Tuesday. So what CareDx launched AlloSure for kidney transplant recipients in 2017, and it's currently responsible for 83% of total revenue. Physicians use the simple blood test to check for cell-free DNA associated with organ rejection. The stock is tumbling today because the short-seller report claims AlloSure is essentially useless in this capacity, missing around 40% of rejections compared to the current standard of care. Image source: Getty Images. Kidney transplant patients are monitored regularly for signs of kidney failure that could signal organ rejection, or something more run-of-the-mill. The standard procedure requires a tissue biopsy to be certain, which is something everyone would rather avoid if possible. According to the short-seller's report, using AlloSure to rule out rejection before conducting a biopsy would miss about 40% of rejection episodes that would otherwise be detected by standard means. That would make CareDx's test essentially useless, and unlikely to retain customers. Now what According to Kerrisdale, the company's large aftermarket study underway at 50 transplant centers is responsible for the vast majority of AlloSure sales. During the first quarter of 2019, the company recorded 5,710 AlloSure patient tests, which puts it on pace to double from 11,634 patients tested last year. AlloSure was ordered by 101 kidney transplant centers in the first quarter, 50 of which were also study sites for its ongoing trial. During the previous quarter, 100 transplant centers ordered tests, 47 of which were part of the trial. That doesn't exactly jibe with Kerrisdale's suggestion that transplant centers are leaving CareDx in droves, but it doesn't suggest physicians are thrilled with the service either. CareDx will report second-quarter earnings on Aug. 1, and investors will want to pick through the report for signs that transplant centers aren't reordering the AlloSure service. If the signs are there, today's losses could be the beginning of a much longer slide. 10 stocks we like better than CAREDX INCWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and CAREDX INC wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of June 1, 2019 Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source