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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 5, 2020

 

 

Natera, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware   001-37478   01-0894487

(State or other jurisdiction of

incorporation) 

 

(Commission

File Number) 

 

(IRS Employer

Identification No.)

 

201 Industrial Road, Suite 410

San Carlos, California 94070

(Address of principal executive offices, including zip code)

 

(650) 249-9090

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class  

Trading Symbol(s) 

 

Name of each exchange on which registered 

Common Stock, par value $0.0001 per share   NTRA  

Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On August 5, 2020, Natera, Inc. issued a press release announcing its results for its second quarter ended June 30, 2020 and provided a related investor presentation. A copy of the press release and a copy of the investor presentation are furnished herewith as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

 

The information in this Current Report on Form 8-K and the accompanying Exhibit 99.1 and Exhibit 99.2 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by reference in such filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.

 

Description

99.1  Press Release dated August 5, 2020.
99.2  Investor Presentation.
104  Cover Page Interactive Data File (formatted as inline XBRL)

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  Natera, Inc.
     
  By:

/s/ Michael Brophy

    Michael Brophy
    Chief Financial Officer (Principal Financial and Accounting Officer)

 

Dated: August 5, 2020

 

 

 

 

 

Exhibit 99.1

 

Natera Reports Second Quarter 2020 Financial Results


SAN CARLOS, Calif., August 5, 2020 /PRNewswire/ — Natera, Inc. (NASDAQ:  NTRA), a pioneer and global leader in cell-free DNA testing, today reported financial results for the second quarter ended June 30, 2020 and provided an update on recent business progress.

 

Recent Accomplishments & Highlights

 

   · Processed approximately 234,100 tests in the second quarter of 2020 compared to approximately 194,200 tests processed in the second quarter of 2019, an increase of 21%.
     
   · Generated total revenues of $86.5 million in the second quarter of 2020 compared to $74.4 million in the second quarter of 2019.
     
   · Published Signatera™ study in Nature Cancer validating ability to monitor tumor response to immune therapy in 25 different types of solid cancer.
     
   · Launched the PEDAL study designed to demonstrate Prospera test enhancements at the American Transplant Conference.
     
   · Presented four abstracts, including one oral presentation and three poster presentations, at the American Society for Clinical Oncology conference demonstrating the performance of Signatera in areas including colorectal cancer and hepatocellular carcinoma.
     
   · Enrolled first patients in both CIRCULATE-Japan and BESPOKE CRC for Signatera in colorectal cancer, and in PROACTIVE for Prospera.
     
   · Received positive coverage from Noridian for Prospera; commenced full commercial launch.
     
   · Received the Force for Change Illuminator Award from Leading Women Entrepreneurs.

 

“The business was very resilient in the second quarter,” said Steve Chapman, Natera’s Chief Executive Officer. “We posted another very strong volume and revenue result despite the COVID-19 impact, and we achieved major milestones across the oncology and transplant businesses. We are very proud of the team’s performance during this challenging time.”

 

Second Quarter Ended June 30, 2020 Financial Results

 

Total revenues were $86.5 million in the second quarter of 2020 compared to $74.4 million for the second quarter of 2019. The increase in total revenues was driven primarily by sales of Natera’s Panorama and Horizon tests. Natera processed 234,100 tests in the second quarter of 2020, including approximately 221,600 tests accessioned in its laboratory, compared to 194,200 tests processed in the second quarter of 2019, including approximately 181,600 tests accessioned in its laboratory.

 

In the three months ended June 30, 2020, Natera recognized revenue on approximately 220,000 tests for which results were reported to customers in the period (tests reported), including approximately 208,400 tests reported in its laboratory, compared to approximately 187,600 tests reported, including approximately 174,800 tests reported in its laboratory, in the second quarter of 2019.

 

Gross profit* for the three months ended June 30, 2020 and 2019 was $39.5 million and $30.5 million, respectively, representing approximately 46% and 41% gross margin* respectively. The company was able to achieve higher margins in the second quarter of 2020 primarily because of improved cost of goods sold per test and increased revenues.

 

 

 

 

Total operating expenses, representing research and development expenses and selling, general and administrative expenses, for the second quarter of 2020 were $91.2 million, compared to $59.2 million in the same period of the prior year. The increases were primarily driven by headcount growth to support new product offerings.

 

Loss from operations for the second quarter of 2020 was $51.6 million compared to $28.6 million for the same period of the prior year. 

 

Net loss for the second quarter of 2020 was $59.6 million, or ($0.75) per diluted share, compared to net loss of $32.4 million, or ($0.48) per diluted share, for the same period in 2019. Weighted average shares outstanding were approximately 79.0 million in the second quarter of 2020.

 

At June 30, 2020, Natera held $571.2 million in cash, cash equivalents, short-term investments and restricted cash, compared to $441.0 million as of December 31, 2019. As of June 30, 2020, Natera had a total outstanding debt balance of $247.5 million, comprised of $50.1 million with accrued interest under its $50.0 million line of credit with UBS at a variable interest rate of 30-day LIBOR plus 110 bps and a net carrying amount of $197.5 million under its seven-year convertible senior notes. The convertible senior notes were issued in April 2020 for net proceeds of $278.9 million, of which a portion was used to repay the $79.2 million obligations under the company’s 2017 term loan with OrbiMed Advisors. The gross principal balance outstanding for the convertible senior notes was $287.5 million for the second quarter of 2020.

 

2020 Financial Outlook

 

Natera anticipates 2020 total revenue of $345 million to $365 million; 2020 cost of revenues to be approximately 51% to 55% of revenues; selling, general and administrative costs to be approximately $260 million to $280 million; research and development costs to be $85 million to $95 million, and net cash burn to be $125 million to $155 million**.

 

* Gross profit is calculated as GAAP total revenues less GAAP cost of revenues. Gross margin is calculated as gross profit divided by GAAP total revenues.

 

** Cash burn is calculated as the sum of GAAP net cash used by operating activities (estimated for 2020 to be between $117 million and $147 million) and GAAP net purchases of property and equipment (estimated for 2020 to be approximately $8 million).

 

Test Volume Summary

 

Unit  Q2 2020   Q2 2019   Definition
Tests processed   234,000    194,200   Tests accessioned in our laboratory plus units processed outside of our laboratory
Tests accessioned   221,600    181,600   Test accessioned in our laboratory
Tests reported in our
laboratory
   208,400    174,800   Total tests reported in our laboratory less units reported outside of our laboratory including Evercord units in prior periods

 

About Natera

 

Natera is a global leader in cell-free DNA testing. The mission of the company is to change the management of disease worldwide with a focus on women’s health, oncology, and organ health. Natera operates an ISO 13485-certified and CAP-accredited laboratory certified under the Clinical Laboratory Improvement Amendments (CLIA) in San Carlos, Calif. It offers proprietary genetic testing services to inform obstetricians, transplant physicians, oncologists, and cancer researchers, including biopharmaceutical companies, and genetic laboratories through its cloud-based software platform.

 

 

 

 

Conference Call Information

 

Event:  Natera's Second Quarter 2020 Financial Results Conference Call 
Date:  Wednesday, August 5, 2020 
Time:  1:30 p.m. PT (4:30 p.m. ET)
Live Dial-In:  (800) 708-4540, Domestic 
  (847) 619-6397, International
Conference Password: 49854736
Webcast:  https://edge.media-server.com/mmc/p/mh4xc5b8

 

A webcast replay will be available at investor.natera.com.

 

Forward-Looking Statements

 

This release contains forward-looking statements, including regarding the company's business operations in light of the COVID-19 pandemic. Any forward-looking statements contained in this release are based upon Natera's current plans, estimates, and expectations, as of the date of this release, and are not a representation that such plans, estimates, or expectations will be achieved. Subsequent events may cause these expectations to change, and Natera disclaims any obligation to update the forward-looking statements in the future.

 

These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially, including: we face numerous uncertainties and challenges in operating our business in light of the COVID-19 pandemic; we may be unable to further increase the use and adoption of Panorama and Horizon, through our direct sales efforts or through our laboratory partners, or to develop and successfully commercialize new products, including Signatera and Prospera; we have incurred losses since our inception and we anticipate that we will continue to incur losses for the foreseeable future; our quarterly results may fluctuate from period to period; our estimates of market opportunity and forecasts of market growth may prove to be inaccurate; we may be unable to compete successfully with existing or future products or services offered by our competitors; we may not be successful in commercializing our cloud-based distribution model; our products may not perform as expected; the results of our clinical studies may not be compelling to professional societies or payors as supporting the use of our tests, particularly in the average-risk pregnancy population or for microdeletions screening, or may not be able to be replicated in later studies required for regulatory approvals or clearances; if our primary CLIA-certified laboratory facility becomes inoperable, we will be unable to perform our tests and our business will be harmed; we rely on a limited number of suppliers or, in some cases, single suppliers, for some of our laboratory instruments and materials and may not be able to find replacements or immediately transition to alternative suppliers; if we are unable to successfully scale our operations, our business could suffer; the marketing, sale, and use of Panorama and our other products could result in substantial damages arising from product liability or professional liability claims that exceed our resources; we may be unable to expand third-party payer coverage and reimbursement for Panorama, Horizon and our other tests, and we may be required to refund reimbursements already received; third-party payers may withdraw coverage or provide lower levels of reimbursement due to changing policies, billing complexities or other factors, such as the increased focus by third-party payers on requiring that prior authorization be obtained prior to conducting a test; if the FDA were to begin actively regulating our tests, we could incur substantial costs and delays associated with trying to obtain premarket clearance or approval and incur costs associated with complying with post-market controls; litigation or other proceedings, resulting from either third party claims of intellectual property infringement or third party infringement of our technology, is costly, time-consuming and could limit our ability to commercialize our products or services; any inability to effectively protect our proprietary technology could harm our competitive position or our brand; and we cannot guarantee that we will be able to service and comply with our outstanding debt obligations or achieve our expectations regarding the conversion of our outstanding convertible notes.

 

Additional risks and uncertainties that could affect our financial results are included under the captions, "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our most recent filings on Forms 10-K and 10-Q and in other filings that we make with the SEC from time to time. These documents are available on our website at www.natera.com under the Investor Relations section and on the SEC's website at www.sec.gov

 

Natera assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release.

 

 

 

 

Contacts

 

Natera, Inc.

 

Investor Relations
Mike Brophy, CFO, Natera, Inc., 650-249-9090

 

Media

Paul Greenland, VP of Corporate Marketing, Natera, Inc., pr@natera.com

 

 

 

 

Natera, Inc.

 

Condensed Consolidated Balance Sheets

 

(Unaudited)

 

(in thousands)

 

         
   June 30,   December 31, 
   2020   2019 
       (1) 
Assets          
Current assets:          
Cash and cash equivalents  $77,322   $61,926 
Restricted cash   55    55 
Short-term investments   493,852    379,065 
Accounts receivable, net of allowance of $3,080 in 2020 and $2,919 in 2019   58,706    53,351 
Inventory   18,033    12,394 
Prepaid expenses and other current assets, net   15,536    16,376 
Total current assets   663,504    523,167 
Property and equipment, net   25,925    23,283 
Operating lease right-of-use assets   21,475    23,730 
Other assets   12,357    12,476 
Total assets  $723,261   $582,656 
Liabilities and Stockholders’ Equity          
Current liabilities:          
Accounts payable  $3,450   $8,604 
Accrued compensation   16,583    16,088 
Other accrued liabilities   53,082    49,043 
Deferred revenue, current portion   52,392    56,016 
Short-term debt financing   50,053    50,123 
Total current liabilities   175,560    179,874 
Long-term debt financing   197,476    73,656 
Deferred revenue, long-term portion   22,533    23,808 
Operating lease liabilities, long-term portion   23,115    26,297 
Other long-term liabilities   310    310 
Total liabilities   418,994    303,945 
           
Commitments and contingencies          
           
Stockholders’ equity:          
Common stock (2)   8    8 
Additional paid in capital   1,093,072    976,955 
Accumulated deficit   (794,583)   (699,171)
Accumulated other comprehensive income   5,770    919 
Total stockholders’ equity   304,267    278,711 
Total liabilities and stockholders’ equity  $723,261   $582,656 

 

(1)The condensed, consolidated balance sheet at December 31, 2019 has been derived from the audited consolidated financial statements at that date included in the company’s Annual Report on Form 10-K for the year ended December 31, 2019.
(2)As of June 30, 2020, there were approximately 79,717,000 shares of common stock issued and outstanding.

 

 

 

 

Natera, Inc.

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

 

(Unaudited)

 

(in thousands, except per share data)

 

 

                 
   Three months ended   Six months ended 
   June 30,   June 30, 
   2020   2019   2020   2019 
Revenues                    
Product revenues  $80,414   $65,099   $167,460   $128,463 
Licensing and other revenues   6,058    9,256    13,024    12,716 
Total revenues   86,472    74,355    180,484    141,179 
Cost and expenses                    
Cost of product revenues   42,731    41,382    84,251    82,987 
Cost of licensing and other revenues   4,208    2,443    7,666    4,141 
Research and development   23,005    12,124    41,230    23,559 
Selling, general and administrative   68,188    47,042    133,869    90,874 
Total cost and expenses   138,132    102,991    267,016    201,561 
Loss from operations   (51,660)   (28,636)   (86,532)   (60,382)
Interest expense   (4,038)   (2,721)   (6,502)   (5,445)
Interest and other income, net   1,924    836    3,911    1,289 
Loss on debt extinguishment   (5,848)       (5,848)    
Loss before income taxes   (59,622)   (30,521)   (94,971)   (64,538)
Income tax expense   (15)   (1,895)   (38)   (1,969)
Net loss  $(59,637)  $(32,416)  $(95,009)  $(66,507)
Unrealized gain on available-for-sale securities, net of tax   104    1,061    4,850    1,347 
Comprehensive loss  $(59,533)  $(31,355)  $(90,159)  $(65,160)
                     
Net loss per share:                    
Basic and diluted  $(0.75)  $(0.48)  $(1.21)  $(1.01)
Weighted-average number of shares used in computing basic and diluted net loss per share:                    
Basic and diluted   79,069    68,224    78,681    65,542 

 

 

 

 

 

Exhibit 99.2

 

1 Not for reproduction or further distribution. Natera, Inc. Second Quarter 2020 Earnings Presentation August 5, 2020

 

 

2 Not for reproduction or further distribution. Safe harbor statement This presentation contains forward - looking statements under the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this presentation, including statements regarding the market opportunity, products and launch s che dules, reimbursement coverage and product costs, commercial partners, user experience, clinical trials, financial performance, strategies, anticipated future performance and gen eral business conditions of Natera, Inc. (“Natera”, the “Company”, “we” or “us”), are forward - looking statements. These forward - looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially, including: we face numerous uncertainties and challenges in achieving our financial projections ; w e may be unable to maintain our business and operations as planned due to disruptions and economic uncertainty caused by the COVID - 19 pandemic; we may be unable to further i ncrease the use and adoption of Panorama and Horizon, through our direct sales efforts or through our laboratory partners, or to develop and successfully commercializ e n ew products, including Signatera and Prospera; we have incurred losses since our inception and we anticipate that we will continue to incur losses for the foreseeable futur e; our quarterly results may fluctuate from period to period; our estimates of market opportunity and forecasts of market growth may prove to be inaccurate; we may be unable to co mpe te successfully with existing or future products or services offered by our competitors; we may not be successful in commercializing our cloud - based distribution model; our products may not perform as expected; the results of our clinical studies may not be compelling to professional societies or payors as supporting the use of our tests, pa rticularly in the average - risk pregnancy population or for microdeletions screening, or may not be able to be replicated in later studies required for regulatory approvals or clear anc es; if our primary CLIA - certified laboratory facility becomes inoperable, we will be unable to perform our tests and our business will be harmed; we rely on a limited number of su ppl iers or, in some cases, single suppliers, for some of our laboratory instruments and materials and may not be able to find replacements or immediately transition to altern ati ve suppliers; if we are unable to successfully scale our operations, our business could suffer; the marketing, sale, and use of Panorama and our other products could result in substantial damages arising from product liability or professional liability claims that exceed our resources; we may be unable to expand, obtain or maintain third - party payer cov erage and reimbursement for Panorama, Horizon and our other tests, and we may be required to refund reimbursements already received; third - party payers may withdraw coverage or provide lower levels of reimbursement due to changing policies, billing complexities or other factors, such as the increased focus by third - party payers on requiring that prior authorization be obtained prior to conducting a test; if the FDA were to begin actively regulating our tests, we could incur substantial costs and delays associated with try ing to obtain premarket clearance or approval and incur costs associated with complying with post - market controls; litigation or other proceedings, resulting from either third party cl aims of intellectual property infringement or third party infringement of our technology, is costly, time - consuming and could limit our ability to commercialize our products or services; any inability to effectively protect our proprietary technology could harm our competitive position or our brand; and with respect to our ability to service and comply with our o uts tanding debt obligations and our expectations regarding the conversion of our outstanding convertible notes. We discuss these and other risks and uncertainties in greater det ail in the sections entitled “Risk Factors” and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our periodic reports on Forms 10 - K an d 10 - Q and in other filings we make with the SEC from time to time. Given these uncertainties, you should not place undue reliance on the forward - looking statements. Moreove r, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward - looking statement. In light of these risks, uncertainties and assumptions, the forward - looking events and circumstances discussed in this presentation may not occur and act ual results could differ materially and adversely from those anticipated or implied. Except as required by law, we undertake no obligation to update publicly any forwar d - looking statements for any reason after the date of this presentation to conform these statements to actual results or to changes in our expectations. We file reports, proxy sta tements, and other information with the SEC. Such reports, proxy statements, and other information concerning us is available at http://www.sec.gov . Requests for copies of such documents should be directed to our Investor Relations department at Natera, Inc., 201 Industrial Road, Suite 410, San Carlos, California 94070. Our telephone number is ( 650 ) 249 - 9090.

 

 

3 Not for reproduction or further distribution. • Processed 234,000 tests, on par with record volume performance in Q1 2020 • Total revenues of ~$86.5M with product revenues up 24% vs Q2 2019 • Enrolled first patients in both CIRCULATE - Japan and BESPOKE CRC for Signatera ™ in colorectal cancer and PROACTIVE for Prospera • Received positive final pricing and coverage from CMS for Prospera and commenced full commercial launch • Received the Force for Change Illuminator Award from Leading Women Entrepreneurs • Published Signatera study in Nature Cancer validating ability to monitor tumor response to immunotherapy in 25 different types of solid cancer • Presented data to expand Signatera to metastatic CRC patients Recent highlights

 

 

4 Not for reproduction or further distribution. Announcing two new clinical indications for Signatera Tests per year (in millions) • Est. opportunity now up to ~2M tests per year • Data published in Nature Cancer and presented at major conferences • On path to secure reimbursement - IO dossier submitted to CMS in June Stage II - III CRC Oligometastatic CRC IO response monitoring Total 1M ~0.1M ~0.8M ~1.9M

 

 

5 Not for reproduction or further distribution. 164K 163K 167K 174K 200K 194K 200K 209K 236K 234K Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Total processed units (in thousands) Resilient performance in Q2 • Strong year on year growth despite COVID - 19 • Existing accounts recovering, still expect return to normal in IVF setting

 

 

6 Not for reproduction or further distribution. $ 52 M $ 63 M $74M $86.5M Q2 2017 Q2 2018 Q2 2019 2020 Q2 Revenue growth timeline Total Revenues ($ in millions) • Improved Q2 growth vs historical trend • Product revenues up 24% against the same period in prior year

 

 

7 Not for reproduction or further distribution. $388 $270 $236 $211 $200 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 Q1 2015 Q2 2018 Q2 2019 Q2 2020 Target Average selling prices and COGS momentum intact ASP: Total revenues/tests reported 1 Blended COGS trajectory 2 1. ASP is calculated as total revenues / tests reported in Natera’s laboratory. Total revenues excludes revenue recognition f rom Qiagen, FMI, and BGI partnerships, and certain non - recurring items 2. Blended COGS trajectory is computed by total COGS divided by tests accessioned $384 $393 $395 $404 $416 $407 $300 $320 $340 $360 $380 $400 $420 $440 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

 

 

8 Not for reproduction or further distribution. COVID - 19 operations on track Nationwide mobile blood draw capability • Patients can request a blood draw at their home from the Natera online portal • Mature offering with >10,000 mobile blood draws executed Virtual ordering for physicians enabled through online platform • Physicians can order a test for a patient and receive the results entirely remotely without an in - office visit Expansion of lab facility in Austin, TX to support capacity • Currently accepting samples for NIPT, Carrier Screening, other products • Safety and testing protocols fully operationalized in both Austin and San Carlos, CA

 

 

9 Not for reproduction or further distribution. Prospera reimbursement pathway complete 2018 / 2019 2019 / 2020 x Completed analytical validation x Completed clinical validation x Successful pre - submission meeting x Obtained Z - code x Completed CLIA validation x Formal LCD submission x Draft LCD release x Launch registry study x Final MolDx LCD published x Establish pricing x Noridian coverage

 

 

10 Not for reproduction or further distribution. Extending our data leadership in Organ Health • 500 kidney transplant patients from several major U.S. centers • Improve understanding of quantification of background cfDNA for more precise rejection assessment • 2 leading PI’s from large academic institutions PEDAL Study • Refined workflow based on findings from >2 million cfDNA tests • Proprietary technique to quantify background cfDNA • Flags patients at - risk for false - negative interpretation Prospera Quantification

 

 

11 Not for reproduction or further distribution. Oncology: progress across commercial channels on track Direct channel Clinical Direct channel Pharma Pharma BD reps Hiring oncology field force 100K+ clinical patients/yr 50+ active pharma partners 1 million+ genetic tests in 2018 in China Grow contracted value and revenue Launch in 2020 Biopharma engagement in 2020 Final LCD for colorectal cancer Presence Near - term goal

 

 

12 Not for reproduction or further distribution. Signatera CRC – Medicare reimbursement on track 2019 2020 x Successful pre - submission meeting x Obtained Z - code x Completed clinical validation x CLIA soft launch x Formal LCD submission x Draft LCD release x Launch registry trial • Final LCD published • Final pricing

 

 

13 Not for reproduction or further distribution. Expanding CRC addressable population by ~10% with new data in metastatic disease • Signatera data in stage IV oligometastatic CRC presented at ESMO GI World Congress 1 , prospective trial data coming at ESMO in Sept • 20 - 30% of metastatic CRC estimated to be oligometastatic 2 , eligible for surgery with curative intent +/ - adjuvant chemotherapy • Similar clinical utility as in Stage II - III CRC, to inform adjuvant treatment decision and detect relapse early 1. Stacey A. Cohen, M.D. Clinical Experience of a Personalized and Tumor - Informed Circulating Tumor DNA Assay for Minimal Residual Disease Detection in Oligometastatic Colorectal Cancer Patients. ESMO GI Oral Presentation, assigned ID: SO - 34 2. Primrose, John, Falk, et al. (2014) Systemic chemotherapy with or without cetuximab in patients with resectable colorectal liver metastasis: the New EPOC randomized controlled trial. The Lancet Oncology, 15 (6), 601 - 611

 

 

14 Not for reproduction or further distribution. New application for Signatera: IO response monitoring ● 200,000 patients treated with immunotherapy (IO) annually, most do not respond 1 ● Pseudo - progression causes uncertainty and delays in assessing efficacy ● Continued response monitoring for secondary resistance and exceptional response 1. IQVIA™ Institute for Human Data Science Releases Global Oncology Trends 2019 Study: Record Number of Cancer Drugs Launched in 2018 across 17 Indications. IQVIA DECISION POINT 2 CT #1 CT #2 CT #3 Signatera TM Regimen B Regimen A Modify treatment strategy? True progression? TIME DECISION POINT 3 Discontinue IO in exceptional responders? DECISION POINT 1 BASELINE Si gnatera

 

 

15 Not for reproduction or further distribution. Monitoring of ctDNA levels has now been shown to be a clinically valid method of assessing the early efficacy of immune checkpoint inhibitors… “ Nature Reviews – October 2018 ( Cabel et al) ctDNA response was seen significantly earlier than radiographic response and was associated with improved patient survival. These findings provide rationale for use of ctDNA in conjunction with standard imaging to provide an earlier and more comprehensive assessment of immunotherapy efficacy. Clinical Cancer Research 2018 (Goldberg et al) ctDNA profiles can accurately differentiate pseudoprogression from true progression of disease in patients with melanoma treated with PD - 1 antibodies. Results of this blood test performed at regular intervals during systemic treatment reflect tumor biology and have potential as a powerful biomarker to predict long - term response and survival. The findings from this prospective study suggest broad clinical utility for ctDNA - based surveillance in patients treated with immune checkpoint blockade. “ “ “ JAMA Oncology 2018 (Lee et al) Nature Cancer 2020 (Bratman et al) “ “ “ “

 

 

16 Not for reproduction or further distribution. Nature Cancer publication validates Signatera technology for IO response monitoring, pan - cancer 1 • Signatera technology evaluates tumor response to immunotherapy in 25 different solid tumor types • ctDNA increase in combination with increasing tumor volume on imaging, was identified in 30/73 patients and predicted treatment non - response with 100% accuracy • ctDNA clearance at any time during treatment was associated with 100% overall survival with median 25.4 months of follow up 1. Bratman SV, Yang SYC, Iafolla MAJ, et al. Personalized circulating tumor DNA analysis as a predictive biomarker in solid tumor patients treated with pembrolizumab. Nat. Cancer. 2020. doi : 10.1038/s43018 - 020 - 0096 - 5

 

 

17 Not for reproduction or further distribution. Signatera IO Medicare reimbursement pathway 2020 2021 / 2022 x Successful pre - submission meeting x Obtained Z - code x Completed clinical validation x Formal LCD submission • Draft LCD release • Final LCD published • Final pricing

 

 

18 Not for reproduction or further distribution. Balance Sheet Q2’20 Q1’20 Change QoQ Cash & Investments 2 $571.2 $405.9 $165.3 UBS Line of Credit $50.1 $50.1 $ — OrbiMed Debt Facility $ — $72.9 ($72.9) Convertible Senior Notes 3 $197.5 $ — $197.5 F inancial overview ($ in millions, except for per share data) P&L Q2’20 Q2’19 Change Product Revenues $80.4 $65.1 $15.3 Licensing and Other Revenues $6.1 $9.3 ($3.2) Total Revenues $86.5 $74.4 $12.1 Gross Margin% 1 46% 41% 466 bps R&D $23.0 $12.1 $10.9 SG&A $68.2 $47.0 $21.1 Net Loss Per Diluted Share ($0.75) ($0.48) ($0.27) 1. Gross margin is calculated as gross profit divided by GAAP total revenues. Gross profit is calculated as GAAP total revenues les s GAAP cost of revenues. 2. Cash and investments also include cash equivalents and restricted cash. 3. This balance reflects net carrying value for the Convertible Senior Notes under ASC 470 - 20 while the gross principal amounts out standing is $ 287.5 million as of June 30, 2020

 

 

19 Not for reproduction or further distribution. Reinstating and raising 2020 annual guidance Accelerating investments to capitalize on strong early returns from product launches $ (millions) Original Current Revenue $335 – $350 $345 – $365 Gross margin % revenue 43% – 49% 45% - 49% SG&A $240 – $260 $260 - $280 R&D $80 – $90 $85 - $95 Cash burn $125 – $150 $125 – $155

 

 

 

 

v3.20.2
Cover
Aug. 05, 2020
Cover [Abstract]  
Document Type 8-K
Amendment Flag false
Document Period End Date Aug. 05, 2020
Entity File Number 001-37478
Entity Registrant Name Natera, Inc.
Entity Central Index Key 0001604821
Entity Tax Identification Number 01-0894487
Entity Incorporation, State or Country Code DE
Entity Address, Address Line One 201 Industrial Road
Entity Address, Address Line Two Suite 410
Entity Address, City or Town San Carlos
Entity Address, State or Province CA
Entity Address, Postal Zip Code 94070
City Area Code 650
Local Phone Number 249-9090
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $0.0001 per share
Trading Symbol NTRA
Security Exchange Name NASDAQ
Entity Emerging Growth Company false