Natera, Inc. · NASDAQ:NTRA
Natera — Q4 2019 Earnings Presentation
19 slides from Natera's earnings presentation, Feb 26, 2020
Slide 1: Natera, Inc. Q4 2019 Earnings Call
1 Not for reproduction or further distribution. Natera , Inc. Q4 2019 Earnings call February 26, 2020
Slide 2: Safe harbor statement
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
Slide 3: Transformative 2019
3 Not for reproduction or further distribution. Transformative 2019 ● Extended market leadership ● New peer reviewed publications ● Significant COGS reductions ● Improved reimbursement ● Clinical validation data in multiple cancer types ● ~$55 million in cumulative pharma contracted value ● Draft Me
Slide 4: Three goals for 2020
4 Not for reproduction or further distribution. Extend leadership position in reproductive health • Volume growth and improving unit economics • Drive path toward cash flow breakeven Change patient care for transplant recipients • Major clinical launch on track for 2020 Establish Signatera ™ as the
Slide 5: Continued volume growth momentum
5 Not for reproduction or further distribution. Continued volume growth momentum Total tests processed 88K 218K 317K 447K 515K 669K 804K 2013 2014 2015 2016 2017 2018 2019
Slide 6: 2019 annual and Q4 revenues
6 Not for reproduction or further distribution. 2019 Annual revenues ($ in millions) 2019 Exceeds top end of guidance Q4 Revenues ($ in millions) $67 $83 Q4 2018 Q4 2019 24% $302 .3 $285.0 $287.0 $289.0 $291.0 $293.0 $295.0 $297.0 $299.0 $301.0 $303.0 $295 - $302 Guidance Actual Gross margin 40% 47%
Slide 7: Average selling prices and COGS momentum
7 Not for reproduction or further distribution. Average selling prices and COGS momentum ASP: Total revenues/tests reported 1 $388 $263 $224 $200 Q1 2015 Q4 2018 Q4 2019 Target* Blended COGS trajectory 2 1. ASP calculation excludes revenue recognition from Qiagen, FMI, and BGI partnerships, and cert
Slide 8: Transplant: Pathway to significant revenues
8 Not for reproduction or further distribution. $42 $56 $70 $84 $98 3% 4% 5% 6% 7% Transplant: Pathway to significant revenues Revenue sensitivity ($ in millions) ● $2B market ● < 5% penetrated < 5% Total Total tests greenfield Market penetration Source: Natera, I nc . internal company estimates
Slide 9: Prospera reimbursement pathway on track
9 Not for reproduction or further distribution. Prospera reimbursement pathway on track 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
Slide 10: Prospera outperforms 1st generation dd-cfDNA test
10 Not for reproduction or further distribution. 1 Sigdel TK, et al. J. Clin. Med. 2019, 8, 19. 2 . Bloom RD, et al. J Am Soc Nephrol . 2017 Jul;28(7):2221 - 2232. Prospera outperforms 1 st generation dd - cfDNA test ● More sensitive and specific than serum creatinine ● Assessed all types of rejecti
Slide 11: 2019 pharma total contracted value goal achieved
11 Not for reproduction or further distribution. 2019 pharma total contracted value goal achieved • >50 Pharma deals signed to date • Multiple prospective studies signed & planned in CRC, NSCLC, Pancreatic, Bladder, HCC, Breast, other • Benefit for pharma trials: 1. Study enrichment: treating only M
Slide 12: Leadership in CRC data and clinical development
12 Not for reproduction or further distribution. • Sponsored by Natera • Prospective, non - randomized • 1,000 Stage II - III CRC patients tested with Signatera • Real - world study of MRD - guided treatment following Medicare LCD • Testing protocol 6x in Year 1, and 4x in Year 2 • Sponsored by NCC
Slide 13: Signatera colorectal cancer opportunity and Medicare draft LCD
13 Not for reproduction or further distribution. ● Est. opportunity ~1 million tests annually ● Over 85% of relapses caught too late for curative surgery 1,2 Medicare draft LCD in Colorectal cancer MRD Program Use Signatera after surgery to evaluate the need for adjuvant chemotherapy and avoid unnec
Slide 14: Signatera colorectal cancer Medicare reimbursement pathway on track
14 Not for reproduction or further distribution. Signatera colorectal cancer – Medicare reimbursement pathway 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
Slide 15: Key commercial channels
15 Not for reproduction or further distribution. Key commercial channels 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 i
Slide 16: Q4 2019 financial overview
16 Not for reproduction or further distribution. Balance Sheet Dec 31, 2019 Sep 30, 2019 Change Cash & Investments $441.0 $454.6 2 ($13.6) UBS Line of Credit $50.1 $50.1 $0.0 OrbiMed Debt Facility $73.7 $73.6 $0.1 Q4 2019 financial overview ($ in millions, except for per share data) P&L Q4'19 Q4'18
Slide 17: 2020 annual guidance
17 Not for reproduction or further distribution. 2020 annual guidance $ (millions) Outlook Revenue $335 – $350 Gross margin % revenue 43% – 49% SG&A $240 – $260 R&D $80 – $90 Cash burn $125 – $150
Slide 18: 2020 investments support rapid growth
18 Not for reproduction or further distribution. 2020 investments support rapid growth • Commercial leadership position • COGS reductions: - Algorithm improvements - Automation - Alternative sequencing platforms • Commercial channel to launch colorectal cancer test • Support partner product developm
Slide 19: Conceive. Deliver. Thrive.
Conceive. Deliver. Thrive.