Slide 1: Natera, Inc. Second Quarter 2020 Earnings Presentation
Natera, Inc. Second Quarter 2020 Earnings Presentation 1 August 5, 2020 Not for reproduction or further distribution.
Slide 2: Safe harbor statement
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, produ
Slide 3: Recent highlights
Recent highlights • Processed 234,000 tests, on par with record volume performance in Q1 2020 • Total revenues of ~$86.5M with product revenues up 24% vs Q2 2019 • Enrolled first patients in both CIRCULATE-Japan and BESPOKE CRC for Signatera™ in colorectal cancer and PROACTIVE for Prospera • Receive
Slide 4: Announcing two new clinical indications for Signatera
Announcing two new clinical indications for Signatera • Est. opportunity now up to Tests per year ~0.8M ~1.9M (in millions) ~2M tests per year • Data published in Nature ~0.1M 1M Cancer and presented at major conferences • On path to secure reimbursement - IO dossier submitted to CMS in June Stage I
Slide 5: Resilient performance in Q2
Resilient performance in Q2 Total processed units 236K 234K • Strong year on year (in thousands) growth despite COVID-19 209K 200K 200K • Existing accounts 194K recovering, still expect return to 174K normal in IVF setting 167K 164K 163K Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 201
Slide 6: Revenue growth timeline
Revenue growth timeline Total Revenues • Improved Q2 growth ($ in millions) $86.5M vs historical trend $74M $63M • Product revenues $52M up 24% against the same period in prior year Q2 2017 Q2 2018 Q2 2019 2020 Q2 6 Not for reproduction or further distribution.
Slide 7: Average selling prices and COGS momentum intact
Average selling prices and COGS momentum intact ASP: Total revenues/tests reported1 Blended COGS trajectory2 $440 $450 $416 $400 $388 $420 $407 $404 $350 $400 $393 $395 $384 $300 $270 $380 $250 $236 $211 $200 $360 $200 $150 $340 $100 $320 $50 $300 $0 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q
Slide 8: COVID-19 operations on track
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 tes
Slide 9: Prospera reimbursement pathway complete
Prospera reimbursement pathway complete ✓ Completed analytical validation ✓ Completed clinical validation ✓ Successful pre-submission meeting ✓ Obtained Z-code 2018 / 2019 ✓ Completed CLIA validation ✓ Formal LCD submission ✓ Draft LCD release ✓ Launch registry study ✓ Final MolDx LCD published 2019
Slide 10: Extending our data leadership in Organ Health
Extending our data leadership in Organ Health Prospera Quantification PEDAL Study • Refined workflow based on • 500 kidney transplant patients findings from >2 million from several major U.S. centers cfDNA tests • Improve understanding of • Proprietary technique to quantification of background quant
Slide 11: Oncology: progress across commercial channels on track
Oncology: progress across commercial channels on track Direct channel Clinical Direct channel Pharma 100K+ clinical 1 million+ Presence patients/yr Hiring oncology Pharma BD reps genetic tests in 50+ active pharma field force 2018 in China partners Near-term goal Biopharma Final LCD for Grow contrac
Slide 12: Signatera CRC – Medicare reimbursement on track
Signatera CRC – Medicare reimbursement on track ✓ Successful pre-submission meeting ✓ Obtained Z-code ✓ Completed clinical validation ✓ CLIA soft launch 2019 ✓ Formal LCD submission ✓ Draft LCD release ✓ Launch registry trial • Final LCD published 2020 • Final pricing 12 Not for reproduction or furt
Slide 13: Expanding CRC addressable population by ~10% with new data in metastatic disease
Expanding CRC addressable population by ~10% with new data in metastatic disease • Signatera data in stage IV oligometastatic CRC presented at ESMO GI World Congress1, prospective trial data coming at ESMO in Sept • 20-30% of metastatic CRC estimated to be oligometastatic2, eligible for surgery with
Slide 14: New application for Signatera: IO response monitoring
New application for Signatera: IO response monitoring Regimen A Regimen B CT #1 CT #2 CT #3 ● 200,000 patients treated with immunotherapy (IO) annually, most do not respond1 ● Pseudo-progression causes uncertainty and delays in SignateraTM assessing efficacy ● Continued response monitoring for secon
Slide 15: Nature Cancer 2020 (Bratman et al)
“ Monitoring of ctDNA levels has now been shown early efficacy of immune checkpoint inhibitors… Nature Reviews – October 2018 (Cabel et al) “ to be a clinically valid method of assessing the “ ctDNA response was seen significantly earlier than radiographic response and was associated with improved p
Slide 16: Nature Cancer publication validates Signatera technology for IO response monitoring, pan-cancer
Nature Cancer publication validates Signatera technology for IO response monitoring, pan-cancer1 • 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 patient
Slide 17: Signatera IO Medicare reimbursement pathway
Signatera IO Medicare reimbursement pathway ✓ Successful pre-submission meeting ✓ Obtained Z-code 2020 ✓ Completed clinical validation ✓ Formal LCD submission • Draft LCD release • Final LCD published 2021 / 2022 • Final pricing 17 Not for reproduction or further distribution.
Slide 18: Financial overview
Financial 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 Sha
Slide 19: Reinstating and raising 2020 annual guidance
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 $1
Slide 20: Conceive. Deliver. Thrive.
Conceive. Deliver. Thrive.