Slide 1: Natera, Inc. Third Quarter 2020 Earnings Presentation
Natera, Inc. Third Quarter 2020 Earnings Presentation 1 November 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 a record 262,000 tests; up ~12% sequentially and 31% versus Q3 2019 • Total revenues of ~$98.1M; up 26% vs Q3 2019. Product revenues up 39.5% vs Q3 2019 • Strong momentum from ACOG and SMFM practice bulletin supporting NIPT in all pregnant women • Unblinded positive SMA
Slide 4: Step function change in volumes
Step function change in volumes • Strong market Total processed units (in thousands) 262 share gains in reproductive health 236 234 200 200 209 194 • Commercial launch 164 163 167 174 on track in transplant and oncology Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Slide 5: Accelerating revenue growth
Accelerating revenue growth Total Revenues Product Revenues1 • Volume ($ in millions) ($ in millions) outperformance 26% $98.1 39.5% $93.3 combined with 19% $77.9 improving ASPs 17% $65.3 $66.9 $55.9 • New products beginning to gain momentum Q3 2017 Q3 2018 Q3 2019 Q3 2020 Q3 2019 Q3 2020 1. Exclude
Slide 6: Average selling prices and COGS momentum
Average selling prices and COGS momentum ASP: Total revenues/tests reported1 Blended COGS trajectory2 $450 $422 $416 $400 $388 $407 $350 $404 $300 $270 $393 $395 $250 $234 $208 $200 $200 $384 $150 $100 $50 $0 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q1 2015 Q3 2018 Q3 2019 Q3 2020 Tar
Slide 7: ACOG/SMFM practice bulletin supports NIPT
ACOG/SMFM practice bulletin supports NIPT • Level A recommendation: “cfDNA is the most sensitive and specific screening test for the common fetal aneuploidies” • SNP-based method highlighted as having advantages for detection of triploidy and twin screening 7 Not for reproduction or further distribu
Slide 8: Step change in average risk NIPT coverage
Step change in average risk NIPT coverage Total lives covered1 Medicaid states covered (in millions) ~201M 14 50% 75% ~134M 8 2016-19 2020 (YTD) 2016-19 2020 (YTD) 1. Source: Policy Reporter/Natera estimates 8 Not for reproduction or further distribution.
Slide 9: Expanding data set in Organ Health
Expanding data set in Organ Health Clinical Utility Study1 Cancer in Transplant • 154 physicians used Prospera • 3 studies using Signatera and to evaluate rejection in post- Prospera tests transplant patients • Improve understanding of • 300% increase in probability of cancer recurrence and organ co
Slide 10: Signatera CRC reimbursement pathway
Signatera CRC reimbursement pathway 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 10 Not for reproduction or further distribu
Slide 11: 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 12: Signatera IO: Broad draft local coverage decision
Signatera IO: Broad draft local coverage decision • Received in response to IO monitoring dossier • Draft LCD creates accelerated pathway to reimbursement in a broad range of solid cancers 12 Not for reproduction or further distribution.
Slide 13: Signatera IO: Medicare reimbursement ahead of schedule
Signatera IO: Medicare reimbursement ahead of schedule Successful pre-submission meeting Obtained Z-code Completed clinical validation 2020 Formal LCD submission Draft LCD release • CLIA soft launch • Final LCD published 2021 • Final pricing 13 Not for reproduction or further distribution.
Slide 14: Continued momentum in Signatera Pharma Channel
Continued momentum in Signatera Pharma Channel • DARE study: multi-center, randomized phase 2 trial of Palbociclib • Signatera to be used for patient enrollment eligibility and continued therapy effectiveness monitoring • Multiple Signatera trials in breast cancer underway 14 Not for reproduction or
Slide 15: Financial overview
Financial overview ($ in millions, except for per share data) P&L Q3’20 Q3’19 Change Product Revenues $93.3 $66.9 $26.4 Licensing and Other Revenues $4.9 $11.0 ($6.1) Total Revenues $98.1 $77.9 $20.2 Gross Margin%1 47% 44% 352 bps R&D $26.4 $12.8 $13.6 SG&A $75.7 $56.7 $19.0 Net Loss Per Share (Basi
Slide 16: Re-raising 2020 annual guidance
Re-raising 2020 annual guidance $ (millions) Original Q2 Raise Current Revenue $335 – $350 $345 – $365 $380 – $390 Gross margin % 43% – 49% 45% - 49% 46% - 49% revenue SG&A $240 – $260 $260 - $280 $270 - $280 R&D $80 – $90 $85 - $95 $90 - $95 Cash burn $125 – $150 $125 – $155 $140 – $150 16 Not for
Slide 17: Conceive. Deliver. Thrive.
Conceive. Deliver. Thrive.