Slide 1: Safe Harbor
Safe Harbor This presentation contains forward-looking statements. All statements other than statements of historical facts contained in this presentation, including statements regarding the market opportunity, products, commercial partners, user experience, clinical trials, financial performance, s
Slide 2: Recent Highlights
Recent Highlights Total revenues of $53.6M in Q2 2017, up 14% from Q1 2017 Revenues grew 3% YoY despite adoption of in-network pricing Revenues grew 14% sequentially vs. Q1 2017 Broader insurance coverage, stable in-network contracts driving ASP increases Blended Average Selling Price of $452 vs. $4
Slide 3: Sales Rep Productivity Growth
2015 2016 2017 Q1 Annualized 2017 Q2 Annualized Direct Units (in 000s) Per Direct Sales Rep Sales Rep Productivity Growth 4
Slide 4: NIPT for All Women – Expanding Coverage
Millions of Covered Lives NIPT for All Women – Expanding Coverage 79.6M 29 plans 97.1M 33 plans 108.1 M 49 plans UHC Aetna Other 56.7M 5 0 50 100 150 200 250 2Q2015 4Q2015 2Q2016 4Q2016 2Q2017 Expected Future NIPT Average Risk Covered Lives by Quarter
Slide 5: Medicaid Continues to Expand
Medicaid Continues to Expand Increased NIPT Coverage Since Q2FY16, 11 new states have begun providing coverage for high risk NIPT 34 Increased published pricing Since Q2FY16, 15 new states have formally included NIPT on their fee schedule – with 5 states increasing published payment rates 25 Increas
Slide 6: Significant Opportunity Exists for Continued Growth in Expanded Carrier Screening
Significant Opportunity Exists for Continued Growth in Expanded Carrier Screening Source: Company Estimates Market continues to shift from cystic fibrosis-only carrier screening to broader panels CF only ~ 60% Broad Panels ~ 40% New ACOG guideline disruptive to large reference labs focused on cystic
Slide 7: Focus on Direct Channel Yielding Higher Growth
Focus on Direct Channel Yielding Higher Growth 63% 14% 8 18,800 30,700 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 2Q 2016 2Q 2017 Year Over Year 26,900 30,700 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 1Q 2017 2Q 2017 Quarter Over Quarter
Slide 8: Vistara Beta Successful
Vistara Beta Successful 1. Snijders, et al. Ultrasound Obstet Gynecol 1999;13:167–170 2 Company estimates based on publically available epidemiology of individual diseases in the panel Two confirmed positives so far, reimbursement and turnaround times consistent with expectations Screens for 30 gene
Slide 9: Evercord Launch Underway
Evercord Launch Underway 35 Horizon identifies 35 conditions that have been treated with cord blood stem cells 80 Treats nearly 80 diseases 30,000 transplants performed since 1988 80% of medical professionals prefer a company that provides products from conception through pregnancy and beyond.* 80%
Slide 10: Reach 500k Patients With Quality Message
Reach 500k Patients With Quality Message Natera patients become Evercord customers Panorama order and engagment with Patient Portal Build trust in Natera as a leader in women’s health and resource for patients Evercord awareness and education via email, SMS, and Patient Portal Evercord purchase and
Slide 11: RUO Launch of Signatera
RUO Launch of Signatera *Based on prevalent population which has received a treatment with the intent to cure (~87% of total prevalent), 2 tests a year Assumes incidence of ~1.7M new cancer cases annually (SEER data), 50% eligible for treatment monitoring with 5 tests per diagnosis at $500 / test So
Slide 12: Launching Pan-Cancer Technology Platform
x Launching Pan-Cancer Technology Platform Single molecule sensitivity in a tube of blood Personalized assay designed for each individual Fast turnaround time Expected low cost of goods sold <$200 Predicted relapse with 93% sensitivity, zero false positives Lead time up to 11 months Cumulative relap
Slide 13: Natera's Path to Cash Flow Breakeven
Natera’s Path to Cash Flow Breakeven Reimbursement for existing test volumes COGS Improvements New product launches in women’s health channel Stable operating expenses as revenues grow 14
Slide 14: Average Selling Prices Stable and Improving
Average Selling Prices Stable and Improving Multi-year, fixed price payer contracts Increasing average risk NIPT Coverage Increasing coverage for microdeletions Shift from procedure code to NIPT Code In-Network shift Shift from procedure code to Microdeletions code Total revenues / tests accessioned
Slide 15: Significant Earnings Potential Embedded in Current Volumes
Significant Earnings Potential Embedded in Current Volumes Estimated Quarterly Un-Reimbursed Test Volume Expected Future ASP Estimated Revenues & Cash Flow from Un-Reimbursed Volume Average Risk NIPT 26,000 $450 $12MM Microdeletions 40,000 $450 $18MM Total per quarter 66,000 $450 $30MM 16
Slide 16: Microdeletion clinical experience publication
Microdeletion clinical experience publication shows high prevalence and improved performance 31.7% 5.2% 44.2% 15.7% Reflex tohigh DOR OriginalProtocol Positive Predictive Value 1/1,255 1/1,464 1/676 Prevalence in the referral population Total 22q Other mdels Source: Martin et al., Clinical Genetics,
Slide 17: R&D Investments Driving Strong Returns
Q1 2015 Q2 2017 R&D Investments Driving Strong Returns Q1 2018E ~ Blended COGS Trajectory $97 savings X 475,000 tests / year = $46MM annual savings Greater than 51% ROIC on all R&D spend 18 $388 $291 $250 0 100 200 300 400 500
Slide 18: Q2 2017 Financial Overview
Q2 2017 Financial Overview Shift to in-network contracts primary driver of change vs Q2 2016 P&L Q2 ‘17 Q2 ’16 Change Horizon Revenue $16.3 $15.9 $0.4 Panorama Revenue $32.9 $32.1 $0.8 Total Revenue $53.6 $52.0 $1.6 Gross Margin%* 36% 28% 800 bps R&D $11.8 $10.3 $1.5 SG&A $34.3 $33.2 $1.1 Net Loss P
Slide 19: 2017 Guidance Unchanged
2017 Guidance Unchanged ($ in millions) Current Revenue $210 - $230 Gross Margin % revenue 35% - 40% SG&A $135 - $140 R&D $45 - $50 Cash Burn $65 - $75 20
Slide 20: Orbimed Debt Financing
Orbimed Debt Financing $100 million commitment $75 million funded at close; additional $25 million available at Natera’s option through 2018 7 year loan Interest only until maturity LIBOR + 8.75%, subject to a 1% LIBOR Floor May be repaid prior to maturity date 21
Slide 21: Orbimed Debt Financing
Orbimed Debt Financing + $100 million commitment — $75 million funded at close; additional $25 million available at Natera’s option through 2018 * 7yearloan + Interest only until maturity + LIBOR + 8.75%, subject to a 1% LIBOR Floor + May be repaid prior to maturity date @natera Water fuerrproauton
Slide 22: Natera
2 natera’ . Deliver.