Slide 1: Natera, Inc. Q2 2019 Earnings Call
Natera, Inc. Q2 2019 Earnings Call 1 August 7, 2019 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 ● Total revenues of $74.4M in Q2 2019, up 18% vs. Q2 2018 on strong volume growth ● Completed key technical and commercialization milestones in sequencing partnership ● Completed successful pre-submission meeting and submitted dossier to Medicare for reimbursement of Signatera™ in
Slide 4: 1H 2019 volume growth extends Natera's leadership
1H 2019 volume growth extends Natera’s leadership Net unit growth in first half 2019 among largest in company history 394,655 327,162 247,066 216,647 1H 2016 1H 2017 1H 2018 1H 2019 4 Not for reproduction or further distribution.
Slide 5: Continued strong year on year growth in Q2 2019
Continued strong year on year growth in Q2 2019 Total processed units by quarter NIPT HCS Others First quarter Second quarter 250000 250000 199,487 1 195,168 1 200000 ~20% 200000 ~20% 164,355 162,807 150000 150000 100000 100000 50000 50000 0 0 1Q18 1Q19 2Q18 2Q19 1. Adjusted to reflect ~700 Evercord
Slide 6: Positive momentum in average selling prices
Positive momentum in average selling prices ASP opportunity Total revenues/tests reported1 $411 $407 $393 $384 ● Improving results with prior authorization, Medicaid reimbursement ● Average risk NIPT remains upside: Estimated ~$60M annual revenue and cash flow opportunity from existing volumes alone
Slide 7: Blended COGS targets driving strong returns
Blended COGS targets driving strong returns Blended COGS trajectory $450 $388 $20-30M+ $400 $350 in annual $300 $270 additional $250 $236 1 $200 gross profit $200 $150 opportunity $100 $50 $0 Q1 2015 Q2 2018 Q2 2019 Target* 1. Excludes impact to COGS of $5 due to one-time vendor charge of approximat
Slide 8: Oncology MRD market opportunity
Oncology MRD market opportunity ctDNA / Liquid biopsy Therapy Early Monitoring selection detection $15B $6B Based on internal company estimates 8 Not for reproduction or further distribution.
Slide 9: Local or regionally advanced colorectal cancer – 4-5x larger than kidney transplant monitoring
Local or regionally advanced colorectal cancer – 4-5x larger than kidney transplant monitoring New cases per year Existing patients >1M 100,000 20,000 18,000 180,000 Local or Kidney Kidney Local or Kidney regionally transplant transplant regionally transplant advanced CRC advanced CRC Monitoring fre
Slide 10: Unmet need #1 in local or regionally advanced CRC: Effective monitoring for relapse
Unmet need #1 in local or regionally advanced CRC: Effective monitoring for relapse Time to relapse (months)5 PPV for positive test result5-8 ● 25-30% of patients relapse1,2 97% ● Over 85% of relapses 14.2 8.7 months caught too late for 8.7 months lead time months leadwith time curative surgery1,2 w
Slide 11: #2: Assessing risk/MRD status before adjuvant chemo
#2: Assessing risk/MRD status before adjuvant chemo ● Most patients are cured with surgery alone # patients treated to benefit one ● Adjuvant chemo is recommended for 11 patients at high risk of relapse – High-risk patients often missed – Low-risk patients significantly overtreated – Serious treatme
Slide 12: Signatera colorectal cancer – Medicare reimbursement expected in 2020
Signatera colorectal cancer – Medicare reimbursement expected in 2020 ✓ Successful pre-submission meeting ✓ Obtained Z-code ✓ Completed clinical validation ✓ CLIA soft launch 2019 ✓ Formal LCD submission • Launch registry study • Draft LCD release • Establish pricing 2020 • Final LCD published 12 No
Slide 13: Signatera outperforms CT imaging for evaluation of patient response to Keytruda
Signatera outperforms CT imaging for evaluation of patient response to Keytruda immunotherapy ● 70 patients across 10+ cancer types, Example: H&N cancer Mean Tumor Molecules / mL treated with single-agent Keytruda Target Lesion (% Change) (pembrolizumab) at Princess Margaret Pseudo-progression Cance
Slide 14: Prospera ProActive trial – Largest prospective registry trial for kidney transplant
Prospera™ ProActive trial – Largest prospective registry trial for kidney transplant Protocol Description Number of patients • > 3,000 in test arm • Through 3 years post-transplant Duration • High risk of rejection patients for five years post-transplant • More effective use of biopsy • Outcomes inc
Slide 15: Second prospective trial launching for Prospera
Second prospective trial launching for Prospera ● Clinical study with Dr. Phil Halloran, One Lambda, and a network of leading transplant centers ● A prospective, multi-center trial (approx. 15 sites) that will study Prospera, Molecular Microscope, and DSA ● Will generate key insights into the benefi
Slide 16: Prospera reimbursement pathway on track
Prospera reimbursement pathway on track ✓ Completed analytical validation ✓ Completed clinical validation ✓ Successful pre-submission meeting ✓ Obtained Z-code 2018 ✓ Completed CLIA validation ✓ Formal LCD submission ✓ Draft LCD release ✓ Launch registry study • Establish pricing Anticipated 2019 •
Slide 17: Q2 2019 financial overview
Q2 2019 financial overview ($ in millions, except for per share data) P&L Q2’19 Q2’18 Change Horizon Revenue $24.3 $21.4 $2.9 Panorama Revenue $36.5 $35.7 $0.8 Total Revenue $74.4 $63.1 $11.3 Gross Margin%1 41% 35% 6% R&D $12.1 $11.9 $0.2 SG&A $47.0 $37.4 $9.6 Net Loss Per Diluted Share ($0.48) ($0.
Slide 18: 2019 annual guidance raised
2019 annual guidance raised ($ in millions) Revenue $275 – $305 Gross margin % revenue 35% – 41% SG&A $180 – $190 R&D $60 – $65 Cash burn $80 – $100 18 Not for reproduction or further distribution.
Slide 19: Not for reproduction ©2019 or further distribution
19 Not for reproduction ©2019 or further Natera, ©2019orNatera, Inc. Not for reproduction distribution. furtherInc. All Rights Presentation distribution. Reserved. Notisfor reproduction designed or further for medical distribution. professionals and is not intended for a general audience.