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 Processed 130,400 tests in Q3 2017, 15% growth vs. Q3 2016 Panorama®: approximately 91,200 tests processed, 4% growth YoY HorizonTM: approximately 32,800 tests accessioned, 60% growth YoY Launched new Panorama capability for screening twins pregnancies First NIPT that can determine
Slide 3: Sales Rep Productivity Growth
2015 2016 2017 YTD Annualized Direct Units (in 000s) Per Direct Sales Rep Sales Rep Productivity Growth 4 Supplementing core products Continued menu differentiation Pricing transparency tools Further redraw rate reductions Rounding out NIPT product offering
Slide 4: Driving Growth in Core Products
Driving Growth in Core Products 4% 60% 5 Processed Units Accessioned Units 20,500 32,800 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Q3 2016 Q3 2017 87,400 91,200 70,000 75,000 80,000 85,000 90,000 95,000 Q3 2016 Q3 2017
Slide 5: The only NIPT to provide zygosity that may help triage high-risk twin pregnancies
The only NIPT to provide zygosity that may help triage high-risk twin pregnancies T21, T18, T13 with sensitivity and specificity > 99%* Zygosity with sensitivity and specificity > 99%* Monochorionic pregnancies are at high-risk for complications 1 out of 5 monochorionic pregnancies misclassified as
Slide 6: Medicaid Continues to Expand
Medicaid Continues to Expand Note: comparisons to Q2FY16 based on Natera data available Increased NIPT coverage Since Q2FY16, 13 new states have begun providing coverage for high risk NIPT Increased published pricing Since Q2FY16, 15 new states have formally included NIPT on their fee schedule Incre
Slide 7: Signatera Product: Personalized Enrichment Technology
Product Personalized Enrichment technology mPCR Hybrid capture Genome coverage 3-5 kb (>16 targets) Scalable to hundreds 75 - 250 kb NGS coverage > 100,000X 8,000 – 10,000X COGS < $200 Estimated $500 - $1500 Signatera (RUO) Advantages 1Abbosh. Nature 2017. 2Lanman. PLOS One 2015. 3Newman, Diehn. Nat
Slide 8: Pharma Market Bearing Fruit
Pharma Market Bearing Fruit Within 3 months of RUO launch, signed 6 pilot deals with leading pharmaceutical companies Expected applications in pharma: Earlier treatment opportunity, upon molecular relapse Earlier assessment of therapy response, esp. in immunotherapy Longitudinal tracking of patient-
Slide 9: Signatera for Recurrence Monitoring
Signatera for Recurrence Monitoring Standard of Care Surveillance Patient following Surgery and/or Adjuvant Chemo No ctDNA detected ctDNA detected Early treatment with systemic agent Increase Imaging Example: Lung cancer Unmet Need: 5-year survival in regionally advanced lung cancer is low at 29%.*
Slide 10: Signatera in the Adjuvant Setting
Signatera in the Adjuvant Setting Previously Diagnosed Cancer Patient No Residual Disease Residual Disease Surveillance Adjuvant Chemotherapy Curative-intent Surgery Example: Colorectal cancer Unmet Need: ~20% of Stage II CRC patients receive adjuvant chemo in US, but only 2-4% will benefit.(1) NCCN
Slide 11: Signatera U.S. TAM in Recurrence Monitoring/MRD
*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 Sources: SEER Data, L.E.K.
Slide 12: Average Selling Prices Stable
Average Selling Prices Stable Multi-year, fixed price payer contracts Increasing average risk NIPT coverage Increasing coverage for microdeletions Broader Medicaid coverage Shift from procedure code to NIPT code In-network shift Shift from procedure code to microdeletions code Total revenues / tests
Slide 13: 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 28,000 $450 $12MM Microdeletions 41,000 $300 - $600 $12MM - $24MM Total per quarter 69,000 14 $24MM
Slide 14: R&D Investments Driving Strong Returns
Q1 2015 Q3 2017 R&D Investments Driving Strong Returns Q2 2018E ~ Blended COGS Trajectory $106 savings x 490,000 tests / year = $53MM annual savings ~50% ROIC on all R&D spend since Q1 2015 15 $388 $282 $250 0 100 200 300 400 500
Slide 15: Q3 2017 Financial Overview
Q3 2017 Financial Overview Average selling price changes, growth in Horizon volumes primary drivers of change vs Q3 2016 P&L Q3’17 Q3’16 Change Horizon Revenue $16.9 $12.2 $4.7 Panorama Revenue $35.7 $38.1 ($2.4) Total Revenue $56.7 $53.9 $2.8 Gross Margin%* 39% 36% 340 bps R&D $12.6 $11.3 $1.3 SG&A
Slide 16: 2017 Guidance Update
2017 Guidance Update ($ in millions) Current Previous Revenue $212 - $220 $210 - $230 Gross Margin % Revenue 35% - 37% 35% - 40% SG&A $135 - $140 $135 - $140 R&D $45 - $50 $45 - $50 Cash Burn $80 - $90 $65 - $75 17
Slide 17: 2017 Guidance Update
2017 Guidance Update Revenue $212 - $220 $210 - $230 Gross Margin % Revenue 35% - 37% 35% - 40% SG&A $135 - $140 $135 - $140 R&D $45 - $50 $45 - $50 Cash Burn $80 - $90 $65 - $75 @natera Not for further reproduction or use
Slide 18: e Natera’
e Natera’ onceive. Deliv