Slide 1: Natera, Inc. Q3 2019 Earnings Call
Natera, Inc. Q3 2019 Earnings Call 1 November 6, 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 $77.9M in Q3 2019, up 19% vs. Q3 2018 on 20% volume growth ● Completed key technical and commercialization milestones in sequencing partnership ● Received positive draft local coverage decision from Medicare for reimbursement of Signatera™ in colorectal cancer ●
Slide 4: Extending market leadership
Extending market leadership Total processed units 200,229 ● Q3 2019 volume growth 167,172 – 20% growth vs Q3 2018 130,381 – 3% growth sequentially vs Q2 2019 Q3 2017 Q3 2018 Q3 2019 4 Not for reproduction or further distribution.
Slide 5: Positive momentum in average selling prices
Positive momentum in average selling prices ASP opportunity Total revenues/tests reported1 $411 $407 $393 $395 $384 ● Improving results with prior authorization, Medicaid reimbursement ● Average risk NIPT remains upside: Estimated ~$60M annual revenue and cash flow opportunity from existing volumes
Slide 6: 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 $234 $200 gross profit $200 $150 opportunity $100 $50 $0 Q1 2015 Q3 2018 Q3 2019 Target* * Target COGS estimate based on currently funded and active R&D projects 6 Not
Slide 7: Transplant: Pathway to significant revenues
Transplant: Pathway to significant revenues Total tests Revenue sensitivity ($ in millions) $98 ● $2B market $84 ● < 5% $70 penetrated $56 greenfield $42 3% 4% 5% 6% 7% Total < 5% Market penetration Source: Natera internal company estimates 7 Not for reproduction or further distribution.
Slide 8: 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 9: Oncology MRD market opportunity
Oncology MRD market opportunity ctDNA / Liquid biopsy Early Monitoring Therapy detection $15B selection Based on internal company estimates 9 Not for reproduction or further distribution.
Slide 10: Key commercial channels
Key commercial channels Direct channel Clinical Direct channel Pharma 100K+ clinical patients/yr Hiring oncology Pharma 1 million+ genetic tests Presence 50+ active pharma partners focused sales reps BD reps in 2018 in China Study enrichment, Application Cancer Stage II-III CRC, Offer Signatera Trea
Slide 11: Unmet need #1 in CRC: Effective monitoring for relapse
Unmet need #1 in CRC: Effective monitoring for relapse ● 25-30% of patients Avg time to relapse (months)4 Serial testing to detect relapse4 relapse1,2 98%* ● Over 85% of relapses 88% 8.7 months months caught too late for 8.7 lead time 14.2 mos 69% lead time 64% curative surgery1,2 with with Signater
Slide 12: #2: Assessing risk/MRD status before adjuvant chemo
#2: Assessing risk/MRD status before adjuvant chemo ● Most patients are cured with surgery alone # patients treated to benefit one but still receive chemotherapy 11 ● Adjuvant chemo is recommended for patients at high risk of relapse – High-risk patients often missed – Low-risk patients significantl
Slide 13: Signatera colorectal cancer – Medicare reimbursement expected in 2020
Signatera colorectal cancer – Medicare reimbursement expected in 2020 Successful pre-submission meeting Obtained Z-code Completed clinical validation CLIA soft launch 2019 Formal LCD submission • Launch registry study Draft LCD release • Establish pricing 2020 • Final LCD published 13 No
Slide 14: Q3 2019 financial overview
Q3 2019 financial overview ($ in millions, except for per share data) P&L Q3’19 Q3’18 Change Horizon Revenue $26.1 $23.5 $2.6 Panorama Revenue $37.6 $36.0 $1.6 BGI Revenue $6.9 $0.0 $6.9 Total Revenue $77.9 $65.3 $12.6 Gross Margin%1 44% 36% 800 bps R&D $12.8 $12.4 $0.4 SG&A $56.7 $38.4 $18.3 Gain f
Slide 15: 2019 annual guidance tightened to top end
2019 annual guidance tightened to top end ($ in millions) Revenue (PF for Evercord sale) $299 – $306 Revenue (reported) $295 – $302 Gross margin % revenue 39% – 41% SG&A $195 – $205 R&D $52 – $57 Cash burn $65 – $75 15 Not for reproduction or further distribution.
Slide 16: ©2019 Natera, Inc. All Rights Reserved. Not for reproduction or further distribution.
©2019 Natera, Inc. All Rights Reserved. Not for reproduction or further distribution.