Slide 1: Natera, Inc. Q3 2018 Earnings Call
Natera, Inc. Q3 2018 Earnings Call November 8, 2018
Slide 2: 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 3: Recent highlights
Recent highlights • Processed 167,172 tests in Q3 2018, 28% growth vs. Q3 2017 – Panorama®: approximately 115,000 tests processed, 26% growth YoY – HorizonTM: approximately 44,400 tests accessioned, 36% growth YoY • Total revenues of $65.3M in Q3 2018, up 17% from Q3 2017 • Announced multiple prospe
Slide 4: Core technology driving $18 billion opportunity
Core technology driving $18 billion opportunity NOVEL POWERFUL MOLECULAR BIOINFORMATICS METHOD validated with NYS, CAP, CLIA and published in 46 peer reviewed publications* PRENATAL ONCOLOGY TRANSPLANT $4 Billion $12 Billion $2 Billion *peer reviewed product and method publications Not for further r
Slide 5: 2018 volume growth accelerating
2018 volume growth accelerating Total tests processed Year-on-year growth 167,172 167,172 164,355 162,807 28% 137,773 130,381 130,381 15% 125,731 113,517 121,335 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q3 2016 Q3 2017 Q3 2018 Not for further reproduction or use 5
Slide 6: Study shows stronger performance in a larger cohort
Study shows stronger performance in a larger cohort LARGER SAMPLE SIZE STRONGER PERFORMANCE 350 1 0.9 292 0.9 300 0.8 0.74 250 0.7 200 0.6 0.5 150 0.4 107 100 0.3 0.2 50 0.1 0 0 Natera study1 Bloom et al2 Natera study1 Bloom et al2 SAMPLE SIZE AREA UNDER THE CURVE (AUC) a combined indicator of sensi
Slide 7: Transplant reimbursement pathway
Transplant reimbursement pathway Completed analytical validation Submitted clinical validation Successful pre-submission meeting • Obtain Z-code 2018 / 2019 • Complete CLIA validation • Formal LCD submission • Draft LCD release • Establish coding and pricing 2019 • Launch registry study • Fina
Slide 8: Signatera Near-term milestones
SignateraTM Near-term milestones • Data development update: – CRC podium presentation at ESMO – Breast cancer podium presentation at SABCS: Leicester, ISPY-2 data – RCC study with Fox Chase • CLIA launch 1H 2019 – Prospective observational studies in colon, lung and breast • Continued growth in phar
Slide 9: Phase 2 lung cancer trial with Bristol-Myers Squibb
Phase 2 lung cancer trial with Bristol-Myers Squibb • Signatera results used for treatment decision-making prior to randomization in early stage NSCLC, to assess the benefit of adding Opdivo to standard of care • Addressable patient population up to 75,000 per year in the U.S. • De-risk pharma strat
Slide 10: Collaboration with Neon Therapeutics
Collaboration with Neon Therapeutics • Phase I study that utilizes NEO-PV-01 + Keytruda + chemo in untreated NSCLC patients • Correlate Signatera data with treatment response • First time a patient-specific therapeutic has been combined with a patient-specific diagnostic in the clinical setting Not
Slide 11: Average selling prices stable as expected
Average selling prices stable as expected Total revenues / tests reported* Pricing drivers going forward • Multi-year, fixed price $447 payer contracts $432 • Increasing average risk $411 NIPT coverage • Increasing coverage for microdeletions • Broader Medicaid coverage Q1 2018 Q2 2018 Q3 2018 *Q1 2
Slide 12: Blended COGS targets driving strong returns
Blended COGS targets driving strong returns Blended COGS Trajectory $122 savings per unit X $450 $388 626,000 tests / year $400 $350 = $300 $282 $76M annual savings $266 $250 ~ $200 $200 $150 ~59% ROIC $100 on all R&D spend $50 $0 since 2015 Q1 2015 Q3 2017 Q3 2018 Funded projects Not for further re
Slide 13: Q3 2018 financial overview
Q3 2018 financial overview Growth in Panorama and Horizon volumes is primary driver of change vs Q3 2017 ($ in millions, except for per share data) P&L Q3’18 Q3’17 Change Horizon Revenue $ 23.5 $ 17.9 $ 5.6 Panorama Revenue $ 36.0 $ 33.9 $ 2.1 Total Revenue $ 65.3 $ 55.9 $ 9.4 Gross Margin% 1 36% 38
Slide 14: 2018 guidance update
2018 guidance update ($ in millions) Revenue $250 – $260 Gross Margin % revenue 33% – 36% SG&A $150 – $155 R&D $50 – $55 Cash Burn $65 – $75 Not for further reproduction or use 14
Slide 15: natera
® natera’ ive. Deliver.