NTRA - Earnings call transcript Q1 2018

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Operator

Welcome to Natera's 2018 First Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode.

Following management’s prepared remarks, we will hold a Q&A session. [Operator Instructions].

As a reminder, this conference call is being recorded today, May 8, 2018. to Financial conference Officer. like Michael over now Chief Brophy, would turn call the to I Please ahead. go

Michael Brophy

Thanks, operator. first webcast. live Good our Q&A. conference on call Today's afternoon. line CEO. Thank you discuss the is be results for Steve the conference Chapman of joining Matthew call via our is quarter will Also to XXXX. Rabinowitz, joining for our broadcast being

also has of be will referring will available We the posted replay investors.natera.com. A slide that to investors.natera.com. to been presentation call be at a

statements the These our and and filed Please XX-K Form the reflect for During dates and of expected statements. differ statements assumptions results. guidance, in including events important forward-looking differ results press including capabilities, our our related the various and We products, other with course such performance, most our judgment could SEC, known this market the release. for currently financial from partnerships, will and current caution X-K conference XXXX, documents results or that as make regarding recent anticipated factors studies, for call, to that size, materially. future and release clinical forward-looking us operational today's on documents opportunities the factors with such actual that and Form effects our and cause that risks guidance year operating we on and identify may those and to financial contained file, to from future events actual the our we you time-to-time, expectations our refer based best strategies, full future

not the made presented any obligation is this after or statements disclaims today, or any or update the Natera may made information. replayed being during as today. revise of If during contain accurate call Forward-looking call to statements. the reviewed forward-looking information call current are

we do today's guidance our forum. public during so further unless guidance or call, not in will provide performance will the updates on on a quarter We but provide any

performance will otherwise turn changes numeric each comparison. reference number financial such to the or unless and to quote our I'd year-on-year over discuss call a noted, growth Matt. like now, a We of And as we represents

Matthew Rabinowitz

Thanks, everyone since you cover for March. last highlights And spoke and will the recent our us. afternoon in joining I Mike. progress and our we additional on provide Mike thank progress. financial Good business in detail will

will be were we mentioned, just to Mike that investors.natera.com. As posted slides referring at

contracts forward stable. sign the strong for QX revenue return payors. have growth be we call, growth of quarter-on-quarter testing to expanded for our with position as in we We stable and we Natera volume First, pleased driven made environment to Based year these this see some to volume our growth unprecedented and is long-term and together. leadership are the the service we by components in part by decisions, in strategy posting on our predicted expect our QX. going decisions and growth excited we volume is described time. genetic offering, health women’s pricing substantially QX on coming technology pricing Ongoing anticipated to Besides key long-term the in driving superior

improve Horizon business our our gross March distribute to in we will later regard enable deal with emerge margins. as addition, sold sequencing the with roadmap. and DNA expected. we content goods call said is broadly QIAGEN particular our already In described continue to as More about platforms testing. will in we with cost we to be this consistent seeing are That Furthermore, and at new contributing our of to leading high Natera carrier

is Panorama, And in even differentiated to substantially strong market testing. that are this oncology and improve patient release position we as with to continue prenatal a has Lastly, exceptional we that potential care. on establishing larger data than the

of beginnings XXX,XXX Natera’s which of the quarter see volumes, in XX% revenue. tests recent A versus over represents On on the to oncology’s starting XX% over sequentially year versus XXXX. we fourth our Slide of the growth processed are summary contribution X. last same quarter and quarter, highlights to We the

the sequential In wide largest fact, by unit QX volume the growth was the quarter of history in margin. company a

For a with particular, growth in sequential QX XX% posted processed year. which we last represents growth QX, XX% XXX,XXX of quarter second Panorama compared and in consecutive sequential strong tests and

recognized year-on-year. Horizon saw in in quarter, line our up we of total QIAGEN million XXXX. revenues which of our with screening in revenues grew QX XX% This year $X.X also our QX payment expectations and volumes in QX versus includes momentum XX% QX XX% call. sequentially received the XX% versus as in XX.X from carrier roughly million in continued which was We the We and generated discussed last

carrier be our for ultimate we side the been we Importantly, initiative units reduced in err major revenues cost driver than booking estimate for which team and detail our workflow. on Mike of provide in [ph] we will accounting, QX. the first more cash be goods call. is a our announce This pleased will sought which we on in an I of XXXX. accrual Since will has quarter launched our rather expect our QX very key based revenues receipts. later to recently reporting on R&D reported our accrued caution this first estimate under that are screening rest have This for requires collections to basis of us of to is out what quarter a we Horizon am with sold cash the

the pace. oncology for in colon Cancer and in results on I at bladder a continues meeting American successful at April. Research studies cancer As Association progress presented mentioned, We recently our

cancer, replicated bladder cancer pan-cancer Signatera to platform. promise across that its and as Given lung is we’ve to outstanding cancer, believe up now live colon we performance starting RUO a

the companies. deals studies for now XX leading effort, use-only we research On with have pharmaceutical

in more seen the strong pipeline. many for have pharma this deals have We offering interest from and

our Panorama and driven have a slide previous our for about talking progression in spent recent We of summarize the progress time Horizon. I’d like volume commercial in Now, to lot growth. the The that calls volume activities our quarter. earnings next shows

capability screen launched while and categories. risk maintaining twin accounts seeing combination. same-store accounts so high in and in stable doors are well Innovations to account risk Panorama new and very user remained units, experience We’ve work in volumes retention products our XX% the opening mix metrics. strong of seen continues both Panorama year. average new to sales In new in high Our growth growth we roughly volume both has XX% business, at and last

business screening growth Panorama has outpaced attachment we momentum continuing. see carrier Our and strong even in to that

like in these products breaking yet Vistara, volumes with as but performing our expect consistent before, new And products Evercord We newly mentioned and roughly a in that on out products million we not QX XX we ramp-up factor are in are XXXX have results is launched the from driving Historically, which early driving we and period. seen also some are QX. these volumes in more seasonality expectations.

every fundamentals have the So positive while the we don’t expect remained and expect over business sequential growth the we to quarter, post year. of the of this in growth level balance

study cancer from our preliminary Danish April. we muscle AACR The bladder patients included in by On slide, On bladder measured conference of more absence over are remarkable treatment. the the University. in who prospectively Aarhus tumor in These data, and regular drawn presented our DNA than abstracts Signatera this patients XXX intervals and at would colleagues announced the invasive in XX previously blood initial at studies would where years study colon from cancer or two three was readouts the we the with colon included collaboration from as stratifying the showing relapse Signatera not or based blood who after on and diagnosis. ability presence in oncology

clinically. tested months high positive bladder On indicates the up relapse lung average, predictive after colon. Signatera who detected clinical relapse months they with patients all with value or positive exceptionally cancers for X.X and ended and molecular For for was treatment, four four This relapsing PPV.

interest In is a with XX.Xx, addition, relapse with sensitivity This individual average perspective Furthermore, of opportunity no very new is clinical stage likely cohorts an relapse detection risk positive result. in these an meaning the to molecular Signatera this to Xx more the of individual clinical X disease versus show patients Xx XX.Xx staging is to relapse statistically showing Signatera many to a Signatera an is and for up immunotherapy. the multi-varied XX.Xx The a analysis, other than clinical types. only In high result relapse. cancer ratio for all into negative relapse tumor disease. Pharmaceutical between that the positive was to offer where colon with factor great were standard X utility, high and This molecular are patients XX.Xx higher traditionally when for From to treatment to relapse a for significant. scan. compared waiting upon available especially to cases chance for being clinical than treat Stage order has later who to only relapse companies biomarkers. X early Stage with striking longer these of higher believe without predicts magnitude could gold other is features be clinical are we trials adopt on

also standard consistently identified evaluation RECIST monitoring. accuracy. and into were We for In could promise colon criteria Signatera for and Across treatment Signatera showed has or addition in with monitoring, responding data can it great our which time a studies. adopted were which the cancer FDA endpoint in to believe treatment clinical by high make studies bladder which three that recurrent types, not response be the to patients criteria

right Signatera it success Finally, tested result treatment XX% negative or including Treatment other combining of with the XXX% important also Even positive and than single succeeded any the Signatera were variables. blood other outcome. sample accurately predict use the fails predicting et time the statistical the variables failure in could a who unique for significance a patients at cetera, analysis lymph to of we diagnosis diagnosis finding. of variable all traditional nodes, multi-varied had tumor of the of bladder more in size, staging, data, in A only while became at patients.

believes for for the clinical alone who Signatera patients NCCN diagnosis. to at could new points enough be trials Our This this medical guidelines. positive of enter are time treatments team explore to that practice urgency

are We with pharma currently this several companies in opportunity. about discussion

samples, been over X,XXXx years three on reminder, all and in plasma points the a with two because tumor each all hugely of enrolled analyzed clinical tissue, valuable outcomes these the patients are As patients across data ago. study have first being them longitudinal our collaborators collecting with over studies

is breast same years several doing are cancer thing well ones designed whether as analytical liquid like biopsy assay very a other biopsy whether questions or gets get DNA there of monitoring report year. tests smaller than not into clinical is other means to the them specific sequencing are mutations panel bigger studies a types. other is they of We in tumor many on in from targeted associated effectively Signatera tests. or every tumor and a We the patient definition coming contrast, we to expensive based This getting on single different the studies the liquid in of and Signatera This readout often tissue with of available, the focused present today tissue market to cancer This likely appropriate presence for. as scan has disease produces therapy any work cancer be mutations one Most Signatera in absence the months less are Clonal not and on been therapies see how quantity they the targeted requires to X,XXX the where associated The ctDNA for genomic want it’s to more but some profiling generally late-stage aid can not use and use selecting response clonal profiling generally Each manufactured are be most found outer clinical or for just custom-built would custom sequencing considered biopsy from first with in MRD produce the a one-size-fits-all But treatment. cell. plasma. of it’s consist something panels by necessarily and something on a listing a tissue. meaning and high. broad assessment. where are They of of that if doctors used the to circulating for therapy. is is mutations scan and result patients. is actionable, lot prefer genes for with one targeted mutation called cost test genomic application condensing a found. each platform In

and be our to on is that of hetrogen XX blood. of single know cost vast scans because prone scan very majority like stages for use and we critical few of So prioritizing not all the is other early means AAV tumor just highly diagnoses means adopted stage This of it be like a a where targeted, these that, cancer in assay give This We even to review liquid today. save a to over Mike? we by early DNA supports let detect new biopsy could This to opportunity a expect test [ph]. companies track every disease, XX goal With to tumor late. choose and are copy shots a patient we market clonal tube is in to performance. major that both in to compete affected help lives. Mike and just ourselves our mutations have low improve repeat hand huge financial me untapped a

Michael Brophy

Thanks.

basis In required received accrual the this described, XXX. in a in quarter the quarter is cash as booked accounting an revenue. Matt past, given which As report on the by standard we we first as revenue

revenue Now total out period reported get tests whose expect in on just each we estimated to on from the our the we were results to customers collections book based test.

So as tests clinical forward, well lab. will as reported in in period given and accessioned disclose processed tests our going a we tests

performed processed is a still both sold cost includes and tests to tests it metric growth measure assessing metric volume via platform I think for remains accessioned our lab accessioned tests good goods since overall Constellation in the tests of per unit. good a and

We this goal slide new the for first presented for the call, As conservative our our standard. reasons previously QX stable we year under particularly estimates collections this to described take and pricing the in a approach on Matt accounting quarter predicted mentioned. our is the since is

number We and of as a coverage. in Medicaid tailwinds. NIPT have future coverage include microdeletions we have also current past pricing risk payor as and discussed for These that broader the average well

testing New were pursue recently York performing. to example, already broader a we allows us provider became for Medicaid in For we credential which reimbursement

their states first time QX. the In have or NIPT rate their on addition, four priced improved either for schedule fee during

actual all monitoring is data. more collections in are current there get as changes think these for to we our QX collections types our and for of We we the progress exceed estimate scope

to volume sequencing described, as investments improvements a products growth our driven context to by the for our is revenue revenue NIPT making business, new the in return So contributing we growth, core stable is I monetizing an after to XXXX providers, piggyback to The driving pricing path emergence of on relying breakeven key the describe previously. to new core technology next-generation cash can we and for flow a below growth here than QX we level as able without was and cost and that described better to implication on plans meaningfully improvement was our in which their next the average still risk this We microdeletions mid-XXX here shows year achieve. QX. were think we NIPT of a by target drive we in partially COGS slide COGS or middle hiring can set rapid expectations by our progression. The volume of outpacing reimbursement our COGS driven This the a performance lab. XXXX, temporarily

next up the to workflow of recent months in that on we do Horizon closely the are hiring and we monitoring few some expect launch. So catch

and new As workflow in COGS Matt the screening year lower second with carrier mentioned, we half this we of launch. to expect the the launched recently drive

driven XX drive Beyond lower blended based that, We've significant we to and some think as the we've improvements and returns side technology us R&D XXXX, if very of revenues concept generated on COGS COGS strong that even COGS leave can in next since have on improvements count page, only next will have months the the investments of the have allow substantial the see volumes. key so. on reduction again in aside achieved the we NIPT you made product over beginning that data in reductions but much you or been right-hand

and our the quarter. the summarize quarter results results wire to from full crossed this The Now the for afternoon. year the

results. XXX new the as brevity for the Since on we results an well on that under today, quarter described, the QX from reported call QX it’s as adopted ASC approach standard, XXXX points going I the comparison. apples-to-apples current this I'm the So to are ASC focus retrospective so of to full XXX key

revenues Our quarter first million to first quarter XX.X for XX.X compared million total were XXXX. the of

quarter were for margin first prior of to year. stated the million the we provided I we signed XX% on QX QIAGEN a in the million deal last earnings in estimate from million the the Gross is release, XX.X which XXXX recognized to the revenues the this press compared year. were As same period X.X compared quarter than we slightly call. gross quarter the QX March XX.X for of XX% margins Panorama in in higher

is As this are exceed there our we point. whereas substantially collections scope complete believe estimate described to QX collections above, XXXX for QX we at

growth received that we cash, of QX XXX.X capitalized cash, close non-cash million what Horizon million reporting cash previously. a first of XX component driven unchanged the disclosed legal and to today. investments the held $X based out this So quarter X%. XXXX, XX.X one-time quarter on it’s cash an At quarter from we XX% for company was quarter increase partly by charge were about in by higher to The of than be first the of out volume the an possible a increased to largest growth. may short-term Total for year-on-year compared and in year, the expenses revenues QIAGEN restricted paid are turn first to the in charge compared and increase we the equivalents, versus on increase March the the last of million quarter, R&D. is of about the settlement operating related which million

our net of line under accrued Advisors million the and down million a amount term held we drawn $XXX under debt million, million $XX place of had facility credit As Orbimed interest in of XX.X with UBS. including March carrying XX, seven-year with XXXX, XX.X

Turning our guide I outlook. as to mentioned. future No to March changes in

million; and I've to underlying expect XX% XXX and to from be total million; revenues this research volume XXX to general key and The with XX by be to to margins to driven be approximately of and revenues million We contributions same. previously. our XXXX in to XX% products, operating driven of million guidance expenses Revenues to administrative stable million. the costs as XXX XX burn growth to new stable product million pricing, XXX selling, costs remain XX roughly revenues; by development described assumptions approximately be cost of million XX improvement, COGS cash million;

would Now, the Operator? line questions. I like open for to

Operator

[Operator Instructions].

comes question with first Our Jaffray. from line Piper Bill Quirk the of

Your line is open. now

Bill Quirk

Great. afternoon, everybody. Thanks. Good

Matthew Rabinowitz

Hi, Bill.

Michael Brophy

Hi, Bill.

Bill Quirk

First question, of quarter, in rec the just kind through on QX in with guidance out QIAGEN the thinking and sort rev will here no change guidance? the in how the about that do recur that the payment we the QX and

Michael Brophy

Thanks, for the Bill, question.

able the described milestones balance to we just prepaid the we that So upfront. came of going the in upfront revenue booked we certain as off the book process royalties earn of were million the development the previously. that from and that we received we Obviously be portion XX recognition deal is as reach the to

So it’s not smaller going to like going quarter going be anything that. be a much recurring X million to or every It’s forward.

Bill Quirk

the was year? the inference you sort should – good. continue in of then color that sequential obviously the thinking to just performance very kind caught a just but driving little of And necessarily throughout growth. your maintaining terms pace And this? we what’s we not volume sequential see significant the in same comments not sequential of Okay, add about Can increase being about

Matthew Rabinowitz

seen to quarterly going. growth the maybe is will on a basis phenomenal XX% dynamics a you we part. that to growth as as But year-by-year year-on-year and Steve about in terms to want far the see established concerned, you that great as talk [ph] is volume expect keep which pretty you’ve before Well,

Steve Chapman

sure. Yes,

and half So XXXX year of that the with products is we second NIPT customers us our into talked of improving and think lot rounding opportunity addition then twins really launch I new our of out the break a Evercord user to new Vistara. and that about give the in us differentiate the and experience, offering

that So we pace of increases at QX, of our when we’re record in closing from customers. we customer, look levels each continued in saw then volume the increased QX in And new at same-store continuation in sales. seeing of account now you

largely customers driven and sending So volume sales. customer by then more same-store increases each more in

just QX. very seen the we’re pleased in obviously growth So with record that we’ve

Matthew Rabinowitz

we see We some There seasonality. that to quarter. QX in a be remarks. make Bill, do prepared the did comment high is tend

But growth So basis you to kind expect yearly can’t we to going our continue think quarters. that subsequent on strong. of a continue is growth in

Bill Quirk

Okay, got Thanks, it. guys.

Operator

you. Thank

Stanley. comes of with question Steve the line next Beuchaw from Morgan Our

now Your open. line is

Steve Beuchaw

we seasonality commentary the QIAGEN get follow the guidance considering time. the to afternoon. frankly like meaning and guidance, around actually the higher. Good would of guidance be the to course drift sort normal a year and for first take product quarter consider the the up on If you’re results Thanks the the second year to is and full to question. and want over then is progression I of seems cadence Bill’s the we if new natural we difficult it the that consider little revenues

if So line. might the for anything the we flag not if that they of I’m ex-QIAGEN, wondering so obvious may be on balance the consider top be year should you’d that there

Michael Brophy

going growth QX X.X be as not the the And and that that’s XXX range. concerned, of has Mike. you still the characterized, pricing far Yes, just much, It’s you Happy the pricing from smaller would within then in XXX quarter-to-quarter. as stable to for of from dynamics mind is Hi. that assume balance the keep going QIAGEN and to if Steve. kind year. elaborate million guys so there. Thanks, anything much It’s recur tend win to to to

Matthew Rabinowitz

It for sentiment good the at quarter. here. real was great do I’m QX. very issue the I That’s But math. not a upon appreciate

Steve Beuchaw

can One I’ll and talk I Chapman wonder back environment if and about the the then in queue. you in guys, going maybe Steve prior jump is group authorization.

policies. actually may field, intense the bit some the reversing given is time If you on clinician environment. like of out some some from you so second, this some of have authorization may time fairly pushback be a to push hear those much for – I know at quite that point don’t in on seems And one prior hard. competitive or might spent then comment everything. again, little And you the as a making if not could you It thank be been pushing another time

Michael Brophy

Thanks.

answer let authorization. prior comment on your me So

So prior had this in authorization still those just with is of a an the in of we’re markets. is that consistent policies that auth subject business prior parts in and actually and year of of evolving the expectations timeframe dynamic inevitable our our adjudicate so of as and rolled it, November the about the with kind how reminder, consistent we plans, of some the evolve. far we to they in which prior year annual of the claims to seen books seeing last beginning guidance. are challenges we continues that at authorization out have we’ve that lot incorporate A choices they made their Everything

monitor pushback to appreciate that’s But I has continuing some we’re encouraging. So there and been that. that

think going year. kind it’s that’s goes the as for she the of now I rest of for steady to continue. But

Steve Chapman

Thanks, on Yes, environment. comment the I’ll competitive Mike.

any So there have been changes. really significant

It’s they think an add the environment, necessarily I space. competitive recently still to notable competitive are nothing so in extremely there.

forth. right been performance it’s But products the some now with we and a in that for environment working the and and obviously so far we’ve we the additional We’re facing as of pretty launching very pleased on our while. same our user much as made quarter think experience moves first

Operator

Thank you.

line the Doug Company. Schenkel of from comes Cowen question next Our with &

open. now Your line is

Adam Wieschhaus

Hi, Signatera on Adam guys. Doug. Thanks RUO On my for This Wieschhaus question. for -- is your taking

Michael Brophy

Hi, Adam.

Adam Wieschhaus

Hi, any of partnerships biopharma Thank this sign biopharma number but you new Mike. On product, and might it Signatera is to quarter there sign? that to deals able did missed your in RUO any have you’re limit I you.

Matthew Rabinowitz

Well, and can that been a a there but strong. it’s we the just number it sign large really limit has to is amount

new bunch this quarter So did in yes, the more lot we sign deals of and a there’s a pipeline.

those out and going signed results of to just you’re see cadence deals steady reporting being pharma. to So a

is We’re on not relationships have those be pharma. most The data fantastic. the and for ctDNA the is up treat we got to are the that is just And in patients these these and is these of study to States therapy, this up detection trial But large high. public even that start able consistently of years specificity of prognostic adjuvant you is when test levels, catching the a going setting tailwind seeing test out portion a United recurrence. and starts most the cancer range is you What to The few to report different pick interested proprietary of see whether the we to in the to such recurrence high next with are test molecular the because all for in the upon patients in we residual if will market strong, that signing early so The amazing. you’re that along detected that the specificity we’re of methods strong those with cancer power from remission to of and and one out recur obviously applications different we’re this things monitoring know recurrence test. a patients a doing test, low that that’s sorts with very such being with million at from of disease that because technology specificity XX people Signatera here. exciting done living can

second the big that’s application. So

just a at new And endpoint is antigen of is tracking for area vaccines. cancer new looking for as personalized of the – fourth third The immunotherapy the the trials. personalized area clinical work all

look you prognostic the indicator. Kaplan-Meier so is a data at If this curves, strong to use as

the your you the cost DNA reduce of and cell level substantially of accelerate trial the can You and use for the trial.

interest indications the So signing across all companies process a and pharma ongoing. seeing up deals these new the is different in from negotiating of deals and we’re lot of those

going team. launch. the is gearing to fast to, our can’t We a but start growing we bandwidth a take are trials as up just want little we that in on be all for limited bandwidth that think obviously midyear I bit as as we

Adam Wieschhaus

to one XXX as impact I in maybe just have lighter be year. it you due on little growth you just as Okay. the than QX wondering strong due Thanks. XX% maybe more QX? previously the [indiscernible] that Thank QX. to headwind QX? negative be QX I of start negative wondering a the could that you. transition, in impact ASC expected less And appreciate an think the other big of which might to quarters mean I’m what to size anticipated to shift color. maybe I was all in but had

Michael Brophy

Thanks.

but of I but think was that purposes So the the phone pronounced having think there modeling the ASC in bit the it’s impact a bit There’s pretty summary of of think not the quarterly is to the broke It’s the little I a difference. through more year. make balanced about question up impact enough for simpler a XXX? course QX huge to was,

Adam Wieschhaus

Okay. That’s helpful. Thank you.

Operator

Thank you.

of with Our line next Genuity. Massaro the Mark Canaccord question comes from

line now Your open. is

Mark Massaro

wanted ask do in where impacting guys. you market share? ability do Evercord, a be you screen have and Hi, might a a sense to and get competitive to and you terms for in of recent you twin what the decent marketplace to your feel dynamics if pregnancies I quarter. Thanks Vistara for wanted congrats stand for strong extent think – to

Steve Chapman

Yes, I’ll is Steve Chapman. This that. take

that So in maternal with allows our when have medicine maybe Vistara team like visiting fetal I weren’t you to sector. get into that the products to differentiated particularly think sales previously, open customers us

the maternal and fetal high space we So we low were risk than growth are regularly see more offices as medicine consistent previously. we into and getting Mike in outlined,

which considerations, very get they on and differentiated customers something unique we have an important can can determine When having market, is, One company there’s out So you offering, else than maybe the into something only the the competitors that two twins zygosity benefits that differentiated. look of And something that. want it’s nice you really offering the account. is to can again, clinical has second want that significantly core at to differentiated. keep our is anything

twins Natera a clients of they had So our offering. competitor use offer because previously had a then that and to many competitor big to needed NIPT also they

reason and think we’re entry our penetrated market – why and getting offices increase retention market risk have to share, barriers and part probably seeing it risk to look So have high today those accounts the of you as the competitors one-third think been XX%, been and overall we’ve at penetrated average between in because or is the we we we closer an XX% in that’s so for When today. largely account is rate able from to think competitors remove about now of XX% raised. stands XX% closer our I around market the

Mark Massaro

that you of out And wanted sense of helpful. the as to annual greater the commercial to any NIPT? come really I and for has payor gone. get relates heard chatter That’s ACOG adoption average it meeting a for meeting coverage risk

Matthew Rabinowitz

questions. Matthew. for great. is these Thanks They’re This

higher We’ve to total the markets than some add many so is So I the been growth just there. continuing of on. low much pretty said. that. a and of with risk our to market Steve want what competitors Natera out share has share color first a impressive one-third about got on trajectory And That’s that

reported are XX% Our share even We the but probably low, well above markets risk higher XX%. past of low now. the and maybe in about

coverage is pressured issue. to that about very So payor the [ph] this question

from it out. say payors reluctant ongoing to statements of the sort every and seeing ACOG process. United we policy like are are push, meetings more stronger and we of But ACMG steady cover making the and ACMG month timing are – Aetna, with reluctant is others statement a holding make the kind timing pressure make stronger payors the in payors, is can We that’s And line strong ACOG mounting. about also additional low risk of see about so, that any to statement of for and a continually I

that but societies key out. some pressure the we is and hold ambiguous covering held them out of there mounting. and have harder continually they have And are of more risk these so number growing from lives to companies that response is and for the harder who XX% insurance Obviously – these becoming out, from they a are it’s now payors covered certain and So members are some of the payors. hear are professional low concerned, that than holding there

and So just I at but all can and been I’m we you we that’s soon, see to aggressive that will reluctant they to they happen say but risk much given in to on prepared will the exactly fact pressure we commit low these haven’t mount pretty continuing hopefully it the will our fold. say cover when to meetings, society this is a that are guidance. that

Our guidance change assumed hardly any has in low coverage of risk.

Mark Massaro

in encouraging can I clearly data out us your That’s making give missed the are maybe on the you’re building provide or really a I biopsies. launch then pathway? on FDA cancer it, biopsies to year? Can on one sense you’re progress liquid biopharma liquid comment Matt, thinking And you putting a you about and something have collaborations might going LVT sneak potentially one some just you if to And in. can submitting how strong this – last oncology clinically helpful. tack

Matthew Rabinowitz

you are we’re phenomenal ability really is the prognostic unprecedented that who some its is I those in in in corner at just we’re and oncology curves. is on our is generating terms negative But that careful how differentiate prognostic where compared produced. because Look, data this dominant see the those oncology are to question. I when world got would say that The versus the data don’t path that data I oncology in of in be the phenomenal the of pretty look knows positive. Signatera being Great data just curves the and to that data encouraging; is encourage think to tests showing market data unprecedented. to I Kaplan-Meier to

going infrastructure a got customized it’s enabled lot a lot team that around all happen amazing year. the support end we logistics doesn’t it out working the guys next version this year per But We’ve for and In as at timing, like the to to build at logistics that got got in patient. launch the get soon are that’s technology of terms end in to updated. clear that of will and QX the around looks still well. will this now the launch year, operational this and we the of happen we of build to If panels to an keep the it very target you there’s of go be it on pushing operations and right capability, but

the we remission the we year. to are insurance timing the as cover, the There’s be that the going to patients. single recurrence to the for cash to is we’ve few in and right we you much end down low will go about of So the themselves as to pay a catch from insurance. besides offering. to sequencing on didn’t we relatively doesn’t advantageous this very the having market be And bill submission a joint ongoing this and and but are visits likely and that that big the very roughly to just for play opportunity very ask. we commitments the doctor very now the the of FDA a are times, without be it’s FDA the for a that track able that think Signatera be is amount else is for submitting detection made of said have assay this subject of on with for But imaging, we others and molecule that, FDA going in and patients as the earlier are will is I’ll far is because and imaging the concerned, something target Signatera yes, cost all us level done radiation potentially situation and to And cancer which very we haven’t And CMS going a can that with can small in in. mention attractive

from base. pay a opportunity cash has Natera and good of the there’s payment patient a managing cash very So logistics become big at very broad

our our in a into the that get few billing to infrastructure this infrastructure over existing of leverage we phlebotomist years. existing market way will So I think significant and next

Mark Massaro

Great. very Thank much. you

Operator

you. Thank

Our the Craig-Hallum. comes Nowak final with question of line from Alex

is now Your line open.

Alex Nowak

Great. the through Just lawsuit? to looking the you update settle on do taking Illumina on Good or afternoon, everyone. here process? curious Any plan court you’re this if

Matthew Rabinowitz

I’ll take that.

on going not beyond we’re already lawsuit what to So commented. the we’ve comment

a big As said this agreement We react We think knew besides the was way very Illumina we’re position we And Illumina. with supply the long-term this have not very a to carefully. [ph] in We’ve good here. that, we landscape this surprise. IP before, reviewed announcement with QIAGEN. may

And these we follow. So good all our surprising in disrupting There’s at just position. the it’s litigations business that it’s that think running not a nothing very we’re and course very there.

Alex Nowak

how estimating cautious prudent us cash remind in you future through in flow the being you show collection your example, just And cash Can Matt. XXX. than helpful, QX, more regard around does with to That’s Okay. the then understanding Mike, you’re up and receive this do revenue for ASC P&L results? if

Michael Brophy

QX, a year mechanics quarter, be would where an have likely that assess be we make collection come precise from out. our back worked would it’d we total Yes, would now although would and adjustment the for cash we in to

Alex Nowak

it’s on I also helpful. continued data company’s Signatera. but here I from appreciate for That’s the a drag releases another profit. Matt, there’s just the I question then think opportunity huge me. would Okay. overall a And congrats on

to being undervalued visibility, and more The argument it to made think Signatera own out be would technology into some give ever today there’s of wondering Natera. into just its I’m business kind I essentially is because asset spin sense make So folded Signatera being that here. when an

Matthew Rabinowitz

It’s question. and a don’t at be good it in various would for argument sense There a that company? looked are ever At in separate there right we’ve ways this now. Yes. Well, spinning this an arguments. think out Signatera we makes stage,

significant working liquid without In to are performance existing trials and are the just really cheap. many cases, first a piggybacking do not is these Signatera. of a amount world might The it’s with to biopsy the thing the of us. samples. in progress as money who We’ve the clinical [ph] us with think. Doing that lot enormous as were top working spend samples so the been KOLs is, technology drag looking been banks their of that company, on cases Natera, with an expensive trials on very We’ve of the much but strong of trials have you having of part us and made around some collecting paying

collected done, a work of low a and very of speed lot lot profound high a getting we’re So cost. at data

year got oncology XX% for which think is budget R&D In I now had a of which was think on And terms was I of the of R&D around around we’ve budgets budget, XX%, oncology. we XX% spend. last R&D figure

this and profits. And worldwide. we’ve software is also refined of is company’s mass oncology in our package that on the is on applied PCR a built in overlap we’ve review space capability this developed other speaking a and also opportunity Constellation got a So prenatal have bearing huge thing the is multiplex the a taken to the drag the lot prenatal We’ve going we not and practically, expect that the that in for we oncology space of cloud beautiful tweaks to which we bunch really with of technology.

company dividing skills so lot the across be to not us of a these R&D the efficient the it be R&D overlapping for management And lines. be be it out of for in out us team team the to nor and efficient there’s would dividing these would lines along

of that very got organization way. the protocols we’ve we a well got where So to matrix over different at couple is sort right this a of use well projects last years and stage, established these overlapping expertise to manage the very team an think together. in We’ve good of very working lot efficient

we but think possibility the Yes. that Could right the now. so is It in looking future off a would thing And at it near doing future? don’t we being all to the we’re weighed, happen right in term. not these things spin in be the something

Alex Nowak

understood. Thank Okay, Great quarter. you.

Operator

that And does thank in and session. you today’s does Q&A This you. gentlemen, Thank the conclude Ladies conference. for participating conclude today’s program.

disconnect. all a Everyone, great day. may have You

Natera (NTRA) 8 May 182018 Q1 Earnings call transcript