NTRA - Earnings call transcript Q1 2022

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Operator

Welcome to Natera’s 2022 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 5, 2022. I would now like to turn the conference call over to Michael Brophy, Chief Financial Officer. ahead. go Please

Michael Brophy

afternoon. to Good of for our joining Thanks, the Thank results call discuss quarter of conference Operator. you our XXXX. first

our General line, by broadcast conference live the am CEO; being Chapman, and webcast. On call is Solomon of Manager I Moshkevich, via Oncology. Today’s Steve joined

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

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

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

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

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

Steve Chapman

Mike. Thanks, Great.

slide get into on highlights us the three. Let

the XX%. growth As million process in all in QX. we and and had XXXX XX% at another Pro comparisons. QX yet accelerate. breakout last of up Test strong last from this should of Qiagen XX% versus the ASPs. in for year forma to you grew a the was sequentially press Year-on-year million, XX% year-on-year in revenue product came by also see and north more increased year. year, release, driven tough were than continues be can quarter revenues volume stellar one-time of XX% benefit Total $XXX and total revenues $XX roughly from sequentially Keep for mind, business QX. by Natera QX

into We oncology excellent get we the the our drivers with are will Signatera volumes. shortly, especially in growth seeing clinical business, across but

guidance far and total are for $XXX million are raise million $XXX at of $XXX the we QX, we for to we the revenue Given revenue $XXX the million in We forecasting traction, able now year QX our and so seeing the are year. year. started late million, in to

to clarity on operating will time more Mike can getting which channels, rapidly are and given get investments in has We we been later cash in commercial on leverage R&D the breakeven. when flow the we more have on call. making this us spend

stock I balance the our substantial the company and in for creation compensation year. take opted executive of reflection have the -- a the of upside our achieved in we Board, value achievable, and we believe As confidence is leadership the to

also director open the on million market. shares independent in bought X lead Our

on firing XXXX, our strong we the are are our increased cylinders confident all in of the On maintain ability shows a momentum. our quarter show to and heels we guidance first results

had levels exciting roughly papers we in few of from quarter, the the slew six a XX seen highlights of volume on record past to milestones published notable back business, months. the in Turning peer-reviewed a have which our has transplant

academic the and recent many Northwestern. also lung Medicine in transplant. Lung the other joined Lung one leading among A starting pulmonologist space. We of XXXX Director Dr. in Ross real-world joined Chicago heart of Cedars of the have previously as with at published at that and at David very Transplantation Bhorade of is Professor of were announce and multi-site having Lung including with is separately Bhorade Olymbios Dr. at of VALID clinical UCLA. medical leading peer-reviewed Program Sangeeta Program recently of Dr. first we in the in and validation latest study is at clinical the of Cedars Dr. Heart and Transplant a Affairs. Prospera few author Vice Dr. Dr. Renasight Dr. in announced Lung credited of Medical Sinai Ross, Heart us publication a announced the pleased Natera of Director David notable addition of to transplantation, transplant space Heart has of Transplant Director Heart served and prospective Journal lung of the transplant and X,XXX we transplant Health Michael Transplantation. a a Sinai Medical a Medical publications was the member weeks an Journal hires ProsperaX, academic program this Olymbios, as programs patient Medical was the Transplant ago, validation study Bhorade the the physician President a we Organ founded University announced leadership

single oncology. Oncology now of progress an of post-surgery an update XX%. in in in was versus to Society the four exciting. We there previous time from the II journal, medical III circulate landmark and to at circulate of GI ASCO data excellent were papers see weeks a XX% time in detection make patients incredibly the presentation to a the submission recurrence We which XXXX. in a point a draw very MRD point update showed also which Also, tier now at is Signatera key showing continue oral with in is single analysis detection top The Stage blood pleased Surgical January,

have on path said the published getting we step to guidelines. before, key the NCCN As a paper was

So I collaborators of our proud am paper really quickly team and Natera so the the get to moving for submitted.

collaboration breast this to in year. I-SPY In we have good in performance had also addition, X Genentech diseases some validating their consortium. with have Signatera And at AACR in recently ASCO lineup data further cancer in coming triple-negative HR-positive we exciting an presented

rates initially established at for price the last was we reimbursement since the the year. front, measurement On Signatera ADLT completed period $XXXX first pricing our

As Medicare been of to think an for $X,XXX. volumes, revised XXXX, Obviously, Signatera strengthens boost to the April also rate it X, our gives time. I with but immediate reimburse ADLT position commercial has over that now payers upward

slide of let run volume The Moving get a next is into some of us the view our quarterly trends. four, to slide longer progression.

I think progress rapid this context view have the we helpful to gives made.

you volumes were what are of example, see as of twice recently more the they than For can QX XXXX. as

product we in Of and have course, a above are big expectations. oncology well Health reason Organ been launches outperforming is our progressing why the

seen have volumes. particularly For in tremendous Signatera, growth, clinical the we

ahead our hypothesis mix into more also launch plan. Clinical ASPs work we we increase boost mouth significant significant and a range got have as are uptake GI cancer still a across might That presentation Medicare We and -- community-based types organic the of broad our word from of circulate to be seeing as of colorectal of are gotten a ASCO We received happening. units. that spreads. further had cancer appears

will We we spend hold. are efforts starting well, is well. quarter in for rapidly in that later several taking kidney results getting made I and is more oncology scale are currently in cell-free time are levels on see and record more this products types on particularly strength transplants on our the in the clearly we volume that past other Prospera Health DNA We the a tool health broadly, call. channel the investment from Mike and monitoring over the think Organ our as graft and concept had benefit a That just for the These seeing to we commercial we as are of weeks. the track is organ demonstrate continued great

has revenue you trajectory benefited from very the was been have few of overall last over years slide versus business the seen trends, prior just positive strong. ASP the on The the QX into we perspective XXXX hand trends outpaced growth puts we QX next shows has the as On past in slide, volume year-on-year revenue quarters. trajectory four the and the the see of of side years. side can The the left revenue right-hand clearly

built have we will about that new very in these getting and encouraged in leverage oncology on products are and later are As channels to talk ramp, the the we see starting are quickly call. transplant more that Mike we to

a let in me Health. Okay, few cover Organ progress on recent slides our

are now roughly with We papers XX of having the peer-reviewed months. fruits in past our published data generation six in the Organ seeing labor Health

the On of journal multi-site heart the and the Lung an This than transplant demonstrated XXX impact included published rejection study, study in the acute of the AUC DEDUCE in perspectives in Heart test samples. premier transplant space. Journal next heart to with X.XX a Prospera was which our of identify patients arm in ability more high Heart slide, clinical transplantation, study this validation in

area XX% change chronic genetic with Renasight DETECT our This approximately diagnosed DTR randomized the lot on In of about impact million would robust study are validation a and genetic is care in exceptionally has clinical could We trial. because the large test of chronic patients I the market study offered a of ongoing a clinical multi-gene gene kidney the the New genetic spend a Renasight large we the of England disease testing bit XXX,XXX XX% of disease time been published limited thought and community, result opportunity was those want are in a care big testing medical nephrology on Journal transplant continuing is patients we in kidney had controlled a health panel very a of past. on in living spent making Medicine are with an States United We and more addresses scale. of have year. utility, at build introduced hereditary showed and as patients per Natera-sponsored haven’t by To-date kidney about have and etiology disease. to evidence to XXXX, that that a newly There care. mostly testing scale in patient on we high accessible make to chronic a large XX their which Renasight, with time academic test. centers. a is basis a NIH-supported

with tests positive in study the found of analyzing first was the commercial for at Nephrology Renasight XX% experience findings of tested. XXXX Our Journal the of patients published American first

also financials other where in pre-invested many larger utility RenaCARE finished publication called one had access large make the expect XXXX. invested a definitive turn excited previously I RenaCARE comment of a future prospective scale is with to say multi-site that a of The will example to are submit the trend about in call into clinical cases the enrollment. opportunity. We in our we study trial late into are and a RenaCARE for and to over. Renasight big of want our I study business we the actually results good almost before we overall

is term impacts over, many longer cost these are RenaCARE this expenses, trial While where one-time goes study the near-term remains. expenses, of like opportunity once away but upside the our the operating

Mike because let now, update cash grow an this heart oncology. is charter similarly lung we in and sales stable have Once provide give creates don’t section on the Another oncology details call can to this in can example you over doing nationwide those them to as to to done, breakeven. controlled more underpenetrated relatively invested path force, talented do in despite very trials and of geographies. in This will randomized stay Solomon in me again the we operating are now With they are being his transplants. call. the volumes leverage very we expenses on flow or their a have that, later hand

Solomon?

Solomon Moshkevich

Steve. Thanks,

starts commercial made significant the have then far of and and oncology, in apply their this each more physicians to gains adopt Signatera more We patients. and across as progress so year test as more physician experience

analysis presented was will important where earlier no this has addition could adjuvant groundbreaking patients now major now, reflects study country. of in past add in QX, while chemotherapy, to at has to guideline enrollment also both If into X,XXX enroll milestone, will field groundwork potential This MRD initiated Academic fall the compared open Stage for the of will circulate mentioned registry One case will drive patients which the and significant is at it’s real have from was presenting the are over top enrolled also of enrollment that which updated clearly the a at the presentation test every U.S. negative high-quality these I patients year. decisions, turn through XX% and the to successful, laid to NCCN four positive expecting In years announced XXX coverage. publish publications to as Getting test not treatment. among their the announce trial year, publication January. key have in to further stage improve who well back in The this of undergone and MRD II post-op also because odds the and III position incorporating CRC of a CIRCULATE-Japan the submitted weeks the are our measure benefit. in predictive point coverage surgery the an study recall clinical Conference sites. single position CRC were believe this patients Signatera five XXXX. we from Stage study adoption on prove which at a across and time to physicians launch Japanese that we year publication outcomes. latest we positive we XXXX the point is III another roughly of will Signatera a CRC. that We clinical XX%, up world start half first inclusion, randomized XXXX. recurrence test impact. The be calendar data saw CRC How think prospective that of trial, with than strong, We this from the plan inflection milestone drive where we help show now in all SSO to is patients in in been the in readout data over peer-reviewed impact XX Oncology Steve in in the payers The way benefit the conference nearly earlier. to this pleased in the Stage over this benefit analyzing will clinical trial who detection we for IV you the We negative at interim in study’s of a private patients be to The definitively on care. excitement from additional data pace clinical as in results that designed expected more efforts which Many study Signatera treatment trial, bespoke in evidence data,

this difficult of So yield example be first-mover entering our can the is great field. will a that advantage clinical for how to replicate upon data others prospective

not presentations cancer. XXX Signatera triple-negative in of to two this that again The breast prognostic strong studies HR-positive with value Genentech, BEATRICE of XX-months the benefit in earlier imaging. and in help in In conjunction from April, demonstrated three I-SPY we an the from strategy. clearance in in Moving showing points predictor setting showed lead partnership Signatera times of the study time triple-negative is weeks to response. of analyzed may had and to we recurrence early and imaging for we utility In XXX who on, over patients up at complete Signatera cancer report to significant Consortium, identify patients therapy breast can time with ctDNA of of a the ctDNA the breast past are adds after neoadjuvant from over This with cancer. pathologic just this conducted X XXX neoadjuvant a detect AACR breast ahead patients treatment change of responding in cancer

come the the The cancer, statement a of I cancer, the More guidance drug to that once trials as communicated a MRD solid to early-stage on endpoint context industry touch treat looking world testing The with an renal right productive testing to information where both vision helps and for to our clinical lifted. is In this development soft or highlight written and out We data in use step points and Conference I accelerate to ctDNA phases the statement posters establish guidance clinical trial is we approval of to presented. Its But the data we early-stage industry be lifesaving to carcinoma, references drug specifically FDA regularly drug can early have and the of breast of pathway new intent embargoed multiple FDA Merkel for to Signatera previously development of developers draft will a embargo issued this week Natera sarcoma to strong drug which ctDNA. populations Natera, development. for for incorporate time to to tissue potential the to eligibility now, ctDNA where pipeline, our that lung therapies. across are line draft has readouts in tumors, approval. also it want for their by FDA used -- solidify cell. support accelerate a tumor the using into lays really present enrich forward a ctDNA document once be for ASCO potential will earlier solid and serial data using cell all to guidance is document seven June patient the the drug used on the positive the partners, because will for

to that currently are IMvigorXXX III strength am and and addition pharma of beginning that adoption still in our pleased pipeline the that ZEST But diversity continues enrolling. are gain trials at to Phase curve. the We say to just I

We on the including Friends to the U.S. the of regulatory have Cancer Device fronts, Breakthrough CIRCULATE been trial pre-submission with just including and with to we received Blood meetings investigational participation and engaged device multiple Pack Research. associated enable FDA that in active Designations, exemption industry our consortia and

a the let coverage update. significant Signatera. this us look at take since Finally, last slide roadmap for on our Nothing changed has

under initial multiple for and progress the types additional of outcomes can on year Signatera, making are improve improve to We covering into really their we to front. Private next plan we for payers to starting our needle additional publication tumor get own good realize Medicare economics. the the covered that this covered the guidelines Meanwhile, to towards move help and indications CIRCULATE-Japan to NCCN have coverage. evaluating health gaining benefits and that track we the are be into both the are submissions the year. private potential payer populations of inclusion data and clinical and believe on Again, LCD

Now, I to review the am to going to over Mike the financials. hand Mike? call

Michael Brophy

Thanks, Solomon.

is the in The also transplant licensing teams here last stood growth over financial covered up points. and QX the other drop detail one-time for the in the we in in oncology major year release. and slide commercial The last the we Qiagen as Steve first the the call just revenues contained just seen reflects press have year. of revenue

for this year-over-year. for is same Qiagen. So, for and pro It’s other comparison the lines Note licensing that also story grew forma result, forma meaningfully pro gross margins. the

you basis see improved margins gross a So year-on-year. can on repeatable

leverage exome, of are strong be Last in are high down gross margin XXXs. our matures. products temporarily health note because you getting were of are we test out note relatively should positive call as will that which over volumes by will ASP expensive This ASPs lot year, in One mix we ahead Signatera. low the is the this the Signatera first recall compared implies that’s are time. we Signatera forecast from on and continued A patients already upfront schedule to launch their level which year people a currently of means the for Signatera weighed are the gross the where to margins getting I think transplant all important points. women’s running,

expand, our We have by expanded cancer the community mix mid-XXXs far in we roughly reach colorectal seen Medicare jump into driven a as so reimbursement the further up setting. and year, into to continues this

tests in ADLT clear extremely our course, down that going As and plasma immature will higher the in that it but for cash be think more patient in due Note we slide. couple I to the lot next coverage upfront for few of But Steve cash about a light evolution next setup and takes for amplified as us. more see ASPs and a and that of commercial is revenue, volume into reflect of product, the for for QX we those large overall The timing still talked largely the burn remains toward in cash trials than this because have will particularly quarter, weeks time on launch costs patients. testing volume key tests. of new there’s on R&D a The we us. to an slides. raise of that increased past, cover The Signatera so Medicare guide large clinical same of of progress repeat made the future is cash. translate mix was the quarter dynamics. in the the the to is that We SG&A increase to expands larger described. burn was of as expansion. cost this The moving March, we year of lines that our booked I channel processed a on experienced reflects elevated usually year, and the dynamic investments in volumes mix spend we usage mix ASP seasonal

guidance. us million let the revenues On were revised Okay, at $XXX get to previously we to million. $XXX great,

million. to million resetting are upward $XXX that $XXX range We to

very continue Horizon. and Panorama progress quarterly sequential to on We strong see

we for very the Prospera. by uptake encouraged rapid addition, are volume and In Signatera

quickly, might cash. to this gross in and volume margins growth Signatera pressure expect near-term is on that this result you Given ramping

getting for products. trend However, of traction on positive we feel comfortable the the the the these holding Signatera continued ASP are rest and we given target study

Steve because flat, health And the the investments, we see nicely. in then guide higher seasonality normal volumes, and QX stable these the to a QX QX are QX described. and revenues grow despite as getting scale for as is keeping and we are versus business We reminder, line on expect expense women’s

have and lot With last the decade business teams or the the the last commercial those we results over we dramatically. lot and a quarters out grown developed of On in learned in apply can forecasting next have as in have NIPT. growing so, a slide, rigor the we five hand, now we the built

have still up lot of the volume own on we bottoms a While learn, we our can now territories forecast sales experience. based build from

gain I grow. products our commercial That growth means demonstrate and think the can bigger only products, and that to the the the our years version functions digits of territories in on we existing the of team high recent in to shared support including we to scale projects, significant come. and results existing on also over trials. more low-double ROIC expanding means even business. clinical lab should R&D and lab very investing years the This the can next drive SG&A for focus prospective efforts need few volume

can margins helped that do to we drive that today from similar require XXXX, investments, risk XXXX R&D these be initial endeavors. from reasonably us you in gross in results particularly the ‘XXs While high ROIC the the tend Those think and years technical that and these that again. know predictable, high projects followed ‘XXs us to we are projects we of to low low sizable of projects the XXXX at

billion where the team in growth background the think We poised to informs to built flow have further between a opportunities is that few commercial path next clear years So to position. breakeven. over we our flow leadership get market improvements cash a that’s under-penetrated cash have large drive Stable the minor already with very in the we breakeven even COGS. relatively billion revenues and to $X.X $X.X to path ASP

Our as cash to steadily to from usage go get go XXXX. closer we we breakeven usage to should XXXX expect cash down down meaningfully and

future believe Over there gross margins above growth long-term margins substantially XX% our very and in we the XX% more longer think above is are we operating revenue and achievable. term,

really think are balance we existing plan. I good we very feel and that to position lines up our So that with a well in like execute sheet

excited are about I operator you. the with we very to it questions. hand quarter. that, with will Operator? this So to for Happy share

Operator

from first the of [Operator comes Instructions] Morgan Our question Stanley. line Savant Tejas from

line now open. is Your

Tejas Savant

things of guys. and start Good points Hey year. just clarification the a kick maybe to guide. the off, strong on the of evening to couple Mike, congrats on

included Given mentioned look primary the channel perhaps cancer or mentioned that for increase Signatera second here for of in you of -- the thinking and And shipping are commentary that that just we the part any reduction building screening then bump what’s care on? we cash out supply disruptions ADLT and the should year? perhaps at about so -- et into that phasing as burn for through you beyond. for should that of just fully be is there XXXX chain code there on that terms in sort was we factored Can offsets you lay sort or samples delays, out cetera,

Michael Brophy

question. the Yeah. Sure for Thanks

you incorporated the for for this a this will that So, full you year. the be update I guide first on ADLT of that year, That ADLT is really really feel monitoring the business. rate even because that the remind the indication. the But of recurrence volumes just don’t is fantastic in in rate, benefit that’s the to

-- Signatera move in are time remission, in window, are going you with adjuvant that’s six to graduate which kind and you you points. from then start the months you that that in this first first treatment recurrence bundle of monitoring to once the payment So, is

in our So volume as is for years, the going base of an that ADLT business rate. percent increase progresses next over of to of couple the qualify

think incorporated mature a for is the of little in to in the you it business as that. but effect yes, to So, the see guidance, bit needs full order I

that’s ASP. So on the

is point the OpEx, kind really that to revenues growing a or nor would that full care contemplates of place in we teams contemplate relation need not the in the fast would build this have guide call and -- modestly to This On growing. out like this and the burn that. separate cash just does a sales do how current of anticipate what not and kind been we primary

to we of with we work, -- So hurdles a care screening, But of a lot produce channel a progress primary But, that term, call technical front. there, remind lot need And would we in that again, service you we carrier we leverage because first, now, there make top very commitments I just the have in got it an need got that point States. feel regards to on fantastic to data channel to strongly think hope the I best of the would have screen. explain OB-GYN it would before clear. expanded of right we lot technical United longer make to carrier

Tejas Savant

came That’s starts Roe then business, that that on And recently it was around see questions I the its base of Supreme how quick Got average that it. that slope get to has every implications the be months overturned making eventual laws. that got impacting updates NIPT and on would for of can just by MGM partnership as and any IPD adoption? couple and ago? first And you follow-up of the v. this the helpful. do risk one state since very a you the the Court on news and Wade, also out decision a own How a penetration evolved then well,

Steve Chapman

Yes.

can the maybe, things comment Mike, the v. on side. quickly me Wade billing the you about and Roe talk Let on then

prevent calcium example, treating think, I any just with from baby benefits can a Wade, haven’t are care seen v. a have for NIPT policies seizures. on states with that people Roe significant impacts get the And and more the hypocalcemia really to we testing at getting there syndrome, is our reminder, birth amount of could there George and on that improve overall. already prevent restrictive the NIPT, So,

So Mike, I doesn’t think really restrictive in even we an majority Wade the Roe the vast want cases. states factor they are take in billing? more do v. seen to haven’t you where about comment of But impact.

Michael Brophy

Yeah.

health women’s a largely as the really to mean, vendor NIPT side, there is March Just on the authorization now risk support prior I to volume variable PA the because point on in is turn terms business, the for [Technical that call the categories. talked all XXXX going we the has we Difficulty] into page of full receding in ACOG in the billing and turn linked

So expect the of piece the will to just evolve that continue we smaller I business.

Tejas Savant

Very time it. the for Thanks Got guys. helpful.

Operator

you. Thank

from comes Max Masucci of the Cowen. question next Our from line

is now line Your open.

Stephanie Yan

is being on This taking Yan the received? offering To trends for quarter. the give congrats some and any you more more some are off, trends can your and volume seen detail and and health for have about newer selling offerings Max Hi. generally questions Empower the you you of women’s Thanks Masucci. targeted Stephanie cross are us demand great seeing a start for how

Steve Chapman

will Sure. Yeah. I take that.

So, cancer Empower is a hereditary testing.

are a from seeing physicians did interest We test pilot. to Natera. We there from order is that

I products that seeing the we on demand the then side, mean, data. think to timeframe footprint. commercial an carrier with noninvasive XXXX. that just support health of we are the and sector, in in vast uptick, of we of are majority And given full would a kind health where peer-reviewed the women’s testing. well, perform to we And a think are XXXX screening the seeing solid, is do remaining launch we have And very, be amount good significant our I still then there testing prenatal area and the which Horizon then Panorama very did of in continued is we very poised volume because I particularly women’s

of One testing. data peer-reviewed prenatal of the on the the key for highlights side non-invasive study SMART the was publication

and mean of January. Journal the incredible. in important is amongst testing field was ever I that So the been Gray the multi-state think study that that’s and the done -- driving that prospective was largest study SMART actually uptick knows the published as the just non-invasive everyone in peer-reviewed base. publishing is in exceptionally really evidence think were And results we prenatal I

Stephanie Yan

Got determination and cancer it. the coverage are new the give from And earn you we coverage and as LCD and under pursue? oncology applications new the Super in oncology types how new and to draft for a organs what see umbrella you can that new helpful. transplant refresher and us also, final can indications an it quickly pursuing, and you paid or implies around long start in getting takes transplant how

Steve Chapman

Yeah.

with have umbrella I and coverage both do transplant you couple a now So oncology these place. things, of in is think,

we follow additional for have and across kidney the and said, colorectal then XX-week that submissions coverage and that. and the times there’s both organ several that And health to business in coverage so testing today, through then back the and hear done we many today, monitoring. also and we want for they donor-derived -- the oncology DNA testing in we questions business. submit have we in transplants And generally, information you of oncology additional or eight-week But sort timeframe roughly cell-free immunotherapy then with have

think I are having and we sort gotten kind right where now or submitted that’s to just of having questions. either responded just feedback of

coverage there’s to are of additional for the that with -- am are coverage positively ultimately, not come where under if come I knowledge recent sort out so, my LCD. same But decisions I And very in of interacting and umbrella of think the waiting the in. any we we have others sort boat sure to

Stephanie Yan

Got that for taking it. for thanks questions. and Thanks my color

Operator

you. Thank

from comes question next Catherine from of the Our Schulte Baird. line

Your now open. line is

Catherine Schulte

hearing for Thanks guys. is doctors first lot Are question. up a NIPT York between media that’s your noise field and commercial Short reps been this from the and in largely Times of the report. New this bring work? of the any around something Hey in guess either or I the your year the those report there’s insulated

Steve Chapman

Yeah.

XX aneuploidies supportive has screening a for very the physicians been years. think of I largely past for care screening the and OB-GYN part of are

started predictive sensitivity. XXs positive the that about an So But look the value and very and okay is positive in value really at when you X%. predictive only unfortunately decent had biochemical screening low a

we higher, because So, in with doctors trisomy line non-invasive biochemical, where to other like testing XX% predictive it’s example. is like in positive with have XX, much published sort been microdeletions value but right for with There it’s for X% of experiencing. lower, XX% what prenatal there in of orders is the kind range the

volume as four for among largely And support of physicians that testing general in supportive But doing. in Congress to continue We The months and non-invasive data I the strong disagree screening physician were testing follow characterized frustrated five from screening. non-invasive was is way notice there feel some the did publish how we process prenatal physicians. in the it I months, up think past and actually think characterized. has they orders was the doctors are think base addition, media about and with the what significantly American I in and the quite very gone so of a that they Obstetrics recommends and and Gynecology

Catherine Schulte

Very for around sounds but about transplant lawsuit the this you newer in It your record helpful. And competitor. think with we year? any seeing All volume recent then volumes is repercussions business mentioned right. recent growth how like that well, weeks. your And then should commercial going indications from the news

Steve Chapman

I And are think test starting said, see and position. of feeling I innovation that to ever at some now, want really what seeing I the but really physicians and have peer-reviewed positive are we in order a are the done now record levels. we putting the significant as to result field. in now, is the the peer-reviewed mean in that we we as I the we data initial in two some had I we interaction. us are great in received XX last the and We of think we papers well largely the lot a was roughly that last by closing leading validation others studies right of ourselves come in there we just heart and that both was kind clinical gap very we very, thing than months physicians most Yeah. this we these later holding and two been mean lung. that that nice think are are had were was of and data, six those published months of utilization the a have peer-reviewed in I less great because slightly mean ways, published kind back and studies had

So we are feeling good about things.

there. with I as very battle for I where in penetrated Natera. there are a is to think are underpenetrated are days. large, long early As think early think we convince very -- I for deeply just to here pacing we heart, with there, big everybody there incumbent far can, opportunity we what And line -- us although is but is but seeing think not in a market overall, the it’s send and I just uphill trying a doctors very we pleased It’s

Catherine Schulte

All Thank right. you. Great.

Operator

Thank you.

Goldman Sykes Our Sachs. next Matt question comes from the line from of

line now is open. Your

Matt Sykes

Great. Thank you. my taking for Thanks questions.

think flexibility you hop is and just given some levers, and Organ covered prepared you of a we the next Health, you the R&D how again can upfront apologies little already you I the side SG&A have on Maybe as if the from it releases the should years terms in and as ones maybe points, remarks. levers data year know much quick probably have OpEx SG&A. than the Organ build-out Where do But it’s a how releases. then you the Thanks. year And look reminder queue. do you But then, in model? know just flexible on two Just back as me, of that year? have will spend. future I one A Health commercial of that about just it to pull is had sorry, your see a course done, leave in understanding forward, this best on bit the data you big spend you within some is think question of Mike just some of for think less couple two just go about, the about through of I we a this data you over

Michael Brophy

is also the any you I mean the some give hit spend. on will one the the trial that to operating waves clinical expense combines R&D. for additional I tops lines think do I commentary. are and of will mean, the just for I immediately I Steve and levers will SG&A there -- Yes. outline comes both

the are make where just have not I a run of trial years, we So, trial it’s a many prenatal a Renasight as and non-invasive us example on study, remarks, trial don’t had good study the randomized that is it’s think five the in for for was but Steve for run going and well necessarily set next that business is expensive touched another that But example. I as a Steve pretty there in run you space mentioned that to an on kind established and prepared [Technical like XX up years. where bubble sure historical the to costs full others testing very Difficulty] briefly SMART mean, we trial for that. large

soon of next types year. as can of a to as off roll trials So that, lot those start

already the done. of same I of we A that growth can get think executed lot there’s shares the had XXXX. team of I that the And work team. XXXX from to time leverage from were would be the the be kind We add lot in winning you managed way needed. strategy to we side, have this that think a commercial and a do can the on -- that to selective we things Difficulty] is we is $X at small up what [Technical that

second the that on will well. So, and Steve, any comments I you do as have you other let take one

Steve Chapman

No.

kidney heart, on Organ they one big and have And there were reads One year. had both on it. going this then and testing That’s trial to covered donor think positive. readouts we in and when the you really we study out. three that’s side, of those it think Health very one and the significant be that I most be the lung said a significant to DNA of in And Trifecta is trials I data ever derived next then both are going mean, I the on very submission. that’s in done cell-free

out So reporting year. this we look forward to later that

Matt Sykes

Great. Thanks very much.

Operator

you. Thank

from Our line the next question Souda Puneet of Securities. comes from SVB

is line Your now open.

Puneet Souda

guys. Thanks taking Thanks my question. Great. for Okay.

strong on congrats and a So here. quarter

that how terms Signatera maybe And or question you on on handled? from and getting end end? that across have can taking are are company the investors you the So maybe what provide overall any how taken those marketing is, prioritization sales what or end steps gives and we think, then Steve are I us changes both have also I of approach first, being sales NIPT you important for of you confidence mean, sort the us been that around in approaching

Steve Chapman

Sure. Yeah.

briefly will I on the guess, I comment marketing side. So, sales and

you things very are think well. think going I

mentioned have the up. We clinical volumes Signatera are

at test think levels. are I the doctors record ordering

are oncology, health across that and Organ we women’s fact, Health. In across across seeing

So there’s there changes I not think necessarily. any really

of quo. it’s think largely I sort status

impact regards anything we with in-- any sort to of sort of are on as have fact lawsuit Health if think or negative are of previously, reference Organ the removal materials that the any numbers. were seeing, the you the have to as part doing was, expect of materials context the the product our in way. don’t space, those to of we in we some of And say I in removed we have and differently I attention. media sell we ability mentioned are would any question the the record seeing

So, you Mike, about do want minute? to talk a auths for prior

Michael Brophy

the cover to products. bit of was prior roll because interest did get consequence the little the earlier auths the of as time business we there I are there I fewer Q. just And piece broad XXXX, And lot mean just part or in a a that’s into smaller as prior already just of authorization our given into going requirements Yeah. out a even overall volumes. in small of a

Puneet Souda

for it. guys. No. that Got clarifying Okay. Thanks

physicians product, give the the and -- are use a and how it where are and perspective, off-label that levels you were that as we the we the KOLs product, progress because of think they how but sense goes are setting. community when can the should indication the the about levels? about current today should think here, it like are indication of about beyond expansion physicians that versus excited seems from progress stands we obviously utilizing Signatera your But across as There excited. well be into just a the utilizing with We field and number as to speak maybe are test, us for appears obviously, of

Steve Chapman

will reimbursed. just where the a I test and Yeah. it’s is say difference validated where between there is

indication reimbursement. published which of peer-reviewed validated a the XX for is excitement than way, product. And papers we are think limited are There offering order in about test more and are physicians across. now I areas so of an their seeing the pan-cancer pan-cancer we today But we

different types, XX cancer so I more and than patients different forth. think X,XXX

physicians of surprised to So test. lot it not out with in the the data of line that’s using on we there the performance are see a

Solomon, do doing are pipeline what and you want we bit and to data get kind additional generate talk of to more little about a to reimbursement? the

Solomon Moshkevich

Sure. Yeah.

I Stage in the and do IV I seeing growth CRC Just and in early Stage indications how are continued III, before emphasize Stage much pan-cancer core want II to immunotherapy monitoring. that, adoption we covered in resectable in

in you say, risk that a who along, will already where we mentioned produce are addition a or to, are cancer facing this we is much said discussed think community year a later are inflection we early-stage in validation let have it to as you this and being have in test, physicians CRC. growth CRC to have In breast first you up And if the the for indications experienced prepared MolDX most seeing patient are data, as where coverage also think mentioned then with physician comes private inclusion, other that in opportunity decision, that always our different and payers package pipeline, of treatment physician we Medicare, significant order private remarks, clinical payers. think shared continuing we be I-- it’s of with with thinking now which to a test. that you through patient’s increasingly important but the we similar being positioned, really amount reimbursement that are good a and and year to early point guideline challenging we see we and for next in with where the of trying easy evaluate about for options And in Signatera a terms one

Puneet Souda

Okay. just terms provided have but Thanks question, don’t guys. if ASCO? And know I you Got updates, in in then be ASCO, we last expecting anything should it. of

Solomon Moshkevich

and remarks, forward we We those posters the got data abstracts have in to we is on lifted. seven showed look and embargo when the Yeah. more XX prepared sharing

Puneet Souda

Thanks guys. Great.

Operator

Thank you.

from question from line the next comes Our Canaccord. of Mikson Kyle

now is Your line open.

Unidentified Analyst

rate progress genetic the Mikson. screening tests a and great in on in they on for This FDA may things Congratulations safety starts communication so guys. published [ph] in Kyle titled older is, FDA so you question, space? some Hi, that I second quarter. growing first-time whole the trend And is or first higher that with regulate age the I way older, question prenatal my a [inaudible] recently that this do seeing guess what to believe are is non-invasive the you Down of also Do results. be, publications read Quick such false a XX first-time Thank LDTs the mid-April, have question, a of suggest demographic growth could that mothers syndrome. would of this feel market others NIPT as material you much. drive you a changing near-term? the the in and coupled

Steve Chapman

Yeah.

on all support post-test study XXX NIPT patients. counselors complementary shared important would in always the the papers offer counseling peer-reviewed and strongly XX to genetic published recently NIPT I we study, on evidence the with are So transparency largest regards and have that SMART to education by we is that’s say, peer-reviewed performed information FDA believed we very the FDA, and employ sessions pre- and ever why including we and genetic over which and

predictive We report. negative predictive each also positive on of the disorder each the and value put value directly

of given So a the position data our more FDA, to and work because validation depths of that, we the studies. with breadth of closely our great the are in

pregnancies years But by impacted past know So it does towards birth demographics, are screening, positive continue else has the information and a is negative if again, less us think where patients of roughly significantly appear advantage evolving, I getting we we majority over really NIPT than in support we disadvantage. With still many and a rate of of still a are NIPT. NIPT way slightly is a at hasn’t to under-penetrated, vast the regards sort that’s in that or XX% grow, that shared only biochemical FDA. which older the today an value predictive get things about changing it don’t to testing,

Operator

conference call. concludes This you Thank for today’s participating. you. Thank

now disconnect. may You

Natera (NTRA) 8 May 222022 Q1 Earnings call transcript