Recent Accomplishments & Highlights
- Generated total revenues of
$63.1 million in the second quarter of 2018 compared to$52.3 million in the second quarter of 2017, an increase of 21%. - Processed 162,807 tests in the second quarter of 2018, compared to approximately 125,700 tests processed in the second quarter of 2017, an increase of approximately 29%.
- Processed approximately 113,300 Panorama tests in the second quarter of 2018, compared to approximately 89,400 Panorama tests processed in the second quarter of 2017, an increase of approximately 27%.
- Accessioned approximately 41,800 Horizon carrier screening (HCS) tests in the second quarter of 2018 compared to approximately 30,700 Horizon carrier screening tests accessioned in the second quarter of 2017, an increase of approximately 36%.
- After the close of the quarter,
Natera successfully completed a secondary equity offering of 5,175,000 shares priced at$20 per share and raised$97.3 million in net proceeds, which included shares sold upon the exercise of the underwriters' over-allotment option. - Announced development of powerful kidney transplant rejection marker in a study with the
University of California –San Francisco that demonstrated superior performance ofNatera's mmPCR technology for detecting acute rejection in kidney transplant patients. - Published results from a clinical validation study of a new biomarker for pregnancy management that relies on
Natera's proprietary fetal fraction based algorithm to identify pregnancies at high risk for fetal abnormalities that may not otherwise be detected with available cell free DNA tests for fetal aneuploidies. - Announced that
Natera has now signed agreements for 20 trials with leading pharmaceutical companies for the use of Signatera in oncology efforts. - Appointed Dr.
Roy Baynes , Chief Medical Officer at Merck and SVP and head ofGlobal Clinical Development atMerck Research Laboratories , toNatera's board of directors.
"We were very pleased to present excellent results in our kidney transplant study with UCSF, deepen our oncology expertise with the addition of Dr. Baynes to our board, and publish a clinical validation study that we believe extends our technology leadership in NIPT," said
Second Quarter Ended
Total revenues were
In the three months ended
Gross profit for the three months ended June 30, 2018 was $22.1 million, representing a 35% gross margin, compared to $17.7 million, representing a 34% gross margin in the same period of the prior year.* The improvement in gross margin was primarily due to increased revenues recognized from our Panorama and HCS tests, continued cost savings resulting from streamlined workflows under Version 3 of Panorama, and our updated in-house HCS automation workflow launched in
Total operating expenses, representing research and development expenses and selling, general and administrative expenses, for the second quarter of 2018 were
Loss from operations for the second quarter of 2018 was $27.2 million compared to $28.4 million for the same period of the prior year.
Net loss for the second quarter of 2018 was
At
2018 Financial Outlook
* Gross profit is calculated as GAAP total revenues less GAAP cost of revenues. Gross margin is calculated as gross profit divided by GAAP total revenues.
**Our 2018 revenue guidance is based on the new revenue recognition guidance, ASC 606, which was effective for us in the first quarter of 2018.
*** Cash burn is calculated as the sum of GAAP net cash used by operating activities (estimated for 2018 to be between
About
Product offerings include Spectrum®, a preimplantation genetic test for embryo selection during in vitro fertilization (IVF); Anora® to understand the genetic causes of a pregnancy loss; Horizon™ to detect risk of inherited mutations such as cystic fibrosis and spinal muscular atrophy; Panorama®, a non-invasive pregnancy test (NIPT) to screen for common chromosomal anomalies in a fetus as early as nine weeks of gestation; Vistara to screen for single-gene disorders that represent total incidence greater than Down syndrome; Evercord™, a cord blood and tissue banking service offered at birth to expectant parents; and Signatera™ (RUO), a personalized cell-free DNA test that can identify minimal residual disease, treatment response, and cancer recurrence to aid researchers in oncology.
Each test described above except Signatera™ (RUO) has been developed and its performance characteristics determined by the CLIA-certified laboratory performing the test. These tests have not been cleared or approved by the
Conference Call Information
Event: |
Natera's Second Quarter 2018 Results Conference Call |
Date: |
Wednesday, August 8, 2018 |
Time: |
1:30 p.m. PT (4:30 p.m. ET) |
Live Dial-In: |
(877) 823-0171, Domestic |
(617) 500-6932, International |
|
Conference ID: |
8659708 |
Webcast: |
investor.natera.com |
A webcast replay will be available at investor.natera.com.
Forward-Looking Statements
This release contains forward-looking statements, including quotations of management, statements under the heading "2018 Financial Outlook," and statements regarding
These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially, including: we face numerous uncertainties and challenges in achieving the financial guidance provided; we derive most of our revenues from Panorama, and if our efforts to further increase the use and adoption of Panorama or to develop and commercialize new products and services in the future do not succeed, our business will be harmed; we have incurred losses since our inception and we anticipate that we will continue to incur losses for the foreseeable future; uncertainty in the development and commercialization of our enhanced or new tests or services, for example if the results of our clinical studies do not support the use of our tests, could materially adversely affect our business, financial condition and results of operations; our quarterly results may fluctuate significantly; we may be unable to compete successfully with either existing or future products or services; our cloud-based distribution model may be difficult to implement, and we may not be able to commercialize this model if we do not comply with ongoing regulatory requirements; we may be subject to increased compliance risks as a result of our rapid growth, including our dependence on our direct sales force; we rely on a limited number of suppliers or, in some cases, single suppliers, for some of our laboratory instruments and materials and may not be able to find replacements or immediately transition to alternative suppliers; we may be unable to expand third-party payer coverage and reimbursement for Panorama and our other tests, or we may be required to refund reimbursements already received; third-party payers may withdraw coverage or provide lower levels of reimbursements due to changing policies, billing complexities or other factors; our estimates of total addressable market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates; and we are subject to litigation, which may require us to incur substantial costs, could divert the time and attention of our management and other employees and could result in substantial damages if unsuccessfully defended.
Additional risks and uncertainties that could affect
Contacts
Investor Relations
Media
Barbara
Natera, Inc. Condensed Consolidated Balance Sheets (Unaudited) (In thousands) |
|||||||
June 30, |
December 31, |
||||||
2018 |
2017 |
||||||
(As Revised) (1) |
|||||||
Assets |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
12,306 |
$ |
12,620 |
|||
Restricted cash, current portion |
5,612 |
59 |
|||||
Short-term investments |
70,901 |
106,247 |
|||||
Accounts receivable, net of allowance of $1,773 in 2018 and $2,000 in 2017 |
57,002 |
44,089 |
|||||
Inventory |
12,324 |
8,998 |
|||||
Prepaid expenses and other current assets |
7,225 |
8,612 |
|||||
Total current assets |
165,370 |
180,625 |
|||||
Property and equipment, net |
25,313 |
29,667 |
|||||
Restricted cash, long-term portion |
342 |
342 |
|||||
Other assets |
3,336 |
3,979 |
|||||
Total assets |
$ |
194,361 |
$ |
214,613 |
|||
Liabilities and Stockholders' Equity (Deficit) |
|||||||
Current liabilities: |
|||||||
Accounts payable |
$ |
7,689 |
$ |
8,529 |
|||
Accrued compensation |
8,615 |
9,599 |
|||||
Other accrued liabilities |
30,520 |
33,257 |
|||||
Deferred revenue, current portion |
1,174 |
1,420 |
|||||
Short-term debt financing |
50,132 |
50,112 |
|||||
Warrants |
— |
2,644 |
|||||
Total current liabilities |
98,130 |
105,561 |
|||||
Long-term debt financing |
73,211 |
73,065 |
|||||
Deferred rent, net of current portion |
8,922 |
9,241 |
|||||
Deferred revenue, long-term portion |
36,135 |
— |
|||||
Other long-term liabilities |
— |
1,329 |
|||||
Total liabilities |
216,398 |
189,196 |
|||||
Stockholders' equity (deficit): |
|||||||
Common stock (2) |
6 |
6 |
|||||
Additional paid in capital |
491,887 |
472,552 |
|||||
Accumulated deficit |
(513,072) |
(446,375) |
|||||
Accumulated other comprehensive loss |
(858) |
(766) |
|||||
Total stockholders' (deficit) equity |
(22,037) |
25,417 |
|||||
Total liabilities and stockholders' equity (deficit) |
$ |
194,361 |
$ |
214,613 |
(1) |
Natera adopted Financial Accounting Standards Board Accounting Standards Update No. 2014-09 effective January 1, 2018 with full retrospective application to January 1, 2016. Results for periods prior to January 1, 2018 have been revised accordingly. |
(2) |
As of June 30, 2018, there were approximately 55,454,000 shares of common stock issued and outstanding. |
Natera, Inc. Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (In thousands, except per share data) |
|||||||||||||
Three months ended |
Six months ended |
||||||||||||
June 30, |
June 30, |
||||||||||||
2018 |
2017 |
2018 |
2017 |
||||||||||
(As Revised) (1) |
(As Revised) (1) |
||||||||||||
Revenues |
|||||||||||||
Product revenues |
$ |
60,353 |
$ |
50,929 |
$ |
114,622 |
$ |
99,323 |
|||||
Licensing and other revenues |
2,716 |
1,354 |
10,787 |
2,342 |
|||||||||
Total revenues |
63,069 |
52,283 |
125,409 |
101,665 |
|||||||||
Cost and expenses |
|||||||||||||
Cost of product revenues |
39,204 |
33,709 |
78,259 |
66,797 |
|||||||||
Cost of licensing and other revenues |
1,791 |
850 |
3,328 |
1,462 |
|||||||||
Research and development |
11,852 |
11,786 |
26,192 |
24,436 |
|||||||||
Selling, general and administrative |
37,440 |
34,309 |
75,365 |
71,891 |
|||||||||
Total cost and expenses |
90,287 |
80,654 |
183,144 |
164,586 |
|||||||||
Loss from operations |
(27,218) |
(28,371) |
(57,735) |
(62,921) |
|||||||||
Interest expense |
(2,560) |
(218) |
(4,949) |
(401) |
|||||||||
Interest and other (expense) income, net |
(3,933) |
(413) |
(3,796) |
887 |
|||||||||
Loss before income taxes |
(33,711) |
(29,002) |
(66,480) |
(62,435) |
|||||||||
Income tax expense |
(113) |
(64) |
(217) |
(111) |
|||||||||
Net loss |
$ |
(33,824) |
$ |
(29,066) |
$ |
(66,697) |
$ |
(62,546) |
|||||
Unrealized gain (loss) on available-for-sale securities, net of tax |
46 |
62 |
(92) |
262 |
|||||||||
Comprehensive loss |
$ |
(33,778) |
$ |
(29,004) |
$ |
(66,789) |
$ |
(62,284) |
|||||
Net loss per share: |
|||||||||||||
Basic |
$ |
(0.62) |
$ |
(0.55) |
$ |
(1.23) |
$ |
(1.18) |
|||||
Diluted |
$ |
(0.62) |
$ |
(0.55) |
$ |
(1.23) |
$ |
(1.18) |
|||||
Weighted-average number of shares used in computing basic and diluted net loss per share: |
|||||||||||||
Basic |
54,551 |
53,088 |
54,342 |
52,924 |
|||||||||
Diluted |
54,551 |
53,088 |
54,342 |
52,924 |
(1) |
Natera adopted Financial Accounting Standards Board Accounting Standards Update No. 2014-09 effective January 1, 2018 with full retrospective application to January 1, 2016. Results for periods prior to January 1, 2018 have been revised accordingly. |
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