Recent Accomplishments & Highlights
- Generated total revenues of
$65.3 million in the third quarter of 2018 compared to$55.9 million in the third quarter of 2017, an increase of 17%. - Processed 167,172 tests in the third quarter of 2018, compared to approximately 130,400 tests processed in the third quarter of 2017, an increase of approximately 28%.
- Processed approximately 115,000 Panorama tests in the third quarter of 2018, compared to approximately 91,200 Panorama tests processed in the third quarter of 2017, an increase of approximately 26%.
- Accessioned approximately 44,400 Horizon carrier screening (HCS) tests in the third quarter of 2018 compared to approximately 32,800 Horizon carrier screening tests accessioned in the third quarter of 2017, an increase of approximately 36%.
- Signed Phase 2 lung cancer study with
Bristol-Myers Squibb to investigate our Signatera (RUO) assay as a potential biomarker for Opdivo. - Announced Phase 1 study with
Neon Therapeutics to evaluate its personalized cancer vaccine. - More than 25 deals signed with leading pharmaceutical companies for Signatera (RUO).
- Completed enrollment of 20,000 patients in SMART trial for microdeletions.
- Successful completion of pre-submission meeting with CMS for kidney transplant rejection assay.
"We were very pleased to see our pipeline of initial studies with pharma evolving to multiple prospective clinical trials," said
Third Quarter Ended
Total revenues were
In the three months ended
Gross profit for the three months ended September 30, 2018, was $23.6 million, representing a 36% gross margin, compared to $21.3 million, representing a 38% gross margin in the same period of the prior year.* The decrease in gross margin was primarily due to a one-time release of
Total operating expenses, representing research and development expenses and selling, general and administrative expenses, for the third quarter of 2018 were
Loss from operations for the third quarter of 2018 was $27.2 million compared to $25.8 million for the same period of the prior year.
Net loss for the third 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 Third Quarter 2018 Results Conference Call |
Date: |
Thursday, November 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: |
1980757 |
Webcast: |
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) |
|||||||
September 30, |
December 31, |
||||||
2018 |
2017 |
||||||
(As Revised) (1) |
|||||||
Assets |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
34,535 |
$ |
12,620 |
|||
Restricted cash, current portion |
4,222 |
59 |
|||||
Short-term investments |
130,891 |
106,247 |
|||||
Accounts receivable, net of allowance of $1,980 in 2018 and $2,000 in 2017 |
60,397 |
44,089 |
|||||
Inventory |
12,244 |
8,998 |
|||||
Prepaid expenses and other current assets |
6,399 |
8,612 |
|||||
Total current assets |
248,688 |
180,625 |
|||||
Property and equipment, net |
24,833 |
29,667 |
|||||
Restricted cash, long-term portion |
342 |
342 |
|||||
Other assets |
3,446 |
3,979 |
|||||
Total assets |
$ |
277,309 |
$ |
214,613 |
|||
Liabilities and Stockholders' Equity |
|||||||
Current liabilities: |
|||||||
Accounts payable |
$ |
9,884 |
$ |
8,529 |
|||
Accrued compensation |
9,587 |
9,599 |
|||||
Other accrued liabilities |
31,067 |
33,257 |
|||||
Deferred revenue, current portion |
1,156 |
1,420 |
|||||
Short-term debt financing |
50,135 |
50,112 |
|||||
Warrants |
— |
2,644 |
|||||
Total current liabilities |
101,829 |
105,561 |
|||||
Long-term debt financing |
73,284 |
73,065 |
|||||
Deferred rent, net of current portion |
8,775 |
9,241 |
|||||
Deferred revenue, long-term portion |
36,850 |
— |
|||||
Other long-term liabilities |
— |
1,329 |
|||||
Total liabilities |
220,738 |
189,196 |
|||||
Stockholders' equity: |
|||||||
Common stock (2) |
7 |
6 |
|||||
Additional paid in capital |
600,146 |
472,552 |
|||||
Accumulated deficit |
(542,688) |
(446,375) |
|||||
Accumulated other comprehensive loss |
(894) |
(766) |
|||||
Total stockholders' equity |
56,571 |
25,417 |
|||||
Total liabilities and stockholders' equity |
$ |
277,309 |
$ |
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 September 30, 2018, there were approximately 61,673,000 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 |
Nine months ended |
||||||||||||
September 30, |
September 30, |
||||||||||||
2018 |
2017 |
2018 |
2017 |
||||||||||
(As Revised) (1) |
(As Revised) (1) |
||||||||||||
Revenues |
|||||||||||||
Product revenues |
$ |
62,662 |
$ |
54,512 |
$ |
177,284 |
$ |
153,835 |
|||||
Licensing and other revenues |
2,618 |
1,398 |
13,405 |
3,740 |
|||||||||
Total revenues |
65,280 |
55,910 |
190,689 |
157,575 |
|||||||||
Cost and expenses |
|||||||||||||
Cost of product revenues |
39,477 |
33,558 |
117,736 |
100,355 |
|||||||||
Cost of licensing and other revenues |
2,202 |
1,054 |
5,530 |
2,516 |
|||||||||
Research and development |
12,393 |
12,609 |
38,585 |
37,045 |
|||||||||
Selling, general and administrative |
38,374 |
34,478 |
113,739 |
106,369 |
|||||||||
Total cost and expenses |
92,446 |
81,699 |
275,590 |
246,285 |
|||||||||
Loss from operations |
(27,166) |
(25,789) |
(84,901) |
(88,710) |
|||||||||
Interest expense |
(2,781) |
(1,477) |
(7,730) |
(1,878) |
|||||||||
Interest and other income (expense), net |
449 |
(437) |
(3,347) |
450 |
|||||||||
Loss before income taxes |
(29,498) |
(27,703) |
(95,978) |
(90,138) |
|||||||||
Income tax expense |
(118) |
(162) |
(335) |
(273) |
|||||||||
Net loss |
$ |
(29,616) |
$ |
(27,865) |
$ |
(96,313) |
$ |
(90,411) |
|||||
Unrealized (loss) gain on available-for-sale securities, net of tax |
(36) |
67 |
(128) |
329 |
|||||||||
Comprehensive loss |
$ |
(29,652) |
$ |
(27,798) |
$ |
(96,441) |
$ |
(90,082) |
|||||
Net loss per share: |
|||||||||||||
Basic |
$ |
(0.49) |
$ |
(0.52) |
$ |
(1.71) |
$ |
(1.70) |
|||||
Diluted |
$ |
(0.49) |
$ |
(0.52) |
$ |
(1.71) |
$ |
(1.70) |
|||||
Weighted-average number of shares used in computing basic and diluted net loss per share: |
|||||||||||||
Basic |
60,570 |
53,447 |
56,462 |
53,100 |
|||||||||
Diluted |
60,570 |
53,447 |
56,462 |
53,100 |
(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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