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Natera Q1 Revenues Rise 28 Percent on Increased Product Revenues

NEW YORK – Natera reported after market close on Thursday that its total first quarter revenues rose 28 percent year over year, driven by an increase in product revenues.

For the three months ended March 31, the Austin, Texas-based company said that revenues increased to $194.1 million compared to $152.3 million for the same quarter last year. It beat the consensus Wall Street estimate of $176.6 million.

Excluding $28.6 million in revenues from a collaboration with Qiagen recorded in the first quarter of 2021, Natera's total revenues increased by 57 percent year over year in Q1 2022. The two companies announced they were ending their agreement in March 2020.

Product revenues rose 58 percent year over year in the recently completed quarter to $190.0 million in the first quarter of 2022 from $120.4 million a year ago. Natera attributed this increase to higher test volumes compared to the first quarter of 2021. The firm processed approximately 489,300 tests in the first quarter of 2022, compared to approximately 348,200 tests processed in the first quarter of 2021.

Meanwhile, licensing and other revenues were down sharply year over year to $4.1 million from $31.9 million.

Net loss for this quarter amounted to $138.6 million, or $1.45 per share, compared to $63.9 million, or $.74 per share, for the same period in 2021. It narrowly beat the consensus Wall Street estimate of a loss per share of $1.48.

Natera's R&D spending doubled to $80.4 million in the recently completed quarter from $40.2 million a year ago. Its SG&A costs grew 36 percent to $147.6 million from $108.3 million in the first quarter of 2021.

During a conference call, Natera CEO Steve Chapman commented that several nonrecurring costs such as clinical trials underpinned the company's rise in R&D spending.

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

Mike Brophy, the firm's CFO, added that Q1 regularly sees larger cash usage, with this year's "seasonal dynamic" amplified due to the increased volume of tests processed.

Natera also briefly addressed concerns about the potential overturn of Roe v. Wade and its possible effects on the company. "There are already states that have more restrictive policies, and we haven't really seen any impacts on our NIPT testing overall," Chapman said.

Chapman largely attributed this to the array of benefits that NIPT offers, in terms of improved neonatal healthcare, saying that "Roe v. Wade really doesn't factor in the vast majority of cases."

Regarding Natera's women's health business overall, Brophy added that "we expect to see the normal seasonality in women's health business where Q2 is stable versus Q1, and Q3 and Q4 grow nicely."

As of the end of Q1 2022, Natera had $158.3 million in cash and cash equivalents, $228,000 in restricted cash, and $593.7 million in short-term investments.

The company increased its full-year 2022 revenue guidance to a a new range of between $790 million and $810 million. It previously guided to a range of $770 million to $790 million.

In after-hours trading on Thursday, Natera's stock was up 8 percent on the Nasdaq at $36.99 per share.