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Natera Q2 Revenues Rise 40 Percent on Higher Test Volume

NEW YORK – Natera reported after market close Thursday that its total second quarter revenues rose 40 percent, driven largely by strong growth in Signatera volumes, particularly in the colorectal and immunotherapy monitoring indications.

For the three months ending on June 30, the Austin, Texas-based company said that revenues increased to $198.2 million compared to $142.0 million for the same quarter last year.

Product revenues rose 39 percent to $194.6 million in the second quarter of 2022 compared to $139.6 million in the same period last year.

During a conference call held after the financials were released on Thursday, Steve Chapman, Natera's CEO, noted that the company's growth came despite the negative impact of a timing difference of about $3 million worth of volume that weren't reported until early July.

"We took the expenses on that testing in Q2 but will recognize the revenue and margin benefit in Q3," Chapman stated, adding that he believes that the "printed results actually understate the momentum we think we're seeing in the business right now."

Estimating that its Panorama test commands approximately 50 percent of market share, Natera currently anticipates full-year revenue in the range of $805 million to $825 million, up from its previous guidance range of $790 to $810 million.

Chapman said that the new revenue range implied annual revenue growth of 37 percent, and this year's current progress leaves the company confident that it will achieve cash flow breakeven in mid-2024.

Natera reported a net loss for the second quarter of $145.2 million, or $1.50 per share, compared to a net loss of $116.0 million, or $1.32 per share, for the same period in 2021.

The firm held cash and cash equivalents of approximately $91.3 million and short-term investments of $547.4 million at the end of the quarter.

Natera officials noted that the firm anticipates upcoming study publications and increased reimbursement will drive further growth.

The company was recently included in United Healthcare's preferred laboratory network and gained expanded CMS coverage for Signatera in the muscle invasive bladder cancer indication.

"We anticipate several important datasets to be published or submitted in the coming months in the area of colorectal, gastroesophageal, pancreatic, breast, ovarian, melanoma, and more," stated Solomon Moshkevich, the firm's general manager of oncology.

He added that data from the Circulate Japan study now includes 18 months of clinical follow-up versus the 12 months the firm had projected earlier, and the firm has enrolled the first patients into its Circulate US trial.

"We think these two trials are an important part of our strategy to increase utilization [and] achieve our coverage goals," Moshkevich said.

He added that the firm is hopeful that the publication of the Circulate Japan trial may encourage the NCCN Guidelines Committee for colorectal cancer, which meets in late August, to incorporate tumor-informed MRD into its guidelines.

Natera's shares were up 0.78 percent, to $51.39 in early morning trading.