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At JPM, Natera CEO Lays Out Growth Potential for NIPT, Transplant, Cancer Testing

NEW YORK – Natera officials said on Tuesday that the company processed more than 1 million tests in 2020, among them about a million for the reproductive health business alone. The company also exceeded its pre-pandemic goals for growing its Prospera transplant testing business while launching its Signatera cancer test and securing reimbursement for it.

"We really hit our goals and did exceptionally well in 2020, and we set ourselves up nicely for an excellent 2021," CEO Steve Chapman said during a presentation at the JP Morgan Healthcare Conference, held virtually this year. "The overall net unit growth that we saw as a company was the fastest that we have ever seen in the history of the business."

For 2021, the company sees opportunities in noninvasive prenatal testing for average-risk pregnancies, a market he said is only about 20 percent penetrated and could go up to 90 percent penetration over the next few years.

Up to $300 million in additional annual revenue could come from microdeletion testing. Natera performed more than 400,000 microdeletion tests last year, he said, but has not yet been reimbursed for most of these, even though CMS has priced the test at $759 with a CPT code.

But reimbursement could change when data from the SMART (SNP-based Microdeletion and Aneuploidy Registry) trial, a prospective 20,000-patient clinical study with genetics outcome data from live births that looks at NIPT performance, including for microdeletions, will be presented at a conference at the end of this month.

Based on these results, if microdeletion testing were to be reimbursed at the $759 rate, this would translate to $300 million in additional revenue per year, Chapman said, and even if it was only reimbursed at $250 per test, this would add $100 million to annual revenues.

Another boost in revenues could come from transplant testing. Natera's market opportunity for its Prospera test, which measures donor-derived cell-free DNA, is greater than $2 billion, he said, and the market is penetrated less than 10 percent today.

Last year, the company improved Prospera by measuring the level of background cell-free DNA. COVID-19, for example, can lead to greatly increased background DNA in transplant patients. In 2021, Natera will release the results from two COVID-19 transplant studies, he said, showing the clinical utility of measuring this background.

In oncology, Natera is mostly focusing on minimal residual disease (MRD) testing, a $15 billion market opportunity. It has published results for its Signatera test in colorectal, breast, lung, bladder, and other cancer types and has "seen consistently very high levels of performance" of 88 to 100 percent sensitivity in detecting relapse ahead of imaging, and greater than 98 percent positive predictive value, he said.

Natera's pharmaceutical business for Signatera also grew significantly last year, he said. The company signed contracts valued at more than $65 million in 2020, he noted, including for multiple Phase III clinical trials, and the average deal size is getting larger.

Chapman pointed specifically to a bladder cancer study sponsored by Genentech that showed that using MRD testing as a selection criterion for treatment had a significant survival benefit. "We think this is now a must for all pharma companies, to include MRD assessment in every adjuvant trial," he said.

In clinical testing, Natera is going after colorectal cancer as the first indication for Signatera, an opportunity of about 1 million tests annually for stage II and III CRC alone. In that setting, the test can be used for adjuvant decision-making as well as for surveillance, he said. Its second indication, to be launched later this quarter, is for immuno-oncology response monitoring, where the test is "outperforming the tissue-naïve products that are on the market," he said. Natera hopes to get reimbursement for IO response monitoring this summer, when a local coverage decision is finalized.

Looking to other cancer types, Natera has published clinical studies in lung, bladder, breast and esophageal cancer already, he said, and more than 50 additional studies are ongoing. "This is gonna allow us to unlock many other different cancer types under the umbrella LCD coverage," he said.

Regarding its 2019 deal with Foundation Medicine to develop personalized cancer monitoring assays, Chapman said that the partners have made "a lot of progress" and expect to launch assays for biopharmaceutical customers this year, followed by a clinical launch.

The company also has completed work with BGI to get its Signatera test up and running in China, he said, and has signed a handful of agreements for pharmaceutical studies that have an arm in China. Following these pharma studies, Natera will "focus on the clinical opportunity where we're working hand in hand with BGI to work out the launch strategy," he said.

In the near term, the firm sees a market opportunity of 1 million Signatera tests per year for colorectal cancer, 800,000 tests for IO response monitoring, and 600,000 tests for new cancer indications. "Ultimately, we think this will be a pan-cancer assay," he said, adding that more updates will come during Natera's next earnings call.