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Natera Launches Tumor Genomic Profiling Assay, Expects Reproductive Health to Break Even This Year

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NEW YORK – In a move to expand its footprint in oncology beyond liquid biopsy testing, Natera this week launched a tumor genomic profiling assay for therapy selection that will likely put it in direct competition with other laboratories that have being offering tissue-based cancer testing.

In a conference call to discuss Natera's fourth quarter and full-year financial results, CEO Steve Chapman and other executives provided more details about the test, called Altera, which complements Natera's existing Signatera liquid biopsy disease monitoring assay.

In addition, they discussed results of the large-scale SMART noninvasive prenatal testing (NIPT) trial and provided an outlook for Natera's women's reproductive health, oncology, and transplant medicine businesses.

The new Altera test relies on exome sequencing, with added coverage for 440 clinically relevant oncogenes, as well as transcriptome sequencing for structural variant and gene fusion detection. It analyzes both tumor and normal DNA to filter out germline variants, and it reports mutations, microsatellite instability (MSI), and tumor mutational burden (TMB). Chapman said Natera can "piggyback on the broad reimbursement" that is already in place for other tissue genome profiling assays.

Natera is offering Altera both as a standalone test for therapy selection, a $6 billion market opportunity, and in combination with its personalized Signatera test, which is used for minimal residual disease (MRD) detection in colorectal cancer and, as of this week, for immuno-oncology monitoring.

"There are significant synergies between the two tests, particularly in advanced-stage indications where the use of a therapy selection panel is commonplace and reimbursed, and the need for improved monitoring of a patient's response to immunotherapy is clear," Chapman said.

He added that the Altera-Signatera combination will be an "independent offering" to the personalized cancer monitoring assays it has been developing for Foundation Medicine's FoundationOne CDx test under a deal signed in 2019.

Patients receiving Signatera already undergo exome sequencing of their tumor in order to design the test, which is customized to each patient's mutations, and Altera can use the same tissue sample. "This is a key advantage for advanced-stage patients where both [cancer genomic profiling] and treatment monitoring are clinically indicated, and where tissue can often be scarce," said Solomon Moshkevich, general manager for Natera's oncology business.

The clinical launch of Signatera testing for colorectal cancer is "well under way," he said, and Natera has completed hiring its commercial oncology team. For Signatera IO, the indication launched this week, the company does not expect a final reimbursement decision from the Centers for Medicare and Medicaid Services until the second half of the year.

On the pharma side, Natera signed up more than $65 million worth of contracts in 2020, up from $46 million in 2019. "That business got a boost in December when Genentech's IMvigor study was presented," Chapman said.

That trial, a phase III randomized controlled clinical study of adjuvant atezolizumab (Genentech's Tecentriq) in muscle-invasive bladder cancer, showed a 41-percent survival benefit in patients shown to be MRD-positive by Signatera, which made up about a third of participants, but no benefit in MRD-negative patients.

"Critically, the study shows how Signatera can take a trial that did not work in all-comers and make the results positive by getting the drug to the right patients, who are MRD positive," Moshkevich said. "As you can imagine, we fielded a lot of interest after the results of the study. Going forward, we expect most adjuvant trials to include some level of MRD-related stratification."

Reproductive health

Natera's women's reproductive health business, which still makes up the majority of firm's clinical testing, is expected to become cash-flow breakeven sometime in 2021, Chapman said, a milestone for the company that will allow it to make further investments in its oncology business.

As of January, he said, all the major national insurance plans cover NIPT for all women, independent of risk, and many state Medicaid plans also cover it. "We're very well positioned for the increase in NIPT adoption over the next several years," Chapman said. "We believe the average-risk NIPT market could get close to 75 percent to 90 percent penetration over the next three to five years, which bodes well for our business." However, as of now, the mix of NIPT tests conducted for high- and average-risk women has not changed much, he added.

Last month, Natera and its collaborators released results from the SMART (SNP-based Microdeletion and Aneuploidy Registry) trial, a prospective 20,000-patient study of mostly average-risk pregnant women with genetic outcome data from live births that ran for several years. The study also included validation of Natera's new Panorama AI algorithm for data analysis, which relies on deep learning neural networks.

According to the company, the study found the Panorama test to have 99 percent sensitivity and 99.97 percent specificity for trisomy 21, with a positive predictive value of 95.1 percent. The Panorama AI algorithm reduced the no-call rate to under 1.5 percent, meaning that few tests need to be repeated. Those women with a very low fetal DNA fraction were found to be at increased risk for conditions such as preterm birth or pre-eclampsia.

For 22q11.2 microdeletion detection, the test was 100 percent sensitive for deletions larger than 2.5 Mb and had an overall sensitivity of 83 percent, with a 53 percent positive predictive value.

Based on these results, "we now believe that professional guidelines can change and that microdeletion testing in NIPT will be more broadly reimbursed," said Matt Rabinowitz, cofounder and executive chairman of Natera's board of directors. He noted that two publications with results from the study are being submitted to a peer-reviewed journal.

The study also found that 22q11.2 microdeletions are more common than previously assumed, with an incidence of about 1 in 1,500, which Rabinowitz said is higher than the incidence of cystic fibrosis or spinal muscular atrophy, and similar to that of trisomy 21 in women under 35 years of age.

"The final results from this trial were even stronger than expected and put us in an excellent position to achieve reimbursement for our microdeletion test and further drive market share gains within the NIPT space," Chapman said.

On the transplant business side, Natera continues to produce data on the "unique differentiators" of its Prospera test, Chapman said, specifically, the ability to measure background cell-free DNA as part of the same workflow. This background, which occurs in COVID-19 patients, for example, can mask organ rejection, and Natera has submitted a study on this for publication in a peer-reviewed journal.

"Overall, we continue to hit our internal volume growth targets for Prospera and we're very pleased with how the transplant business is developing," Chapman said.