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New Natera CEO Highlights Three Goals for Company at JP Morgan

SAN FRANCISCO (GenomeWeb) – Natera plans to focus on three main goals in the coming year, according to its new CEO, Steve Chapman: expanding its leadership in reproductive health by pushing toward becoming cash-flow break-even in that business, establishing Signatera as a standard test in cancer care, and commercializing and securing reimbursement coverage for its kidney transplantation test.

Chapman, who spoke at the JP Morgan Healthcare Conference here this week, recently took over from Matthew Rabinowitz, who will continue to serve as the firm's executive chairman and will remain involved in longer term technology development and strategy.

Chapman said the main hindrance of its reproductive health business is that many of the noninvasive prenatal tests it runs are not paid for. When the company entered the NIPT market with Panorama, it focused on average-risk pregnancies, for which neither private payors nor Medicaid provided reimbursement at the time. While some payors have recently begun reimbursing for such tests, a number still do not, most notably national payors Aetna and United Healthcare. Chapman estimated that it is paid for around 35 percent of the tests it runs for average-risk pregnancies, which comprise 60 percent of its NIPT business. Going forward, Chapman said that aside from securing reimbursement policies from payors, it will also work to collect more on appeals and from patients themselves.

Some of the reimbursement lessons learned in reproductive health have driven Natera's strategy in the oncology business. Rabinowitz noted that reimbursement is the reason why the firm has decided not to pursue early detection as an application for its liquid biopsy assay, Signatera, like a number of other firms are doing, such as Guardant Health and Grail. "We've learned from NIPT that you want to go for the high-risk people first and can then bridge to low-risk," he said.

Neither is the company targeting the tumor profiling space to guide therapy selection, like Foundation Medicine and Guardant Health. Instead, its first application will be in recurrence detection. Unlike the Guardant or Foundation liquid biopsy tests, Signatera first requires the patient's tumor to be biopsied and sequenced. Then, based on the results, Natera designs a bespoke assay targeting around 16 mutations found in that patient's tumor.

The assay is currently available for research and the company plans to launch a clinical version in the first half of this year. In the meantime, however, its deals with pharmaceutical companies have been very fruitful, Chapman said, both from a revenue generation standpoint and to demonstrate the performance and utility of the assay.

Data from pharmaceutical collaborations would help make the case for reimbursement and could also support a submission to the US Food and Drug Administration. Chapman said Natera would consider both its own FDA submission for particular indications and submissions of companion diagnostics in partnership with pharmaceutical companies.   

As of the end of 2018, Natera had signed more than 30 deals with pharmaceutical companies, representing $9.1 million in contracted revenue, Chapman said.

Natera also plans to launch a cell-free DNA test for kidney transplantation rejection this year. In collaboration with researchers from the University of California, San Francisco, the company published a clinical validation of the assay last month in the Journal of Clinical Medicine.

The researchers retrospectively evaluated 300 plasma samples from 193 patients, 217 of whom had matched biopsy samples. The biopsy samples were analyzed in a blinded manner and classified as active rejection, borderline rejection, or stable.

Natera's cell-free DNA assay uses the same massively multiplexed PCR technology as its Panorama test. For the transplantation study, mmPCR targeted 13,392 SNPs, which were then analyzed via NGS.

Of the 300 samples, 23 samples did not meet inclusion criteria — 15 because they were collected within three days of the transplant and eight because they could not be sequenced. Of the remaining 277 samples, 217 had matched biopsy samples. The researchers found that the assay had a sensitivity and specificity of 88.7 percent and 72.6 percent, respectively, when the level of donor-derived cell-free DNA was set at 1 percent. Positive predictive and negative predictive values were 52.0 percent and 95.1 percent. Raising the cutoff improved the specificity and PPV, while lowering the cutoff improved the sensitivity and NPV.

Chapman said the firm has already submitted a dossier to the Centers for Medicare and Medicaid Services for reimbursement. CareDx already markets a cell-free DNA-based assay for kidney transplant rejection, which has a reimbursement rate of $2,800, and Natera expects to receive a similar rate for its own test. The company also plans to launch a registry study for the kidney transplantation test this year.