Natera Reports First Quarter 2016 Financial Results

SAN CARLOS, Calif., May 10, 2016  -- Natera,  Inc. (NASDAQ:  NTRA), a leader in non-invasive genetic testing and the analysis of circulating cell-free DNA, today reported financial results for the first quarter ended March 31, 2016 and provided an update on recent business progress.

 

Recent Accomplishments & Highlights

 

Generated total revenues of $61.9 million in the first quarter of 2016 compared to $47.4 million in the first quarter of 2015, an increase of 31%

Accessioned greater than 105,000 tests in the first quarter of 2016 compared to approximately 64,000 tests accessioned in the first quarter of 2015, an increase of approximately 64%

Accessioned greater than 81,000 Panorama tests in the first quarter of 2016 compared to approximately 55,000 tests accessioned in the first quarter of 2015, an increase of approximately 47%

Accessioned greater than 19,400 Horizon carrier screening tests in the first quarter of 2016 compared to approximately 6,000 Horizon carrier screening tests accessioned in the first quarter of 2015, an increase of approximately 223%

Expanded our base of in-network covered lives with regional and national commercial plans. Total covered lives under in-network contracts in the United States now exceed 175 million lives in our direct commercial channel alone, and roughly 200 million lives in our direct and laboratory partner commercial channels 

Strengthened our management team with the promotion of Dr. Kimberly Martin to senior global medical director, Women's Health and the additions of Bruce Yeager as VP, Market Access, and Dr. Ramesh Hariharan as Vice President, Marketing and Medical Education

Realized substantial reduction in Panorama cost of goods sold via technology innovations that have further reduced sequencing costs and eliminated lab workflows

"We are very pleased with our performance in the quarter," said Matt Rabinowitz, Natera's chief executive officer. "We believe this demonstrates the strength of our commercial offering, and our progress on COGS and in-network agreements position us well for long-term leadership in women's health and other areas of genetic testing such as oncology."

 

First Quarter Ended March 31, 2016 Financial Results

 

Total revenues were $61.9 million compared to $47.4 million for the first quarter of 2015, an increase of 31%. This was primarily due to higher test volumes, particularly for Panorama and Horizon.  Tests accessioned were greater than 105,000 tests in the first quarter of 2016 compared to approximately 64,000 tests in the first quarter of 2015, an increase of approximately 64%.  Roughly 45% of first quarter total revenue was derived from test volumes accessioned in the quarter; the balance of our revenues was derived from tests accessioned in prior periods.      

 

Gross profit for the three months ended March 31, 2016 was $29.6 million, representing a 48% gross margin, compared to $22.6 million, representing a 48% gross margin in the same period of the prior year.* Gross margins remained effectively flat between the first quarter 2016 and 2015 as we mitigated the impact of NIPT coding changes that reduced average selling price in 2015 by improving collections on previously denied claims, reducing our cost of goods sold on a per unit basis, and increasing our commercial focus on our most profitable accounts. 

 

Total operating expenses, representing research and development and selling, general and administrative expenses, for the three months ended March 31, 2016 were $39.2 million, an increase of 36% compared to $28.9 million in the same period of the prior year. The increase in the three months ended March 31, 2016 over the prior period was driven primarily by an increase in research and development activities and additional headcount.