Natera (NTRA) 8 Aug 24 2024 Q2 Earnings call transcript

In a recent earnings call, Natera Inc. presented its Q2 financial results, revealing a company that is thriving across all fronts. The quarter saw revenues surge by 12% sequentially compared to Q1 of 2024 and by 58% compared to Q2 of the previous year. This growth was driven by record volumes and a strong quarter of ASP growth, with volumes up over 23% compared to Q2 of last year.

The company's focus on women's health and oncology segments proved to be particularly successful, with significant growth in both areas. In women's health, Natera has maintained its market leadership in NIPT and expanded carrier screening. In oncology, Signatera, the company's MRD testing platform, experienced impressive growth, with clinical volumes increasing by roughly 13,000 units over a very strong Q1.

Strategic Wins and Clinical Advancements

Natera's strategic wins extended beyond financial growth, with notable developments in clinical and product areas. The company's ALTAIR investigators, who are currently working on a prospective overall survival study for Signatera in colorectal cancer, have announced a delay in submitting their data to ESMO due to the need for more patient review and data analysis. This delay will result in the presentation of the data at ASCO GI in January 2025, which is expected to mark the first prospective overall survival data readout for Signatera in colorectal cancer.

The company also achieved a major win in the organ health sector, with the National Kidney Foundation recommending genetic testing for the majority of patients with kidney disease. Natera's Renasight test, which covers 385 genes, is well-positioned to benefit from this recommendation. Additionally, the company launched a new feature for its Prospera Heart test, which enhances the detection of organ rejection for heart transplant patients and allows for a more accurate risk assessment.

Financial Outlook and Future Prospects

With such a robust performance, Natera raised its guidance for the full year, centering it around roughly $1.5 billion in revenue and a 55% gross margin. This implies annual revenue growth of nearly 40% and an increase in gross margins of roughly 10 percentage points from the 45% gross margin posted last year. These figures underscore the company's strong financial health and growth trajectory.

Looking ahead, Natera's pipeline is brimming with promise. The company is poised to present significant data readouts in colorectal and other cancers, including the highly anticipated 36-month readout from the GALAXY study, which will provide prospective overall survival data in colorectal cancer. Moreover, the company's ongoing clinical trials in colorectal, bladder, and breast cancer hold the potential to significantly impact clinical practice in the United States and globally.

Conclusion

Natera's Q2 earnings call painted a picture of a company that is not only financially robust but also strategically positioned for long-term growth. The company's success in women's health and oncology segments, coupled with its clinical advancements and promising pipeline, bode well for its future prospects. As Natera continues to innovate and expand its offerings, it is poised to lead the way in the genomics and healthcare sectors.