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Natera beats revenue views on higher test volume

August 9, 2017

Natera reported after the close of the market on Tuesday that its second quarter 2017 revenues were up 3 percent.

The San Carlos, California-based molecular diagnostics company reported total Q2 2017 revenues of $53.6 million compared to $52.0 million in Q2 2016, beating analysts’ average estimate of $50.6 million. Total revenues included $52.3 million in product revenue and $1.3 million in licensing and other revenue.

Natera processed around 125,700 total tests in Q2 2017, up 17 percent from 118,700 in Q2 2016. Natera’s noninvasive prenatal test, Panorama, consisted of 89,400 of those, up 8 percent year over year, and generated $32.9 million in revenue. But its biggest increase in testing volume came from its Horizon carrier screening test. Natera processed 63 percent more Horizon tests in Q2 2017 than the prior-year period, at 30,700 versus 18,800. The firm generated $16.3 million in revenue from Horizon.

In addition, CEO Matt Rabinowitz said during a conference call discussing the Q2 2017 performance that the firm’s average selling price for its tests increased to $452 per test from $408 per test in Q1 2017 — the first time average selling prices have increased since going public.

The company also noted that it recently launched its circulating tumor DNA technology Signatera for research-use only by oncology researchers and pharma firms. Ultimately, Natera anticipates that the market for minimal residual disease and recurrence monitoring in cancer could be $12 billion in the US.

In addition, the company said that it entered into a $100 million debt facility with Orbimed Advisors and that it intends to make an initial draw of $75 million with the remaining $25 million available through 2018. Rabinowitz said in a statement that the debt financing “provides us with the capital we need to pursue our key objectives.”

Natera recognized a net loss of $27.7 million, or $.52 per share, up from $23.2 million, or $.46 per share, for Q2 2016. It beat Wall Street’s loss-per-share estimate of $.54.

Natera’s R&D expenses were $11.8 million, up from $10.3 million in Q2 2016, while SG&A expenses were $34.3 million, up from $33.2 million in the prior-year period.

For full-year 2017, Natera anticipates total revenues between $210 million and $230 million.

The firm finished the quarter with $7.1 million in cash and cash equivalents and $95.0 million in short-term investments.

In early Wednesday trade on the Nasdaq, shares of Natera were up 19 percent at $9.75.

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