Natera Inc at Canaccord Genuity Growth Conference (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kyle Alexander Mikson - Canaccord Genuity Corp., Research Division - Analyst : Sure. So Mike, just set the stage. So let's start with the 2Q results. So Natera announced last week results ahead of your preliminary numbers announced July 19, and you increased your revenue guidance to $620 million, which is impressive given you started 2021 with guidance of $500 million to $525 million. So I guess what drove the broad-based success in the second quarter? And then looking forward, what are the company's expectations regarding volume, patient flow and self-access in the second half of the year?

Question: Kyle Alexander Mikson - Canaccord Genuity Corp., Research Division - Analyst : Got it. Yes. And I'm glad you went over all the businesses. It's clearly a broad-based strength in the quarter. And then can we talk about kind of the macro trends with NIPT? You are the market leader, entered the space in 2013 and the impressive with -- Panorama has been impressive. It's been a really strong performance, right? And I think that's driven by the kind of the quality of performance of the test itself as well as the commercial structure and performance of your sales team. So can you just talk about other factors that driven the kind of unique commercial success of the product and whether that's the actual technology itself? Or like I said, just your investments to kind of beef up the infrastructure?

Question: Kyle Alexander Mikson - Canaccord Genuity Corp., Research Division - Analyst : Okay. And I appreciate the deep dive on the technology. That's helpful. I appreciate it. And then like moving to just the economics on that business. We've had pretty solid margins, ASPs of like $300, $400 and COGS per test. So they seem like the economics, the margins will improve over time. I guess what are you doing? What will happen? What drivers will cause that margin to kind of increase over time? Where you see margins kind of getting to, I guess, on the business?

Question: Kyle Alexander Mikson - Canaccord Genuity Corp., Research Division - Analyst : Got it. Okay. That was great. And let's move on to some of the other, I guess, businesses other than NIPT in a second, but I just want to stick on kind of expanding the market opportunity. And then recently, with the results last week kind of expanded the TAM a little bit, and you talked about like expansion there. So it does sound crazy though to kind of think about expanding the number of pregnancies that could have NIPT done, right? Because I guess the growth has been standing over the past few years. What are the factors that are really driving that going forward? Whether that's coverage or just awareness or accepting sort of the guidelines. And just given some of the recent progress in those areas over the years, what are the company's expectations in terms of how large accessible market you get to currently and is today and could get to over time?

Question: Kyle Alexander Mikson - Canaccord Genuity Corp., Research Division - Analyst : Yes, NIPT, because there's a lot of kind of moving pieces there.

Question: Kyle Alexander Mikson - Canaccord Genuity Corp., Research Division - Analyst : Awesome. I'd love to stay on that topic. Let's just actually switch gears to oncology. It seems like every cancer diagnosis company today has some sort of MRD program or test right now, CRs obviously the low-hanging fruits. Signatera was launched a few years ago, 2017 for RUO and then 2019 for probably commercially speaking. It's performed nicely recently, as you were saying, the quality and the quantity of the published data has been pretty impressive. I guess like with that background, with that context, what is it that makes MRD such an attractive market, almost like a table stakes kind of area towards these diagnostics comes to that?

Question: Kyle Alexander Mikson - Canaccord Genuity Corp., Research Division - Analyst : Okay. I'm tempted to talk about (inaudible) like kind of CenTrak. So reimbursement for cancer recently got the ADLT it's up from like 800 or so. So could you talk about how that new rate flows into the P&L? Just given that like negotiations with payers are still ongoing with private payers? And I guess just where do you think that volumes will flow to over time with outside the actual window for current funder and things like that?

Question: Kyle Alexander Mikson - Canaccord Genuity Corp., Research Division - Analyst : Got it. We're kind of just nearing the end here. Maybe just quickly, want to just talk about some of the -- kind of expanding the patient population for Signatera, got data coming out? Do you expand the potential market to -- I think it was like 13 million testers now.

Question: Kyle Alexander Mikson - Canaccord Genuity Corp., Research Division - Analyst : Yes. There's a lot to look forward to. There's a lot that we didn't cover today. I would definitely recommend investors going to the past earnings calls through the website to look further...

Question: Kyle Alexander Mikson - Canaccord Genuity Corp., Research Division - Analyst : Thanks, Mike, for calling out. I hope to see you next year. Enjoy the rest of the conference.