Natera Inc at JPMorgan Healthcare Conference Transcript

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

Question: Rachel Vatnsdal - JPMorgan Chase & Co. - Analyst : Perfect. So thank you, Steve. Maybe just to kick it off here, just unpacking the solid top line and cash flow beat that you guys announced on Monday. Can you walk us through what were really the main drivers that drove that strong performance this quarter?

Question: Rachel Vatnsdal - JPMorgan Chase & Co. - Analyst : Perfect. And then obviously, a lot of new product announcements today, I think that's the highlight of this presentation. So first off, just on the tumor-free MRD offering. Can you talk more about the decision to launch that product? How do you envision this operating coexisting with the current standard of Signatera? And then how should we think about the performance of Signatera versus that other tumor-naive tests that are on market today?

Question: Rachel Vatnsdal - JPMorgan Chase & Co. - Analyst : Perfect. Then just on the early cancer detection test, can you talk about how that early data that you shook out really relative to your internal expectations? And then where do we go from here in terms of pursuing an FDA-grade validation study?

Question: Rachel Vatnsdal - JPMorgan Chase & Co. - Analyst : Perfect. That's helpful. And maybe shifting over to the whole genome version of Signatera that you announced. Can you walk us through how should investors be thinking about the margin profile of this test and anything we should be aware of on the margin front as you launch it?

Question: Rachel Vatnsdal - JPMorgan Chase & Co. - Analyst : Perfect. Then maybe stepping back across these three new product launches that you talked about today, should we expect any of them to meaningfully contribute to 2025? Or is this more of a '26 and beyond story?

Question: Rachel Vatnsdal - JPMorgan Chase & Co. - Analyst : Perfect. That's helpful. Maybe shifting to 2025 volume growth expectations. You guys have talked about how you expect to be able to at least expand volumes at the same level that you did in 2024, excluding some of the one-time impacts obviously. So given where 4Q landed, can you just talk about your confidence? Is that still in play for '25?

Question: Rachel Vatnsdal - JPMorgan Chase & Co. - Analyst : Sure. That's helpful. maybe shifting to a few Signatera specific questions then. Signatera saw really strong volume growth again throughout 2024. You've exceeded your historical guidance of that 8,000 to 10,000 units of sequential improvement on Signatera. So given the past approach, just given some potential one-time fluctuations in order trends, are you planning to continue embedding that same 8,000 to 10,000 level, or is it time to update that range as we look throughout '25?

Question: Rachel Vatnsdal - JPMorgan Chase & Co. - Analyst : Perfect. Maybe more broadly, if we look at MRD penetration, can you give us the latest view on how penetrated do you think this market is? Where do you think it can really go to in terms of what percentage of US physicians do you anticipate using Signatera by the end of this year?

Question: Rachel Vatnsdal - JPMorgan Chase & Co. - Analyst : Perfect. That's helpful. Maybe just on the topic of ASPs for Signatera. Can you spend a minute talking about the traction that you've seen on the ASP front? We had some noise earlier this month as well with the CLFS on the payment rate there. But you've also talked about improved coverage from Medicare Advantage. So walk us through some of the puts and takes on the Signatera ASP front.

Question: Rachel Vatnsdal - JPMorgan Chase & Co. - Analyst : That's helpful. Maybe just going alongside that then gross margins on Signatera given some of the ASP lift that you're expecting, but also on the COGS side as well. Can you walk us through -- you've talked about that Signature will be accretive to corporate margins and contribute to overall gross margin improvement. So how should we think about that margin lift in '25 and beyond?

Question: Rachel Vatnsdal - JPMorgan Chase & Co. - Analyst : Maybe shifting over to women's health. Just on the competitive front, can you walk us through what you're seeing from market dynamics given some of these competitor exit? What areas of the market are you most excited about for 2025 in women's health?

Question: Rachel Vatnsdal - JPMorgan Chase & Co. - Analyst : Maybe sticking on the topic of some of these ASP dynamics, Natera has benefited from some of these true-ups over the last few quarters. So can you spend a minute talking about how should we see the durability of these true-ups going forward and the impact there?

Question: Rachel Vatnsdal - JPMorgan Chase & Co. - Analyst : Maybe a last question in the last minute or so, just on profitability. This was a very great year for inflection for Natera in 2024. We've also talked about wanting to reinvest cash flow back into the business and some of the product launches that we received today. So can you talk about how you're kind of balancing cash flow generation versus reinvesting back in the business in '25 and beyond?

Question: Rachel Vatnsdal - JPMorgan Chase & Co. - Analyst : Perfect. And with that, we are out of time. So thank you, everyone, so much for joining us today.