Natera Inc Q4 2024 Earnings Call Summary

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

Question: Douglas Schenkel - Wolfe Research, LLC - Analyst : Hey. Good afternoon. Thank you for taking my questions. I think a couple of questions, following-up on your prepared remarks. Steve, in your prepared remarks, you talked about -- I think it was the ability to double Signatera revenue at the current level of volume, over the next few years. Just, maybe, dumbing it down for me as a math person, cutting through all of that, does that mean that you would expect to, potentially, get Signatera ASPs up to around $2000, over the balance of the decade? And, then, I guess one for Solomon. You talked about the rationale behind why more targeted approaches have resonated on the clinical side with Signatera. Obviously, that continues to resonate. That said, some pharmaceutical companies have indicated they want a broader panel. How is the introduction of your genome-based products resonating with pharmaceutical and biotech customers, in the early going? And how is that factored in the guidance? Thank you.

Question: Douglas Schenkel - Wolfe Research, LLC - Analyst : Yes. That was great. Thank you, guys.

Question: Rachel Vatnsdal - JPMorgan Chase & Co. - Analyst : Perfect. Thank you. Good afternoon, you, guys. Thanks for taking the questions. First up, here. Just on Signatera, if we look at the volume growth that you saw throughout 2024, you did roughly 14,000 sequential unit growth throughout last year. You said you're going to do above that 8,000 to 10,000 per quarter or sequential per quarter in 2025. But can you just give us some more color on how much above you could do versus that 8,000 to 10,000? Like the old-long term plan that you, guys, have had. And, then, could it be something in that range of 14,000, like we saw last year? And, then, I have a follow up as well.

Question: Rachel Vatnsdal - JPMorgan Chase & Co. - Analyst : Great. Thanks for that color. Then, I just wanted to dig into the concept of true-ups, here, as well. You mentioned that you're not including true-ups within the current guide for 2025. You've also talked about how the magnitude of those true-ups are going to come down, as you guys continue to do better on collections and have more visibility in that. So could you just level set for us: What should we expect in terms of that true-up getting more standard, as we go forward in the trajectory, there, over the next few years? Thanks.

Question: Tejas Savant - Morgan Stanley & Co LLC - Analyst : Hey, guys. Good evening. Thanks for the time, here. Just to start, maybe, one for Alex, here. I know, in the deck, you talked about the number of targets only being one variable impacting tumor-informed MRD assay performance. But how many markers do you anticipate tracking for your personalized whole genome panels, that's the 16, like the current version of Signatera? And how did you think about that choice, in terms of cost considerations versus optimizing for, perhaps, higher sensitivity? And can you just share some early color on feedback from the oncologist community?

Question: Tejas Savant - Morgan Stanley & Co LLC - Analyst : Got it. That's helpful. And, Mike, a quick follow-up on the guide, for you. First, how are you thinking about any potential benefit from the NovaSeq X transition? And, second, on the Medicare lung reimbursement for Signatera, any color you can share, in terms of pair mix, Medicare versus commercial and non-small cell lung? And how many deaths will be covered in the surveillance setting?

Question: Tejas Savant - Morgan Stanley & Co LLC - Analyst : Got it. Appreciate the color, guys. Thank you.

Question: Puneet Souda - Leerink Partners LLC - Analyst : Yeah. Hi, guys. Thanks for the questions, here. Maybe, first one. On the cadence, can you remind us, maybe Mike, how should we think about growth through the year? You have a number of drivers. Obviously, data reading out, products launching, and, on top of that, John talked about a number of ASP drivers. So just trying to understand how to think about Q1 and the cadence through the year? And the gross margin lift that you have in the guide was also strong. Is that largely ASP? Or how much COGS reduction are you thinking about? Again, looking at both Oncology and Women's Health. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 9:30PM, NTRA.OQ - Q4 2024 Natera Inc Earnings Call And I have a follow-up.

Question: Puneet Souda - Leerink Partners LLC - Analyst : Got it. And, then, if I could, I'll try my best with this question on NCCN. But we're also getting questions on the advanced adenoma data that you provided in the slide deck. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 9:30PM, NTRA.OQ - Q4 2024 Natera Inc Earnings Call So NCCN ctDNA is prognostic but not predictive. And, then, they also said ctDNA is not recommended for surveillance. I appreciate the merkel cell support that you're getting there. But could you elaborate on the oncologist feedback? And, one side, there's the traction with pairs, potentially. But, on the other side, there's also the offset, maybe, in the community setting. The oncologists are still going to be looking for NCCN. So, maybe, just help us capture the NCCN and how you're thinking about that? And, just, on advanced adenoma, why should we not see any degradation there? Thank you so much.

Question: Puneet Souda - Leerink Partners LLC - Analyst : Got it. Helpful. Thank you.

Question: Catherine Schulte - Robert W. Baird & Co. Inc. - Analyst : Hey, guys. Thanks for the questions. Maybe, first, on biomarker bills. Is there any way to frame what your success rates have been in getting paid in those states, to date? How has that evolved once the bill becomes effective? And, then, I know you aren't baking anything into guidance but how do you think those success rates could realistically evolve, over the course of the year?

Question: Catherine Schulte - Robert W. Baird & Co. Inc. - Analyst : Okay. And, then, maybe, on R&D. Just given the magnitude of the increase you're calling for this year, can you just talk through the spend buckets within that Oncology versus Women's Health versus early detection? How much is the FDA-enabling study? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 9:30PM, NTRA.OQ - Q4 2024 Natera Inc Earnings Call And, then, just how will be thinking about R&D growth, over the next couple of years? Or where that might settle out, as a percent of revenue, over time?

Question: Catherine Schulte - Robert W. Baird & Co. Inc. - Analyst : Great. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 9:30PM, NTRA.OQ - Q4 2024 Natera Inc Earnings Call

Question: Daniel Brennan - TD Cowen - Analyst : Great. Thanks for the questions. Maybe, just starting on price, Mike, just walk us through -- I think you said Women's Health price is flat in '25. So what are you assuming on the Signatera? And, if you could let us know, on commercial payers, just what's the progress been there? And what are you baking in, implied in that price for '25, of commercial payers? And then I have a follow-up.

Question: Daniel Brennan - TD Cowen - Analyst : Great. And, then, maybe, just to follow-up on lung. Can you just remind us what percent of the lung indication you have, today, wasn't covered by [IO]? Of the 200,000-plus incidents, how many of those patients are already applicable for [IO]? So what's, like, the expansion that you see? And any other approvals we could expect, this year? Which tumor types are high on the list? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 9:30PM, NTRA.OQ - Q4 2024 Natera Inc Earnings Call Thank you.

Question: Daniel Brennan - TD Cowen - Analyst : Great. Thank you.

Question: Dan Leonard - UBS Group AG - Analyst : Great. Thank you for running long. I'll ask a two-parter on early cancer. First off, can you clarify the timing? I think you mentioned 18-month trial. So does that mean we'll get data by the end of 2026? And you'd hope for a 2027 FDA-approval, if all goes well? That's the first part. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 9:30PM, NTRA.OQ - Q4 2024 Natera Inc Earnings Call And the second part. Can you touch on the platform capability? Is this a platform where you could add other cancers as well, on the same format? Or would any future multi-cancer offering be a different technology platform, entirely?

Question: Subbu Nambi - Guggenheim Partners, LLC - Analyst : Hey, guys. Thank you for taking my question. Two questions. One, could you elaborate on why you believe no one else will receive ADLT status? One could argue a first-in-class tumor knife test, for example. And, then, second, how much of an advantage is having a biobank, with all the Signatera samples to develop a tumor-nanve and screening tests that you just touched upon, then?

Question: Subbu Nambi - Guggenheim Partners, LLC - Analyst : That's great. Thank you, guys.