Natera (NTRA) 8 Nov 222022 Q3 Earnings call transcript

Welcome to Natera's 2022 Third Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode.

Following management’s prepared remarks, we will hold a Q&A session. [Operator Instructions] As a reminder, this conference call is being recorded today, November 8, 2022.

I would now like to turn the conference call over to Michael Brophy, Chief Financial Officer. ahead. go Please

afternoon. to Good of for our joining Thanks, the Thank results call discuss quarter of conference operator. you our XXXX. third

CEO; Manager line, Steve the joined and our Solomon On Moshkevich, Oncology. of I'm General Chapman, by

Today's conference webcast. call broadcast via being is live

referring at slide presentation be investor.natera.com. to been that will call a of replay A the to also will has posted We investor.natera.com. be available

slide two. on Starting

clinical opportunities coverage capabilities, partnerships, expected such size, financial forward-looking as of related and market this product and reimbursement operational for dates, anticipated our conference studies, statements results. make regarding course will and expectations our current for assumptions future the operating various outlook During future release financial we including effects performance, our and strategies our products, future and and events on and call, projections, and outlook, that

refer We XX-Q judgment best differ and actual reflect Form recent events caution or to or including release. Form file our the based X-K most SEC, the on Please the statements that could us you today's currently known from press time-to-time with that to XX-K our results filed with and documents we such factors materially.

important differ suggested statements. cause that other and actual results in our to Those factors by identify materially documents contained risks those forward-looking from may or the

statements during X, are the being call XXXX. made Forward-looking made November as of today,

Natera or any information. after information revise during presented accurate may any update the contain or today, this call is current reviewed statements. replayed If the call obligation forward-looking not or disclaims to

a our performance we quarter any call, we'll provide on guidance guidance do public further or unless today's provide updates the on forum. but will so in We during not

unless as represents growth numeric of performance. our number comparison. such reference a a quote each noted, financial or we changes otherwise discuss year-on-year will We And

to And Steve? now the to Steve. call over like turn I'd

Mike. Thanks, Great.

our start Let's QX highlights. with

spend quarter in and moment. see growing the grew processed XXX,XXX release, over quarter QX. in year this last As tests all we we We're product time momentum seeing had strong strong you can and on QX press Revenues across more XX% that I'll XX% year-over-year. another from approximately lines a

pleased million. increase We to XXXX over million, able XX%, revenue one-time guide an $XXX $XXX midpoint, represents in once revenue initial raise compared our are to annual again by range million. of our new March to the growth At million this $XX in guidance milestone and QIAGEN our guidance be the of excluding in $XX to implies to XXXX this

few the from now, have are for launch We There exercising of few in with the evaluating screening the days program the of in program. some been forecast. forecasting legal a the early careful being But results with we our California impact. developments prenatal caution the are are and we last

and to addition, where on Signatera benefits are but get term. we've immediate being disruption we recently cautious Empower the expected and to focus both In in Signatera I'll that the centers of account the for demand. in guide teams to integrated the sales our Empower later, with move

well above reasons we seeing the oncology performing roughly forecast for roughly We on processed internal year, Signatera, revenue our units momentum strong One are is for XXX,XXX this track we of think which we year. are key the year. this volume with the and the for is tests raise XXX,XXX

on further expand moment. will a We our Signatera volumes in

key Signatera space. breadth data types competitive this across over multiple generation for The depth in of and a others tumor advantage our is

first publish published ovarian Gynecological so with XXXX we XX studies, were pleased Oncology. cancer XX in coming validation Journal far now to several peer-reviewed our more fact, soon. the in study have We of in and In publications

JCO was Precision accepted which in over includes timepoints, just study, our In addition, large-scale gastroesophageal Oncology. validation XXX

factor of Nature pleased to announce in its Medicine, follow-up, with we an has forward And XX now study, months Finally, of XX. been median impact look accepted that we are publication CIRCULATE which to the shortly. has

Our announced Kidney predicting the our second growth standard-of-care time We donor-specific this Organ both antibody-mediated this few antibody quarter. superior to This to rejection. and contributor in moments. spend publication test revenue from was a current a demonstrated were Trifecta more publication Prospera strong data study the the volume in products Health in Transplantation. I'll on

are that made pleased completed Finally, in investigation we seller report. March our an to detailed independent the Directors of committee of allegations the independent a short has share Board into

a of firm investigation, on the personnel, the assisted behalf other has like this. the this were deep was matter against experience with records. you company in and in company concluded WilmerHale allegations of report leading as executives, on independent in Board, is WilmerHale, wrongdoing committee, The team company law Board by The the which unfounded. access communications Based to the know investigations the international that had

We with the weren't surprised findings.

of our where in in confidence requests. the belief the firm, recall, do As had of a as substantial program, in salary time respond members bought and and response to open and morning company of a reiterated have took team happy It's of the we activity support amount team the compliance you on from work strength based program. the to energy remainder to the outside our their additional the but involved call, of equity XXXX. the great we and it to very the the detailed And to Q&A following form for that our we executive compliance on next our law stock of all completed this were investigation

surprised article, we and the given about report inquiries broad specific January we request been have allegations just made, responded receive to. Of have expect. nature NIPT the some short the the profile of There of weren't regulators, York no space you in or customarily made a accusations which that to high course, claims would from New Times

program the Board wrapping feel an involved company, from said Independent I in by wrongdoing we the we important very detailed compliance the milestone. have which place, As of the and and allegations found represents strong no think review outset, up investigation, we a a

Okay, great.

the Let's next get trends into detailed business more slide. of on the

rapidly again mentioned, QX. once in grew As volumes I

continued big of growth. in As of base reminder, a leaving a big a despite market, one-time we volumes, from got bump deliver QX rapid to that so key we competitor the XXXX,

Women's Health expand expansion a get Women's go business continue competitive I'm on on on market that call and going today, moment contributions to into The wins. detail the we to I'll to spend Health and NIPT from not continues just so opportunity. balanced

only opportunity we First, is large market the patients. think still NIPT a penetrated, so help XX% XX% there's about to more to

commonXX-XXs is well prospective going the including trial Second, in the microdeletion. XXq given our largest and clinical which our both we looking done evidence, forward, Natera is think SMART ever trial, peer-reviewed leadership differentiation positioned the and at

possible think of be advocate critical may prenatal some opportunities milestone where societies we there testing. it's may Finally, genetic ahead for expansion

there's happening So a the scenes. behind things of lot great

volumes. Okay, back to

the positive and Health Women's significantly kidney, and segments leading that volumes working Prospera to and transplant heart get test our to and in indicators to are lung continues to are in aren't now we transplants. heart reimbursement ramp those in we in addition In lung traction future. The revenues, also growth, in they seeing contributing are yet the

largest QX of clinical traction and The Signatera our historical XX,XXX been gives to volumes. year-over-year. we're the you growth of of Signatera we've seen tests, Altera in Signatera. seeing increase Finally, the has slide In detailed next representing with we snapshot XXX% contributor XXXX, growth performed volume

and in tests growth of stage new this For Signatera volume ordering increases The patients. for adding of oncologists growth is are ordering increase in that approximately Signatera XXXX, at from XXX%. number we a from that the previously, started expect and Signatera both the to coming with and patients Altera repeat perform XXX,XXX of base rapid

have For example, we XX% community estimate in a United past test of States roughly the XX,XXX that the ordered the in quarter. Signatera oncologists

volume think of a that's indications these into little standard-of-care. like volumes we Signatera have strong testament half cancer chunk in where actively is the indications IO I of and we integrated more and the a than are Medicare pursuing how is to colorectal strong and A think data are significant monitoring, Medicare quickly reimbursement. becoming reimbursed remaining

these of this committed Signatera. wanted to but to early, previously a volumes important understanding is annually, our quarter I had We out breaking numbers strategy growth to share these slide because

the and and pressures monitoring, if it's term. immediate the as the the we the margins Signatera our growth Given we volume unreimbursed traction seeing, strategy right are to recurrence volume establish in a even reimbursement MRD for to continue clearly think standard-of-care

get the we're XXXX. the will in today, but aren't that we areas we rapid the into cash in is forecast particularly our reasons have for coverage, call, burn guidance reimbursed opportunity believe later of volumes, for growth Mike increasing the the near-term in but Signatera a one

that in continue even breakeven, flow the a non-covered to reduction XXXX, rapid in Signatera seeing path to expect we by increase followed a are cash flow major We cash with now. indications in

which XX%, into translating revenue volume you XX%. in million growth volume Total shows increased increase is $XXX that is slide growth next a This of revenue our of growth. larger growth

Signatera growth, volumes continued to ASP now As $XXX over Signatera important $XXX critical model. to progression are to QX. from particularly the over Clinical and the ASPs is year about last quarter, to in $XXX last increase overall

the coverage. proportion our come is indication, improving, near-term, believe the are tests ADLT monitoring $X,XXX. is rate We in improve, greater Medicare at from will which And driven by increasing of to the to by reimbursed recurrence an ASPs the mix volumes starting continue of and reimbursed Medicare our of

In we've as coverage both we lung always are mix we for the and shift mix for Medicare remained we haven't our kidney has factors transplant, we've mix and ASP. indications. our into commercial shift of heart some as to ASPs payer on pressure see been Advantage In uncovered limited by although those impacted incorporated those seeing currently tests, stable submitted or

a germline possibly working, In ASPs, coverage on but gaining seen increased handful pressure we're guidelines. forthcoming there's with addition, we've of some opportunities including

continued across a on we significant have progress of key several volume now peer-reviewed and heart initiatives. Health, Organ data In make indications. We kidney, lung to

publications we XX published XX alone. months in fact, past the In

on cell-free estimated algorithm, X.XX Both testing highlight demonstrated the an an the of our donor-derived having Trifecta quantity DNA here and X.XX. X.XX fraction to study donor-derived the standard-of-care antigen. and of that predict The outperform cell-free donor-specific publication current of the DSA and AMR with Prospera's of cell-free donor-derived superior standard-of-care AUC to going versus was AUC study. components I'm the DNA, from second slide DNA

We physicians strong has great we're our Health with work data franchise our the help doing Organ of team expect in very the pleased continued and how to drumbeat across of patients. and done continue XXXX. We're to

to I our about discuss to it turn cancer Oncology, I Solomon want before early talk to detection over efforts. Now

development methylation both remain products. initial CRC present ECD early We XXXX. colorectal of and DNA for our data performance We to our case-control track platform from in detection multi-cancer continue on the assay

On discussions are FDA with feedback hoping and to the front, the receive XXXX. continue final regulatory in we our

FDA discussion pre-submission our with meeting, two pathways we a During first productive with had emerging. the

followed samples using health the study. validation The FDA surveillance oral for first post-market path the includes a study, by

while validation, initial The conducting prospective path the FDA. we're second use study the oral health the for a could new for study

feedback the While are the await either we the we from option. final FDA, finalizing design for

XXXX. to additional We ECD about program are excited in information provide our

it results With to that, review over to detail. more I in Solomon our now Oncology turn will

Solomon?

Thanks, a and I'll from some Today drivers the will in of our investments the data Oncology; clinical Steve. pipeline; deeper we're success commercial I making of the future. that on key touch our key highlights dive bit on for

we've described growth that with Signatera the incredible the observed Steve MRD test.

tumor-informed has with this many detect is dynamics personalized earlier product help quantitative whether inform patients very The effective. and sticky cancer testing. for It shown the treatment repeat a test of a months been As imaging. physicians early help recurrence identify rates diagnostic in treatment to than to and decisions both high can has been monitoring standard reminder,

attributable We strengths. key our is four success believe commercial to

of First, scientific the is calling we've oncology. we gain affairs, including on team country, and XX sales practiced strategic around groups. other leading including we started the professionals, tenured industry-leading than who've and team large four This oncologists large surgeons, medical a in and to that board-certified and more accounts with team a and momentum combine with have of VA recently physicians,

very veteran are really as selected proud to Veterans heading later have into We community, week. a Day the especially to been partner this

a as record secured good Number pricing. we've coverage execution with strong track of MolDX, repeatedly market both two, has access our team and

hard service IO for recurrence and and adjuvant to rather recurrence for at important labs In competitive pricing advantage. On to For includes example, is neoadjuvant, quarter monitoring patient. than and MRD a pricing, status, just replicate. secured are past And these distinctions we've being received are adjuvant which limited We we've bladder, other $X,XXX is it the this per monitoring, think colorectal coverage our the includes monitoring. both ADLT adjuvant.

and strong phlebotomy, portals, three, Number medical physician times user with mobile electronic record turnaround experience integration. fast

of experience For example, is their latest further by to partnership our oncology this Epic, pre-installed access portfolio national already Signatera our enhanced with tests. in where version software, is EMR of the

NCCN scale in example, get always With blood infrastructure and from the we including of poised coverage prepare key of expansion to as readout place, payers For Signatera and and that Altera better. to sustainably we're for we inclusion this believe key same studies. several We're ahead, milestones the and potential Medicare testing guidelines, into and tumor several striving specimens. private by quickly clinical

advantage, fourth And major that's our data the leadership.

Given be of far we time collect one more gather advantages types. overall takes samples of have. XX may than long-term I'm across execution the significant this different it very biggest longitudinal publications clinical dozen includes which team, that follow-up, the to and peer-reviewed cancer proud two of the our thus XX in XXXX and

move submission a right XX rapid manuscripts additional at so We in continues have generation now, to pace. evidence our

at ovarian and in in Paris Medical presentations In Phase cancer, our melanoma, European breast three Society we Conference cancers. months, in validation had in and X a study published study oral uveal the the for colorectal two Oncology past we clinical

Touching are on U.S., XXX% and decisions each ovarian imaging. in those In patients. few serial XX help And cancer with we There believe here. we XX,XXX Signatera an cases recurrence testing, ovarian year diagnosed can of specificity, versus new lead detected analyzed samples approximately treatment highlights study, of average a multi-site XX-months time sensitivity the inform many from and XXX% standard for with the with patients. of Signatera XXX

Natera builds publication, setting, plus studies plus which the demonstrated in pipeline, been trial dynamics yet already the of Phase and of at immunotherapy. early-stage and cancer, the of developing base BELLINI published Leicester studies University power study additional the cancer, for upon breast ctDNA in I-SPYX Signatera evidence plus in with the announced. monitoring BRCA-mutated X neoadjuvant that the additional the In recurrence ongoing triple-negative the not is in breast during and presented neoadjuvant the breast adjuvant have already triple-negative the from consortia significant cancer, This with settings, manuscripts monitoring in ESMO submitted

deeply committed for of are utility cancer. to Signatera proving with the We breast patients

in from patients line cancer, in X evidence, chemotherapy. benefit adjuvant This leading data real-world showing that no the with over submitted colorectal near ESMO. the and great showed body Finally, XX,XXX were results at The presented MRD-negative will significant future disease be in evidence. to patients with GI from oncologists a Stage prior X Signatera addition publication to will be existing for of

our approximately with challenging for XXX affecting is XXX Signatera management to study cancer this help most We with year. plasma another from to to over Nature GI XX,XXX is XX-months, the the stage real-world consortium, way coming which extended in collected clinical cancers this going been beyond for patients cancer, has follow-up next of multi-site in U.S., believe samples per study type This publication from patients. sets accepted had now we the major publication a disease, formally which readout pave recently accepted CIRCULATE for from validation the for the in inform common sixth by Medicine. CRC, gastroesophageal in And new over

as for father my somewhat cancer we is esophageal last one lost personal to year. me This

to we appears this providing for pleased Japanese practice were from guideline of great MRD to forward the think recommendation MRD. for is step in see a Oncology, Society the cancer. strong of revised recently Additionally, JSMO, use be Medical serial what testing colorectal a We a

we generates much quite it in to trials. without data coming the trials inflection separate scans, and are indication. will X in But the there need Signatera the each payer some reimbursed there point yet. be This of not will some CT coverage believe be point fully inform pan-cancer definitive fashion, Phase where like an design years, adopted for that's in clinical or cases, we drives often in directly evidence required At

addressable in current giving team represent million coverage immunotherapy approved to penetration, we Our monitoring X.X and indications as an bladder year tests response per of colorectal, estimated market our further. full to do expand plenty to up work even commercial at

investments staff. one, excellent of position an in in are Number we be lab our processing several ahead to up where scaled our us we're making This expanding for business. tests success. sets footprint reimbursement we're expecting and the Finally, in vision, long-term already to substantial and achieve the future and

economic clinical establish we to Signatera. are pan-cancer for investing heavily utility Number two, and in trials clinical

surrogate in Japan companion current eventually, is a diagnostic IVD version as developing of an three, into This to the gain to regulatory global require endpoint. as and version addition approval by Europe, Number we're LDT product. order and a FDA to Signatera, expansion of access, market the support which and the approval in

we expanding what the expect addition promising in Signatera the detection we're the menu the is selection four, we we're technology, Number our is in a in to therapy to liquid advancing to menu to think early think future. a future cancer dividends Plus, and add product pay going which assay program. biopsy

of database Finally, already combination service. research clinical insights serial germline of Several a partners promising we're ctDNA with together to out therapies exome access data biomarkers. which unique outcomes, to can novel inform new of started new dynamics have and with building data, real-world our and our development generate tumor the and its new

end to year, have the we XXX,XXX this over expect cumulative run Signatera of By tests.

database, So not future, we think great creates to over test a will data million opportunity. in it's in have we a unrealistic Signatera which think points our the

business. to think Although the we things right capital-intensive future the are they're long-term do investments, of these for the

like to to to hand I'd Now cover the financials. over Mike Mike?

Thanks, Solomon.

QX our is The view key results. of covered just Steve revenues. on and trends first the the standard slide volumes

Signatera touched in to strong on ASPs, despite year. forecast volume germline were margins gross are and fact that headwinds levels. growth QX the we the Steve the some that were our and deliver fact blowing Our transplant revenue similar QX to out able this we

resolved volume sessioning, although do we we QX. strong some to fully test to had, and we've experience continue have expect that With during the growth backlogs

in down margins quarter, we the modestly those compared what gross of think can they held be in variables All to the future. together

lower quarter, related small the expense But were pro treatment to acquisition was expenses flat sequentially. the due technology we accounting to R&D forma in change expenses that, of operating last basically year. for in a made

fielded receivables increase in quarter, this the on a last Since few we our questions year.

For would on between cycle. over collection would by the $XX remained from year. collect XXXX million collected be million million think of we additional this $XX receivables about this context, we $XX in levels, in longer point if had in roughly trends and We flow to Medicare QX, a collected can the and cash have cash now time as QX remaining constant

To XX,XXX expect reimbursement. a QX. there are the payers million claims, Women's One, detail, cash, we on We next QX and QX to call by all one-time primary to will is Health more initially which represented held which provide claims in a and receivables. year. described now our bit system two billed issue in between to end we estimate the that be for those out drivers yield for That bolus we the accrued increase the claims in prior temporary of in roughly flow of could cash about $XX submitting of in

The waiting confirmation in increase dramatic and monitoring Medicare-reimbursed revenues, accrued that code were to have Signatera this accrued prior a of now IO for full-year's the have final claims we for payments. revenue pricing we second submitting have Z by worth driver but we is caused as almost We year.

we Medicare. to that bill have those will claims to details, those Now out we start

in very I'll stabilizing slowed Over we time, Medicare very commercial that's Medicare, implement collection the to think our our path so increase additional year the will that can be modestly business. takes QX, from automation, time complete. note QX at near-term, XXX about QX will days what this or more days test quarters we much out. two least from insured which to collections XX-months experience patients manual this a present, gradual cycle Medicare processing, and improvement. get between get DSOs it also DSOs to process of in so, because XXX DSOs and At require takes but in cash learned to slower be as support that We've cash to than us we increased that faster

and stand today. ground are of ourselves We've lot that story. strategically, to growing just for want multiple I a And in and a We've large you lead the summarize covered in commercial we've leader our infrastructure. where of generating got in especially those established a market frontloaded to markets. data investment significant newer we already Okay, as

volumes and of onto we We generate and Because on the invested cost-efficient significant our these revenues established to can grow. sequencers come the capital in are by products reaping the benefits lab. as that returns according Austin cost scaling continue lower

So just drives clear visibility cash that to base flow case breakeven.

a That our XXX this our workforce cancer team in team. identified that XXXX, our while we're change, we With single-digits. us sales to the Steve a breakeven That next efficiencies complete, resulted drive of cash month burn significantly employee line operating to review. sight plus have cash within position small driver being very to think integration we budgeting low about strategic in growth elimination reduce commercial part holding great cycle, thereafter. reduction in flow year, referenced of the in positions allow as path of the growth an during and hereditary move our we expense will of oncology with still primary XXXX combination

one time we're this a of as the the in company, the early these in right change page. as be have that and achieve can on lot number would as could we represent position spent see can each more function a believe hand of step we achieved describing think we've be of catalysts of course, another achieved them. you side One the why potentially meaningful Any these of to great for we near-term, of year. catalysts a or Of

good. Okay,

revenue range the the to touched get the the year. update year. guidance for next Let's of the for and rest updated the Steve the on guidance slide to

strong seeing Oncology. trends in positive Clinical volumes and ASP are We

we basis on being slightly on stronger to volumes Signatera based to year-to-date adjusting XX%, stand a currently. with target are margins XX% We margin dilutive to our where gross gross

would Signatera expect of and ahead a it claims make near coverage much future, wouldn't cancer shut that a is for to cancer. getting of, here of array off is claims The sense agree our in everyone paid breast guideline I breast good possible CRC broader shut on there in news the ahead to NCCN a Medicare for change off for test us or example, possible path

to think a see on In do our for do and to is we the path a coverage in changes, of there ASP on addition, transplant improving heart lung path testing anticipated we germline us through get some business guideline and

On our ‘XX at burn significant XXXX to $XXX and improvement million now cash we guidance, be expect roughly with beyond. in in

was by that As an pressure in outlined, ASPs this caused increase in DSOs and is germline think fixable. some we

wanted mentioned, changes always strategic burn Solomon we As reduce we further. could there's if make to cash

decisions, we For the don't indications in example, although opportunity could think clinical uncovered limit spend; our smart reduce volumes ahead. trial growth those Signatera are we or given

And so And results call that, we're the pleased to with hand the let operator you very for me share to questions. today. Operator? with over these

you. Thank

opening to CEO, for to questions, lines Steve Before the Steve? I turn Chapman. would call like over the

Yeah. Thanks, operator.

XXX,XXX tests the in Signatera. just to call said the prepared quick robust year. that quarter-on-quarter and QX we expect greater do reiterate to I actually It Signatera earlier meant want to I remarks, be growth than between see QX about And XXX,XXX. that so one this on to clarification, Just we're in expecting was

you. Thank

Let's up questions. it open for

line with Your question Instructions] the SVB Puneet [Operator of from first comes Securities. Souda

questions. the Thanks guys. Hey, for Yes. taking

of So a couple questions.

that XXX% implies mean, of I year-over-year. than test, that oncology growth XX,XXX here the on and you one us. more XXX,XXX was well And ahead guiding are first that to The

now you payments how a trend different ASP -- number we ADLT the to result first as going payments, one. obviously getting is how think growth is question real indications? think the Medicare about So of you're really That's that ASP? should So different do the

to is about this how continuing a experience here big given two here? should is you Because leadership with seeing have the that and here growth is sort obviously, you of assay I think have growth year you're this this XXXX number of then grow very -- remarkable And position had market. -- really, question one in and you we the meaningfully the here think that you're

Yes.

But we've with a of I the make you let all, me is we I in the look So seen this we building growth both comments, in very think the beginning. data. rapid can mean, growth the first and ‘XX the Mike if and colorectal. that I here, have, with indications I'll say, pleased especially we're you dig just I then a couple colorectal uptake ASP And think think at obviously of just trends. momentum great think we're and and, beyond into flywheel then the really that

So we've us. of got opportunity lot of a ahead

And are into time, a into shift come new over seeing in. expect, more you'd time point as the also for very But at monitoring pipeline. and we the indication we're certainly initial coming more seeing it's patients robust that same in time recurrence that growth patients

And incredible over mentioned I time. had to to that's going to better where are prepared based So continue quarter, we U.S. as in really we the get product. remarks, now. XX% last we think that's of oncologists order the And on think I

patients as mean, impact and array as get of have things positive to on of So monitoring coverage a can these as we get I IO a recurrence commercial all shifting broader we start coverage, more ASP. to colorectal, to start beyond bladder.

of trends So to ASP just maybe want on ‘XX. the some briefly you then touch Mike, on do and

thanks, And Puneet. Steve. Thanks, sure. Yes,

monitoring Medicare improve, for also recurrence mix we've to has we're well. set, steadily as of ASP where and and we've on Just mix gotten in a CRC Signatera both terms the level going as been shift mix we coverage with like improving patients $XXX ASP that of rapidly year where and reimbursed Medicare patients the we've and on grown started continued ASPs, to last

think mix into I that shift next is year. something pretty a trend durable that's

range. that in XXXX exit we So mid-$XXX

alone. grow secured mix shift favorable room the dynamics response $XXX, $XX now Solomon And pricing to that, we've there's think reimbursement monitoring. purely immunotherapy I the terms in another on of to touched then just on on, beyond formally

well. claims we'll build as So start those out to

both got colorectal And Medicare's reimbursement a significantly lot broader cancer. example, breast a to reimbursement as in cancer reimbursement terms broaden of, for then in we've opportunities commercial of for a possibility

multiyear as a I that positive drivers the So for really kind of see of drivers lot ASP.

the early test. which on screening competitor programs, you've launch Got market tool liquid a RS already I had. I the competitors. this discussions data helpful. appreciate this And the mean, liquid then But it. That's also FDA has could two that There's and Steve,

so cash that, think assumption And market. my about burn. obviously, you this And to us help that addition that just involve position to how want do is -- will in

So burn for ’XX. you when XXXX moderate that to are for what expect does cash mean that then in

So going just through how walk us happen. to that's

Thanks my for you. thank So taking questions.

thanks. Yes,

really position. we're in that the a look, think, I the entrant in market. where into not we've So first been And well we before did think position I

think think there's now and as sort an I different a then strategy back And certain what's tailor take landscape launch the in look the the I that of to step up commercialized detection some think tailoring and that road includes happening kind of way think, doing aspects at design to on the important. products pick I that. get to things would our of opportunity, map and I a be and

So in to some being position ways, there's we're an that advantage in. the in

also team. reiterate, big have just sales sort one do of we I’ll a

in maybe the members kind team or XXX people range, something know, that. I commercial all somewhere in, think I of don't like

future. us think women primary of covering that's product their see because a commercialize we're we an for OB-GYN for care as the care. look swath most the opportunity to in broad practices, We primary So

But built when in have sort that of go couple figuring plan which it we've next there and plans the we're path down comes for years. already the to our and out to to of going of budget to trial kind us over gotten the opportunity

to in on that and that that a early a ultimately up talk may path we trial Mike flow we the includes So breakeven very having end about to in when significant necessary I reduction cancer the do detection. spending think had ’XX clinical cash

been -- to tuned just stay out, I And we've to you data have in. it go of and So kind reads think we'll already there. built we the as from

Your next question from Savant with line of Morgan comes the Tejas Stanley.

evening. Good guys. Hey,

still you there So of cash you thinking feel for on that and of just that else time here we Steve, like laid sort in really can in any how you the theme Or keeping pan-cancer slippage push there? line? anything out you the about mind? are do there sticking to the confident there, bets mid-‘XX need on breakeven? And Is Signatera Is be sort this hit burn mid-‘XX breakeven oncology for beyond slide.

Yes.

over have very let at the So maybe then first, you of Mike. that get seriously. comments flow first breakeven, cash executed, management when to cost I it to I'd and a get to of projects I'll couple taking we're And me to as we all, say, look turn think, make

with ways probably think the we many a And Empower looked sales by people. the Signatera I business had you of recently sales workforce about team. we've create synergies reduction, at saw across team integrating the to XXX

So very we're initiative taking this seriously.

lower like sequencers. also in many that throughput, building reduction COGS have that cost new projects out things more like higher things We includes Austin includes to moving lab capacity

So difficult they done. manpower take work done. And projects and that to get they to just have aren't these and be time are do, to just development planning

coverage commercial improving covered So Signatera, for for getting us. we clearly of on ASP, in other things the pretty could areas that coverage indications colorectal like see the of includes tests ahead business. the execution getting of more ASP there's Then that path some the there's

obviously puts less are up, our So are things there that together, and what little we've are control, takes, set there’s control within a nicely things as come and I directly some are think, some some within things there our for. and all these that

is when see followed burn XXXX that cash in And to achievable. expect to a reduction We a by that, cash flow breakeven. line we that do very path together, put think in clear significant all very think you time ‘XX, I

we're road putting of achievable can we're that position did the kind think of we levers I of for important where a all I of some on a think mean I outlined. the mid-‘XX If these big where bets, we in lot to together there's we Solomon wanted that and seeing things they're pull is a accelerate we they get cost look, think things, hit and future money, map. we of of a the doing lot business. that lot because that pieces

this stage. levers right of pull the sticking keeping line to at to flow want by our pull Now model but very We the the bunch can flat necessarily. COGS, expenses the right cash it's and the by think one We prudent the that's executing strategy, sight seeing quarters. if look, being good do we're this getting move relatively quickly, that we a two is breakeven that and or ASP, quarter in said, we of don't think in we we could plan, executing clearly

anything? want to do you add Mike,

comprehensive. No, Thanks, quite that was Steve.

are paid Got it. tests thinking XXX,XXX That's helpful. Medicare this and Steve, going well. to me. can reimbursement getting on prior you up of, for go you broadens the fraction And then hope you do anticipate submit one on the Obviously, sense as Signatera about sort as the at it's to us that year. you claims give to that How these a -- moment? you of

So curious on bit. that

feeling are given Nature about there? then time now should it April, frame marquee a next this you NCCN here, you And think have sort for Medicine May this that the still straightforward you guideline process, good inclusion. publication of process And have out that relatively the you be on paper do

Yes.

comment little Solomon, So guys of can sort NCCN. covered indications. between bit And non-covered the seeing talk mix on or a about maybe me you and let that then Mike we're

NCCN, on all in of think know that So they we I met August. sort

haven't was out paper the pure the wasn't the future. it will come that unfortunate and the it wasn't But accepted that think that from near think We circulate meeting. at part stage. because We included, I seen readout reviewed obviously, in

entire So journals of featured. in the which of prominently now being Nature impact that is very it the I has field been in that one accepted think Medicine, medicine, existence in highest

in think future included of the reviews obviously that allow I we'll be to guidelines.

really be see these surprise corner think how the into for come think oncology of big a society of just win out. think, was going have I do we Japanese just but But guidelines was upside that turn significant to the the August kind way. results of line we that a see as unfortunately meeting, sight just there's publication I in go. things So are of to including how I have year, kind to us medical to big next out. we see things and Then one, pan really

a I forward. And be positive like committee of for formally great looking will there place. national think see something testing. think great around I And obviously, in a And future this look I read-through to at. step that think is step the think world as MRD the be members a this there's I we it's guideline a forward that's put

what Mike, Solomon, from cover non-covered? to we a of covered do you seeing and we're want kind indication mix, which

want to you do take Mike, that?

sure. Yes,

So improvement talked see think that kind is basis. glad to we of I think some sequential overall I roughly a I on mix the stable to mean, previously. about modest are there's what that we've

that half volumes Medicare we where what is means are roughly So into a of the coverage. indications falling have

are Now, of that not half all that doesn't patients. reimbursed, mean those of volumes obviously because patients Medicare are the

of actually is For people to from we're colorectal reimbursed patients. low-XXs seeing percent are the the those progression like really last seen example, the the some we've And what something indication cancer in high-XXs there high-XXs Medicare year. over nice

I potential Medicare mix within continue colorectal to think scope cancer improve. there's to for our

expect. nicely, that's think the as you'd monitoring, way perhaps versus to is serial testing progressing upfront about one and really way So and about think mix to mix that's

monitoring last on initial year then and where strong set getting a staying We had got tests launch a they're and Signatera people up protocol year coming and they're back, repeat tests. really their of lot

in mix so our to continues And that favor. improve

those modestly we have a So would and high-level point. the this are of mix, hoped I be that's where trends kind at of to think, view above,

next Your with from the comes Masucci question Cowen. line of Max

questions. taking the Hey, fior thanks

is are sequencing of keep curious or or First our mid-XXXX target or if for checkpoints still place radar if the the the and key your assumes a just lines curious, internal that I'm you're what refresh capabilities. And on profitability infrastructure bit? infrastructure build-out, we updated time outsourcing enhanced the in should one, the that

Yes.

So and it up let we me can open then comment there first further.

have our and infrastructure, that up throughput, high of, we then include So tissue scalable lab moving now kind there scaling I think, up particularly, both, to infrastructure Panorama. right are sequencers for more our also several projects that

For we're the of seat. running doing, we're next example, there wanting still number we're on still despite Panorama tests the

obviously, where in of There's we have So the $XX there, sequencing COGS significant project. pretty reduction the is plus advancing range a opportunities project. per straightforward million system areas other

corner advancements and would along going throughout work then on the end reduction. size these of towards things more and majority technology coming I that ’XX the progress given But exciting will, as say ‘XX and we advancement the the now the vast well. ‘XX, stuff think, of beginning some There's well. the in primary projects. COGS these kind just not It's in are to the just we are we're really, as some of several technology scale of that we've as kind I projects of, on right these of working of in really come opportunities. with Now cool some turn got Actually, be and

get kind of Now of ‘XX. are, to frame. throughout by other hit full of in will, early in hitting capacity late time ‘XX now many kind of, the and ‘XX sort right them of be course that some phased ‘XX, of, But the will the then and of up end ones

Mike, add to do anything to want that? you further

No, I it. that covers think

One moment.

Julia Qin with the question next from of comes line Your JPMorgan.

good question. Hi, afternoon. Thanks for taking our

FDA and and the you positioning the kind what potential of would burn cash pathway? So Could have know different scenarios well? as talk would the two under the on about each cons two competitive pros for Obviously, that approval pathways. very cancer product's be screening, each you implications

said to your Or embedding using side? expectation when with potential market oral fully about earlier time trial you already the health investment, current how scenario are that more cash So studies? general think should the are we need on referring the for frame cost-efficient that you prospective those that product a launch? flow the a invest before And you data

further asking for Thanks there. Yes.

with with always is as focus a our positioning lead think it's lead And to goal and from been our So -- well. look, from I what performance. here that's a technology standpoint,

those adenomas, started have back. kind As important, that opportunity really that kind see I development multiple a of to didn't we back that years step mentioned, for and what's have to an if multiple, of opportunity take the a step of take kind ago, maybe example,

the but unique we in also product a is market we of that we're our capabilities that leverages So data the that I have designing our then technology developing. And what the core way access also know to. the how about strength we and think have,

leverage XX and tumor we understanding far thousand that data we ran as mining tumor what's that Now excellence plus can early-stage uniquely have exons as we important.

way think with leading leading and go. is a to great always we technology So with performance

important COGS him, that and very distribution Of is to course, also focusing be we'll clearly. and on

that with pathways, running cost of at as about samples post-market look or roughly the prospective FDA I an think, as associated we sort initial health same. Actually, oral the the the when of So will surveillance study. doing validation pathway FDA then study running doing the think level we both is and the then be oral the the one health study other and different of validation those,

I patients to be enrolling kind similar amount of take number the think we'd and we both expect kind in time. enrollment similar of a cases, of of

range to colonoscopy of, that they've and and executed patients XX,XXX in of with of, kind there's million actually, And in range $XX landscape $XX done ways we the some the one of of look that studies, I recently doing matched range standard are, million in those the and gold at year. kind think of, of to been of some the kind of companies have newer the studies prospective sort as start trials took

and expedited some kind of, think pretty a kind the some do manner I way, it's of pretty that manner. cost going of cost-effective in do we and ways newer there's intend to But to, studies trends, amount. these same roughly either designs in newer us we leverage a think to So can newer we it

much? forward And another the assume any in magnitude we contribution does going helpful. still your the very incremental IO how those if reimbursement? That's Signatera, of should And you. and it's from And Got about contract then one not, meaningful how think on revenues ‘XX? current VA monitoring guidance the

Yes.

had pricing pricing just the something we although do So actually in. include that monitoring, some we obviously, initially that's there's in just got I briefly, IO mentioned And upside expected. think, versus we what I'll the

want guidance, -- what talk It's upside. The generally does there. is kind to in not is And growth do had of that kind is I VA plugged our that we about some new and think think good think I are of there's part you something expectations there? seeing something represent we're a of I this win. VA our and Solomon, really the

Yes.

This Veterans process that a the process to public with a narrowed was the was process was competitive in was working about initiated excited through. The that Natera It Administration. were really as had we're So earlier test of was which selected kind the tumor-informed year. eligible, tumor-informed signal of the testing labs, going with think where the who was of is as perception standard market a standard-of-care. -- only a I good its emerging RFP

of going sort that's is And expect serial of were in going size, is other the nature. for in provide does It's we service have as in cover that initial to pan testing. Natera step. contract The our to and to to and contract. $X many range cancer great that is future. an the selected as we opportunities so have gone, contracts it we And customers It the this testing lead million VA with re-up in to it's $XX million

our the However, I example strategic other to VA with seen we've cancer, think customers. on is rollout our our heavy advantage. seeing an -- we're initial other we leading as of expect oncology many the to that I And with colorectal and to important of be adoption going contribute the mission it's the and think groups achieving first-mover around account country large many to do

Catherine comes question Schulte of next from line Baird. the with Your

for Hey, guys. Thanks the questions.

then we that? that where in on seeing COGS path update First, for And give impact today forward tests try can many stand just the there? you the average Signatera on you for IO and an how the $X,XXX think about to pricing, are as bundle

want take to one? you the Solomon, first do

but don't colorectal and $X,XXX. number does for you testing reflect priced the would I pricing that that tests on is cancer, for the of slightly pricing say see talked about average the patient, longer we've an under was than with frequency where expected average previously Signatera, Sure. Yes. that time with frame service can think I example, was higher just what service patients what per for for

the pricing what reflect. So that's did

about we're per announcing on granular able more be when we'll we then information, will that. more I more test patient Now think and -- detail average data to give

Yes.

question. Let me COGS the comment on

to $XXX had now through basis here just the a per dropped improvement to in level we're to projects expected So the QX. QX of that's in kind in-house per to we just on just as in drop blended repeat then a down And and based again can next COGS, more below and lower towards of mid-$XXXs projects that's to just mix -- a year blended our down COGS Q&A, monitoring, upwards get a of ‘XX unit again, efficient. to on Historically, we on your in $XXX basis, and think lower blended low course on to that going set. shift we seeing basis and some the unit Steve get was that of continues -- the continue earlier continue below

state? then California if that program stand, And program, that you to it locked into not something is are the that, it. Got your with can out NIPT Or turns allowed the is for pricing you renegotiate?

Yes.

kind of Let me that. talk on

end, to the I the companies process, think a of were all there selected, make state. lot think program, Austin initially of we about they really offer it decisions in RFP was in was the way the for applied we're the only NIPT I they allowed ones and devised, what had best kind testing was Quest, So to them. But was an thought and and

opportunities to we're be, some and price we're lower that would that a other the thought expanding cross-sell okay, think, there's We volume taking products. that, given I and

go participate. ahead So we to decided and

a go it's in obviously, lower we it ahead was important we California. It with it Now to decided of but wasn't margin thought be to opportunity. because ideal, kind

injunction given kind the that Now legal an from, program. where prevents them been recent implementing of, that's of happening against with program there's aspects this the certain

that it's not of, means. we're kind what I think understanding still, clear exactly

one that go But us. think also positive And is likely things I fine program. way the path back So think, of the being we a frankly, of that's, were. I to for the in kind that we're

think have see kind how things of just to we So I pan out.

assuming, very scenario. obviously corner conservative our of, we've sort the turn year rest kind goes, of, of as both the in and been modeling us For the, worst-case the we guidance into ‘XX, for

scenario be would worst-case to So improvement that upside. any

Thank great. you. right, All

allotted concludes for the today's reached questions. have time We This conference.

disconnect. now may You