Natera (NTRA) 3 Aug 232023 Q2 Earnings call transcript

Welcome to Natera’s 2023 Second Quarter Financial Results Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference call is being recorded today, August 3, 2023.

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

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

Chief Oncology; On the Solomon Alex of CEO; Chapman, Steve Aleshin, and line, I’m Moshkevich, joined General by Medical Officer. our Manager

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

referring to slide presentation be available. as as our to IR been that will call the of it’s replay site A the to also will has posted We investor.natera.com. be posted soon

on Starting X. Slide

regarding we During and and future the statements of make course such financial operational projections. events call, anticipated our will performance, conference and future our forward-looking this as outlook

for effects market various opportunities current assumptions our results. operating on reimbursement capabilities, partnerships, for and products, future clinical dates, including product financial and Our studies, that outlook, and expected expectations related strategies and and release size, coverage

materially that from or or to We actual and us reflect Please Form forward-looking refer cause documents Those documents statements those known our filed judgment X-K to could today’s with and materially. recent our the to the Form that currently factors based differ time such the caution time file you with on in the SEC, XX-Q release. to including events most results important or best results differ actual factors contained that press risks our suggested other may by identify and from statements. XX-K we

to are revise call the replayed disclaims today, forward-looking contain of during update obligation as during or not August If made information made later reviewed any information. or is current being after this may or Natera statements. XXXX. statements call the today, any Forward-looking call accurate presented X, the

of we year-on-year provide quarter unless growth today’s guidance changes we And a call, will our updates our so represents forum. a a further discuss as We any public unless such in performance number comparison. reference performance. quote or during We’ll noted, guidance but financial will otherwise numerical on each on not the do provide

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

Great. Mike. Thanks,

gross can QX you faster, see, versus and very X% we year Revenues products strong XX% were XX% quarterly up improvements another to paired that to XX% last cash versus quarter. with of growth. expenses, had all a in growth compared continued We just combined with Volumes operating above with QX. than COGS even burn. achieve reduction last led strong As significant deliver to margin year, grew our in This, revenue XX% stable up more another sequentially. delivering us

track billion, revenue significantly financial to we for remain pleased beyond. track believe all the on OpEx are this were on the and we goals cash reduction guide. to burn and be this for We we of We the and year to quarter hit midpoint guide in our $X.XXX increasing set a targets

attended and of June, in of Prospera to We and we also leadership In here unveiled generation. trial, be strengthen test continue from American transplant data I’ll data those kidney Transplant Congress pivotal trial, to ProActive the a is the value our rejection. findings proving in ProActive share key some shortly. our the showing

the from for aneuploidies of data earn SMART in our were We NIPT. the in clinical the test. with This screening and was health, Medicine. trial to Panorama study of published value peer-reviewed paper chromosomal prospective of further sex the we Journal women’s validation fourth additional for pleased the strength our recognition demonstrating In the Genetics largest SMART, clinical

in more crossed the peer-reviewed key with we publication than milestone quarter a the XX In papers. oncology, of

IO monitoring trial in the our the IO with data of care, had in the reimbursed readouts on substantial the of is excellent where collaboration key demonstrating healthcare lung presence the supports in ASCO utility We indication. Signatera EMPower We also at which shared institutions Signatera most in of standard some well-respected including country. Lung on-market a cancer, and performance

the in we And MD continue completion in trial, Anderson. studies in underway, trials demonstrate arm continue to CRC. the readouts had NCCN with prospective Coupled later predictive trial and we enrollment randomized several platform think robust a for of call. INTERCEPT and ALTAIR the the these guideline which we Signatera of from from Solomon prognostic key Altogether, CIRCULATE-Japan CRC, value the to case the of strong the and GALAXY a in will inclusion, cover building future other build

terms we two very results our favor. recently of updates, announced significant other key In litigation in

cancer of also MRD patents personalized including ongoing $XX.XX a accused in are valid. award ArcherDX awarded At of reached will including a against three profits past jury the an patent all favor personalized a XX%. rate that ArcherDX the used and judge judge damages whether The in a products, First, is than and royalty lawsuit and higher ask Invitae. million that award date, unanimous verdict we a future infringed and a If The for jury indication filed all infringement Natera in not royalties test. to three our will monitoring granted, against found Delaware in that to jury XX%. MRD a of Invitae’s lost injunction of at determine monitoring patents grant

$XX returned we July, by March of a down $X overturned case and by the a award, thereby announced decision advertising favorable in damages [ph]. also in brought from false it a to competitor. second, court million reversed Great. XXXX jury reducing The And the previous findings in

with business So into let’s that, next trends some on slide. get the the of

process because quarter, where seasonality that the have This growing across last the improvement. down. reduce represents is We a to was XX% trends usually QX particularly margin saw year-on-year we strong the units slightly made quarter. adequate our versus strong than is this effort This larger spring business, our and amplified path concerted strong QX from of quarter we’re clear this an trend more some and in generating a biggest growth volume health volume and didn’t to not year. another year Signatera We accounts business in had in women’s another typical

margin on future to to think in later. we volumes still that our Given we’ve penetration. are earlier we’re margins improve the some exercise, and think which volumes, a growth. that, women’s our lot we markets we’ll in stages touch discussed committed for year continue opportunities early underpenetrated, in to said in for given product this initiatives Signatera huge opportunity year. lower there’s health size Overall, of second and half in market taken very the we scale, particularly exchange where large we that’s the sensible look we’ll a this are in very upside, of of for the Having

Compared and once We in were years trend in the and were XXXs were absolute the yet QX, couple again saw ago Signatera the in we ahead ASPs in in Medicare doubling indications clinical really growth in QX, a to continues the acceleration units progressed ASP, well almost of schedule. into be of the progressed year-on-year we’ve to the apparent very and where shows trend, in Signatera Recall an range. $XXX engine last QX also mid-XXXs volume mid-XXXs of the another ASP and reimbursement. strong Speaking which very in was to pleased next low that Signatera, the once slide have the year. clinical again. again of QX That size be we to now

this workflow further of pushed be on margin COGS on made Mike product. some places, supplier some time, our meaningful to exome into trends later At will the up made, gross call. more we’ve the tissue our There’s for in which progress progress get more reducing and drivers costs same still details and some these in the

highlights in of margin to achievements ASP five I our and volume, on compared outperformance trend year. this sequential revenue our over first on quarters. and QX slide, trends COGS sequential drive to year the which the helped highlighted next the last to revenue QX revenue I’ll touch The quarter. from last the

an that Mike As revenue and saw you between by QX despite The the of noted revenue we will in was last transplant the call. growth disruption and acceleration discuss year which shortly health, can the on QX see, growth business Signatera clinical, call. we driven the in pharma women’s this of

on Finally, gross margins.

onetime an bit had we events. quarter, margin amplified a was This This XX%. with of some excellent

margins will basis, that over in few improvement margin call. This later XX% significant of been the we to in our led a areas around sustainable have the So on a is would go up normalized from our a in Mike think and big step QX. XX% QX,

we Our us to enabled where exchange in strong we bets the volume on on margin execution bets believe made took overcome lower opportunity. the these track. negative We that some are future of impact for

versus us Panorama California shifted is to has margin helped and on program now Vasistera, revenue. back prenatal First, which the screening volume largely both

on the despite coverage screening still carrier finally, the it we believe we in expanded there’s down course, believe future. upside improves Second, margin. And in growing Signatera, opportunity of dragging as

reverse. will improve, which have they Signatera margin margins the been, impact drag As

for ASP continuing still our strong we rest very year. for about these deliver guide to strong of of execution, the While feel middle COGS our have with margins the gross room and range our good around the upside

now XX to health. move business. our now publications We have let’s than more peer-reviewed Okay, women’s on women’s health in

the with XX included the enrolled confirmed prospective study across largest Panorama were molecular XX,XXX is than one SMART truth. in with As reminder, ever of study results the as those, analysis greater a NIPT All performed NIPT global patients diagnosis clinical centers.

pregnancies, sex Panorama’s Genetics officially screening study and sex screening all the Medicine clinical NIPT across with excellent This study real results prospective the validation in validated for recent published over paper from fourth As May. aneuploidies I chromosome aneuploidies. This when in clinical largest XX,XXX confirmed was the data is SMART for the chromosome mentioned, is were world of outcomes. performance

performance to detect publication on the such In this chromosome XX. also addition latest Trisomy Panorama aneuploidies, common of studied we to aneuploidies sex as

in Our predicted high Trisomy very sensitivity positive XX, results for showed strong. specificity is which resulting very XX% and value a a

the sensitivity for or of in a of The rate in results approximately low of X,XXX, value XX% predicted the X.XX% a one resulting of positive SMART significant and high demonstrated a XXq the most high are XXq. a XXq positive prevalence two. false One on of study approximately in aspects results one

PPV is the times screening of We maternal predicted performance feel of more comparison, endorses. is excellent very and XXq positive of in clinical the utility an ACOG approach which a Trisomy serum data it’s screening This still is XX than supporting the value as strong. XX,

one in carrier gene X,XXX breathing and progressive patients Duchenne difficulties. roughly with who muscular FDA approved pediatric causing in mutation muscle gene. boys QX, therapy confirmed DMD genetic first Shifting the gears weakness, dystrophy for a have to affects issues, heart also screening in the the

can early for one conditions most DMV, the that screening One of of important the to benefits diagnosis doctors have possible like just carrier that so access families got approved. the is treatments and and prepare for like earliest

carrier in currently trials. FDA or many to with that treatments DMD approved Our includes for either screen conditions screen the along other with option Horizon are

with a the where think ACMG expanded we screening Counselors National we the positive So a from utility earlier guidelines strengthens this strong supporting carrier positive and this XXXX year. panel statement Genetic broad case is screening think of clinical carrier the Society for

these allow next We the are rates improvements pave can more that moving help and and to us patients in changes hopeful into way reimbursement other for year.

the held this to any many working prenatal As one you May, in June of scheduling we for guidelines. meeting to one having led ACOG on of later their in timing, and two know, that information changes scheduled September. future fall which on annual Based anticipate groups, more committee

reflected discussed Okay, guidance. of on now in Earlier Health. and fully is Oregon our the the the change recent change the moving Medicare negative we year, impact to in

come of said the receiving heart well now we’ve we and was think as come the our with positioned. lost we back side impact before, out some other volumes we’ve offset that the reimbursement, kidney somewhat seen As well,

and expenses taken and we’ve wanted in business Health to I drive Oregon where at key chronic start stable. presented revenue stats that Conference on demonstrate strong Renasight, the a Kidney data growth clinical now clinical test are to to volume the we’ve adoption our volume addition, few while utility, which In continued a Foundation National position our keeping is kidney realign disease, in On steps April. including growth. to with for we was

strong of which provide support forward. think RenaCARE looking study, we to We’re can the forward going publication

the XX% the recent In XXXX, Lung. with and lung, heart XX at Thus Meeting productive of customers, XX to transplant have International centers Lung the far continued top the and Annual Heart have Transplantation. we’ve Society Prospera our used of of Heart transplant dialogue have top of and XX% centers used including in Prospera

of where has volume number months XX of doubled. active nearly in Prospera In users the has doubled Heart than past the more test addition, the

heart and nice Of pleased provided year, Medicare course, reimbursement. this upside were we to which on coverage receive transplantation earlier some

the strong In will the presence the oral in We at had This Heart NIH. and and we prospective kidney forward several utility the also early year look symposium sponsored experts in by American of Transplant Congress to by from meeting presentations showcasing this Prospera DTRT three data study medical Prospera publish a led we transplantation. posters the and expect included heart June, a field. the later

minutes I’d like ProActive was to spend on featured. data a few that the

ProActive As we from a analysis donor-derived XX a ATC, outlined are X,XXX three from patients. is being study follow-up the of months multi-site enrolled DNA years. study XX has large first in The interim transplant transplant highlights cell-free with followed that patients reminder, patients of over participating several prospective At centers the kidney data. renal

early tool Importantly, impressive advance data that to antibody T-cell as months two four used biopsy. rejection Prospera leading highlights and to mediated insight an when a to evidence is monitoring up of that predicting tool. provide demonstrates up the months, Prospera value the as ongoing health Kidney can rejection a mediated in and This of rejection, for is graft indicator of rejection

will the year early from of We data data in sharing of that evidence bolsters standard of for publishing bolster the future and the as think donor rule readouts who and like patients. American to the help believe sentiments additional subclinical look derived leading ProActive DNA from We the endorsed setting study transplant of organizations Prospera coverage Society current have ProActive medical rejection. Transplant kidney Transplantation will out surveillance in future. societies in forward European surveillance of end the recent to This use cell-free Surgeons transform the the the this care Society of for the in case the we as help

to to oncology. Now, over I’d our recent cover hand like Solomon the progress to call in

Solomon?

practice. who particularly posters reflected sentiment conference, team The our had strong oncology number ASCO MRD the assessment ASCO, into believe we feedback well. several the during a at the at clinical strong in by Steve. dozen from quarter over highly volume be as volumes with in it turnaround are now the publication seeing Thanks, were implementing a We is a we peer-reviewed with growth the improvements test presentations. papers heard routine in times great of that clinicians a time and growth times, to was showing This and new ASP of of now energized and

Let’s take now deeper two ASCO. look a from studies at key

first helped trial for The cemiplimab of treatment. support the samples different of their FDA cover from non-small points, sponsored Phase X cell This X banked approval registrational EMPOWER-Lung nine treatment, Natera I’ll by Regeneron, trial. which XXXX agent and measured one of is was at trial, to a Using first-line in lung advanced treatment ctDNA that cancer. of time three three pre-treatment, week immunotherapy week

the immunotherapy. patients The analysis in nature ctDNA of predictive cancer receiving dynamics validated lung

XX% production patients had improved and Specifically, least patients ctDNA increase or in highest an at of who early the ctDNA achieved with of death a deep risk had clearance outcomes. significantly with in it its monitoring, patients. kind XXX was lung assessment specifically of the This largest study advanced IO data as and was well received a cancer, one of of sets focused

place we IO can this tumors support cancer, broader perhaps believe monitoring across in reimbursement. already broader coverage adoption data including in Medicare solid lung and With help for

As is lung now we cell utilized the largest eligible a non-small of per patient population currently XXX,XXX year. immunotherapy cancer patients with is believe upwards reminder, where

all the utility patients Signatera. at from funnels group radiologic setting of cancer, which practice the feasibility a patients Stage X X, if of The surveillance routine with from Anderson INTERCEPT trials evidence shared Center, test program is want into ASCO, we second Stage without MD the of analysis Stage clinical with and positive Cancer over independent into demonstrating disease. to for and report study patients In an X, assessment ASCO routine thousand Study. MRD if the highlight integrates and resected INTERCEPT is colorectal this they the clinical in surveillance

opportunity scan. improve PET which CT standard the is This known Nearly radiologic surveillance The findings outcomes became surveillance. though two reflex have created disease, XX% half for MRI, patients in were of key diagnosis or into the were a intervention cases ctDNA many with first it of metastatic symptomatic, with early detected imaging the disease CRC. to during in required evidence biopsy, just not before to found or

enrollment Is ctDNA therapies, community enrolled key trials, helps the early XX% treatments. because the utility guided of successfully metastatic utility INTERCEPT and to example routine do questions. as with and in data in without the community well in monitoring from an In with we evidence waves to we strong in in being indicates ALTAIR into GI outstanding patients it setting, the cancer ctDNA for gaining there and clinical some CRC, This study as a whole of Also Signatera practice. to other sets result? disease, more making novel for enabling the interventions in ctDNA-based insights it answer to look into inspired future positive were report into vaccines, enrollment and cancer is surveillance to centers clinical recurrence this trials, model. the clinical does patients leading Second disease, adopt successfully for forward one replicate positive program what novel other cellular were trial. This the and who access completed June how radiologic therapeutic

reminder, slide. as the is includes of on platform, three part prospective CIRCULATE-Japan arms a As this shown which ALTAIR

MRD-negative respond adjuvant chemotherapy benefit First, on the there utility we randomized is called for studies population. for ALTAIR, patients observational drug as in treatment MRD GALAXY significant TAS-XXX. as may X aim in MRD-positive population With will who well know MRD-positive who believe molecular of We a to adjuvant not and from recurrence a treatment percentage patients. escalation study standard the positive the we de-escalation of Phase and to ALTAIR treatment two VEGA in plus extended the establish

anyone or chemotherapy, changes to approved and treatment initially completing when out randomized patients VEGA has who VEGA placebo in the who of TAS-XXX that testing and if standard the after was in trial chemotherapy years, two can they metastatic it's important to on or In note to failed. Signatera the TAS-XXX ctDNA trial, arm entered MRD-positive switch MRD-negative setting into within positive randomized Given follow for get use is that the receive for ALTAIR. already

may definitively it are will believe for This before ctDNA that can CRC We benefit this outcomes Signatera patients improve trial being the molecular show surveilled how CRC for Signatera. imaging. on on recurrence detectable with evident of demonstrate with becomes treatment patients

randomized can next the be changing. year, be in of successful results primary INTERCEPT of in mid one practice of believe definitive and be nature broader CRC on outcome ALTAIR available expect and roadmap We a given clinical we study, ALTAIR of context and the the important investment. considered to areas most should our Natera's

forward survival With presenting the to presentation data for data disease-free and look in the to submitting updated our are XX-months, Conference oral published the now an October, ESMO we GALAXY with study, data NCCN review we this at Committee. by up

with years these been on work and expected between many underway The studies readouts now multiple has XXXX. for

We cancer. these both different and to pipeline we of of including across expect to demonstrate creates upwards and given plan the We studies, XX,XXX in CRC this particularly value advantage. the of indications, other patients playbook care, breast and the of a disease think scale results will and the prognostic same predictive follow quality settings multiple continue Signatera competitive significant

the achieve Coombes adoption. us disease to which in first cancer secure Our study breast across was coverage all Signatera paper of uniquely XXXX, the subtypes helped for Medicare in published

private biobank quality broader reimbursement evidence need as from generate we to However, studies trials. guidelines high as believe payers, randomized well clinical including additional and practice we into more

the expansion have For [ph] we spoken example, EBLISS before cohort. about

points this looked five was We This and longer more the follow-up expanded five have at in patients to publication forward times beyond results significantly what previously XXXX the of three with times plasma published cohort. more ASCO and years. presented time than will

think consortium, is their are of year, treatment now several new growing cancer We're trial the popularity, we X the In addition, this setting trial, building there in partnership The with platform. before help. neoadjuvant I-SPY on Signatera published which and integrating in data our in into the needs testing neoadjuvant earlier X use we prospectively examined patients unmet where I-SPY from can the clinical surgery. breast

skip chemotherapy levels altogether Conversely, a surgery? For example, switch shorten has if of ctDNA, faster to proceed therapy? patients certain duration they type different and can should the a rising to of patient or earlier

neoadjuvant, we HR-positive disease, pipeline all Phase but surveillance, these Phase have disease. and HERX-negative and adjuvant settings, across studies with X Across the of X all in of in extra subtypes multiple emphasis

X only on and to been work and studies shots size efficient announced look that to in DARE all HR-positive in goal and This monitor setting partners, treatment breast multiple us LEADER, patients page. the which on offer surveillance financial as are the recurrence. molecular Given announcing the about from We enough the studies date on our which that this the future reminder co-sponsorship cancer a population, details of of ongoing, Phase have HERX-negative clinical that are are are gives pharma goals. and pipeline within our and to investments these more studies with academic in forward

summary, of quality research In our the clinical breast extending advantage the adoption volume mover to in our first strength test and and our of the cancer. of the continue us coverage, partnerships data, Medicare breadth allow speed believe we will of our

that, it over Mike. Mike discuss our With financial turn and Brophy outlook. results to to I'll

Solomon. Thanks,

next up in revenue significantly outperformance each. with how and Signatera by the and seeing momentum driven in slide also strong Revenues of the clinical growth standard covered the These slide. we're pharma. trends were the the results is and Okay, just majority volume

estimate that accrued [ph] to revenue test the but in screening in also of in in quarter. $X received as we QX, volumes that come ahead a saw be and they were QX units our and had revenues to women's about from We resulted the we out when benefit revenues QX, expectations, carrier results surge in health early results in QX late cause the process we million read a those benefited early in patients quarter in I'd out in so number,

Signatera COGS did saw growth excellent have improvements, the noted ASP traction continued margin one-time substantial performance, we while also renegotiations, organic Steve we the benefits and by quarter, driven gross vendor some margin in the to that recurrent a more sustainable recalling also that mix worth we margins pursue gross stage, mix described Steve the into from earlier. XXs this We've to margin mid realized initiatives are other yet, not that the getting back in initiatives this and California, shifting monitoring core volume-based at gross in It's the Panorama be slightly fully we've I penalized units. three to to OpEx down shift volume so year but benefited can Signatera intentionally quarter see think QX, as in was Total very sign. early compared and think balance encouraging very can a sheet the the remains we on slide. is strong

All quarterly those significant in see trends as another slide. next you contributed to reduction the our on can cash burn,

on As reduce Steve annual mentioned, by track are $XXX burn cash we believe to we year our million. roughly this

As leverage oncology burn operating the space. in we these we infrastructure most built discussed in reductions as past, the we're up driving commercial get we've recently cash of the

versus We investments core our additional women's activities, make health reduction to screening another sequencers Signatera significant modest continue in to saw Signatera. as cycle savings efficient in continue sequentially reduction operations, and switching more our workflows. our more our we efficient get in revenue products COGS We to for carrier improvements our including from particularly QX DSOs to quarterly and driving

we're flow in last four track the vary XXXX. quarters, improvement cash on break expecting. reach but Based expense I evidence even we and on in linear in in I've that a are seen described quarter we burn think how past can DSOs trends to that's good a have so volume quarter-to-quarter, ASP the these cash

that any data data remain make track We share early in preliminary screening. aside leaves significant decisions we before to early on cancer next As before, deliver further that we investment you year. said with investments. on forecast We'll

good. Okay,

on guidance to the move our Let's revised next on slide.

the was now $XXX to ASPs. bottom again stronger raising end guide the completely and to we're and previous range Signatera million by top the year the guide As Steve end now the driven the once pleased our of be that mentioned, we for guide is are billion revenue range. so Previously, $X.XXX resetting volumes

larger up step QX year I revenue up with stable the step plus described the the in QX implies in a pacing QX Given one-time revenue. a for think above, impact the significant

we range I year quarter highlights full is around achievable think the while gross a margin this margins will this quarter-to-quarter, measurement. on gross that bounce clearly results think

some to and modestly our expenses down is year the cash still remains for versus for SG&A burn Steve but bumping and reaching we there, incurred SG&A the first be up in half this of as We're feel non-cash targets XXXX, discussed. I in guide and total good part also year, expected account, so intact, to about accordingly, the

with me to the So questions. over let a call for that, hand operator Operator?

Instructions] Your Savant Morgan from go Please Tejas [Operator first question comes ahead. Stanley. from

evening, margins. I with Hey gross time guys, reproductive the, the business the good start health and here. and thanks to Steve, want for

Panorama California over about, of also upside. volume talked margin there migrated You largely having to enough now and wasn't accounts the where exit certain

contemplate sequencing gross of for of as of light Signatera for in be that for bringing well? floor in-house of margins in of sort of And So, impact the dynamic, why number sort wouldn't the exome XX% the rest the year? does sort that

did necessarily were I think basis there say, that I in that QX. I the accounted for, there a certain us margin, both so but I'll something But, on some benefit, QX, like events, of be Yes, think first gross points, guess as those, we mentioned won't Mike from XXX onetime in I hit think in basis.

Mike, margin the as on So we details improvement I be get into years do on. go you to kind this. expect, Mike? But the think, better of might

it's that had there's other care we extended been right? in the really, the Yes, we've pages, addition couple quarters, two described that's gross and currently still there strategy in corporate volume of the improving, and that up One in volumes initiative to big big initiatives, screening California to past still, dilutive so a grow the also was there step growth is, margin to the to had there the a continue in is then Signatera, the kind gross and while margin.

is tend temporary drag two we gross have, as to those a what on So a, margins. think

of cutting future. neutral net pretty the both, think on still the for beginning are But gross to margin, that. line EBIT we bullish year some temporary but you for drags make of signs I Now, are cost did the of kind on those kind

we're and good other So two that's, making progress one three far out obviously. so on the of

for a over of other still think share about well? sort Got Steve; evidence into oncologists helpful. the entry make XX% essentially sort and those mean are of providers guys is up that now. concerted of talked sort ordering you are proportion sort it. And is that litigation using intact as follow accounts a what That's you there of physicians dabbling push I competitor Signatera, of delay sustainable sort as for particularly, you sort Can of does that that U.S. exclusively advantage on competitors other where, some of mover first and potentially quick I of staying MRD across for mentioned market? Signatera, you Signatera here

great a that's Yes, question.

So continued number that growth way. sort Natera a of the in of particularly in seen using accounts us are accounts sustainable in using are we've the and that

rates and Our them a going for that high, exome of MRD stickiness to product. to you set account patient redo I for I mean think to the very do has sort patient again on the up MRD, and back it's testing. up of not make and set have retention the go sequencing do once sequencing sort that whole and been with exome of sense

an have, MRD marketplace, really any it's out companies we haven't limited been the in like think extremely if basis. I tumor-informed the on So they of seen

And there, be we some I going I and important course, large of we of our stickiness both out but very here. in setting, going is publications We products, and first-mover accounts Guardant competition. sort described this be up are the infrastructure, I the think, just of the have use do always Reveal peer-reviewed from this them think and because time to a time. that advantage that the extensive to dynamic particularly are there think there's products we is market. in of know leads incredibly to that see and that because setting coverage And

I our described described. of those think we – wins we If ongoing infringing I suit standpoint, defend have intellectual DNA the in And strong From we've related we of IP as before, you're said the we of on that suits. the field the particularly the seeing, other a think, portfolio very with ourselves. And to first oncology. property cell-free now someone's there's IP, to intend that win

Thanks guys. Appreciate the time. helpful. Very

Next Schulte question from Baird. from go Catherine Please ahead.

the guess big out million Signatera for I ASP talk Thanks talked out. up called I ASP back you Steve women's health your that within blended took business the quarter? ASPs. pretty But just a $X know just if jump the about trends Mike I guys. Hi first, to could questions. the benefit even the already in quarter, in

Yes.

can First, of I'll you get couple make then Mike, kind a and maybe, the comments, into details. of

and improving we've so turning processes about think protocols. obviously, just some that we're improving there's talked And And and those. from billing opportunities on on operations sort working on that crank our ASP the the of before things come I of

also we're beginnings I seeing, the coverage some addition, think, In expanded for kind screening. carrier first of of good

still still upside. some there improve want you there's ASP, of about a that's the early opportunity do Mike, think lot and to there's talk to very of I specifics? certainly, but the any

modestly And I stronger sure. Yes, to you that the tend contribution the to ASPs. which this up the amplify measuring of a were in kind this kind again we if a mean, on mentioned, ASPs Signatera We total think had I quarter, basis. drivers quarter. you're pharma again revenue of up [indiscernible] in addition

screening. step-ups I terms are seen like of unit a fairly really think organic benefit got organic of to like us. feel good divided sustainable These Signatera I than other the of in for of ASP, on kind basis, here drivers the kind we've about feel look revenue kind reported the We clinical moves example. do for timing we test one on carrier per by

results. the with pleased really So

out FDA any the and had that to then is month. around there? on this you FDA proposed expected LDT put potential regulation the a conversation And guys you any thoughts other with Great. Okay. have Have rule

have should puts try deliver position is very to validate that up change tests of that change And standpoint, informed our extensive to We're thoroughly of tried to all think validated happening products high-quality the a great event positioned to bodies to And what's prepared. But we there. the is and publications, this governing have the can you and very doing, in we've us on way agencies publications. and mean we've have thoroughly we well set kind and some what a various I guidelines very I is there stay touch in regulatory make in we're sure obviously that. that Yes. anyway. the that key think, an in from we're peer-reviewed peer-reviewed we with

Thank Great. All right. you.

question from ahead Rachel Next Vatnsdal go Please from Rachel. JPMorgan.

Thank Great. you.

that So meeting mentioned you first for prenatal that and June September, scheduled microdeletions health, and women’s up meeting. on screening for agenda ACOG had expanded carrier I believe on were June the

could expectations went? endorse that right you you it meeting – after if So just line have regarding then come the And meeting see there? tell how us how ACOG or quickly XXq, when updated information we can time could September any

respect mean, a really with various details, even that’s question. meetings topics don’t to in information or things. the look, all Yes, any get of what kind and we happens good I these

kind of in? a look trends topics significant the the a given ACOG would of So, think, think be step and topics that take I are are expanded just carrier back screening I community and XXq bigger that What I happening at be of And think, SMART the study screening kind that of from portion that interested might we the certainly doing interest. carrier expanded given now is or picture.

of happening. be. and meetings coverage. focus I a predictive the discussing. publishing XXq, performance what’s imagine hoping out it prospective we see more that’s in of information late they’re out is really study, to done we they status NIPT, specificity, And We would and is disease incidence, the going that to do been on trial what exactly the fall for think on did the SMART just specs we again, kind largest know need guideline, we find If put sensitivity, are the meets What like excellent value. in we positive ever But timing would one both all issue occurring on data don’t funnel that that would that criteria

should Great. you on Cross here, is But I an on you American which I then lot some pan-cancer updates that Shield California potential payers? testing. same Medicare Society also, conversations how And to follow-up is push give are a your NCCN of assay, trying over private know to oncology. a guidelines? us latest have Blue those Can payers Blue offer And understand update conversations with shifting evolving, just positive. then that commercial Cancer in the especially the still of from that a ahead

latest your for So can the you Really, what just that expectations us there? Thank mean could Signatera walk business? you. through

Yes.

study leading bill. So biomarker really their has bipartisan American what way well. understand, the been we on from And going cancer it’s charge in a very

I have have adopted think that law. into they it XX-plus now states

coverage to they’re near over. certainly some to bill place, into you it’s with our be see you national if to going the plans early. other I from payers, are from maybe to plans, regional and discussions goes wouldn’t But kind that have jump the additional then side, pay the think it’s still see what Once of have come creating future. surprised commercial in and I in hoops

Puneet please from Souda comes from Partners. Puneet, question Leerink go ahead. Next

some indication took think Hey guys, one And thanks for I CGP of the sort you we more adjuvant first the a trajectory also happened you This time. can then when breast. broadly mean for can that in CRC the for you had the It taking here? you have indications? well. now questions. indication and IO had do get is as talk you then and pan-cancer oncology. about settings know, Maybe you As

for been leading this market have obviously You some time.

I do can love so the when there Alex would we on of a reach are want that? Solomon sense and their think to get And you too. – if you thoughts, can just And line,

Yes.

take why one? you Solomon, don’t that

Puneet. to. Hey, Happy

– yes, we’ve that enjoyed with So And for additional are submissions success far. thus this planned right we year, good multiple now. have one Medicare under we’ve review some obviously,

we’ve in you and is and esophageal generating we recently and and cancers in paper can data validity looking melanoma that where think and in shaping in to see I We’ve data think up support that carcinoma. at to We cell gastro publishing pancreatic look Merkel discussed before. and data a forward decisions. the generated the coverage have lung strong

pipeline up. smaller of in mind there’s patient is and that think I – each those test population add Keep to of So a that’s think we that the shaping percentage very as going one smaller well. nice a I

breast gotten thus the been important, in So uniquely have far cancer we’ve subtypes. with all across super coverages coming especially

by we generating are organized we operate coverage, this pan-cancer definitely we’re know committees point, the well. see about to we question really indication. also They’re the that relevant for going how indication. planning an guidelines But at And do to your as and inflection if make NCCN that. indication data To by opportunity structured

And so do to think continue the just we smart thing is evidence. great generating

benefited obviously, for sort of maybe I or Steve, of see to do expect just then competitors from And wanted sense you of business, benefit get at the point? exited continue you rest year? you one look as Thanks. super. that the testing of volume. at Mike, volume Or the the migrated a had the have That’s of in it. and Got half you to there to the majority this carrier

Mike, you tell I Mike, I late shifted Yes, of want go to sort standpoint, But on that go over – Yes, the think in the think I ahead. going kind QX. to if QX volume further. ahead, of sorry, and volume was just comment

going say. Yes. I to No, was that’s exactly what

kind kind QX, over QX. of had bolus of you think a I shift

particularly – beyond, you QX. and some do in per our that continued you expect growth seasonality I pattern. business in see And some in QX some have in got as think I QX to here just – normal

any improvements then And do too you there Great. side? ECS on ASP expect

do Mike, to you take want that?

Yes, sure.

in way the call, just, of really I actually and mean, just kind QX carrier conservatism of So we modest for with erosion to I consistent screening talked people on implies a the ASP our business. that’s out kind on the prudent us QX and and perspective plan the the a the from prior about ASPs, just guide carrier is what think, and the of

see of holding higher the a matter for to looking is to that that over we’re that improve than to we’re ASPs what was earlier, screening think then, guideline business I Steve kind until few hoping the in next care get sustainably there and referencing quarters. get

Got right. guys. it. Thanks All

Please Sykes ahead. go Goldman Sachs. from Matthew Next,

Hey is Matt. the guys, Prashant and for for on Congrats the thanks [ph] this quarter on question.

if ruling Court Supreme Mississippi your test year, Jackson enacted versus last all? Dobbs in health June do impacting the that see Given segment volumes, how in you at of women’s

we think the And have Supreme I have haven’t any rulings where that I out. been Court impacts come seen Yes. the come those areas I question. mean out. there’s appreciate in various

you is current screening? see this serum maternal months? systems NIPT what next it. private Got mix the six evolving do and practices to Okay. Thanks. over hospital shift then how of And months the using And versus XX

XX% overall. Yes. around think penetrated NIPT is now We

a still obviously, growth room that there. portion of So patients There’s of certain a there’s for lot get screening. never

And to so eligible. not they’re going be

XX% of next toward years XX%, we two never can get that to maternal do shift going penetration. to think from serum up something XXX% said the to there’s over three we’ve get NIPT. screening kind continued you’re range. penetration, that to years And So But away in this

lot. a Thanks it. Got

from question go from Next Dan. ahead Dan Cowen. is Please TD Brennan

just one Thank Maybe on you. guidance. the Great.

I think think you mentioned kind the gross the range of of I margin, on second kind half. Steve, of middle fair is for

$XX you base through terms beat the And the raised be quarter, that the and just if you around the case is puts in consensus. of midpoint the margins of – maybe and strong takes by that? walk on should like can versus about really gross it So looks about which then and level revenues, just million,

health should back So kind think of the maybe Signatera conservatism? And how half we of about the in kind and that of women’s year? is

that Yes. and ASP sort help I but overall revenue talk ahead. a the guide. then don’t a couple consensus can about of you improve little margin make just margin, go the And and on Mike, I’ll of why think comments COGS

mean, with last we conservatism. same the been as a of guidance is eight years, we business I it’s remains our think, guide I becomes and the Yes, to try what which hope both measure approach the and forecast

out gives of drivers he us a here, can on some what of call, that’s kind guide that few Steve more when some on playbook think certainly upside for talked upside I and list to put potential But standard about the of revenue the we’ve we there’s So and details. the guide. the the

margin the gross this think applies guide. also I that year really to

for guys know first the that this I get you like here and as range to to those safe as is feel range into half. a of a paramount I’d through do push full you’re gross you that the these those feel you I exit year. going year up. of going of bounce continue drivers And this now several expect a know, us business kind to long certainly like quarter-to-quarter. when given time margin But have gross are seeing in next, margins to followed be can of story around for that who we’ve on Gross margins that measured

I’ll color So you add some or detail? pause more to want there. Steve, did

margin wanted this just as we look, gross I off quarter of I to a of well. opportunities mean, kind those jump events. Yes, from on some the percentage said one-time longer-term XX% couple with points of

net around of kind sustainable. at XX% So

lot reduction of I a now. opportunities increase that COGS significant there’s projects right Now, mean, as to that working we there’s we’re go on forward.

at on room as to level. projects COGS million we to sequencing we can, save business higher to line of plus the suppliers tissue moving the logistics So in-house the certain negotiate sequencing And identified we’re to potentially that bring and million finishing throughput still those. tail maybe at instruments, additional there’s a end $XX aspects we run $XX four three we of then deeper COGS of – think can some with move improvement based We’ve projects. those implement

as the down, and opportunities. course, so improvement gets the go on of of we you’ve volume more monitoring to staying Signatera, shifting recurrence more setting, other more the people on lastly are ASP COGS is then margin, as And moves side more the then that And margin. bigger, gross and got test they’re gross to occurring the moving, on things, improves and the business that the which see shift

have getting is there. really that seen future, better. turning and the And billing work the going so crank that think the yet. impact there’s just lot in help to that’s operations and on And I to done we we a But been of haven’t just

time if a we guidelines on XXq a that that make and perform, could into expanded higher for we these commercial with get policy significant screening percentage Medicare helps start like payers every or that we every guidelines as tests then helps. impact. new out paying There’s come things And have that come carrier as getting come that does of in of time policies, paid a course, one the Signatera get we of

and So very improvements. over in a we’re we us time we’re – we’ll sustainable, while in There’s seeing future. right that position put we going in are to improvements we continued that doing the really see it’s range the do that strong are can that now lot

feeling Great. on for remind we’d in just being how Thank not right you us guidance, terms that. hear your in it of guys is kind of now? kind NCCN talked about you. and you an Thank but timing and when about I and like, obviously, of driver, are know you’ve this upside included

then make maybe a couple I’ll Yes. and Solomon. comments

that, hey, first were think the the not in paper’s to NCCN So that vote. kind this it leading published, if a very I the in last clear have fact, at is not think going guidelines And because year we I it’s really year wasn’t considered shot Galaxy be we considered. of in

really considered a said with we’ve kind is, for list we this be would footnote year So in factors is different have prognostic they we to chance potentially and out which guideline Galaxy what major where the as cancer. think included the levels of first being we colorectal the There’s published that can be vote. of a be

footnote And Signatera is there where as think getting a be that would listed in so win. a I

algorithm recommendation in And listed down then, maybe the road the table. official being

it’s for enrollment that randomized see ALTAIR the a adjuvant and on to on of and data. patients off a these areas treatment treatment couple large they said, surveillance. for negative that completed I escalation and molecular study. positive was and trials, start looking positive where they’ve Solomon described we are we’d incredible MRD at patients additional scale highlighted Now, like things study also where kind prospective One hey, have randomized just on become mean, extended recurrence the

an fact trial reading we on enrolling is that that randomized the done enormous plan step the data out and forward, is summer. So next

The data surveillance. they where the wanted value was see on of clinical said, to other they area

patients involved weren’t for surveillance. the which clinical news for great the two even are testing we that in, significant And positive with study, Anderson is the ran paths we INTERCEPT just for utility showed MD very

are also well. it’s think then, you good And very those both think we have beyond CRC of signs. as to So

indications good there’s where we products we’re and of there looking have other at other course think, data kind I and well. opportunities as

Next David. Piper go Sandler. Westenberg question Please from from comes ahead, David

I got two them questions. up Hi. just both ask I’ll front.

expanded has actually it to maybe just renegotiation has more ask carrier, panel? pause one. been of on terms been I’ll of conversion it in bit then your my carrier and a progress or second carrier more basic I’ll And the little In of – the

Yes.

with place of happened our been improving say, would of there’s addition competitors, would basis. when of to then that And one is that appeals swallowed revised and think happened I their of some and since – that in – what sort policies we in maybe consider been already big started operations other a have a up that payers policy us case-by-case I business paying we payers and the QX influx on in coming some or a initially shop I So there’s very then had that saw paying what’s think in. the closed And of low kind QX. in margin we

guideline we of here at to in stages help. new we’re and So is ship think I from place going ACOG a think seen, have turning very the early I the obviously getting of kind

the some we why said, tipping some then of reeducate on The a from that existing to smaller and hey, want a we more But There might order definitive certain well something are look, came seen out, of of we’ve what and kind this make policy payers helpful test, guidelines. as they them kind point. obviously if covered. be where cases may that not they ACOG that’s customers be in cover would is kind have panel. payers And decision change

appreciated. XX payment last legal million Very the you quarter. didn’t in see recognize where it. question I One the here. Got

on if So congrats you cash statement I flow going Thank is where was shows that wondering you. just And when to a it up quarter. show great publish up?

Yes, it’s a It’s show up It’s a to yet. cash payment. not judgment. not going

Steve to few a more as there’s so go described. there steps And

for accrued it’s the in financial but right that So is statements. something it’s a now judgment, not

Thank that joining today’s gentlemen, you Ladies and now for disconnect. and may you concludes all call.