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Natera Q4 Revenues Rise 24 Percent

NEW YORK – Natera reported after the close of the market on Wednesday that its fourth quarter 2019 revenues grew 24 percent year over year, while full-year revenues climbed 17 percent.

2019 "was clearly a transformational year for us across all focus areas," said Steve Chapman, the firm's CEO, on a conference call to discuss the financial results. "We delivered financial results above the top of our previous guidance."

For the three months ended Dec. 31, 2019, Natera reported $83.2 million in revenue compared to $67.0 million in Q4 2018 and beating analysts' average estimate of $77.8 million.

The increase in total revenues was driven primarily by sales of Natera's Panorama and Horizon reproductive health tests, the San Carlos, California-based company said.

The firm reported Q4 2019 product revenues of $74.5 million, up 18 percent year over year from $63.1 million, and Q4 2019 license and other revenues of $8.7 million, up 123 percent year over year from $3.9 million. The latter includes $3.8 million in development revenue from strategic partners.

The molecular diagnostics firm processed 209,400 tests in Q4 2019 — including approximately 198,300 tests accessioned in its laboratory — up from 174,200 tests in Q4 2018, including approximately 162,900 tests accessioned in its laboratory. Natera no longer breaks down results by test type for competitive reasons.

Chapman said that the firm expanded its market share in reproductive health during the quarter, while growing the average selling price and reducing the costs of goods sold for the tests.

For its organ transplant test, Prospera, the firm published peer-reviewed data, obtained CLIA validation, and received a positive final coverage decision from Medicare, he said, "all of which lays the foundation for a commercial launch in 2020."

Regarding its oncology test, Signatera, the company published clinical validity data in multiple cancer types, established partnerships with Roche's Foundation Medicine and BGI, signed more than $55 million worth of contracts with pharmaceutical firms, and obtained a draft coverage decision from Medicare for colorectal cancer.

Natera's R&D spending rose 17 percent year over year to $15 million in the recently completed quarter from $12.8 million in the year-ago quarter. Its SG&A costs climbed 43 percent to $58.6 million from $41.1 million.

The company reported a net loss for the quarter of $35.2 million, or $.46 per share, compared to a net loss of $31.8 million, or $.51 per share, in Q4 2018. The firm beat Wall Street analysts' average estimate for a net loss per share of $.55.

Natera's revenues for full-year 2019 increased 17 percent to $302.3 million from $257.7 million in 2018.

The firm reported 2019 product revenues of $269.9 million, up 12 percent year over year from $240.4 million, and 2019 license and other revenues of $32.4 million, up 87 percent year over year from $17.3 million.

It processed about 804,300 tests during the year, including 753,800 tests accessioned in its lab, a 20 percent increase from the 668,600 tests processed, including 625,900 accessioned in its lab, in 2018.

Natera's net loss for 2019 narrowed to $124.8 million, or $1.79 per share, from a net loss of $128.2 million, or $2.22 per share in 2018. It beat Wall Street analysts' estimate for a 2019 net loss per share of $1.88.

The company's full year 2019 R&D expenses remained flat year over year at $51.4 million, while its SG&A expenses rose 33 percent to $206.2 million compared to $154.9 million in 2018.

Natera anticipates 2020 revenue of between $335 million and $350 million, SG&A expenses between $240 million and $260 million, and R&D expenses between $80 million and $90 million. This revenue forecast does not include any potentially positive impact from reimbursement for noninvasive prenatal tests in the average-risk population.

As of Dec. 31, 2019, Natera held $61.9 million in cash and cash equivalents and $379.1 million in short-term investments.

In mid-morning trading on the Nasdaq, Natera's shares were up about 7 percent at $37.18.