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Natera Revenues Grow 35 Percent in Q4

NEW YORK – Natera reported after the close of the market on Thursday that its fourth quarter 2020 revenues rose 35 percent year over year, driven by an increase in product revenue.

"Q4 2020 was the best quarter we've ever had at Natera," said CEO Steve Chapman during a conference call to discuss the financial results.

For the three months ended Dec. 31, 2020, Natera reported $112.4 million in revenues compared to $83.2 million in Q4 2019, beating the average Wall Street estimate of $106.6 million.

Product revenues totaled $106 million, up 43 percent from $74 million in the year-ago quarter, while licensing and other revenues fell 32 percent to $5.9 million from $8.7 million a year ago.

The molecular diagnostics firm processed about 295,000 tests in Q4 2020 — including approximately 281,000 tests accessioned in its laboratory — up from 209,400 tests in Q4 2019, which included approximately 198,300 tests accessioned in its laboratory.

During the call, Chapman announced the launch of Altera, a tissue-based cancer genomic profiling assay that relies on exome sequencing and RNA-seq, as well as the launch of its existing Signatera assay for immunotherapy monitoring.

The company reported a net loss for the quarter of $76.4 million, or $.89 per share, up from a net loss of $35.2 million, or $.46 per share, in Q4 2019. Wall Street analysts, on average, had predicted a net loss of $.62 per share.

R&D expenses more than doubled in Q4, to $32.4 million from $15.0 million in the year-ago quarter. SG&A expenses rose to $94.1 million, up 61 percent from Q4 of 2019.

Natera's full-year 2020 revenues increased 29 percent to $391 million from $302.3 million in 2019, beating the average Wall Street analyst estimate of $385.5 million.

Product revenues were $367.2 million, up 36 percent year over year from $269.9 million, and 2020 license and other revenues were $23.8 million, down 17 percent year over year from $32.4 million.

The firm processed about 1,026,500 tests during the year, including 974,400 tests accessioned in its lab, up from the 804,300 tests processed, including 753,800 accessioned in its lab, in 2019.

Over the course of 2020, Natera signed deals worth more than $65 million with pharmaceutical companies.

Natera's net loss for 2020 rose to $229.7 million, or $2.84 per share, from a net loss of $124.8 million, or $1.79 per share, in 2019. The average Wall Street analyst estimate was a loss of $2.54 per share.

Full-year 2020 R&D expenses almost doubled to $100.0 million from $51.4 million in 2019, while SG&A expenses rose 47 percent to $303.6 million from $206.2 million.

Natera anticipates 2021 revenues between $500 million and $525 million, SG&A expenses between $430 million and $450 million to fund its commercial teams for oncology and transplant medicine, and R&D expenses between $160 million and $180 million to develop new oncology products or expand them into new indications.

The company also expects cash flow for its women's health business to reach breakeven for the first time in 2021. "Having our core women's health franchise cash-flow breakeven allows us to continue making substantial investments to maintain our leadership position in oncology for the long term," Chapman said.

As of Dec. 31, 2020, Natera held $48.7 million in cash and cash equivalents and $688.6 million in short-term investments.

In morning trading on the Nasdaq, Natera's stock was up 8 percent at $117.52.

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