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Natera's Q3 Revenues Drop 3 Percent

NEW YORK (GenomeWeb) – Natera reported after the close of the market Thursday that its third quarter 2015 revenues were down 3 percent from its third quarter 2014 revenues.

The San Carlos, California-based molecular diagnostics company brought in total revenue of $44.9 million in the quarter, down from $46.3 million in Q3 2014, but beating Wall Street's average estimate of $43.1 million.

The decline in revenues was primarily due to changes to molecular diagnostic reimbursement codes at the beginning of the year that reduced the average selling price for noninvasive prenatal tests, Natera said. In addition, because the firm recognizes revenue primarily on a cash basis, "a meaningful component of the revenue associated with this quarter's increase in volume was not recognized as revenue in Q3 due to billing and collection cycle," Natera CEO Matt Rabinowitz said during a conference call discussing the firm's third quarter performance. Approximately 54 percent of Q3 revenue was derived from tests accessioned in the quarter.

The number of tests it accessioned was up 46 percent year over year to more than 83,000 from 57,000. More than 67,000 of those tests were Natera's NIPT, Panorama, a 37 percent increase from the 49,000 Panorama tests it ran in Q3 2014. In addition, Natera also ran 13,000 of its Horizon carrier screening tests in Q3 2015, a 165 percent increase from the 4,900 it ran in Q3 2014.

"Based on these numbers, we believe we are the NIPT volume leader in the United States," Rabinowitz said.

Natera's net loss in Q3 was $17.6 million, or $.39 per share, compared to net income of $3.7 million, or $.03 per diluted share, in Q3 2014. On average, analysts anticipated a net loss of $.46 per share.

The firm's R&D expenses were $7.3 million in Q3 2015 compared to $4.4 million in Q3 2014, while its SG&A spending was $27.9 million, up from $16.3 million in the year-ago quarter.

Natera ended the quarter with $196.2 million in cash and cash equivalents, and $26.4 million in short-term investments.

Natera also narrowed the range of its expected 2015 full-year revenues. Previously, it said it expected revenues between $175 million and $190 million for the year, but now it expects between $180 million and $185 million.

In Friday morning trade on the Nasdaq, shares of Natera were up a fraction of 1 percent at $9.02.