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Canaccord Genuity Initiates Coverage of Natera With Buy Rating

NEW YORK (GenomeWeb) – Canaccord Genuity today initiated coverage of molecular diagnostics company Natera with a Buy rating. It set a price target of $18.00 for the company's stock.

The San Carlos, California-based company markets a sequencing-based noninvasive prenatal test and is developing cancer products that analyze circulating tumor DNA.

In a note, analyst Mark Massaro said Natera is "one of the best growth companies in diagnostics" which is undervalued relative to its peers. The firm, he added, is the market leader the NIPT space, estimated at $2.5 billion just in the US, and which is only 6 percent penetrated.

Competitors in NIPT include Illumina subsidiary Verinata Health; Roche subsidiary Ariosa Diagnostics; and Laboratory Corporation of America business Sequenom,

Among the drivers to Natera's stock noted by Massaro are the expansion of its technology to average risk women; the cross-selling of the company's microdeletion test; a reduction in the costs attributable to the production of its tests; and the firm's entry into a "massive oncology liquid biopsy market," which he estimated at more than $15 billion.

Natera's stock was up about 1 percent to $11.74 on the Nasdaq in late Friday morning trading.