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Natera Files for IPO, Targets $100M

NEW YORK (GenomeWeb) – Natera has filed to go public with plans to raise as much as $100 million in its initial public offering. 

In a preliminary prospectus filed with the US Securities and Exchange Commission on Monday, the firm said that it plans to list its shares on the Nasdaq Global Market under ticker symbol "NTRA." It has not priced its shares or said how many shares it plans to offer. 

Morgan Stanley, Cowen and Co., Piper Jaffray, R.W. Baird, and Wedbush Securities are listed as the offering's underwriters. 

Based in San Carlos, California, Natera was formerly called Gene Security. It operates in the non-invasive prenatal testing space and offers the blood-based Panorama screening test for trisomies 21, 18, and 13 and for identifying a baby's gender. Its main competitors in the space include Sequenom; Roche's Ariosa Diagnostics; Illumina's Verinata Health; Laboratory Corporation of America's Integrated Genetics; and Quest Diagnostics, which recently launched its in-house developed test called QNatal Advanced.

Additional tests offered by Natera include Horizon for genetic carrier screening; Spectrum, a preimplantation genetic test; Anora, a miscarriage test; and the Prenatal Paternity Test. Earlier this year, it launched a cloud-based software product called Constellation to enable the firm's cloud-based distribution model. 

Under such a model, companies partnering with Natera can run its molecular assays themselves and access Natera's algorithms through the cloud for test analysis. As of the end of May, the firm had entered into five contracts with laboratories outside the US and three labs in the US to develop and run their own NIPTs under the cloud-based model, Natera said in its SEC document.   

It inked a deal with LifeLabs Medical Laboratory Services in April, providing it the rights to perform Panorama in Canada. Earlier in the year, Natera signed a similar deal with MedGenome to provide the test in India.

In addition to prenatal testing, the firm is eyeing a move into the cancer space. Its underlying technology is based on next-generation sequencing, and Natera CEO Matthew Rabinowitz told GenomeWeb last fall that the key to its technology and its utility in the cancer space is its sensitivity. While other NIPT firms have a cutoff rate of about 4 percent DNA fraction, Rabinowitz said that Natera's technology can go down to .01 percent DNA fraction.

In its Form S-1, the company said that its molecular assays measure "many informative regions across the genome from samples as small as a single cell," and in combination with proprietary algorithms and data from the broader scientific community, its approach "can be translated into the liquid biopsy space." It added that it is "developing products for a number of oncology applications" and is working with leading cancer centers to collect samples and develop a liquid biopsy test to analyze circulating tumor DNA of common cancers, such as breast, ovarian, and lung cancer. 

In 2014, Natera recorded $159.3 million in total revenues and a net loss of $5.2 million, it said in its preliminary prospectus. The firm noted that 185,000 Panorama tests were accessioned during 2014. 

For the first quarter of 2015 ended March 31, it had $47.4 million in revenues and a net loss of $10 million. 

As of the end of the first quarter the company had $80.3 million in cash and cash equivalents, and $1.3 million in restricted cash. In April Natera raised $55.5 million in a private financing round.