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Natera Waits for ACOG Guidance on Average-Risk NIPT; Pushes Ahead in Oncology, Transplantation


SAN FRANCISCO (GenomeWeb) – New guidelines from the American College of Obstetrics and Gynecology on the use of noninvasive prenatal testing in average-risk pregnancies have not yet come out, but Natera continues to anticipate that the guidelines will be favorable and encourage the holdouts in the payor community to cover testing. With 60 percent of its noninvasive prenatal tests going into that market, broader reimbursement would be a big boon for the company.

In the meantime, however, the firm is making progress in the other areas of its business: oncology and transplantation.

During a conference call this week to discuss Natera's third quarter 2018 performance, CEO Matthew Rabinowitz said that the firm had developed a proprietary technique for extracting DNA, which he said is now operational in its lab. He added that the new technique saves $6 per Panorama test. It will also be important for the firm's oncology business, since it will enable better recovery of single molecules of cell-free DNA from plasma, noting that "as cell-free DNA testing expands, we'll consider whether to commercialize [the technique] more broadly."

In oncology, the company is on track to launch a CLIA-validated version of its circulating tumor DNA test, Signatera, in early 2019 that will be available for pharmaceutical companies as well as for oncologists to order for their patients.

Solomon Moshkevich, senior vice president of products and strategy at Natera, said that the firm intends to "quickly seek reimbursement from Medicare" for early-stage colon, lung, and breast cancer — indications in which the company has data and for which there are National Comprehensive Cancer Network guidelines that give physicians leeway in deciding how to treat patients. In such cases, the firm aims to position its test as being able to help determine which patients should receive adjuvant therapy after surgery by monitoring patients for circulating tumor DNA, which can indicate relapse.

Moshkevich added that the firm also intends to launch a prospective observational study for these indications in order to support adoption and study patient outcomes.

He said that a deal the firm struck in September with Bristol-Myers Squibb would help support the use of Signatera as a tool to monitor residual disease. Under that collaboration, the companies plan to use Signatera to determine whether non-small cell lung cancer patients who had tumors surgically removed have residual disease. Patients will then receive either standard-of-care adjuvant therapy or adjuvant therapy plus BMS's immunotherapy drug Opdivo.

Moshkevich said this trial is important because if successful, it "could establish the utility of ordering Signatera multiple times in early-stage non-small lung cancer patients" to monitor them for residual disease. There are around 75,000 such cases per year in the US, he said. 

In total, Natera now has 26 signed projects with pharmaceutical companies using the Signatera assay. In coming years, Moshkevich said, its pharma business could generate between  $1 million and $3 million in revenue from phase 2 clinical trials and between $3 million and $10 million from phase 3 trials.

In transplantation, Rabinowitz said that the company had a pre-submission meeting with the Centers for Medicaid and Medicare Services about reimbursement and expects to secure a local coverage determination in 2019.

Rabinowitz said that in order to pursue reimbursement, the firm would use a miscellaneous CPT code in combination with a unique Z code, an identifier for molecular diagnostic tests, which it is in the process of obtaining. Following a draft LCD, it will negotiate pricing with MolDx, he said.

As previously noted, Natera believes that the $2,800 reimbursement price of a similar cell-free DNA test for transplantation rejection, marketed by CareDx, will serve as a guide for Natera's own reimbursement discussions.

Natera first announced it would launch a test to detect acute rejection in kidney transplantation in June, based on results from a retrospective study it conducted with researchers at the University of California, San Francisco.

Since then, Natera said, it has completed both analytical and clinical validation of its assay, which it plans to launch next year.

In the reproductive health space, reimbursement for NIPT in average-risk pregnancies continues to be the biggest hurdle.

Of the major insurance companies, United Healthcare and Aetna have continued to hold out on including NIPT for average-risk pregnancies in their coverage policies. In addition, state Medicaid programs mostly do not reimburse for average-risk pregnancies, although Steve Chapman, Natera chief operating officer, said that one state Medicaid program has now routinely started covering NIPT in the average-risk population.

Chapman reiterated previous comments from Natera that it does expect ACOG to issue favorable guidelines around the use of NIPT in the general pregnancy population, following the withdrawal of a previous bulletin where it did not recommend NIPT as a first-line screen for average-risk pregnancies.

Natera has also finished enrollment of 20,000 patients in its SMART trial, a prospective trial intending to establish clinical utility for NIPT to screen for fetal microdeletions. Paul Billings, Natera's chief medical officer, said that Natera is currently analyzing the first 10,000 patients and aims to publish that interim data in a peer-reviewed journal in mid 2019. He said the company thinks that the study "will demonstrate the importance of microdeletion management," with full results by the end of 2019 or early 2020.

Also on the reproductive health side, uptake of Natera's cord blood banking service, Evercord, has been slower than anticipated. The company previously touted its Evercord product as a way to tap into the consumer genomics market, with the potential of eventually offering whole-genome sequencing at birth.  

Rabinowitz said that while volumes for this product are growing, they are just growing more slowly than originally expected. Cannacord Analyst Mark Massaro wrote in a note to investors that Natera is likely facing competition on this front, including from PerkinElmer. He added that within Natera's reproductive health business, results of the SMART trial would be especially important and could "meaningfully accelerate Natera's ability to get paid for its microdeletions test."

Cowen Analyst Doug Schenkel also noted the lower-than-expected Evercord sales and said that the investment bank is now "cautious on the revenue trajectory of Evercord," but added that Natera's complementary products helped its position.