Natera Spotlights Record Signatera Volumes, Raises Outlook at Canaccord Conference

Key Points

• Natera raised its outlook after broad-based second-quarter momentum, including record Signatera volumes, strong revenue and pricing, improved gross margins, and narrowing losses despite continued investment.
• Signatera volumes exceeded 280,000 units, rising about 34,000 sequentially, supported by clinical data, regulatory and guideline milestones in bladder cancer, and recent commercial expansion.
• Natera is expanding laboratory capacity and international coverage while investing heavily in early cancer detection; its FIND-CRC study is nearing enrollment completion, though the program currently weighs on profitability.

Natera NASDAQ: NTRA Chief Financial Officer Mike Brophy said the company delivered strong second-quarter momentum across its women’s health, oncology and organ health businesses, citing record Signatera volumes, continued revenue and average selling price strength, improved gross margins and narrowing losses while maintaining elevated investment levels.

Speaking at the Canaccord Genuity Growth Conference, Brophy said Natera raised its outlook following a quarter in which volume performance was broad-based. He described organ health momentum as “very strong” and said women’s health posted high-single-digit year-over-year growth despite typically experiencing seasonal sequential declines.

Women’s Health Momentum and Product Updates

Brophy attributed part of the women’s health performance to uptake of Natera’s Fetal Focus offering, which launched several quarters ago and continued to gain traction through the second quarter. He also highlighted the June launch of a new version of the Panorama non-invasive prenatal testing assay.

The updated Panorama test is designed to offer greater sensitivity, particularly in cases with low fetal fraction, an area that Brophy said has historically been challenging for non-invasive prenatal testing. Because the launch occurred in early June, he said it was not a significant driver of second-quarter results but could support women’s health performance during the remainder of the year.

While Brophy characterized the quarter as exceptional, he said his typical framework for women’s health is mid-single-digit volume growth, with the opportunity for faster revenue growth if Natera can increase reimbursement realization for covered services.

Record Signatera Volumes

The company’s oncology business, led by its Signatera molecular residual disease and recurrence-monitoring test, reached more than 280,000 units during the quarter. Brophy said the company added approximately 34,000 units sequentially, compared with a prior quarterly record increase of about 25,000 units.

He noted that first-quarter Signatera volumes were somewhat affected by weather-related disruptions. Natera estimates that roughly 2,000 to 4,000 units that otherwise may have been received in the first quarter arrived later, contributing to the magnitude of the second-quarter sequential increase. Even excluding that effect, Brophy called the quarter an “absolute blowout.”

He cited several drivers of Signatera’s growth:

• Continued generation of clinical outcomes data for Signatera and molecular residual disease testing.
• FDA approval related to Signatera’s use in muscle-invasive bladder cancer.
• Inclusion in National Comprehensive Cancer Network guidelines for muscle-invasive bladder cancer in June.
• The full operational impact of a commercial expansion completed around April.

Brophy said newer offerings, including Genome and Latitude, accounted for only a small portion of total Signatera volume. However, he said their availability broadens the company’s product menu and may enhance Signatera’s positioning with physicians.

Coverage, International Expansion and Laboratory Investment

Natera expects to continue pursuing reimbursement coverage on a tumor-type-by-tumor-type basis, Brophy said. He described the company’s interactions with MolDX, Medicare’s molecular diagnostic services program, as positive and said Natera has now achieved coverage across much of the critical mass of common tumor types. The company is now working on additional, less common cancers, he said.

In Japan, Natera has received PMDA approval for Signatera and has submitted for bladder cancer coverage following its approval in colorectal cancer. Brophy said the company remains on track for an early 2027 Japanese launch. The next steps include discussions with Japanese agencies regarding the number of reimbursed testing time points and pricing, which he expects to be addressed in the second half.

The company is also expanding laboratory capacity. Brophy said Natera’s Austin, Texas, laboratory is expected to become the world’s largest genomics laboratory once its current expansion is completed. First-half capital expenditures increased to approximately $85 million from about $45 million in the prior-year period. He said the elevated spending level is not expected to represent ongoing maintenance capital expenditures, which he estimated at closer to $60 million annually.

Early Cancer Detection Investment

Brophy said Natera remains ambitious in early cancer detection, where its FIND-CRC study is approaching enrollment completion at up to 40,000 patients. He emphasized the expense and complexity of bringing a blood-based early cancer detection assay to market, estimating that a company may need to spend roughly $500 million before selling its first test when clinical development and regulatory work are included.

Rather than immediately building a large commercial team, Brophy said Natera expects to use a phased approach, deploying an initial group of sales representatives in selected geographies and expanding based on early results and returns on invested capital.

He acknowledged that early cancer detection spending is currently weighing on the company’s overall profit profile because the program is generating operating expenses without revenue or gross profit. Still, he said Natera is seeing losses narrow while continuing to invest in research and development, Signatera clinical studies and commercial growth initiatives.

Looking internationally, Brophy said Natera sees significant demand for Signatera in Europe following IVDR approval. He said reimbursement opportunities will need to be evaluated country by country and use case by use case, while noting that the company is conducting clinical studies in Europe, including CIRCULATE-France.

About Natera (NASDAQ:NTRA)

Natera is a global diagnostics company that develops and commercializes cell-free DNA and other genetic testing technologies for clinical applications. The company focuses on three principal areas: reproductive health (including non-invasive prenatal testing and carrier screening), oncology (tumor-informed assays for minimal residual disease and recurrence monitoring), and organ transplantation (cell-free DNA tests to detect allograft injury). Natera combines laboratory testing, proprietary bioinformatics, and clinical reporting to deliver personalized genetic information to clinicians and patients.

Key product offerings include Panorama, a non-invasive prenatal test that screens for fetal chromosomal abnormalities and select single-gene conditions; Horizon carrier screening for inherited conditions; Signatera, a personalized, tumor-informed assay used for detecting minimal residual disease and monitoring treatment response in cancer patients; and Prospera, a donor-derived cell-free DNA test used to assess the risk of organ rejection.

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