SAN CARLOS, Calif., March 8, 2016 /PRNewswire/ -- Natera, Inc. (NASDAQ: NTRA), a leader in non-invasive genetic testing and the analysis of circulating cell-free DNA, today reported financial results for the fourth quarter and fiscal year ended December 31, 2015 and provided an update on recent business progress.
Recent Accomplishments & Highlights
- Generated total revenues of $52.9 million in the fourth quarter of 2015 compared to $49.9 million in the fourth quarter of 2014, an increase of 6.0%. Revenues for the full year 2015 were $190.4 million, an increase of approximately 20% over full year 2014 revenues
- Accessioned greater than 92,000 tests in the fourth quarter of 2015 compared to approximately 59,000 tests accessioned in the fourth quarter of 2014, an increase of approximately 56%. Greater than 310,000 tests were accessioned in the full year 2015, representing test volume growth of approximately 44% compared to the full year 2014
- Accessioned greater than 73,000 Panorama tests in the fourth quarter of 2015 compared to approximately 50,000 tests accessioned in the fourth quarter of 2014, an increase of approximately 46%. Greater than 254,000 Panorama tests were accessioned in the full year 2015, representing Panorama volume growth of approximately 37% over full year 2014
- Accessioned greater than 15,900 Horizon carrier screening tests in the fourth quarter of 2015 compared to approximately 6,300 Horizon carrier screening tests accessioned in the fourth quarter of 2014, an increase of approximately 152%. Approximately 42,000 Horizon tests were accessioned in the full year 2015, representing Horizon volume growth of approximately 158% over full year 2014
- Expanded adoption of our Constellation software platform and cloud-based distribution model, including the launch of Panorama NIPT with Genetica, a leading diagnostics lab that locally performs the test in Switzerland
- Expanded our base of in-network covered lives with regional and national commercial plans
- Launched Natera Connect Patient Portal, providing a direct connection from Natera to over 200,000 patients per year and which patients can use to track test progress, view test results, pay bills, and inquire about additional services
- The American Medical Association (AMA) approved Natera’s application for a Current Procedural Terminology, or CPT, code for fetal chromosomal microdeletions in circulating cell-free fetal DNA in maternal blood, effective January 1, 2017
- Announced the publication in Annals of Oncology of pilot data using samples from the TRACERx Study of Lung Cancer Heterogeneity Using Cell-Free Tumor DNA, funded by Cancer Research UK. The publication describes Natera’s ability to identify heterogeneous cancer mutations in blood samples from early-stage lung cancer patients
“We are very pleased with our performance in the quarter,” said Matt Rabinowitz, Natera’s chief executive officer. “We believe that the substantial growth in volumes is a testament to both our leading technology and commercial execution. We believe the first pilot study supporting our lung therapy selection panel recently published in Annals of Oncology demonstrates the power of our technology in the cancer setting.”
Fourth Quarter and Year Ended December 31, 2015 Financial Results
Total revenues were $52.9 million compared to $49.9 million for the fourth quarter of 2014, an increase of 6.0%. Revenues for the full year 2015 were $190.4 million, an increase of approximately 20% over full year 2014 revenues. The increase in revenues from 2014 to 2015 was primarily due to higher test volumes, particularly for Panorama and Horizon. Tests accessioned were greater than 92,000 tests in the fourth quarter of 2015 compared to approximately 59,000 tests in the fourth quarter of 2014, an increase of approximately 56%. Roughly 46% of fourth quarter total revenue was derived from test volumes accessioned in the quarter; the balance of our revenues was derived from tests accessioned in prior periods. Revenue derived from test volumes accessioned in the quarter was 56% in the third quarter of 2015. The decrease in the fourth quarter was driven primarily by rapid Horizon carrier screening volume growth in the third quarter, some of which was recognized as revenue in the fourth quarter. Natera recognizes revenues primarily on a cash basis.
Gross profit for the three months ended December 31, 2015 was $21.1 million, representing a 40% gross margin, compared to $27.2 million, representing a 55% gross margin in the same period of the prior year.* Gross profit for the year ended December 31, 2015 was $77.5 million, representing a 41% gross margin, compared to $80.9 million, representing a 51% gross margin in the same period of the prior year. Gross margins in 2015 declined versus 2014 primarily due to a shift in product mix towards higher-cost tests and a reduction in revenue received per test. The shift in product mix reflected higher volumes for the Panorama extended panel with microdeletions and the Horizon carrier screening panel, both of which have a higher cost per test than the Panorama standard panel. Because we recognize revenue primarily on a cash received basis, cost of product revenues in the fourth quarter of 2015 includes costs for tests performed in advance of related revenue recognition.
Total operating expenses, representing research and development and selling, general and administrative expenses, for the three months ended December 31, 2015 were $38.4 million, an increase of 68% compared to $22.8 million in the same period of the prior year. Total operating expenses for the year ended December 31, 2015 were $137.3 million, an increase of 71% compared to $80.2 million in the same period of the prior year. The increase in both the three months and year ended December 31, 2015 over the respective prior periods was driven primarily by an increase in research and development activities and additional direct sales headcount.
Loss from operations for the fourth quarter of 2015 was $17.3 million compared to income from operations of $4.4 million for the same period of the prior year. Loss from operations for the year ended December 31, 2015 was $59.8 million compared to income from operations of $0.7 million for the same period of the prior year.
Net loss for the three months ended December 31, 2015 was $23.0 million, or ($0.47) per share, compared to net income of $1.3 million, all of which was distributed to preferred shareholders. Therefore, there were no earnings applicable to common shareholders for the same period in 2014. Net loss for the year ended December 31, 2015 was $70.3 million, or ($2.68) per share compared to a net loss of $5.2 million, or ($1.07) per share for the same period in 2014. Weighted average shares outstanding were 48.6 million for the fourth quarter 2015 and 26.2 million for the year ended December 31, 2015. The difference in weighted average shares outstanding between the fourth quarter and full year 2015 is primarily due to Natera’s initial public offering on July 1, 2015 in which we sold 10.9 million newly issued common shares and 31.4 million preferred shares were automatically converted into common stock on a one-to-one basis.
In September 2015,
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