Overview
Natera reported a strong 1Q21 and raised guidance from a range of $500-$525M up to $550-$575M. Net of a 1 time $28M Qiagen payment, the new range was exactly in- line with our preview note. Natera has several ongoing drivers that should continue to push estimates higher, not just for 2021, but 2022 and beyond.
Signatera
The company compared their tumor monitoring data to Guardant’s recent release. The comparison comes down to the benefits of a patient derived test, like Natera’s Signatera, versus a predetermined panel, such as Guardant and many others. At least in this comparison, Natera is the clear winner on top of which physicians have told us they prefer the patient derived method because of the potential for a false negative result with a panel. Regardless, if Natera’s 3.1M patient TAM is correct, a single digit penetration at $5200 per patient course of post- surgical monitoring creates a huge opportunity for the company and leaves ample room for multiple players.
Outlook
We believe 2022 estimates are likely to move higher with guidance as the driver of NIPT adoption among average risk patients and Signatera penetration into its large TAM in disease monitoring. Our view for 2022 is currently $709M, but that will likely prove too low. At 15X EV/Sales, the price is likely too low as well where $150 appears less and less of a stretch.
Key Slides from the Call
The side by side comparison the Guardant's MRD panel points to a possible permanent advantage to Natera's less appreciated offering.
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Thomas Tobin
Managing Director
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