Full Press Release Details
Natera Reports Fourth Quarter and
Full Year 2021 Financial Results
AUSTIN, Texas, February 24, 2022 /PRNewswire/ - Natera, Inc.
(NASDAQ: NTRA), a global leader in cell-free DNA testing, today reported financial results for the fourth quarter and year ended
December 31, 2021 and provided an update on recent business progress and financial outlook.
Recent Accomplishments & Highlights
"Our Q4 performance capped a transformational
2021 for Natera," said Steve Chapman, Natera's Chief Executive Officer. "We released landmark data in multiple fields,
generated breakout volume growth in Signatera and Prospera, and grew total revenues by 60% for the full year 2021. Our 2022 guidance reflects
the strong trends across our business we have seen so far in 2022."
Fourth Quarter and Year Ended December 31, 2021 Financial Results
Total revenues were $173.0 million in the fourth
quarter of 2021 compared to $112.4 million for the fourth quarter of 2020, an increase of 53.9%. The increase in total revenues was driven
primarily by an increase in product revenues compared to the fourth quarter of 2020. Product revenues were $160.9 million in the fourth
quarter of 2021 compared to $106.5 million in the fourth quarter of 2020, an increase of 51.1%. The increase in product revenues was driven
by an increase in test volumes compared to the fourth quarter of 2020. Natera processed approximately 438,800 tests in the fourth quarter
of 2021, including approximately 424,200 tests accessioned in its laboratory, compared to approximately 295,000 tests processed, including
approximately 281,000 tests accessioned in its laboratory, in the fourth quarter of 2020.
In the three months ended December 31, 2021,
Natera recognized revenue on approximately 410,900 tests for which results were reported to customers in the period (tests
reported), including approximately 397,100 tests reported from its laboratory, compared to approximately 281,400 tests reported,
including approximately 268,300 tests reported from its laboratory, in the fourth quarter of 2020, an overall increase of 46.0% for
Total revenues for 2021 were approximately $625.5
million compared to $391.0 million in 2020, which represents an increase of 60%. In 2021, Natera processed approximately 1,570,000 tests
including approximately 1,513,400 tests accessioned in its laboratory, compared to approximately 1,026,500 tests processed in 2020, including
approximately 974,400 tests accessioned in its laboratory.
In 2021, Natera recognized revenue on approximately
1,453,500 tests reported, including approximately 1,400,100 tests reported from its laboratory, compared to approximately 961,500 tests
reported, including approximately 912,500 tests reported from its laboratory, in 2020, an overall increase of 51.2% for the year.
Gross profit* for the three months ended December
31, 2021 and 2020 was $78.9 million and $52.5 million, respectively, representing a gross margin of 45.6% and 47.0%, respectively.
Natera had lower margins in the fourth quarter of 2021 compared to the fourth quarter 2020 primarily as a result of increased volumes
of lower margin products for which Natera does not receive reimbursement. Gross profit for the year ended December 31, 2021 and 2020 was
$307.1 million and $187.4 million, respectively, representing a gross margin of 49.1% and 48.0%, respectively. Natera was able to achieve
higher gross margins in the year 2021 as a result of increased other revenue recognized from the Qiagen arrangement.
Total operating expenses, representing research
and development expenses and selling, general and administrative expenses, for the fourth quarter of 2021 were $218.6 million, compared
to $126.5 million in the same period of the prior year, an increase of 72.8%. Total operating expenses in the year ended December
31, 2021 were $775.2 million, an increase of approximately 92.0% compared to $403.7 million in the prior year. The increases were primarily
driven by headcount growth to support new product offerings.
Loss from operations for the fourth quarter of
2021 was $139.7 million compared to $74.0 million for the same period of the prior year. Loss from operations for
the year 2021 was $468.2 million compared to $216.3 million compared to the prior year.
Net loss for the fourth quarter of 2021 was $140.6
million, or ($1.48) per diluted share, compared to net loss of $76.4 million, or ($0.89) per diluted share, for the same period in 2020.
Weighted average shares outstanding were approximately 94.8 million in the fourth quarter of 2021 compared to 85.7 million in the fourth
quarter of the prior year. Net loss for the full year 2021 was $471.7 million, or ($5.21) per diluted share, compared to net loss of $229.7
million, or ($2.84) per diluted share, for the full year 2019. Weighted average shares outstanding were 90.6 million in 2021 compared
to 81.0 million in 2020.
At December 31, 2021, Natera held approximately
$914.5 million in cash, cash equivalents, short-term investments and restricted cash, compared to $737.5 million as of December 31, 2020.
As of December 31, 2021, Natera had a total outstanding debt balance of $330.4 million, comprised of $50.1 million including accrued interest
under its line of credit with UBS at a variable interest rate of 30-day LIBOR plus 110 bps and a net carrying amount of $280.4 million
under its seven-year convertible senior notes. The convertible senior notes were issued in April 2020 for net proceeds of $278.3 million.
The gross principal balance outstanding for the convertible senior notes was $287.5 million as of December 31, 2021.
Natera anticipates 2022 total revenue of $770 million to $790 million;
2022 gross margin to be approximately 46% to 48% of revenues; selling, general and administrative costs to be approximately $560 million
to $590 million; research and development costs to be $340 million to $360 million, and net cash consumption to be $370 million to $400
* Gross profit is calculated as GAAP total revenues less GAAP cost
of revenues. Gross margin is calculated as gross profit divided by GAAP total revenues.
** Cash consumption is calculated as the sum of GAAP net cash used
by operating activities (estimated for 2022 to be between $310 million and $340 million) and GAAP net purchases of property and equipment
(estimated for 2022 to be approximately $60 million).
| Unit | Q4 2021 | Q4 2020 | FY 2021 | FY 2020 | Definition | |||||||||||||
| Tests processed | 438,800 | 295,000 | 1,570,000 | 1,026,500 | Tests accessioned in our laboratory plus units processed outside of our laboratory | |||||||||||||
| Tests accessioned | 424,200 | 281,000 | 1,513,400 | 974,400 | Test accessioned in our laboratory | |||||||||||||
| Tests reported in our laboratory | 397,100 | 268,300 | 1,400,100 | 912,500 | Total tests reported in our laboratory less units reported outside of our laboratory |
Natera is a global leader
in cell-free DNA testing, dedicated to oncology, women's health, and organ health. We aim to make personalized genetic testing
and diagnostics part of the standard of care to protect health and enable earlier, more targeted interventions that help lead to longer,
healthier lives. Natera's tests are validated by more than 100 peer-reviewed publications that demonstrate high accuracy. Natera
operates ISO 13485-certified and CAP-accredited laboratories certified under the Clinical Laboratory Improvement Amendments (CLIA)
in Austin, Texas and San Carlos, California. For more information, visit www.natera.com.
Conference Call Information
| Event: | Natera's Fourth Quarter and Fiscal 2021 Financial Results Conference Call |
| Date: | Thursday, February 24, 2022 |
| Time: | 1:30 p.m. PT (4:30 p.m. ET) |
| Live Dial-In: | (877) 823-0171, Domestic |
| (617) 500-6932 , International | |
| Password: | 5675026 |
| Webcast: | https://edge.media-server.com/mmc/p/xjiitdj3 |
Forward-Looking Statements
This press release contains forward-looking statements
under the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts, including
the company's financial guidance for fiscal 2022, its ability to continue to increase its revenues, its product development plans and
its ability to maintain and grow its business operations in light of the COVID-19 pandemic, are forward-looking statements. Any forward-looking
statements contained in this press release are based upon Natera's current plans, estimates, and expectations, as of the date of this
release, and are not a representation that such plans, estimates, or expectations will be achieved.
These forward-looking statements are subject
to known and unknown risks and uncertainties that may cause actual results to differ materially, including: we face numerous
uncertainties and challenges in achieving our financial projections and goals; we may be unable to maintain our business and
operations as planned due to disruptions and economic uncertainty caused by the COVID-19 pandemic; we may be unable to further
increase the use and adoption of Panorama and Horizon through our direct sales efforts or through our laboratory partners; we may be
unable to develop and successfully commercialize new products, including Signatera and Prospera; we have incurred losses since our
inception and we anticipate that we will continue to incur losses for the foreseeable future; our quarterly results may fluctuate
from period to period; our estimates of market opportunity and forecasts of market growth may prove to be inaccurate; we may be
unable to compete successfully with existing or future products or services offered by our competitors; we may engage in
acquisitions, dispositions or other strategic transactions that may not achieve our anticipated benefits and could otherwise disrupt
our business, cause dilution to our stockholders or reduce our financial resources; we may need to raise additional capital to
support our business plans, which may not be available when necessary or on favorable terms; we may not be successful in
commercializing our cloud-based distribution model; our products may not perform as expected; the results of our clinical studies,
including our SNP-based Microdeletion and Aneuploidy RegisTry, or SMART, Study, may not be compelling to professional societies or
payors as supporting the use of our tests, particularly in the average-risk pregnancy population or for microdeletions screening, or
may not be able to be replicated in later studies required for regulatory approvals or clearances; if either of our primary
CLIA-certified laboratory facilities becomes inoperable, we will be unable to perform our tests and our business will be harmed; we
rely on a limited number of suppliers or, in some cases, single suppliers, for some of our laboratory instruments and materials and
may not be able to find replacements or immediately transition to alternative suppliers; if we are unable to successfully scale our
operations, our business could suffer; the marketing, sale, and use of Panorama and our other products could result in substantial
damages arising from product liability or professional liability claims that exceed our resources; we may be unable to expand,