01—Abstract
Summary
Summary of the 10-K filed February 25, 2022. Cited figures are marked; the original filing is the authoritative source.
Natera, Inc. (NTRA) reported total revenues of $625.5 milliona for 2021, up from $391.0 million in 2020 and $302.3 million in 2019, with product revenues of $567.1 million (91% of total revenues).
The company remains loss-making: its net loss widened to $471.7 millionb in 2021 from $229.7 million in 2020, and its accumulated deficit reached $1.4 billion. Panorama (non-invasive prenatal test) and Horizon (carrier screening) together represent the significant majority of revenues, and the filing states the company expects this to continue. Growth is being pursued through oncology (Signatera molecular residual disease test) and organ health (Prospera transplant rejection tests), with research and development expense rising to $264.2 million from $100.0 million.
Liquidity is supported by $84.6 millionc in cash, cash equivalents and restricted cash and $829.9 million in short-term investments, offset by $287.5 million of 2.25% convertible senior notes due 2027 and a $50.0 million UBS credit line with $49.0 million drawn. Operating cash outflow was $335.2 million in 2021. Management states existing cash and marketable securities are sufficient for at least 12 months after February 24, 2022.
The company completed a $551.2 milliond net equity offering in July 2021 at $113 per share. The filing highlights key risks, including reliance on third-party payer reimbursement (particularly for average-risk pregnancies and microdeletions screening, where CPT-code reimbursement has been low), dependence on Illumina as a sole sequencer supplier, the laboratory-developed test regulatory environment, litigation with multiple competitors, and the ongoing COVID-19 pandemic's effect on test volumes.
02—Key points
Key Highlights
- Total revenues rose 60.0% to $625.5 million in 2021 from $391.0 million in 2020; product revenues were $567.1 million, or 91% of total revenues.
- Net loss increased to $471.7 million in 2021 from $229.7 million in 2020; accumulated deficit reached $1.4 billion as of December 31, 2021.
- Panorama and Horizon together represent the significant majority of revenues; test volume grew to approximately 1,570,000 tests processed in 2021 from 1,026,500 in 2020.
- Research and development expense increased to $264.2 million from $100.0 million, including $35.6 million of in-process R&D from a 2021 asset acquisition.
- Cash, cash equivalents and restricted cash of $84.6 million plus $829.9 million of short-term investments; $287.5 million of 2.25% convertible notes due 2027 outstanding.
- Operating cash outflow was $335.2 million in 2021; management believes existing resources suffice for at least 12 months after February 24, 2022.
- Reimbursement remains a key risk: microdeletions testing reimbursement is described as low under the CPT code, and average-risk NIPT coverage depends on payer decisions covering about 95% of commercial covered lives.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 25, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $625.49M$391.00M | +60.0% |
| R&D Expenses | $264.21M$100.03M | +164.1% |
| SG&A Expenses | $511.03M$303.63M | +68.3% |
| Operating Expenses | $1.09B$607.28M | +80.1% |
| Operating Income | -$468.17M-$216.28M | −116.5% |
| Interest Expense | $8.30M$15.08M | −44.9% |
| Net Income | -$471.72M-$229.74M | −105.3% |
| EPS (Basic) | $-5.21$-2.84 | −83.5% |
| EPS (Diluted) | $-5.21$-2.84 | −83.5% |
| Shares Outstanding (Basic) | 90.56M81.01M | +11.8% |
| Shares Outstanding (Diluted) | 90.56M81.01M | +11.8% |
05—Questions
Frequently Asked Questions
How quickly are the company's losses growing relative to its revenue?
Net loss rose to $471.7 million in 2021 from $229.7 million in 2020, while total revenues rose to $625.5 million from $391.0 million. Total cost and expenses increased to $1,093.7 million from $607.3 million, driven primarily by higher research and development and selling, general and administrative expenses.
How dependent is Natera on Panorama and Horizon?
The filing states that Panorama and Horizon together represent the significant majority of revenues, and that the company expects this to continue. Growth in these tests, and reimbursement for Panorama in average-risk pregnancies and for microdeletions, are described as key to future success.
What are the main debt and liquidity obligations?
The company has $287.5 million of 2.25% convertible senior notes due May 2027 and a $50.0 million UBS credit line with $49.0 million drawn. Against these, it held $84.6 million of cash and equivalents and $829.9 million of short-term investments at year-end 2021.
What single-supplier dependencies does the filing disclose?
Illumina is the sole supplier of sequencers and related reagents for many tests under a supply agreement expiring August 2033, and Streck is the sole supplier of blood collection tubes used for Panorama and other cell-free DNA tests. The company states it has not validated an alternative sequencing platform in a commercially viable manner.
06—Continue