Natera, Inc.

Natera, Inc. operates as a diagnostics company applying proprietary molecular and bioinformatics technology to change disease management worldwide, focusing on three main areas of healthcare: oncology, women's health, and organ health. The company's cell-free DNA technology combines novel molecular assays that measure many informative regions across the genome from samples as small as a single cell with statistical algorithms that incorporate data from the broader scientific community to identify genetic variations covering a wide range of serious conditions with high accuracy and coverage. Natera aims to make personalized genetic testing and diagnostics part of the standard of care to protect health and inform earlier, more targeted interventions.

Natera competes in the molecular testing field, which is characterized by rapid technological changes, frequent new product introductions, reimbursement challenges, emerging competition, intellectual property disputes, price competition, aggressive marketing practices, evolving industry standards, and changing customer preferences. In women's health, primary competitors include BGI, BillionToOne Inc., Fulgent Genetics, Illumina through its subsidiary Verinata, Labcorp, Myriad Genetics, Quest Diagnostics, and Revvity Inc. In oncology, competitors include BillionToOne Inc., Caris Life Sciences, Exact Sciences Corp., Guardant Health, Inc., Personalis, Inc., Quest, and Tempus Labs, Inc. In organ health, the primary competitor is CareDx, Inc. The company believes it compares favorably based on its core technology applicable across a range of conditions with high specificity and sensitivity, continued investment in generating scientific data through clinical trials and peer-reviewed publications, strong commercial teams, and user experience including mobile phlebotomy and EMR integrations.

Natera generates the majority of its revenues from the sale of its tests, primarily Signatera, Panorama, and Horizon, and expects this to continue for the foreseeable future. The company sells tests directly through its U.S. direct sales force and through laboratory distribution partners, and also establishes licensing arrangements under its Constellation cloud-based distribution model where laboratory licensees run molecular workflows and access bioinformatics algorithms through the cloud. The percent of revenues attributable to the U.S. direct sales force was 95% ¹ for the year ended December 31, 2025, while U.S. laboratory partners contributed 3% ² and international laboratory partners and other international sales contributed 2% ³. The company bills clinics, laboratory distribution partners, patients, pharmaceutical companies, and insurance payers, with the majority of revenue coming from insurers with whom it has in-network contracts.

In oncology, Natera commercializes personalized blood-based DNA tests designed to optimize therapy decisions from diagnosis to survivorship. Signatera is a personalized ctDNA blood test for molecular residual disease assessment, early recurrence monitoring, and evaluation of treatment response in patients previously diagnosed with cancer, with each patient receiving a custom assay tracking tumor-specific clonal mutations. Signatera has been granted Advanced Diagnostic Laboratory Test status by CMS and Breakthrough Device Designations by the FDA covering its use in various applications, and has been shown in over 170 ⁴ peer-reviewed publications as of December 31, 2025 to identify MRD significantly earlier than standard diagnostic tools. Latitude is a blood-based MRD test for colorectal cancer that does not require a tumor tissue sample. Altera is a tissue-based comprehensive genomic profiling test supporting treatment decisions and therapy selection, representing an approximate $7.0 billion ⁵ market opportunity based on internal estimates. Empower, the hereditary cancer screening test, offers five panel options across 12 common hereditary cancer types and customizable panels with over 190 ⁶ gene options.

In women's health, Panorama is a non-invasive prenatal test launched in 2013 that screens for fetal chromosomal abnormalities including Down syndrome, Edwards syndrome, Patau syndrome, Turner syndrome, triploidy, and five of the most common genetic diseases caused by microdeletions. Panorama demonstrated sensitivity of approximately 99% ⁷, specificity of over 99.9% ⁸, and a PPV of 95% ⁹ for T21 in the SMART study, and demonstrated sensitivity for 22q11.2 deletion syndrome of 83% ¹⁰, clinical PPV of approximately 53% ¹¹, and a false positive rate of 0.05% ¹² using an updated artificial intelligence algorithm. Horizon carrier screening test screens for up to 835 ¹³ inherited conditions and performs with a 99% ¹⁴ detection rate for most conditions. Fetal Focus is a single-gene NIPT that screens for 21 ¹⁵ single-gene inherited conditions. Vistara single-gene NIPT screens for 25 ¹⁶ single-gene conditions with a combined incidence of approximately 1 in 600 ¹⁷. Anora is a products of conception test that analyzes miscarriage tissue. In organ health, Prospera assesses active rejection in solid organ transplant patients by measuring dd-cfDNA, with the Prospera Kidney test demonstrating 89% ¹⁸ sensitivity in detecting active rejection with an AUC of 0.87 ¹⁹ and NPV of 95% ²⁰ in the original clinical validation study. Renasight is a kidney gene panel test that tests 397 ²¹ genes associated with chronic kidney disease.

In December 2025, Natera acquired Foresight Diagnostics, a cancer diagnostics company whose ctDNA-based MRD tests leverage patented technology that targets phased variants, with a limit of detection of 0.3 ²² parts per million and detection below 0.1 ²³ part per million. The total purchase consideration was $424.5 million ²⁴, which included the issuance of 1,127,982 ²⁵ shares of common stock at a fair value based on the acquisition date closing price of $242.06 ²⁶ per share, and contingent consideration of $118.4 million ²⁷. In April 2020, the company issued $287.5 million ²⁸ aggregate principal amount of Convertible Notes, which were redeemed in October 2024 with $287.4 million ²⁹ converted for approximately 7.5 million ³⁰ shares of common stock. In September 2023, the company completed an underwritten equity offering selling 4,550,000 ³¹ shares of common stock at $55 ³² per share, receiving proceeds of approximately $235.8 million ³³ net of underwriting discount. As of December 31, 2025, the company had $80.3 million ³⁴ of outstanding balance under its credit line with UBS, with $20.0 million ³⁵ remaining and available.

Total revenues for the year ended December 31, 2025 were $2,306.1 million ³⁶, compared to $1,696.9 million ³⁷ in 2024 and $1,082.6 million ³⁸ in 2023. Product revenues were $2,295.8 million ³⁹ in 2025, $1,685.1 million ⁴⁰ in 2024, and $1,068.5 million ⁴¹ in 2023. Net losses were $208.2 million ⁴² in 2025, $190.4 million ⁴³ in 2024, and $434.8 million ⁴⁴ in 2023. The company processed approximately 3,525,500 ⁴⁵ tests in 2025, compared to approximately 3,064,600 ⁴⁶ tests in 2024 and 2,496,100 ⁴⁷ tests in 2023. As of December 31, 2025, the company had an accumulated deficit of $2.8 billion ⁴⁸ and $1.1 billion ⁴⁹ in cash and cash equivalents and restricted cash.

Management states that the company expects to continue to incur net losses for the near future as it continues to devote a substantial portion of its resources to research and development and commercialization efforts for existing and new products.

In oncology, Natera is focused on molecular residual disease and recurrence monitoring in solid tumors, where it has generated data in over a dozen different cancer types. The total addressable market in the United States for recurrence monitoring for solid tumor cancers, including immunotherapy treatment response monitoring, is estimated to be approximately $21 billion ⁵⁰, and for blood cancers is estimated to be approximately $3 billion ⁵¹. The company is also leveraging its experience in MRD assay development to research, develop and clinically validate an early cancer detection test with an initial focus on colorectal cancer. With the acquisition of Foresight Diagnostics, the company has expanded its focus to include lymphoma. In women's health, the company expects Panorama to be adopted for the screening of microdeletions and that third-party payer reimbursement will be available for this testing, including expectations that results from the SMART study may support broader use of and reimbursement for Panorama for microdeletions. The company continues to believe that growing recognition from professional societies of the importance of microdeletions testing, combined with the performance of its microdeletions test and additional validation data from the SMART study, will help drive broader reimbursement in the future.

In organ health, Natera estimates the total addressable market in the United States for tests assessing kidney, heart and lung transplant rejection is over $3.8 billion ⁵². The company is continuing to generate data in multiple clinical studies designed to demonstrate clinical utility and other benefits of the Prospera test. Internationally, Natera's products are offered in over 80 ⁵³ countries, primarily through laboratory and distribution partners. The company has a global network of over 100 ⁵⁴ laboratory and distribution partners, including several of the largest international laboratories. The company intends to continue to enhance its existing products, expand its product portfolio, and launch new products in the future.Management notes that the company expects cost of product revenues to increase as the number of tests performed increases, and expects cost of licensing to increase in relation to volume growth. The company has increased its focus on more efficient use of labor, automation, and DNA sequencing as it continues to achieve scale, including updating the molecular and bioinformatics process for Panorama to further reduce sequencing reagents, test steps, and associated labor costs.

The filing does not contain specific operational outlook details regarding supply chain posture, manufacturing capacity, technology infrastructure investments, or headcount strategy with exact figures for future periods. The company notes that it may expand its facilities capacity as its employee base and laboratory processing needs grow, and believes it will be able to obtain additional space on commercially reasonable terms.

Research and development expenses were $624.1 million ⁵⁵ for the year ended December 31, 2025, and the company expects these expenses to increase in absolute dollars as it continues to invest in research and development activities related to developing enhanced and new products. Capital expenditures for property and equipment were $106.2 million ⁵⁶ for the year ended December 31, 2025.The company has never declared or paid any cash dividends on its capital stock and does not anticipate paying any cash dividends for the foreseeable future.

The filing identifies several headwinds and constraints. The company has incurred net losses since its inception in 2003 ⁵⁷ and anticipates net losses for the near future. The significant majority of revenues are derived from sales of Panorama, Horizon, and Signatera, and any adverse impact with respect to these tests could result in an impact to overall revenues. Many third-party payers currently have negative coverage determinations or otherwise do not reimburse for microdeletions screening, and the company expects low reimbursement rates for microdeletions screening to continue, at least in the near term. Most state Medicaid programs currently either reimburse at low rates or do not reimburse for the company's tests. The company relies on a limited number of suppliers, including sole suppliers such as Illumina for sequencers and reagents and Streck for blood collection tubes, and any failure to maintain a continued supply would adversely impact the business.

The filing identifies regulatory and macroeconomic constraints. The FDA issued a final rule in May 2024 that would have subjected many LDTs to regulatory requirements, but a federal district court vacated the rule in March 2025 and the FDA rescinded it in September 2025. The FDA has not indicated how it will interpret the court ruling or whether it will seek a different regulatory approach. Legislative proposals such as the VALID Act have been introduced in Congress, indicating ongoing debate about whether and how LDTs should be regulated. Recent macroeconomic pressures resulting from ongoing geopolitical matters may have an adverse impact on the business, financial results, and prospects, including decreases in per capita income, inflation, rising interest rates, and supply chain issues.

The company faces intense competition in the molecular testing field from companies such as BGI, BillionToOne, Fulgent Genetics, Illumina/Verinata, Labcorp, Myriad Genetics, Quest, Revvity, Caris Life Sciences, Exact Sciences, Guardant Health, Personalis, Tempus Labs, and CareDx, and increased competition is likely to result in pricing pressures that could harm revenues or market share. Natera relies on a limited number of suppliers, including sole suppliers Illumina for sequencers and reagents and Streck for blood collection tubes, and any failure to maintain a continued supply would adversely impact the business. The company is involved in patent infringement lawsuits, including a jury verdict of $57 million ⁵⁸ awarded against it in a lawsuit filed by Ravgen, Inc. in January 2024, and a jury verdict of over $292 million ⁵⁹ awarded against it in litigation with Guardant Health, Inc. in 2024. The company has incurred net losses since inception, with a net loss of $208.2 million ⁶⁰ in 2025 and an accumulated deficit of $2.8 billion ⁶¹ as of December 31, 2025, and anticipates continuing losses for the near future. Many third-party payers do not reimburse for microdeletions screening, and the company expects low average reimbursement rates for microdeletions testing to continue, at least in the near term, which has had and will likely continue to have an adverse effect on revenues.

Management's message emphasizes that Natera is a diagnostics company with proprietary molecular and bioinformatics technology applied to change disease management worldwide, focusing on oncology, women's health, and organ health. The company aims to make personalized genetic testing and diagnostics part of the standard of care. Management highlights the company's commitment to generating peer-reviewed clinical evidence, with over 350 ⁶² peer-reviewed publications as of December 31, 2025, and maintaining a strong intellectual property portfolio with over 650 ⁶³ issued or pending patents as of December 31, 2025. Key strategic priorities include continuing to enhance existing products, expanding the product portfolio, and launching new products. The company intends to continue to invest in research and development activities related to developing enhanced and new products, and expects research and development expenses to increase in absolute dollars. Management states that the company expects to continue to incur net losses for the near future as it continues to devote a substantial portion of its resources to research and development and commercialization efforts for existing and new products.