SAN CARLOS, Calif., October 13, 2019 – Shares of Natera Inc. (NASDAQ: NTRA) declined -2.07% to $34.04. The stock traded total volume of 566.265K shares lower than the average volume of 630.44K shares.
Natera, Inc. (NASDAQ: NTRA) reported total revenues of $66.80M compared to $62.30M for the first quarter of 2018, an increase of 7%. The increase in total revenues was driven primarily by sales of our Panorama and HCS tests. There were 200,194 tests processed in the first quarter of 2019, including approximately 186,500 tests accessioned and 11,800 processed through the Constellation software platform (Constellation units), compared to approximately 164,355 tests processed in the first quarter of 2018, including approximately 153,900 tests accessioned and 9,700 Constellation units, an overall increase of approximately 22%.
In the three months ended March 31, 2019, Natera recognized revenue on 184.70K tests for which results were reported to customers in the period (tests reported), including approximately 173.40K tests accessioned and 11.30K Constellation units, compared to 147,100 tests reported, including approximately 137.80K tests accessioned and 9,300 Constellation units, in the first quarter of 2018, which represents an increase of approximately 26%. Natera recognized revenues on approximately 119.40K Panorama tests accessioned and 9,500 Panorama Constellation units in the three months ended March 31, 2019, compared to approximately 97.0K Panorama tests accessioned and 7,500 Panorama Constellation units in the same period in 2018. Natera recognized revenue on approximately 49,900 HCS tests accessioned in the three months ended March 31, 2019, compared to approximately 37.0K HCS tests accessioned in the same period in 2018.
Gross profit for the three months ended March 31, 2019 and 2018 was $23.50M and $21.70M, respectively, in each case representing a 35% gross margin. We were able to maintain the same gross margin as a result of the increased revenue and cost savings achieved from the launch of our HCS automation workflow, and lower vendor costs attributable to specimen services.
Total operating expenses, representing research and development expenses and selling, general and administrative expenses, for the first quarter of 2019 were $55.30M, an increase of approximately 6% compared to $52.30M in the same period of the prior year. The increase was driven primarily by higher personnel-related expenses, legal fees, travel expenses related to marketing events, and higher corporate-related expenses, offset by a reduction in research and development expenses upon completion of our HCS automation workflow development, which expenses then shifted to cost of product revenues following its implementation.
Loss from operations for the first quarter of 2019 was $31.70M compared to $30.50M for the same period of the prior year.
Net loss for the first quarter of 2019 was $34.10M, or ($0.54) per diluted share, compared to net loss of $32.90M, or $(0.61) per diluted share, for the same period in 2018. Weighted average shares outstanding were 62.80M in the first quarter of 2019.
At March 31, 2019, Natera held $128.50M in cash, cash equivalents, short-term investments and restricted cash, compared to $158.50M as of December 31, 2018. Subsequent to the close of the quarter, Natera successfully closed a follow-on equity offering that yielded roughly $1080M in net proceeds to the company. As of March 31, 2019, Natera had a total outstanding debt balance of $123.60M, comprised of $50.20M with accrued interest under its $50.00M line of credit with UBS at a variable interest rate of 30-day LIBOR plus 110 bps and a net carrying amount of $73.40M under its $125.00M debt facility with OrbiMed Advisors, reflecting no change from December 31, 2018. The UBS line of credit is secured by Natera’s investment portfolio, which is designed to yield higher returns than the borrowing rate Natera incurs in order to fund current operations. Under its debt facility with OrbiMed Advisors, Natera has an option to draw up to $50.00M in additional funds on or prior to December 31, 2019.
2019 Financial Outlook:
Natera anticipates 2019 total revenue of $275.0M to $302.0M; 2019 cost of revenues to be approximately 59% to 65% of revenues; selling, general and administrative costs to be approximately $180.0M to $190.0M; research and development costs to be $60.0M to $65.0M and net cash burn to be $80.0M to $100.0M.
NTRA has the market capitalization of $2.32B and its EPS growth ratio for the past five years was -21.70%. The return on assets ratio of the Company was -43.00% while its return on investment ratio stands at -73.80%. Price to sales ratio was 8.49 while 93.01% of the stock was owned by institutional investors.
