Natera, Ranked Fourth in U.S. Prenatal Genetic Testing, Files Prospectus to Offer Testing Platform to Chinese Laboratories
On October 20, 2016, the “Puhua Medical Hi Conference,” hosted by Puhua Capital and Puhua Medical Investment, and co-organized by Zhejiang University’s Zijin Innovation Town, Jingxin Pharmaceutical, and CTIC Capital, was successfully held in Hangzhou. Leaders, experts, entrepreneurs, and investors from across the country gathered to discuss collaborative synergies among industry, research, clinical practice, and investment in the healthcare sector. At the 2016 Puhua Medical Hi Conference, Mike Bruce, Vice President of Natera, delivered a project pitch. Below is a curated summary of the highlights compiled by VCBeat (WeChat ID: vcbeat).
Natera is a publicly listed diagnostic sequencing company with a market capitalization of $550 million. Centered on non-invasive prenatal genetic sequencing, it can extract genetic material from just a single drop of blood.
Maternal DNA contains a 10% mixture of fetal DNA, which compromises the accuracy of genetic testing results. Natera employs technological methods to separate maternal and fetal DNA, enabling accurate screening for genetic disorders.
Since 2013, the non-invasive prenatal testing (NIPT) market has seen intense competition. However, this has not hindered Natera from achieving strong performance. In 2013, Natera’s cumulative sales reached $15 million, and were projected to reach $220 million by 2016. The number of individuals tested via sequencing reached 310,000 in 2015.
Natera ranks fourth in the U.S. prenatal genetic testing market and is an industry leader. Vice President Mike Bruce stated that the key to its success lies primarily in Natera’s superior technology compared to its peers.
Natera possesses core technologies in two areas, the first of which is multi-variant detection technology, capable of simultaneously targeting over 20,000 loci to detect multiple genetic variants.
Furthermore, Natera possesses DNA separation technology capable of isolating maternal DNA from fetal DNA in pregnant women undergoing delivery. By leveraging this technology to establish more than ten maternal-fetal DNA models, the fetal DNA can be definitively identified. This enables the analysis of the unborn fetus’s genotype; by comparing this genotype with maternal information, a highly detailed model is generated, allowing for the prediction of the fetus’s future genetic traits. The accuracy of fetal sex detection reaches 100%, making it suitable for medical sex determination.
Both of the aforementioned technologies are highly sensitive, requiring only a small amount of DNA extracted from plasma for analysis. They hold significant promise in the field of cancer detection and can reduce false-negative errors in clinical testing. Natera adheres to the principles of test feasibility and cost-effectiveness. By monitoring 20 cancer-prone genetic loci and analyzing circulating DNA in the blood, the detection technology achieves high sensitivity, ensuring that even trace amounts of tumor-derived DNA are detected. The company employs non-invasive testing techniques and leverages large-scale laboratory operations to conduct high-volume testing at a lower cost.
Secondly, Natera’s advantage also lies in its leading commercial footprint. The company has established its own sales network in the United States, with 130 sales representatives building commercial channels through engagement with obstetricians and physicians. Meanwhile, Natera has expanded into international markets through a software-as-a-service model, partnering with numerous laboratories abroad. These partners only need to perform DNA extraction and sequencing themselves, then upload the data to the cloud platform to receive test results.
Natera’s testing portfolio is another major highlight. With prenatal genetic testing as its core technological focus, the company can generate multiple test results from just a single drop of blood. Natera primarily offers sequencing services for women and continues to expand its diagnostic offerings, such as first-trimester screening. Currently, there is an internationally recognized software-based testing approach that is highly compatible with Natera’s technology, enabling one-click access to test results. By centrifuging blood samples from women in early pregnancy to isolate cell-free DNA—10% of which originates from the fetus—genetic testing can screen for the presence of cancer-associated genes in fetal DNA.
In addition, the company offers microdeletion testing, which also requires only a single drop of blood. While competing products in the same category have a sensitivity of only 20%, Natera’s product achieves a sensitivity as high as 90%. The company also conducted a survey and analysis of maternal age among patients with Down syndrome and microdeletions. The results revealed that the incidence of Down syndrome is correlated with maternal age, with women over 35 years old having a higher incidence rate than younger mothers, whereas microdeletions show no direct correlation with age.
The company launched HORIZON 2.0 in July 2015, further enhancing the efficiency of prenatal genetic testing. As of February this year, HORIZON 2.0 had cumulatively tested 88 million individuals. Currently, Natera has partnered with the largest insurance provider in the United States, and its market share in the U.S. is steadily rising. Meanwhile, Natera is actively expanding into international markets through strategic collaborations with more than 70 laboratories worldwide.
Compared with central laboratories in the United States, sequencing costs at Chinese laboratories are lower. MacBruce stated that Natera places great importance on Chinese investors and hopes to identify Chinese partners during this visit to China. He further added that Natera currently has an investment strategy for China and can provide specialized testing platforms for Chinese laboratories.