Natera, Inc. (NASDAQ:NTRA) Q2 2023 Earnings Call Transcript

And then there’s still room to run to bring additional tissue sequencing in-house and negotiate certain aspects of the business with suppliers at a deeper level. And then lastly on Signatera, as more and more and more volume moves to the recurrence monitoring setting, which is the shift that we see occurring as the business gets bigger, of course, more people are staying on the test and they’re moving, shifting to gross margin, the COGS go down, so that improves the gross margin. And then on the other side of things, you’ve got ASP improvement opportunities. And so we have just turning the crank on billing operations and just getting better. And I think that is going to help in the future, and we haven’t really seen the impact to that yet.

But there’s been a lot of work that’s done there. And then we have getting paid for a higher percentage of the tests that we perform, of course, in Signatera every time we get one of these commercial policies, every time we get a new Medicare policy that helps with expanded carrier screening as payers come on and start paying or as guidelines come out that helps. There’s things like 22q if that does come into guidelines that could make a significant impact. So the range that we’re in right now while we’re seeing improvements and we – it’s sustainable, we’ll see continued improvements. There’s a lot that we can do that we are doing over time that are going to put us in really very strong position in the future.

Dan Brennan: Great. Thank you for that. I know NCCN is not included in your guidance, obviously, and you’ve talked about being an upside driver, but just kind of remind us in terms of like, timing and when we’d hear on this and kind of how you guys are feeling about it right now? Thank you.

Steve Chapman: Yes. I’ll make a couple comments and then maybe Solomon. So I think this is really the first year that we have a shot at NCCN guidelines because I think we were very kind of clear leading in last year that, hey, if the Galaxy paper’s not published, it’s not going to be considered. And in fact, it wasn’t considered in the vote. So this is really the first year with Galaxy being published that we have a chance to be considered in the vote. There’s different levels of guideline and kind of what we’ve said is, we think we can be potentially included as a footnote which would be where they list out the major prognostic factors for colorectal cancer. And so I think getting in there as a footnote where Signatera is listed that would be a win.

And then, maybe down the road being listed in the official algorithm recommendation table. Now, they’ve also kind of highlighted a couple things where they said, hey, these are areas where we’d like to see the additional data. One was randomized trials, and Solomon just described the ALTAIR study. I mean, it’s incredible that we have completed enrollment on a large scale prospective randomized study looking at extended adjuvant treatment and escalation for MRD positive patients and treatment on molecular recurrence for patients that start off negative and become positive on surveillance. So the fact that the randomized trial is done enrolling is an enormous step forward, and we plan on reading that data out next summer. The other area where they said, they wanted to see data was on the clinical value of surveillance.

And the great news is the INTERCEPT study, which we weren’t even involved in, we just ran the testing for MD Anderson showed two very significant paths for clinical utility for patients that are positive with surveillance. So we think both of those are very good signs. And then, it’s also you have to think beyond CRC as well. I think, there’s other products and other indications where we have good data and course we’re kind of looking at opportunities there as well.

Operator: Next question comes from David Westenberg from Piper Sandler. Please go ahead, David.