AUSTIN - Natera, Inc. (NASDAQ: NTRA), a prominent player in the genetic testing industry, has been handed a jury decision unfavorable to the company in a false advertising legal battle with Guardant Health (NASDAQ:GH). The dispute, which originated over comparative advertising claims made in 2021 regarding Guardant's Reveal test, concluded with a verdict in Guardant's favor.
Natera expressed disagreement with the jury's decision and plans to request the court to overturn the ruling. The company highlighted that the case did not question the validity or utility of its Signatera test, which is widely recognized for detecting molecular residual disease (MRD) in cancer patients. Despite the evidence presented, Natera noted that certain key pieces of evidence supporting its case were not included in the trial.
Signatera has gained traction as the most commonly used MRD test in the United States, backed by over 100 peer-reviewed publications across various cancer types. The test, which is personalized for each patient, uses circulating tumor DNA to detect and quantify residual cancer, aiming to facilitate earlier recurrence identification and optimize treatment decisions. It has received Medicare coverage for multiple cancer types and for monitoring immunotherapy in solid tumors.
Natera, headquartered in Austin, Texas, specializes in cell-free DNA and genetic testing with a focus on oncology, women's health, and organ health. The company operates laboratories that are ISO 13485-certified and CAP-accredited, also certified under the Clinical Laboratory Improvement Amendments (CLIA).
The press release includes forward-looking statements that reflect the company's expectations as of the release date, with Natera disclaiming any obligation to update these statements. The company acknowledges risks and uncertainties that could cause actual results to differ materially, including the reliability, accuracy, and performance of their tests, as well as the impact of clinical study results on the use of their product offerings.
This article is based on a press release statement from Natera, Inc.
In other recent news, Natera Inc (NASDAQ:NTRA). reported record Q3 revenue of $439.8 million, marking a 64% increase year-over-year. The company witnessed a significant rise in oncology test volumes, conducting 137,000 tests, a 54% increase from the previous year. Gross margins reached a record high of 62%, and Natera generated a cash flow of $34.5 million. Based on these robust financial results, the company has revised its full-year revenue guidance upwards to between $1.61 billion and $1.64 billion.
Analysts have responded positively to these developments. TD Cowen, Baird, and Jefferies have all maintained favorable ratings on Natera's stock and raised their price targets. TD Cowen lifted its price target to $175, Baird to $160, and Jefferies to $182, expressing confidence in Natera's operational success and continued growth.
Natera's largest revenue-contributing product, the Signatera test, showed promising results in predicting overall survival and chemotherapy benefits in colorectal cancer. The company also reported a strong performance in women's health, including the launch of the Fetal RhD test. Despite challenges with private payers and potential holiday-related disruptions in Q4, Natera sees significant growth opportunities ahead with over 100 trials underway.
InvestingPro Insights
Despite the recent legal setback, Natera (NASDAQ: NTRA) has been experiencing significant market momentum. According to InvestingPro data, the company's stock has shown remarkable performance, with a 204.11% price total return over the past year and a 167.02% return year-to-date. This strong performance is reflected in the stock trading near its 52-week high, with the current price at 95.3% of that peak.
The company's financial metrics paint a picture of rapid growth amidst challenges. Natera's revenue growth stands at an impressive 54.94% for the last twelve months, with quarterly revenue growth in Q3 2024 reaching 63.9%. This aligns with the company's expanding market presence and the increasing adoption of its Signatera test mentioned in the article.
However, investors should note that Natera is not yet profitable, with a negative operating income of $242.09 million in the last twelve months. This is consistent with the InvestingPro Tip indicating that analysts do not anticipate the company to be profitable this year. Despite this, another InvestingPro Tip highlights that 7 analysts have revised their earnings upwards for the upcoming period, suggesting potential improvements in financial performance.
For those interested in a deeper analysis, InvestingPro offers 16 additional tips for Natera, providing a comprehensive view of the company's financial health and market position. These insights could be particularly valuable given the recent legal developments and the company's growth trajectory in the genetic testing industry.
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