Natera, Inc. (NTRA) Q1 2020 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for joining us for the Natera, Inc. First Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the call over to Mr. Michael Brophy, Chief Financial Officer. Thank you, and please go ahead, sir.

Thanks, operator. Good afternoon. Thank you for joining our conference call to discuss the results of our first quarter 2020. Also on the line is Steve Chapman, our CEO; Bob Schueren, Chief Operating Officer; Solomon Moshkevich, General Manager of Oncology; and Paul Billings, Chief Medical Officer. Today’s conference call is being broadcast live via webcast. We will be referring to a slide presentation that has been posted to investor.natera.com. A replay of the call will also be available at investor.natera.com. During the course of this conference call, we will make forward-looking statements regarding future events and our anticipated future performance, such as our operational and financial outlook, our assumptions for that outlook, the impact of the COVID-19 pandemic on our business and operations, market size and partnerships, clinical studies, opportunities and strategies and expectations for various current and future products, including product capabilities, expected release dates, reimbursement coverage and related effects on our financial and operating results. We caution you that such statements reflect our best judgment based on factors currently known to us and that actual events or results could differ materially. Please refer to the documents we file from time to time with the SEC, including our most recent Form 10-K or 10-Q and the Form 8-K filed with today’s press release. Those documents identify important risks and other factors that may cause our actual results to differ materially from those contained in or suggested by the forward-looking statements. Forward-looking statements made during the call are being made as of today. If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information. Natera disclaims any obligation to update or revise any forward-looking statements. We will provide guidance on today’s call, but will not provide any further guidance or updates on our performance during the quarter, unless we do so in a public form. We will quote a number of numeric or growth pages as we discuss our financial performance. And unless otherwise noted, each such reference represents a year-on-year comparison. And now, I’d like to turn the call over to Steve.

Great. Thanks, Mike. Good afternoon, everyone, and thank you for joining us. Today, we’re going to review the highlights from the quarter, summarize the impacts of COVID-19 on our business and our response and give you an update on our clinical and commercial progress in transplant and oncology. On to the highlights. We posted $94 million in revenues and a 52% gross margin in the quarter, which is by far the best quarter we’ve ever had as a company and significantly above the range of $89 million to $91 million we preannounced. Q1 was the largest sequential quarter-on-quarter unit growth in the company’s history, despite the disruption in March from COVID-19. Revenues grew 41% over Q1 2019, driven by the strong volumes and another positive quarter for average selling prices. We were also very pleased to achieve a cost of goods sold of $202 per unit accessioned in our lab, very close to the $200 per unit level, we had set as a long-term target. I will spend more time on both ASP and COGS later in the call. We also witnessed a very successful early launch of our Prospera test in the kidney transplant space. In a very short timeframe, we saw orders from 45% of the top 50 and 37% of the top 100 transplant centers by volume. We also activated 18 top centers in the ProActive registry trial, enrolling 145 patients. We think these exceptional initial results indicate significant interest for a more accurate donor-derived cell-free DNA test. We also responded very well to the COVID-19 outbreak. We were very early to implement key safety protocols for our employees in our lab, which has continued running at a high capacity with no disruptions. And we were able to scale our remote ordering capabilities to new levels as we’ve seen record demand for this service in March and April. The ability to maintain high-quality monitoring of patients away from medical facilities expands the clinical utility of our suite of tests to help patients get the care they need during this crisis. We were also pleased to see that coverage for average risk NIPT has been expanded during this time by an additional 20 million lives. We’ve seen positive additional reimbursement from this change already and we will continue to make the case to more large payers that are not yet covering NIPT for all women. As many of you are already aware, we completed a $279 million convertible debt financing in March. The notes have a seven-year maturity and a 2.25% interest rate. We used about $79 million of the proceeds to pay down our senior secured order debt credit facility, which we had put in place when the share price was in the single-digit and it had a roughly 11% coupon. So we think, we’ve improved the balance sheet with that deal and also added about $200 million in cash to further bolster our cash position. The next slide shows more details of our performance in the quarter. We continue to see volume growth across both Horizon carrier screening and Panorama NIPT, as we delivered the largest sequential unit growth in company history. We believe Natera is now the clear market leader by volume and NIPT testing, with more than 2 million commercial tests performed. We have published on significantly more NIPT cases than any other company. We have a highly technically differentiated product, and we now have multiple unique clinical features that are unmatched by our competitors. Our strategy to combine our differentiated product with an extreme focus on user experience, distributed through a highly trained direct commercial channel is working very well. Despite the impact of COVID-19, revenues and gross margins were also a record, and this is largely due to the volume growth and improvement we’ve seen in our ASPs. The next slide shows our historical revenue trajectory over a longer time horizon. We had set a long-term goal of revenue acceleration, driven by new products, ASP improvements and volume growth. We’ve clearly been able to drive that acceleration in our revenue in the last four quarters or so. With meaningful contributions from Prospera in transplant and Signatera in oncology still ahead of us, we feel like we are very well positioned to come out the other side of the COVID-19 crisis in a strong long-term position. The next slide summarizes our response to the COVID-19 outbreak. Compared to many in the industry, we think, we are weathering this disruption well. We’ve kept continuity of operations in our lab and we’ve been able to fulfill record demand for our mobile ordering and mobile blood draw capability. For physicians that care for pregnant women, transplant patients and cancer patients, we offer a web-based platform that allows the doctor to order the test completely remotely. Patients can then schedule a mobile visit, their blood draw will be performed at their house by a qualified phlebotomists and the blood is then sent to our lab like normal. We’ve been working on this application for years, as we handled roughly 10,000 mobile blood draws in 2019. Although the majority of our reproductive health orders are still coming through the usual office channel, we’ve been really pleased with how smoothly this increase in demand has been handled. As we discussed, when we announced our preliminary results for the quarter, we experienced about a 15% drop between the average weekly volume in the first 10 weeks of the quarter, compared to the last two weeks of March. The drop was not 15% across the Board. Part of this were volumes from outbreak hotspots like New York and New Jersey and volumes from our in-vitro fertilization channel. IVF clinics were effectively presented – prevented from initiating new patients, but these are very determined customers. So we expect a rebound when our clinics can fully reopen again. In fact, just recently, the relevant professional society, the American Society of Reproductive Medicine, reaffirmed the essential importance of timely access to fertility treatment, paving the way for a gradual resumption of patient care. There was obviously a lot of confusion around these lockdown orders in late March, and we are already starting to see that the volume is recovering in April, as doctors and patients get back on schedule and make adjustments. Having said all that, we withdrew our guide for the year, specifically because the cadence of the recovery is hard to forecast. As I mentioned at the top of the call, we did see some significant movement on the average risk coverage front. In response to the COVID outbreak, the Society for Maternal-Fetal Medicine posted updated practice suggestions, noting that physicians could consider using cell-free DNA testing in lieu of additional ultrasound tests. Days later, Aetna updated their coverage policy to temporarily cover NIPT for all women. This represents a significant increase in covered lives, and we think these moves bode well for the continued adoption of NIPT as a standard of care for all women in the future. As we mentioned before, we are not getting paid on a large portion of the average risk NIPTs we perform today. Hitting full coverage on an ongoing basis can have a very meaningful impact on our gross profit. We estimate from the volume we do today alone, full average risk coverage would be worth, roughly $60 million in gross profit, and that figure does not include the significant uptick in volume from deeper penetration into the very large average risk market. Okay. On now to the details of our unit economics, ASPs and COGS. For those of you that might be new to Natera earnings calls, we track these metrics carefully to measure our progress towards cash flow break-even for the reproductive health business and along with our volume and revenue growth, we consider these key metrics for measuring our execution. We are really pleased to have good news on both ASPs and COGS this quarter, as you can see on the page. On ASPs, recall that we initially guided 2020 revenues with the assumption that ASPs were going to modestly decline this year. As we said in March, this was largely out of conservatism, but we’ve been pleased to continue to drive ASPs higher in Q1. This is largely due to improving the fraction of time payers reimburse their contracted REIT with us. As long as the underlying payer environment remains relatively stable, we think ASPs can also remain stable, especially because the expanded average risk coverage I described did not come into effect soon enough to meaningfully impact Q1. The drop in COGS was due to R&D initiatives executed in 2019, and lab and supply chain efficiencies, plus the rapid increase in volume we experienced in the quarter. Those of you have who have followed us for years, know that we often report lower COGS per unit in Q1, because the lab runs extra lean to get the job done in the immediate term when faced with higher volumes. We expect COGS per unit to be higher than this level in Q2, partly because volumes will be lower over the same fixed base and we have implemented some COVID-19-specific measures like Hazard Pay for employees that we expect to temporarily affect COGS. Having said that, these Q1 numbers did not include the COGS projects being launched during 2020 that we previously described. And I think, the Q1 performance, coupled with the COGS project, we intend to launch over the next 12 months, shows that we can push this number beyond the $200 threshold over time. Okay. Now on to organ transplant. During our Early Access Program, we’ve seen significant interest from the top transplant centers. We’ve said for a long time that our unique product offering, which has best-in-class sensitivity and negative predictive values, including the ability to identify the important T-cell mediated rejection would be seen as a welcomed alternative for the transplant community. That’s exactly what we’ve seen. In very short order, we’ve now seen roughly 45% of the top 50 centers place orders and 37% of the top 100 centers by volume place orders. This is really incredible and shows the need for a test like ours in the market. The strong response we’ve seen thus far, indicates the long-term potential of our ability to penetrate this market. We are also seeing strong enrollment in our ProActive trial. As a reminder, ProActive will follow 3,000 kidney transplant patients over a three to five-year period to examine the utility of Prospera to accurately identify organ rejection. In a very short time, we’ve activated 18 of the leading centers, with many more coming online soon, and we’ve already enrolled 145 patients. This is exciting and has outpaced our expectations. Although, the COVID-19 pandemic obviously impacted our ramp, we’re seeing volume growth again, in part, due to an interest in remote monitoring. And over the long-term, we’re excited about building a significant business within transplant space. The next slide is just the same chart that we have shown, since we announced the presentation of our validation data. We’ve hit every milestone toward a commercial launch on time. We think we’ve demonstrated in our early access phase that we can scale the volume and are just awaiting the Noridian LCD before we can start billing Medicare. As a reminder, Noridian polished the guidance of the MolDx program, where we’ve already received a positive coverage and we expect Noridian’s final coverage decision to come in soon. Now, I would like to hand the call over to Solomon for an updated – update on our progress in oncology. Solomon?

Thanks, Steve. On the partnership front, our work continues under our development programs with both BGI and Foundation Medicine. And in both partnerships, we expect initial engagement from pharmaceutical clients this year. In our direct pharma business, we continue to see a very good momentum in terms of contracted future revenues, including prospective clinical trials, as well as retrospective studies using bank samples. In the direct clinical business, as we’ve described previously, we hired the first phase of sales reps for Signatera late last year and we started an Early Access Program with top academic institutions, now having worked with the majority of the top NCCN centers. We are pleased with our early trajectory in Q1. And although, the ramp was impacted due to COVID-19, we’ve also received significant interest in using Signatera as a way to help mitigate the effects of the pandemic. We are now seeing volumes start to grow, again, in April. Cancer care has been significantly disrupted by the coronavirus outbreak. As cancer patients are at elevated risk from exposure, many standard surveillance visits and CT scans have been canceled. Doctors are looking for remote monitoring solutions and many are reevaluating the risk benefit of adjuvant chemotherapy, which can weaken the immune system. An article published last month in JAMA about oncology practice during the COVID-19 pandemic actually called out early-stage colorectal cancer specifically, as an example of where adjuvant treatment can be adjusted in the new environment. We think Signatera can really help in these scenarios, as summarized on this slide with our adjuvant and surveillance programs for Stage II and III colorectal cancer and especially with our remote blood draw capability. As we’ve described previously, we believe this clinical indication has the opportunity to translate to over 1 million tests per year, which gives you a sense of the size of these oncology markets, we’re just beginning to unlock. The utility of Signatera was highlighted recently in a new peer-reviewed case report, published in JCO Precision Oncology, demonstrating the technology’s capabilities and yet another type of GI cancer, this time in esophageal cancer. This study, which was published by co-authors from Harvard University and the Dana-Farber Cancer Institute, followed a 72-year old man, with recurrent Stage III esophageal cancer, whose recurrence was detected 350 days before radiographic imaging. After undergoing multiple CT scans, showing no signs of cancer, the patient’s physicians escalated to a PET scan, which revealed a four-centimeter nodule in his liver, that was later surgically removed. Furthermore, the bespoke assay in this case was designed, based off of a FoundationOne tissue test that had already been ordered as part of the patient’s standard care, exactly the way we envisioned the partnership working. We’re very pleased about this demonstration of the potential of our technology and on the proof of principle for our collaboration with Foundation Medicine. We also continue to expand our leadership position with validation data in MRD testing applications. For the first time, we and our collaborators were awarded an oral presentation at ASCO, with an expanded data set in early-stage colorectal cancer. ASCO is holding a virtual meeting this year, and we look forward to presenting this data, along with three other accepted posters. We also have an oral presentation coming up at ESMO GI, later this year and posters at multiple conferences in 2020. On the publication front, in addition to the five papers that we have already published, we have four papers currently in submission, including a pan-cancer set of patients, treated with immunotherapy in the INSPIRE study and the ISPY-2 data in Neoadjuvant Breast Cancer. Meanwhile, we have new cohorts from at least five different cancer types, currently undergoing analysis in our laboratory, which we plan to use to drive future publications. This flow of new data will help unlock additional clinical indications and support the growth of our pharma business, where studies range across many different cancer types. Some of the data expect this year will actually be presented in collaboration with some of our pharma clients. All of this is in addition to the prospective trials, that we announced previously in colorectal cancer, I’m not going to go into the details on all of these studies, again, but new investors can still find our prepared remarks from past events on our website. The key update here is that we’re still moving forward on all of these trials. And in the second quarter of this year, we are scheduled to enroll the first patients for both the CIRCULATE-IDEA trial in Japan and our own BESPOKE CRC trial. Finally, we’re still on track to receive the final coverage decision for Medicare in the second-half of this year, as we’ve discussed previously. The public comment period ended in Q4 of last year, which went smoothly and there’s generally a 12-month window in which Medicare would publish the final LCD. We’re also in active discussions with Medicare on coverage for new indications, and I look forward to sharing more details on that in the future. Now, I’m going to hand the call over to Mike to review the financials. Mike?

Thanks, Solomon. You can see the summary results for the quarter on the slide. As Steve mentioned earlier in the call, we came in at $94 million for the quarter, which is above the preannounce we gave in April. The key driver for the additional revenue above the preannouncement was additional cash receipts for tests that we reported out in prior periods. As we’ve talked about in the past, we are pleased to see our approach to revenue accruals for quarters in 2018 to 2019 has proven to be conservative and cash collections for those periods continue to exceed expectations. As Steve described, the revenue and gross margin performance was primarily driven by strong volume growth and continued improvement on both ASPs and COGS. We made progress with both BGI and SMI, and that revenue recognition contributed to the quarter, but that partnership revenue was slightly lower in Q1 versus Q4 of 2019. We are pleased that the reimbursement environment has remained stable so far this year and we are cautiously optimistic that we can maintain this performance through the balance of the year. We do expect COGS to move up, as Steve mentioned, from this low level in the next few quarters, as we deal with the additional expenses related to ensuring our lab is safe and productive and as we expand capacity. But I think, this quarter demonstrates we can get blended cost to goods sold per unit below $200 over time, particularly for the reproductive health business, which currently makes up the vast majority of our volumes. On the operating expenses front, we saw increases over last year, as expected, as we ramp the commercial and clinical trial effort in both transplant and oncology. Expenses in the reproductive health business remains stable, even as volumes continue to ramp. So that demonstrates to us that our path to cash flow break-even in that part of the business is achievable when the world gets a little more back to normal and we can resume growing volumes. As you know, we went through the guide for the year, given the unknowns around the COVID-19 situation, and Steve gave some color on where, specifically, we are being impacted. While the preliminary data on weekly received units in April and early May looks encouraging, we think it is too early for us to forecast precisely when we can return to growing volumes. So we certainly expect that to happen this year, based on everything we know today. With the convert deal now done and the overbed note retired, we feel we are in a very strong cash position, and we’ll be able to execute on our plans despite this COVID-19 disruption. With that, let me hand the call over to the operator for questions. Operator?

[Operator Instructions] Our first question comes from the line of Doug Schenkel with Cowen. Your line is open.

Hey, good afternoon, guys. So as you mentioned in your prepared remarks, consistent with what you talked about earlier, in the last two weeks of the quarter, you saw a drop versus Q4 weekly levels of around 15%. You’ve talked about seeing some improvement since then. So just to try to unpack that a little bit more. Q2 volume is typically lower than Q1, but you had a lot of momentum through the first 10 weeks of Q1. If it weren’t for COVID, would you still have expected Q2 volume to be lower than Q1? That’s the first part. Second part is, how much better has volume been since the end of Q1? And then the third part is, in hindsight, as you’ve tried to dissect this a little bit more, was the 15% drop versus trends likely a function of the population density and presumably your market concentration in certain hotspots? And is the improvement, since a function of not just your response, but also the fact that as new hotspots have popped up, maybe you don’t have as much exposure?

Yes. Thanks, Doug. This is Steve. So I’ll just clarify. What we said in the prepared remarks is the last two weeks of March were down about 15% from the average in the first 10 weeks of the quarter. As you know, that sort of first 10-week period was a blowout record period of time for us. So the drop is roughly from sort of 15% of that and it was roughly in line with our Q4 weekly volume average. We have seen the business recover actually quite nicely in April. But it varies somewhat, depending on which segment of the business you’re looking at and which region you’re looking at. So as we mentioned, some of the harder hit areas like IVF, for example, although, the outlook is positive, as we’ve seen this new statement come out from ASRM that they’ve loosened the guidelines a little bit, we’re still waiting to see that come in, as appointments get rescheduled. Other areas of the business were actually back to peak levels or in certain segments, we’ve actually now exceeded the previous peak levels. So we’re feeling good about the recovery and good about the trajectory in April. I do think, the ability to go out and close raw new customers has impacted somewhat. And so while we’re getting back the business that we lost, I do think, certain customers we will be able to close and we have seen that occur. I do think, in general, the sort of pipeline of closing a lot of new business is pushed out slightly.

Okay. That’s helpful. And in terms of new practice openings, I would think that would be a little more challenging right now, just given it’s harder to get in front of practices. So is most of your growth right now, most of your volume kind of same stores versus new volumes? And if so, is that something that we should be cognizant of, maybe not for Q2, but as we think about second-half trajectory?

Yes. Well, look, I mean, I do think, we’ve definitely seen some signs that we can close new customers in this environment, and we have put a lot of effort into digital activities like many others have, and we’ve set up this very slick mobile phlebotomy capability. And in certain areas, oncology and organ transplant, for example, I think, it’s very helpful for those patients to not have to go into the office. So we are seeing some new accounts come on, where they’re interested, particularly in the mobile capabilities or the ability to monitor patients remotely. I think, our first goal was to get – build back up the existing accounts and same-store sales. And then at the same time go out and look for new customers that may want access to the service. So we’ve seen both occur, new customers close and the base business coming back. But I do think – comparing it to an environment, where there’s no COVID pandemic, certainly the ramp of closing new customers is not going to be the same, as it would be if we were full steam ahead, reps walking into offices every day. So we can close new business and we are, but it’s not going to be at the same pace that you would have seen otherwise. Mike, would you also want to add anything to that? Yes. Mike, Solomon, anything to add?

No. I think you covered it.

And then last one for me. Any discussion with some of the payers that have moved to temporarily expand NIPT coverage into average risk patients that would suggest these decisions could be made permanent?

Yes. Mike, do you want to take that?

Yes. I mean – so thanks for the questions. The coverage policies that we’ve seen come out have had explicit addendums to them, linking them to the coronavirus outbreak and they’re limited in their time duration. So there’s nothing in the document that would tell you that it’s going to go on for an extended period of time. But we’ve just got to see. I mean, I think, it’s instructive that the expansion and coverage policies seem to come right on the heels of additional practice recommendations from the professional societies. And so I think, while we don’t know, I think, we would expect that those kind of coverage policies would follow the professional society recommendations. So it’s possible that it could continue.

Okay. All right. Thanks a lot.

Thank you. And our next question comes from the line of Tycho Peterson with JPMorgan. Your line is open.

Hey, this is Eleni on for Tycho. Thanks for taking our questions. So firstly, I was wondering, if you can help frame the Aetna opportunity. You mentioned that today, you’re seeing about $60 million in unreimbursed gross profit from average risk volumes. Just wondering, if that includes Aetna or what piece of that was Aetna? And of the remainder, how much is United?

Yes. Mike, why don’t you take that?

Yes. Sure. So just as background, there’s about 210 million covered lives – commercial covered lives in the United States. About 110 million of those lives already had a policy covering average risk NIPT. And of the remaining, Aetna is circa 20 million, 25 million covered lives. And United is bigger, they’re more in the 40 million to 45 million covered lives range depending on how you count some of their ancillary plans. So if you think about Aetna as a percentage of the total commercial covered lives, they’re circa 10% of the commercial lives in the United States. And I think, that’s a reasonably good approximation of their impact on our business. So it’s a – certainly, it’s a tailwind for us. It’s not an enormous change in our ASP trajectory, but it’s certainly a contributor. The balance of the commercial covered lives for average risk really is kind of a long tail. I mean, you’ve got Humana, maybe the next biggest one, and then it gets into an assortment of the loose plans, et cetera. So it’s a good contributor and it’s not the majority. You can see from my remarks that United is obviously quite a bit bigger.

That’s helpful. Thank you. And then, I was also wondering, in terms of the question of whether Aetna’s temporary policy could be a precursor for a permanent plan, whether you could comment on what we could see come out over the next review of Aetna’s policy, which is, I believe, scheduled for May 8? And whether you’ve had any conversations with them after the temporary policy was released?

Yes. I’ll comment on that. So generally, when you have these discussions with the plans, they keep the information flow pretty limited. They don’t want to give away anything, I mean, public companies, et cetera. So you don’t get exact road map. We do feel positive long-term with all of these large payers. They generally tend to follow the professional societies. We’ve said before that we heard that there’s something positive coming from ACOG. We continue to hear that. In fact, we’ve heard that, again, more recently and there’s something drafted that’s going to be released in the near future, that’s positive. We don’t know what it says and we don’t know exactly when it’s going to come out, but we do know that that’s there in the background. I also mentioned sort of backstopping all of this is the SMART study. So if you remember the details of the SMART study, Natera prospectively studied 20,000 patients, over a period of several years. I think, the trial started roughly five years ago, and we expect that data to be published later this year. And we think that will actually be the largest prospective NIPT study, looking at both chromosomal aneuploidy and microdeletions that’s ever been done in the field of NIPT. And we think that study has a very significant opportunity to move the market and the rest of the way forward, if we’re not there by then. With respect to Aetna and United and others specifically, obviously, we’re doing everything we can to engage with them and move the business forward, but we really don’t know exactly what their plans are going to say. We expect them to track the society guidelines.

Thanks. And then lastly, I was wondering, also in terms of the delays you’ve seen in the last two weeks of March. Just wondering, specific to NIPT, how much it can be postponed due to the seven-week testing window for NIPT? And if you can talk about whether some of those patients could come back sooner rather than later, and any other dynamics we could see there?

Yes. I definitely think, there’s a period of time where everyone would sort of figure it out how they were going to manage that last couple of weeks in March. And we sort of see that as probably the worst period of time for disruption on the business. And I think, across every sector of our business, whether it’s the different products in prenatal or whether it’s transplant or oncology, we have seen the volume recover in a pretty meaningful way, since that low in the last two weeks of March. Now some of that is – practice is figuring out how they’re going to operate in this environment and then pushing the play button and restarting. Some of that is us going out and closing new customers or enrolling new customers in our mobile and remote solutions, and then some of it is catch up on patients. We haven’t seen – we’ve gone through and looked at gestational ages and things, and we haven’t seen a big bolus of catch-up patients come back in on the NIPT front. But I don’t think that they were pushed out significantly, such that there would be a very meaningful shift in the average gestational age anyway.

Great. That’s helpful. Thank you.

Our next question comes from the line of Max Masucci with Canaccord Genuity. Your line is open.

Hi, thanks for taking the questions. Are you seeing any evidence of share gains in NIPT, as certain larger competitors are sort of inundated with COVID-19 testing? And do you have any expectations there? I know, we’ve seen the large central labs report sharp volume declines for lab testing that’s not related to COVID-19?

Yes. Certainly, we’ve been in a very competitive environment for a long time. I mean, I think, as you all know, we were the fourth NIPT to market. We’re now the market leader. So a lot of our growth does come from volume gains or competitive wins. I think, many of the smaller, more targeted competitors are offering the same sort of mobile type capabilities that we’re offering. I’m not sure, necessarily, whether the big box laboratories are going after it in that same way. I’m sure, they will, if they’re not already. But we’re continuing to win on the quality of our product and the unique differentiators and our significant focus on user experience. The advantage for us, as we entered into this period was that, we already had all these remote services set up. So remote genetic counseling. We have chat bots, that can talk to the patient in various ways that we built in-house. We didn’t go out and acquire those capabilities. We just built them. We did more than 10,000 mobile draws in 2019. So as we saw that significant ramp in mobile accessibility being requested from our physicians, we were able to step in and service it without a lot of operational challenges.

Great. And then can you just maybe speak to any COVID-19 disruption you’re seeing with the major max, namely Noridian, and how that shaped your opinion about the timing of the finalization for Signatera colon? And then any new color you might have gotten recently around pricing, or are you still expecting to be pegged to an existing monitoring test on the market? Thanks.

Yes. So we’re in constant contact with the MolDx program. As we’ve mentioned, we’ve done pre-submissions on other products in the oncology space, which we’re very excited about, and we’re continuing to have those discussions about additional products. Certainly, I think, there’s a lot to focus on at this point. By the various max, there’s generally a timeline to which they need to issue the final coverage decision and we expect oncology to issue within that time line that’s been outlined. We don’t expect there to be any sort of significant disruption. And again, we continue to be in direct discussions with the key decision makers and we’re feeling very positive about not only the colorectal test, but also the discussions that we’re having about other products in oncology. On pricing, we don’t have any additional updates at this point. We expect that to occur after the final MolDx coverage decision goes in place.

Great Thanks for taking the questions.

Thank you. And our next question comes from the line of Alex Nowak with Craig-Hallum. Your line is open.

Great. Good afternoon, everyone. This is actually Will Fafinski on for Alex here. Thanks for taking the questions. First one for me, on transplants, you recently published the progress of the ProActive study, showing enrollment among sites. How is Prospera being used beyond the registry trial? Meaning doctors who weren’t enrolling for the registry study, how is the test adoption there?

Yes. So we haven’t announced volume numbers there, but we did talk about the penetration. I think, we said 45% of the top 50 transplant centers by volume and 37% of the top 100 transplant centers by volume have used the product during the Early Access Program. Some of those are engaged in ProActive. I mean, you can just kind of run the math and figure out which ones are ProActive or not, but there’s many that are outside of ProActive that are using the test. And we see really a handful of different types of accounts. I think, some have specific patient cohorts that they want to order donor-derived testing on. I think, some want to order it more routinely, as part of their patient care. But overall, we believe this is a very large market opportunity, that’s only about 5% penetrated today. Despite all of the – I think, competitive activity between us and others in the field, there’s an enormous amount of greenfield opportunity when you just run the numbers on the total number of patients that need to be monitored per year. So we feel excited about it. The early feedback that we’ve gotten from physicians really meets our expectations, both and what they’re looking for in a product. And second, in the capability to really penetrate and make this much larger than 5%.

Got it. I appreciate the color there. And then second one for me. Mike, Natera obviously followed the approach of other companies and suspended guidance at this time. But just with the temporary coverage of Aetna, the potential UNH, share gains during COVID, ability to keep some sales with remote monitoring and is the pipeline is still on track? Is it fair to say that you could still hit the original guidance range that you guys provided at the beginning of the year?

It’s certainly possible. But Steve touched on one of the key variables, which is new account starts. And historically, in diagnostics, you just need a sales rep to be in the office or in the center with the physician to get a new account started. And obviously, physicians are much more accommodating to remote startups now than they had been previously. But that’s just – it’s very hard for us to forecast. And so as we look at it right now, we think, it’s wise just to monitor that. And over the course of the summer, we would like to get to more data points, honestly, with this new environment and then come back to you in August.

Got it. Understood. That’s it for me. Thanks, guys, for taking the questions.

Thank you. I’m not showing any further questions.

Great. Well, thank you so much. We appreciate you joining. Take care.

Ladies and gentlemen, this does conclude the program. You may now disconnect.