IPO Report: Natera (NTRA)

Francis Gaskins |

Natera IPO, Natera IPO date, Natera IPO  price, IPOs this week, stocks to buy now, small-cap stocksNatera (NTRA) is a rapidly growing diagnostics company with proprietary molecular and bioinformatics technology that NTRA is deploying to change the management of genetic disease worldwide. It is based in San Carlos, CA.

Three other companies are scheduled to IPO for the week of June 29. The full IPO calendar is available at IPO Premium.

SEC Documents

Manager, Joint-managers: Morgan Stanley, Cowen and Company, and Piper Jaffray

Co-managers: Baird and Wedbush Pacgrow

End of lockup (180 days): Tuesday, December 29, 2015

End of 25-day quiet period: Monday, July 27, 2015

NTRA scheduled a $100 million IPO with a market capitalization of $715 million at a price range midpoint of $16 for Thursday, July 2, 2015 on Nasdaq.   Priced at $18, not change in conclusion.

Natera (NTRA) IPO Summary

NTRA is a rapidly growing diagnostics company with proprietary molecular and bioinformatics technology that NTRA is deploying to change the management of genetic disease worldwide.

NTRA’s novel molecular assays reliably measure many informative regions across the genome from samples as small as a single cell.

Natera (NTRA) IPO Valuation

Glossary

Accumulated deficit (mm)

.

.

-$190

     

Per share dilution

.

.

-$12.64

     
             

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

Natera (NTRA)

$715

3.8

-17.9

4.8

4.8

14%

             

Natera (NTRA) IPO Conclusion

Neutral plus

Q1 rev +74%,

14 rev +189% vs '13

48% gross margin

Loss on rev of -21%

P/E of -18, indicating moderate cash burn relative to market cap

3.8 price to sales, 4.8 price to book

Natera (NTRA) Business

NTRA is a rapidly growing diagnostics company with proprietary molecular and bioinformatics technology that NTRA is deploying to change the management of genetic disease worldwide.

NTRA’s novel molecular assays reliably measure many informative regions across the genome from samples as small as a single cell.

NTRA’s statistical algorithms combine these measurements with data available from the broader scientific community to detect a wide range of serious conditions with best-in-class accuracy and coverage. NTRA’s technology has been proven clinically and commercially in the prenatal testing space.

Liquid biopsy space

NTRA believes this success can be translated into the liquid biopsy space, and NTRA is developing products for a number of oncology applications.

Global network

In addition to its direct sales force in the United States, which NTRA is continuing to expand, NTRA has a global network of over 70 laboratory and distribution partners, including many of the largest international laboratories.

NTRA is enabling even wider adoption of its technology by introducing a global cloud-based distribution model.

Products

NTRA has launched seven molecular diagnostic tests since 2009, and NTRA intends to launch new products in prenatal testing and oncology in the future.

In March 2013, NTRA launched Panorama, its non-invasive prenatal test, or NIPT.

55,000 tests in Q1

Over 55,000 Panorama tests were accessioned during the three months ended March 31, 2015. NTRA’s revenues have grown from $4.3 million in 2010 to $159.3 million in 2014. NTRA’s net losses decreased from $37.1 million for the year ended December 31, 2013 to $5.2 million for the year ended December 31, 2014.

Genetic inheritance is conveyed through a naturally occurring information storage system known as deoxyribonucleic acid, or DNA. DNA stores information in a linear sequence of the chemical bases adenine, cytosine, guanine and thymine, represented by the symbols A, C, G, and T.

Billions of bases of A, C, G, and T link together inside living cells to form the genome, which can be read like a code or a molecular blueprint for life.

While differences in the specific sequence and structure of this code drive biological diversity, certain variations can also cause disease.

Examples of genetic diversity include copy number variations, or CNVs, and single nucleotide variants, or SNVs.

A CNV is a genetic mutation in which relatively large regions of the genome have been deleted or duplicated, and an SNV is a mutation where a single base has changed.

When single base changes are common in the population, that position on the chromosome is called a single nucleotide polymorphism, or SNP.

When genetic variations are a cause of disease, such as Down syndrome or breast cancer, detecting them within the patient's tissue sample can enable diagnosis and treatment. NTRA’s goal is to develop and commercialize non- or minimally invasive tests for the highly reliable detection of variations covering a broad set of diseases.

Natera (NTRA) Intellectual Property

NTRA relies on a combination of patents, trade secrets, copyrights and trademarks, as well as contractual protections, to establish and protect its intellectual property rights.

As of June 15, 2015, NTRA had six issued U.S. patents, one issued Australian patent and two issued Chinese patents.

Natera (NTRA) Competition

NTRA competes with numerous companies that have developed and market NIPTs (non-invasive prenatal tests), including Sequenom, Inc., Illumina, Inc., through its Verinata division, Ariosa, Inc., which was recently acquired by F. Hoffman La-Roche Ltd, Laboratory Corporation of America Holdings, Counsyl, Inc., Beijing Genomics Institute, or BGI, and Berry Genomics Co., Ltd.

NTRA expects additional competition as other established and emerging companies enter the prenatal testing market, including through business combinations, and new tests and technologies are introduced. These competitors could have greater technological, financial, reputational and market access resources than us.

NTRA also competes against companies providing CS tests such as Laboratory Corporation of America Holdings, Counsyl, Inc, Good Start Genetics, Inc., Progenity, Recombine, and Quest. Each of these companies offers comprehensive carrier screening panels. Other laboratories offer CS testing for other diseases, particularly cystic fibrosis.

Natera (NTRA) 5% Shareholders Pre-IPO

Roelof F. Botha            20.2%  

James I. Healy              6.1%    

Matthew Rabinowitz       14.3%  

Entities affiliated with Sequoia Capital    20.2%  

Entities affiliated with Claremont Creek   19.3%  

Lightspeed Venture Partners VIII, LP       10.4%  

Entities affiliated with Sofinnova Ventures 6.1% 

Natera (NTRA) Dividends

No dividends are planned.

Natera (NTRA) IPO Use of Proceeds

NTRA expects to receive $89 million from its IPO and use it for the following:

$29.3 million of the net proceeds received by us from this offering for working capital and general corporate purposes and approximately $60.0 million for continued investments in research and development for its core technology and development of its product offerings. In addition, NTRA may use a portion of the net proceeds received by NTRA from this offering for acquisitions of complementary businesses, technologies or other assets.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
NTRA Natera Inc. 11.72 0.12 1.03 157,448

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