Prenatal Testing by Natera
Non-invasive Prenatal Testing (NIPT) is a blood test used to screen pregnant women for chromosome problems, as early as 9 weeks in pregnancy. MaterniT21 was the first NIPT made available in 2011 by Sequenom (NASDAQ:SQNM) and since then has been the market leader with more than 60% market share according to the company. In a report published this year by Transparency Market Research, the global NIPT market was valued at 0.22 billion in 2012 and is expected to grow at a CAGR of 37.6% from 2013 to 2019, to reach an estimated value of USD 3.62 billion in 2019. Another company with strong financial backing which is targeting this growing market is Natera.
Founded in 2004, Silicon Valley-based Natera has taken in over $74 million in funding so far from OrbiMed Advisors, Harmony Partners, Claremont Creek Ventures, Lightspeed Venture Partners, Founders Fund, and Sequoia Capital. The last round of funding totaling over $50 million was closed in May of last year. In addition to NIPT, the company also offers miscarriage testing and paternity testing.
In early 2013, the company launched their NIPT offering, Panorama™, which the company claims is the only NIPT to consistently demonstrate high sensitivity and specificity for all major aneuploidies beyond Down syndrome. The test can be performed at 9 weeks and according to an article by Xconomy last year, costs $1,495. Natera provides a handy comparison tool which presents 13 attributes of their test to be compared to 5 competitive tests:
Natera recently initiated a partnership with ProPath for the distribution of Panorama in the United States. According to the US Department of Labor, there were were 20,800 Obstetricians and Gynecologists in the US as of 2012 which means there are quite a few decision makers for Natera to influence. No doubt many of these doctors will be using competing NIPT offerings and Natera will need to convince them of their test’s superiority.
There is plenty of competition in this space that the investors of Natera have no doubt taken into consideration, and yet still chose to participate in Natera’s latest funding round to the tune of $50 million. The CTO of Sequenom estimated that his company would process between 150,000 and 200,000 tests in 2013 alone. At Natera’s price point, this would equate to potential revenues of $224 to $299 million. It remains to be seen just how successful Natera will be in stealing market share and investors in Sequenom (NASDAQ:SQNM) should watch the Company’s progress closely.