This report contains forward-looking statements. The forward-looking statements are contained principally in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” but are also contained elsewhere in this report. Forward-looking statements include information concerning our future results of operations and financial position, strategy and plans, and our expectations for future operations. Forward-looking statements include all statements that are not historical facts and, in some cases, can be identified by terms such as "believe," "may," "will," "estimate," "continue," "anticipate," "design," "intend," "expect," "could," "plan," "potential," "predict," "seek," "should," "would" or the negative version of these words and similar expressions.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including those described in "Risk Factors" and elsewhere in this report. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our beliefs and assumptions only as of the date of this report. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. You should read this report completely and with the understanding that our actual future results may be materially different from what we expect.
These forward-looking statements include, but are not limited to, statements concerning the following:
| ● | our expectations regarding revenue, expenses and other operating results; |
| ● | our expectation that, for the foreseeable future, a significant portion of our revenues will be derived from sales of Panorama, Horizon, and Signatera; |
| ● | our ability to increase demand and reimbursement for our tests; |
| ● | our expectation that Panorama will be adopted for the screening of microdeletions and that third-party payer reimbursement will be available for this testing, including our expectations that the results from our single nucleotide polymorphism-based Microdeletion and Aneuploidy RegisTry, or SMART, Study may support broader use of and reimbursement for the use of Panorama for microdeletions; |
| ● | our expectations of the reliability, accuracy, and performance of our tests, as well as expectations of the benefits of our tests to patients, providers, and payers; |
| ● | our ability to successfully develop additional revenue opportunities, expand our product offerings to include new tests, and expand adoption of our current and future technologies through Constellation, our cloud-based distribution model; |
| ● | our efforts to successfully develop and commercialize, or enhance, our products; |
| ● | our ability to comply with federal, state, and foreign regulatory requirements, programs and policies, including potential legislation and a proposed rule from the FDA that would, if passed or adopted, would classify our tests as medical devices, and to successfully operate our business in response to changes in such requirements, programs and policies; |
| ● | our ability to respond to, defend, or otherwise favorably resolve litigation or other proceedings, including investigations, subpoenas, demands, disputes, requests for information, and other regulatory or administrative actions or proceedings; |
| ● | the effect of improvements in our cost of goods sold; |
| ● | our estimates of the total addressable markets for our current and potential product offerings; |
| ● | our ability and expectations regarding obtaining, maintaining and expanding third-party payer coverage of, and reimbursement for, our tests; |
| ● | the effect of changes in the way we account for our revenue; |
| ● | the scope of protection we establish and maintain for, and developments or disputes concerning, our intellectual property or other proprietary rights, including associated litigation costs we may incur and our assumptions regarding any potential liabilities associated with our existing litigation matters; |
| ● | our ability to successfully compete in the markets we serve; |
| ● | our reliance on collaborators such as medical institutions, contract laboratories, laboratory partners, and other third parties; |
| ● | our ability to operate our laboratory facilities and meet expected demand, and to successfully scale our operations; |
| ● | our reliance on a limited number of suppliers, including sole source suppliers, which may impact our ability to maintain a continued supply of laboratory instruments and materials and to run our tests; |
| ● | our expectations of the rate of adoption of our current or future tests by laboratories, clinics, clinicians, payers, and patients; |
| ● | our ability to complete clinical studies and publish compelling clinical data in peer-reviewed medical publications regarding our current and future tests, and the effect of such data or publications on professional society or practice guidelines or coverage and reimbursement determinations from third-party payers, including our SMART and CIRCULATE-Japan studies and our ongoing and planned trials in oncology and organ health; |
| ● | our reliance on our partners to market and offer our tests in the United States and in international markets; |
| ● | our expectations regarding acquisitions, dispositions and other strategic transactions; |
| ● | our expectations regarding the conversion of our outstanding 2.25% convertible senior notes due 2027, or the Convertible Notes, in the aggregate principal amount of $287.5 million and our ability to make debt service payments under the Convertible Notes if such Convertible Notes are not converted; |
| ● | our ability to control our operating expenses and fund our working capital requirements; |
| ● | the factors that may impact our financial results, including our revenue recognition assumptions and estimates; and |
| ● | anticipated trends and challenges in our business and the markets in which we operate. |
Any forward-looking statement made by us in this report speaks only as of the date on which it is made. Except as required by law, we disclaim any obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
The below is a summary of principal risks to our business and risks associated with ownership of our stock. This summary does not address all of the risks that we face. We encourage you to carefully review the full risk factors contained in this Annual Report on Form 10-K in their entirety for additional information regarding the material factors that make an investment in our securities speculative or risky. These risks and uncertainties include, but are not limited to, the following:
| ● | if we are unable to increase demand for our tests – in particular Panorama, Horizon, and Signatera, which together represent the significant majority of our revenues – obtain favorable coverage and reimbursement determinations from third-party payers, and expand geographically, our business will be harmed; |
| ● | Panorama may not be adopted for broader use for the screening of microdeletions, or third-party payer reimbursement may not be available for this testing; |
| ● | if we are not successful in our efforts to develop additional revenue opportunities and expand our product offerings to include new tests, including in oncology and organ health, our business and prospects, as well as our stock price, will be adversely affected; |
| ● | we have incurred net losses since our inception, and anticipate that we will continue to incur losses for the foreseeable future; |
| ● | we have incurred substantial indebtedness that may decrease our business flexibility, access to capital, and/or increase our borrowing costs, which may adversely affect our operations and financial results; |
| ● | our quarterly results may fluctuate from period to period, which could adversely impact the value of our common stock; |
| ● | competition in our industry is intense, and if we are unable to compete successfully with respect to our current or future products or services, we may be unable to increase or sustain our revenues or achieve profitability; |
| ● | our estimates of the total addressable markets for our current and potential product offerings may turn out to be inaccurate, or the markets for our tests may not grow as we expect; |
| ● | we may be unable to obtain, maintain or expand third-party payer coverage of, and reimbursement for, our tests; |
| ● | if we are not successful in our research and development or clinical development activities, including clinical trials and publication of compelling data, our ability to commercialize our products, and therefore our competitive position, will be adversely impacted; |
| ● | our strategic or commercial partnerships, such as our agreements with BGI Genomics Co., Ltd., Foundation Medicine, Inc., and our pharmaceutical partners, may not be successful, and we may be unable to enter into additional partnerships in the future; |
| ● | we operate in a crowded technology area in which there has been substantial litigation and other proceedings regarding patent and other intellectual property rights, and we may fail to adequately protect or enforce our intellectual property relating to our tests, or fail to defend against infringement claims brought against us by other parties, or our assumptions regarding the costs and potential liabilities associated with our existing litigation matters may be incorrect; |
| ● | we rely on a limited number of suppliers, including sole source suppliers, which may impact our ability to maintain a continued supply of laboratory instruments and materials and to run our tests; |
| ● | we have experienced rapid growth, particularly in recent years, and may be unable to successfully scale our operations, which could harm our business and results of operations; |
| ● | we may engage in acquisitions, dispositions or other strategic transactions that could disrupt our business, cause dilution to our stockholders or reduce our financial resources; |
| ● | third-party payers, such as commercial health insurers and government insurance programs, may decide not to reimburse our existing or future products, may set the amounts of any reimbursements at prices that do not allow us to cover our expenses or may otherwise adopt policies and procedures that restrict or harm our business; |
| ● | if the FDA were to begin actively regulating our tests as medical devices, we could incur substantial costs and delays associated with trying to obtain premarket clearances or approvals and incur costs associated with complying with post-market controls; and |
| ● | difficult macroeconomic conditions may have an adverse effect on our business. |
As used in this Annual Report on Form 10-K, the terms “Natera,” “Registrant,” “Company,” “we,” “us,” and “our” mean Natera, Inc. and its subsidiaries unless the context indicates otherwise.
