Latest / Vanguards of Healthcare by Bloomberg Intelligence / Natera’s Billion-Dollar R&D Bet on the Future of Cancer Testing

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Natera’s Billion-Dollar R&D Bet on the Future of Cancer Testing · Vanguards of Healthcare by Bloomberg Intelligence

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  Speaker 1: Welcome to another episode of Bloomberg Intelligence's Vanguards of Healthcare podcast,
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  Speaker 1: where we speak with the leaders at the forefront of
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  Speaker 1: change in the healthcare industry. My name is Jonathan Palmer,
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  Speaker 1: and I'm a healthcare analyst at Bloomberg Intelligence, the in-house
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  Speaker 1: research arm of Bloomberg. We're very happy to welcome Steve Chapman,
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  Speaker 1: CEO of Netera, to the podcast today. Steve has spent
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  Speaker 1: more than 15 years at Natera and has led the
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  Speaker 1: company as CEO since 2019, after previously serving in a
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  Speaker 1: number of operating roles, including chief operating officer. Prior to
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  Speaker 1: joining Natera, he worked at Genzyme Genetics and began his
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  Speaker 1: career as a researcher at UCLA. Steve, thanks for joining
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  Speaker 1: us today.
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  Speaker 2: Thanks for having me.
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  Speaker 1: For those of us who maybe are those in the
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  Speaker 1: audience who don't know Natera that well, how would you
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  Speaker 1: describe the company today and the common thread between, I guess,
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  Speaker 1: your different businesses?
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  Speaker 2: The mission of NITERA is to change the way disease
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  Speaker 2: is managed worldwide. And we do that through a proprietary
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  Speaker 2: technology that can detect extremely tiny quantities of DNA. And
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  Speaker 2: we've implemented that across women's health, where we can detect
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  Speaker 2: disease very early during pregnancy. And then we took that
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  Speaker 2: same technology and applied it to organ health, where we
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  Speaker 2: can detect organ rejection non-invasively. And then oncology, which I
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  Speaker 2: think is our largest growth area, where we can look
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  Speaker 2: for tiny fragments of circulating tumor DNA and detect disease
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  Speaker 2: recurrence before it can be seen on scan.
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  Speaker 1: That's a great synopsis. And I don't want to make
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  Speaker 1: this into a finance discussion, but we are inside Bloomberg,
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  Speaker 1: and I feel like our listeners need a little bit
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  Speaker 1: of context. I mean, you've got it to $ 2. 9 billion
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  Speaker 1: of revenue this year. That's up more than 20%. You're
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  Speaker 1: processing over, I think, a million tests per quarter with
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  Speaker 1: about 300,000 of those being oncology, which is also growing
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  Speaker 1: north of 50%. I think all this to say is
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  Speaker 1: that you're really at an amazing point in the growth curve.
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  Speaker 1: But before we talk about maybe where you are today,
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  Speaker 1: I'd like to rewind a little bit back to your
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  Speaker 1: early days. And I mentioned that you were at Genzyme Genetics.
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  Speaker 1: What brought you to Natera? What did you see that
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  Speaker 1: was early there?
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  Speaker 2: Yeah, so... I started off actually at UCLA working in
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  Speaker 2: the Department of Human Genetics, and I was considering doing
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  Speaker 2: my PhD program. And then I got encouraged to look
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  Speaker 2: into biotech and diagnostics. And then I joined GenZone Genetics,
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  Speaker 2: had a great run there, learned a lot. But I
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  Speaker 2: kind of felt like it was time to move on
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  Speaker 2: to something more earlier stage and something with more exciting technology.
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  Speaker 2: And got contacted by the founder of Natera. They were
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  Speaker 2: looking for someone to come on to lead commercial side
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  Speaker 2: of the organization at the time. And it was a
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  Speaker 2: small company. I think it was about maybe the 10th
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  Speaker 2: or 15th person there, something in that range. And had
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  Speaker 2: the opportunity to come in where it felt like I
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  Speaker 2: could really make an impact on the trajectory of the company.
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  Speaker 2: But also a company that was going to be investing
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  Speaker 2: in technology and investing in the future. And I could
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  Speaker 2: see that what they had built had the potential to
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  Speaker 2: really expand and become a platform technology. And so I
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  Speaker 2: wanted to be part of that and wanted to help
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  Speaker 2: lead the organization and build the company.
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  Speaker 1: You know, if I think back to that time, you know,
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  Speaker 1: I think Sequinome was the first to launch in that
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  Speaker 1: space and you guys shortly thereafter. What were some of
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  Speaker 1: the commercial hurdles in those early days? And when you
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  Speaker 1: say you were the head of commercial, was it just
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  Speaker 1: you or was there actually a sales team at that time?
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  Speaker 2: Well, I think my official title was vice president, but
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  Speaker 2: I think I probably had about three people reporting to
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  Speaker 2: me in the very early days. But when you're bringing
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  Speaker 2: a new diagnostic test to market, there's a series of
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  Speaker 2: steps that you have to go through, you know, designing
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  Speaker 2: the technology, doing the clinical validation work, and then launching
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  Speaker 2: the test, getting reimbursement for the product, and so on
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  Speaker 2: and so forth. So as we kind of moved through
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  Speaker 2: each of those steps, we started to get more and
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  Speaker 2: more encouraged about the potential of the technology. But one
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  Speaker 2: of the challenges in the early days, I think, was
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  Speaker 2: gaining reimbursement because You can build a test and then
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  Speaker 2: if the insurance companies don't pay for it or the
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  Speaker 2: societies don't support it, you're just kind of running a
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  Speaker 2: lot of tests that are unreimbursed and that's not really sustainable.
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  Speaker 2: So we put a lot of energy into clinical validation data,
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  Speaker 2: doing the right types of studies so that we can
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  Speaker 2: go to the insurance companies and get coverage. For a
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  Speaker 2: long period of time, the test was only covered in
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  Speaker 2: what was deemed like high-risk pregnancy, which is women over
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  Speaker 2: the age of 35 traditionally. And so if someone under
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  Speaker 2: the age of 35 wanted the test, it wasn't covered
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  Speaker 2: by insurance. And that was a struggle in the very
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  Speaker 2: early days, but we were able to overcome that. I
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  Speaker 2: think finally in 2020, seven years after we launched, the
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  Speaker 2: societies recommended it for all comers. And, you know, we
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  Speaker 2: were able to go around and meet with the insurance companies. But,
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  Speaker 2: you know, that seven-year period just shows you, you know,
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  Speaker 2: how difficult it can be to, you know, ultimately get
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  Speaker 2: coverage in a broad indication in diagnostics.
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  Speaker 1: Well, I'm sure there's a ton of learnings from there
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  Speaker 1: into your current portfolio. You know, when did you see
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  Speaker 1: maybe early in those early days that, you know, made
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  Speaker 1: you think that the technology could extend beyond women's health
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  Speaker 1: into organ transplant and oncology? Yeah.
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  Speaker 2: So when we launched in women's health, there were three
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  Speaker 2: other companies that were already in the market. And we
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  Speaker 2: were the fourth to come in. And we were about
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  Speaker 2: a year or year and a half behind everybody else.
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  Speaker 2: But based on the strength of the technology and the
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  Speaker 2: team that we brought in, we very quickly became the
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  Speaker 2: market leader. And today we have approximately like 50% market
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  Speaker 2: share in that space. So we felt like we had
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  Speaker 2: something really unique that I think it was able to
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  Speaker 2: perform at an exceptional level for the tasks that we
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  Speaker 2: asked it to do. So we started looking at where
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  Speaker 2: else we could apply this technology. And one area was
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  Speaker 2: organ health. Another area was cancer. And those were sort
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  Speaker 2: of two areas that we started looking at. And probably
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  Speaker 2: around 2014, 2015, we went in on cancer. And we said, okay,
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  Speaker 2: we're going to develop a liquid biopsy test We have
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  Speaker 2: this technology that can detect copy number variants better than
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  Speaker 2: anybody else. And we need to find some markets that
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  Speaker 2: we can go into. So we hired a consultant and
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  Speaker 2: we had them come in. They put together this huge
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  Speaker 2: project and they said, you've got to go into two areas.
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  Speaker 2: One is helping patients that have had a transvaginal ultrasound
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  Speaker 2: and been positive, potentially at risk for ovarian cancer. There's
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  Speaker 2: a lot of false positives there. So you're going to
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  Speaker 2: help them determine whether they actually have cancer or not.
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  Speaker 2: And then the other was lung cancer patients that have
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  Speaker 2: lung nodules. There's a lot of false positives. So help
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  Speaker 2: them determine whether they actually have lung cancer. So we
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  Speaker 2: started working on that. But then we had a side project.
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  Speaker 2: And the side project was to make a personalized monitoring
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  Speaker 2: test that could tell you whether the cancer was present
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  Speaker 2: or absent. And what we would do there is we
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  Speaker 2: would sequence the entire tumor of the patient. And we
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  Speaker 2: would identify a particular variance that were known to be
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  Speaker 2: clonal variants or present in every cancer cell. We would
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  Speaker 2: make a multiplex PCR assay that was just for that patient.
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  Speaker 2: And then we would run that test in the patient's plasma.
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  Speaker 2: And it was really a side project. And we started
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  Speaker 2: working on that. We got some of the results back.
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  Speaker 2: And then we got the results back in the ovarian
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  Speaker 2: and lung. And, well, ovarian and lung monitoring looked good.
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  Speaker 2: the personalized test results were just absolutely amazing. And so
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  Speaker 2: at that point, we said, okay, we're going to scrap
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  Speaker 2: these other projects and we're going all in on this
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  Speaker 2: idea of personalized cancer monitoring. And at the time, nobody
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  Speaker 2: was doing that.
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  Speaker 1: So maybe talk about the pathway from that point. You
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  Speaker 1: make the decision to go all in. What has to
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  Speaker 1: happen from I don't know, the lab perspective, the commercial arm,
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  Speaker 1: the regulatory arm. Can you talk about the progress you've
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  Speaker 1: made to build this platform that you have today in oncology?
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  Speaker 2: Yeah, so the first thing that we did, actually sort
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  Speaker 2: of building on the learnings from women's health, where it
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  Speaker 2: took us seven years to get coverage, as we mentioned,
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  Speaker 2: the first thing that we did was say, we've got
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  Speaker 2: to generate a lot of data. Clinical data is the
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  Speaker 2: key to being successful in diagnostics. And so we hired
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  Speaker 2: a team of scientists and physicians to go meet with
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  Speaker 2: academic centers, meet with doctors around the world and identify
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  Speaker 2: large clinical trials that had been run and large biobanks
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  Speaker 2: that were available that we could use to validate the test.
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  Speaker 2: And also we started prospective studies with large academic centers
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  Speaker 2: collecting new samples. So that was happening. I think we...
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  Speaker 2: We launched, you know, even before the product was available,
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  Speaker 2: maybe 40 or 50 of these clinical trials or studies
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  Speaker 2: that were underway where we had samples coming in. So
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  Speaker 2: that was happening at the same time. the research and
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  Speaker 2: development team was sort of finishing the CLIA protocol because
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  Speaker 2: we have to get the test CLIA validated, get it ready.
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  Speaker 2: And we were building the capacity within the lab to
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  Speaker 2: do the sequencing to get the personalized primers in place.
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  Speaker 2: So all that kind of came together and we ran
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  Speaker 2: the clinical validation and And then we launched, we generated
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  Speaker 2: the first publication, which was in lung cancer, followed by
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  Speaker 2: colorectal cancer. And there was a lot of excitement. But
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  Speaker 2: the question was, was Medicare going to cover it? And
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  Speaker 2: the data looked really good. Most people at that time
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  Speaker 2: didn't understand what you would do with the result, which said, hey,
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  Speaker 2: you still have cancer in your bloodstream. There was a
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  Speaker 2: lot of questions from both pharma and physicians on what
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  Speaker 2: you're going to do with it. But the data looked
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  Speaker 2: really incredible. And we had a study in colorectal we
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  Speaker 2: took to Medicare. We got coverage. And then based off that,
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  Speaker 2: we launched into the marketplace and started selling to physicians.
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  Speaker 1: That's a great synopsis. You know, maybe dive into a
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  Speaker 1: little bit just the world of coverage. I think you
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  Speaker 1: and I are pretty well aware of how fragmented it
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  Speaker 1: is across the different payers. Can you talk about it
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  Speaker 1: from the government perspective and then the commercial perspective, what
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  Speaker 1: you need to do to get coverage?
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  Speaker 2: Right. So to get a test covered by Medicare, you
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  Speaker 2: have to have what they call a local coverage decision
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  Speaker 2: in place. And most people work with this local MAC
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  Speaker 2: or through a group called MoldyX, which works with a
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  Speaker 2: handful of different MACs to administer coverage. And if there's
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  Speaker 2: a local coverage decision in place, then you can submit
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  Speaker 2: under that to get coverage. And so we were able
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  Speaker 2: to get a coverage decision in place for MRD testing
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  Speaker 2: and then submit underneath that. But in order to submit,
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  Speaker 2: you have to have an analytical validation, which shows the
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  Speaker 2: performance specs, so like limit of detection, sensitivity, specificity, and
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  Speaker 2: all these different dilution levels. And then you have to
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  Speaker 2: have a clinical validation that is done in the actual
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  Speaker 2: patient cohort that you intend to get coverage for for
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  Speaker 2: your intended use. So unless you have those things, you
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  Speaker 2: can't even submit. You know, I think that's been one
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  Speaker 2: of the advantages of Natera is we generate a lot
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  Speaker 2: of clinical data, and that's allowed us to get coverage
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  Speaker 2: in a lot of these different areas. But the first
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  Speaker 2: place we got coverage was in colorectal cancer. This was
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  Speaker 2: for stage 2 and 3 patients.
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  Speaker 1: Mm-hmm.
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  Speaker 2: Post-surgery in the adjuvant setting to make a decision about
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  Speaker 2: whether they were, you know, at risk of recurrence and
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  Speaker 2: the doctor wanted to give chemotherapy or not. And then
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  Speaker 2: for surveillance, which is sort of recurrence monitoring for those
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  Speaker 2: patients to try to determine whether the cancer was going
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  Speaker 2: to come back. Since then, we've submitted, I think about,
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  Speaker 2: you know, 15 plus different histologies for coverage. And I
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  Speaker 2: think we've received coverage across eight different histologies so far.
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  Speaker 2: And we're waiting for the remainder to come in over
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  Speaker 2: the next 12 months or so.
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  Speaker 1: How do you think about which area to move to
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  Speaker 1: or histology to move to next? What goes into that framework?
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  Speaker 2: So what's unique about Natera's test is that it works
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  Speaker 2: the same way across histologies. So with Signatera, we don't
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  Speaker 2: have to go back and redesign the assay on a
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  Speaker 2: histology by histology basis. So we're not looking at like
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  Speaker 2: a different workflow. depending on which histology you are. So
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  Speaker 2: it's the same personalized test, the same workflow, regardless of
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  Speaker 2: the histology. So that's actually been very valuable because that's
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  Speaker 2: allowed us to focus on the clinical development and the
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  Speaker 2: clinical data and evidence generation rather than redesigning the test
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  Speaker 2: constantly for each histology. So where we started off in
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  Speaker 2: colorectal and breast and bladder and with immunotherapy monitoring, we
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  Speaker 2: then rapidly expanded really to every histology. And today, we've
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  Speaker 2: launched clinical trials across 20-plus different indications. We generated evidence
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  Speaker 2: across all the major indications, pancreatic, renal, gastroesophageal, ovarian, uterine, melanoma, lymphoma, lung,
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  Speaker 2: et cetera. And largely, we're seeing the tests being used
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  Speaker 2: to detect cancer recurrence or to determine whether the cancer
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  Speaker 2: is still present across those different indications.
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  Speaker 1: So we touched on the government side of reimbursement. Can
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  Speaker 1: you touch upon the commercial side as well?
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  Speaker 2: Yeah. So commercial side, there's, you know, I think various
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  Speaker 2: different approaches. So you have the Medicare Advantage book that's
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  Speaker 2: managed under the commercial structure. Now, they are required to
• 14:55
  Speaker 2: follow Medicare guidelines and coverage. And then you have actual
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  Speaker 2: commercial coverage that's independent from the Medicare Advantage book. And there, usually,
• 15:06
  Speaker 2: typically in diagnostics, you have to have society guidelines in
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  Speaker 2: place in order to get coverage from the commercial plans,
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  Speaker 2: or you have to have a very strong set of
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  Speaker 2: evidence that sort of overrides the guidelines. And that's why
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  Speaker 2: we work so hard on the clinical data because because
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  Speaker 2: we want to get society guidelines in place so we
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  Speaker 2: can get commercial coverage. And generally, we've been very successful.
• 15:33
  Speaker 2: So on women's health, our products are, for the most part,
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  Speaker 2: covered by the American Congress of Obstetrics and Gynecology or
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  Speaker 2: the ACNG. There's some that aren't, but I would say
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  Speaker 2: the majority of them are. On organ health, you know,
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  Speaker 2: we get coverage from the major transplant and nephrology societies.
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  Speaker 2: They've been very supportive of what we're doing. And then
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  Speaker 2: in oncology, you know, the big society is, you know,
• 16:02
  Speaker 2: NCCN guidelines. And it's actually amazing. We, this year, got
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  Speaker 2: FDA approval for Signatera. We got into the NCCN guidelines
• 16:13
  Speaker 2: for bladder, muscle invasive bladder. And, you know, now we
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  Speaker 2: have muscle invasive bladder, Merkel cell, and DLBCL covered by
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  Speaker 2: NCCN guideline, which I think is really great progress given
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  Speaker 2: where we are in the launch.
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  Speaker 1: Is that less than or more than seven years relative
• 16:33
  Speaker 1: to the women's health?
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  Speaker 2: Well, it's probably about that. I mean, you know, if
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  Speaker 2: you think, you know, I think it's been maybe six years,
• 16:41
  Speaker 2: six or seven years since we launched. But, you know,
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  Speaker 2: I think... The studies that we have in place right
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  Speaker 2: now are very significant perspective studies that are, you know,
• 16:55
  Speaker 2: have the ability to be guideline enabling and guideline changing. And,
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  Speaker 2: you know, I think that's exciting as these start to
• 17:03
  Speaker 2: read out.
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  Speaker 1: Well, speaking of that, when are some of the nearer
• 17:06
  Speaker 1: term readouts, you know, that are coming up and which
• 17:09
  Speaker 1: indications are they in?
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  Speaker 2: Yeah, so one of the biggest readouts that we've had
• 17:13
  Speaker 2: So far is the circulate study. And this was in
• 17:17
  Speaker 2: stage two or three colorectal cancer, where the question was,
• 17:22
  Speaker 2: if you have colorectal cancer after surgery with curative intent,
• 17:27
  Speaker 2: is there any residual disease left in your body? And
• 17:30
  Speaker 2: if there is, do you benefit from getting adjuvant chemotherapy
• 17:35
  Speaker 2: or not? And if there's no residual disease left, do
• 17:39
  Speaker 2: you benefit from getting adjuvant chemotherapy or not? And what
• 17:42
  Speaker 2: we were able to show in the study is that
• 17:44
  Speaker 2: patients that have residual disease left or they're MRD positive,
• 17:48
  Speaker 2: they benefit from adjuvant chemotherapy, whereas patients that don't have
• 17:52
  Speaker 2: any residual disease, they don't derive any benefit from adjuvant chemotherapy.
• 17:57
  Speaker 2: So that solves, you know, one of the big challenges
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  Speaker 2: for these patients is should you give chemotherapy or not?
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  Speaker 2: And it's a struggle that, you know, the physicians, you know,
• 18:07
  Speaker 2: tend to you know, kind of use all the evidence
• 18:10
  Speaker 2: that they have available to determine whether the patient's going
• 18:13
  Speaker 2: to benefit or not from getting adjuvant chemo because there's
• 18:16
  Speaker 2: side effects. And, you know, some patients that need it
• 18:19
  Speaker 2: don't get it. And unfortunately, they, you know, they recur.
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  Speaker 2: You know, some patients that don't need it get it
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  Speaker 2: and receive the side effects. So the idea was if
• 18:28
  Speaker 2: we could help doctors with more information about who may
• 18:31
  Speaker 2: benefit and who may not, that can help them make
• 18:35
  Speaker 2: better clinical decisions. So that was exciting. The Invigor 011
• 18:39
  Speaker 2: study was another one that just came out. That was
• 18:43
  Speaker 2: in partnership with Genentech looking at whether their drug atezolizumab
• 18:49
  Speaker 2: would benefit patients in muscle-invasive bladder cancer. And what it
• 18:54
  Speaker 2: showed is that if you're MRD positive or you're positive
• 18:56
  Speaker 2: with signatera, you have a very significant overall survival benefit
• 19:01
  Speaker 2: by getting treated with atezolizumab versus not. And that was
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  Speaker 2: really the main study that got us the FDA approval
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  Speaker 2: and I think has gotten the NCCN guidelines in face
• 19:13
  Speaker 2: and bladder. As we look to the future, there's several
• 19:17
  Speaker 2: exciting studies coming in head and neck cancer, in gastroesophageal cancer.
• 19:25
  Speaker 2: There's a big colorectal readout coming in 2027 called the
• 19:29
  Speaker 2: VEGA study, which we think is very exciting. And then,
• 19:35
  Speaker 2: of course, we've got readouts in lung and breast that
• 19:39
  Speaker 2: should be happening, I think, in this year and into
• 19:42
  Speaker 2: next year, and then many in lymphoma as well.
• 19:46
  Speaker 1: So as I think about, you know, getting included in GlideLines,
• 19:49
  Speaker 1: I think that's obvious that that helps the physicians make
• 19:51
  Speaker 1: the treatment choice. You know, a couple years ago, how
• 19:54
  Speaker 1: were you informing physicians on, you know, or oncologists that,
• 19:57
  Speaker 1: you know, you can really improve outcomes by using these tests?
• 20:00
  Speaker 1: And I'll tell you a quick story, and she won't
• 20:02
  Speaker 1: mind me sharing, but my mother-in-law had stage two colorectal cancer,
• 20:07
  Speaker 1: and I recommended that she ask her doctor about signatera.
• 20:10
  Speaker 1: And his response was, well, that's interesting, but I'm not
• 20:13
  Speaker 1: sure what to do if I don't see it on imaging.
• 20:15
  Speaker 1: If it's positive and I don't see anything on imaging.
• 20:17
  Speaker 2: Right. So can you just talk about.
• 20:19
  Speaker 1: How you've maybe trained or educated physicians over the last
• 20:24
  Speaker 1: couple of years on the power of the technology?
• 20:27
  Speaker 2: Yeah, that's a great question. And, you know, honestly, that
• 20:30
  Speaker 2: really was the question that we were getting a lot,
• 20:33
  Speaker 2: I would say, a couple of years ago. And, you know, today...
• 20:38
  Speaker 2: because of the amount of data that's been generated, I
• 20:41
  Speaker 2: think the question has shifted to how do we implement
• 20:46
  Speaker 2: this in our practice in a streamlined way? You know,
• 20:49
  Speaker 2: how do we put a pathway in place? How do
• 20:51
  Speaker 2: we get it into the EMR? You know, which indications
• 20:54
  Speaker 2: should we use it? You know, rather than, well, what
• 20:56
  Speaker 2: do I do with the result? And the reason why
• 21:00
  Speaker 2: that has changed, I think, is is because of the
• 21:03
  Speaker 2: evidence that's been generated. So we've now had multiple readouts
• 21:07
  Speaker 2: that have showed changes in disease-free survival or changes in
• 21:12
  Speaker 2: overall survival by taking some action on the patients that
• 21:15
  Speaker 2: are MRD positive. And the physicians really look at the
• 21:19
  Speaker 2: peer-reviewed evidence in order to make decisions. One of the
• 21:23
  Speaker 2: things that was interesting, like in this case, like in colorectal,
• 21:27
  Speaker 2: if you're MRD positive, what do you do? Let's say
• 21:31
  Speaker 2: you've you've done your adjuvant chemotherapy and you're MRD positive,
• 21:36
  Speaker 2: what do you do? Or if you're in surveillance and
• 21:38
  Speaker 2: you're MRD positive, what do you do? So there was
• 21:41
  Speaker 2: a study, I think it was from MD Anderson, that
• 21:45
  Speaker 2: showed that if you're surveilling a patient, let's say they're
• 21:48
  Speaker 2: two years out or three years out and they become
• 21:51
  Speaker 2: MRD positive and you don't see anything on traditional scan,
• 21:55
  Speaker 2: so there's no drug available, you can't give the patient anything,
• 21:58
  Speaker 2: you just have to wait. Well, they went and did
• 22:00
  Speaker 2: a deeper imaging. And in a lot of those cases,
• 22:04
  Speaker 2: they were actually able to find something. So in about 50%
• 22:07
  Speaker 2: of the cases where they went and did like a,
• 22:10
  Speaker 2: you know, a second click down in imaging, they were
• 22:13
  Speaker 2: able to actually find a recurrence. And so it wasn't
• 22:16
  Speaker 2: just that, you know, there was nothing that could be done.
• 22:19
  Speaker 2: It was that it was sort of a flag to
• 22:21
  Speaker 2: them to take a deeper look. And, you know, for
• 22:24
  Speaker 2: a good chunk of those patients, they were able to
• 22:26
  Speaker 2: then proceed with some type of treatment for that patient.
• 22:30
  Speaker 1: That's amazing.
• 22:30
  Speaker 2: But what's really cool on this is where we're going
• 22:34
  Speaker 2: in the future. And there's a new concept in pharma,
• 22:40
  Speaker 2: which is called treatment on molecular recurrence. And the idea
• 22:44
  Speaker 2: is that if somebody's MRD positive, and so they have
• 22:48
  Speaker 2: a tiny fragment of circulating tumor DNA in their bloodstream,
• 22:53
  Speaker 2: that's when you want to treat the patient. You want
• 22:55
  Speaker 2: to administer the drug and knock that out at the
• 22:58
  Speaker 2: very early stages rather than waiting for it to clinically recur.
• 23:03
  Speaker 2: So the question that it would have told your mother-in-law is, well,
• 23:05
  Speaker 2: what do I do if I'm MRD positive? The answer
• 23:07
  Speaker 2: would have been, we're going to treat you right then
• 23:09
  Speaker 2: and we're going to knock that cancer out versus, hey,
• 23:13
  Speaker 2: let's wait until it's spread around your body and we
• 23:15
  Speaker 2: can see it on imaging. We're going to take it
• 23:17
  Speaker 2: on at the very early stages. And so this, this
• 23:21
  Speaker 2: trend It's just getting started. I think it's going to
• 23:24
  Speaker 2: be one of the biggest trends over the next five
• 23:26
  Speaker 2: to 10 years in pharma. We just launched a trial
• 23:30
  Speaker 2: with Exalexis, which is called the Stella 316 study. And
• 23:35
  Speaker 2: this is their drug Zanza. And it's doing this exact thing.
• 23:40
  Speaker 2: It's saying stage two colorectal. I think stage two and three.
• 23:45
  Speaker 2: I have to go back and just be clear. But
• 23:49
  Speaker 2: MRD positive. After adjuvant treatment, nothing on the scan. They're
• 23:56
  Speaker 2: randomizing those patients in a phase three study and treating
• 23:59
  Speaker 2: them with this new drug. Amazing. So exactly what, you know,
• 24:03
  Speaker 2: exact situation your mother-in-law was facing.
• 24:06
  Speaker 1: Well, the good news for my mother-in-law is all her
• 24:08
  Speaker 1: signatera tests have been negative.
• 24:09
  Speaker 2: Good.
• 24:10
  Speaker 1: So thank you. Thank you for running those on her behalf.
• 24:13
  Speaker 1: You know, as we think about the paradigm going forward, then,
• 24:16
  Speaker 1: does that mean that most people Well, does that mean
• 24:20
  Speaker 1: Signatera will become a companion diagnostic for most of these
• 24:23
  Speaker 1: drugs going forward?
• 24:25
  Speaker 2: Yeah, so I think that's certainly possible, either like companion
• 24:29
  Speaker 2: diagnostic or complementary diagnostic. You know, as these phase three
• 24:34
  Speaker 2: studies read out, you know, we're kind of in partnership
• 24:38
  Speaker 2: with the pharma company, you know, working with the FDA.
• 24:41
  Speaker 2: And we've already gotten Signatera FDA approved now. Right. But,
• 24:45
  Speaker 2: you know, so now it can be used in all
• 24:47
  Speaker 2: of these different pharma studies. in that way. But certainly,
• 24:52
  Speaker 2: Signatera is going to be right in the middle of
• 24:56
  Speaker 2: the patient's treatment, decision-making, and the ability to administer these drugs.
• 25:01
  Speaker 2: So the trial that is described is one of probably
• 25:04
  Speaker 2: five that have just kicked off across different histologies. And
• 25:08
  Speaker 2: I think if you look five years from now, there's
• 25:11
  Speaker 2: going to be 100 of these. And it makes a
• 25:14
  Speaker 2: lot of sense that if you can administer the drug earlier,
• 25:18
  Speaker 2: before the cancer has become strong and spread around the
• 25:20
  Speaker 2: patient's body in different ways, that you have a better
• 25:24
  Speaker 2: shot at knocking the cancer out.
• 25:26
  Speaker 1: That makes all the sense of the world to me.
• 25:28
  Speaker 1: Maybe thinking about it a bit further, and I don't
• 25:29
  Speaker 1: know where you're going to come out on this, but
• 25:31
  Speaker 1: is there any use case that maybe looks to you
• 25:33
  Speaker 1: like it's ahead of the evidence at this point? You know,
• 25:36
  Speaker 1: are we seeing, and this doesn't necessarily mean signatera per se,
• 25:40
  Speaker 1: but in the world of MRD, are we getting ahead
• 25:43
  Speaker 1: of our skis in any areas?
• 25:45
  Speaker 2: Well, one of the things that we've tried to do
• 25:48
  Speaker 2: is to allow doctors to use the test in ways
• 25:52
  Speaker 2: that they think are relevant for their patient population. And so,
• 25:59
  Speaker 2: you know, that doesn't always match up with kind of,
• 26:02
  Speaker 2: you know, what we thought would be the areas that
• 26:04
  Speaker 2: they were interested in. But what's exciting about that, though,
• 26:09
  Speaker 2: is it usually opens our eyes to use cases where
• 26:16
  Speaker 2: You know, we may not have been investing heavily enough into,
• 26:19
  Speaker 2: you know, into evidence generation. And that allows us to
• 26:23
  Speaker 2: then maybe kick off a clinical trial in that setting. Right.
• 26:26
  Speaker 2: So we are spending this year almost a billion dollars
• 26:33
  Speaker 2: on R & D. And a lot of that is
• 26:35
  Speaker 2: on clinical trials. So, you know, we've we've sponsored our
• 26:40
  Speaker 2: own studies where, you know, traditionally we You know, diagnostic companies,
• 26:46
  Speaker 2: R & D budgets and study budgets are very small.
• 26:49
  Speaker 2: You know, we're now sponsoring our own clinical trials because
• 26:52
  Speaker 2: we think generating the evidence is so important. And we
• 26:57
  Speaker 2: think it really is the path to, you know, bringing
• 27:00
  Speaker 2: the test to more patients that we want to have
• 27:04
  Speaker 2: a definitive study in every major histology. And we're funding that.
• 27:10
  Speaker 1: Maybe from an order of magnitude perspective, you know, where
• 27:12
  Speaker 1: does that put you against others in the marketplace from
• 27:16
  Speaker 1: a spending perspective?
• 27:18
  Speaker 2: Yeah, I think, you know, we've kind of taken a
• 27:20
  Speaker 2: look at sort of where others are. And, you know,
• 27:22
  Speaker 2: I think they're, you know, first, you know, I guess
• 27:26
  Speaker 2: it's not something to really celebrate that you're spending a
• 27:28
  Speaker 2: lot of money, but I do think that we're making
• 27:31
  Speaker 2: very smart decisions and we're investing into the future of
• 27:35
  Speaker 2: the company. And from that standpoint, it's exciting that we
• 27:39
  Speaker 2: have all of these investments in front of us that
• 27:42
  Speaker 2: make sense. And so each one of these is thought
• 27:45
  Speaker 2: out very carefully. We look at whether the likelihood of success,
• 27:50
  Speaker 2: the return on the investment, whether advancing the technology or
• 27:55
  Speaker 2: advancing that indication is going to make sense. And so
• 27:58
  Speaker 2: what we have in front of us right now is
• 28:00
  Speaker 2: just these very large TAM opportunities that make a lot
• 28:03
  Speaker 2: of sense. Most diagnostic companies, if you look at some
• 28:07
  Speaker 2: of the other big ones, they're in the range of
• 28:09
  Speaker 2: maybe three to 400 million. But if you look at
• 28:12
  Speaker 2: some of the, you know, some of the other groups
• 28:16
  Speaker 2: that are kind of well-known in the space names, you
• 28:18
  Speaker 2: would all know they're in the range of like maybe
• 28:20
  Speaker 2: 50 to a hundred million. What I think is exciting
• 28:24
  Speaker 2: is when we built Cigna Terra, our R & D
• 28:28
  Speaker 2: budget was probably 50 million. So now if you think we're,
• 28:31
  Speaker 2: you know, we're spending maybe, you know, you know, 15
• 28:34
  Speaker 2: times more, you know, 20 times more now on research
• 28:37
  Speaker 2: and development, new technology, new clinical trials, Where are we
• 28:40
  Speaker 2: going to be in five years from now? And how
• 28:44
  Speaker 2: are we going to advance the technology and improve access
• 28:47
  Speaker 2: for patients and improve care just with the ability that
• 28:51
  Speaker 2: we have to be able to fund the research and
• 28:55
  Speaker 2: to fund the technology development? Well, it's interesting.
• 28:57
  Speaker 1: Just thinking about technology a little bit, you know, we've
• 29:00
  Speaker 1: been talking about Signatera, which is the tumor-informed.
• 29:02
  Speaker 2: Right.
• 29:03
  Speaker 1: But you also have Tuber, Naive, and then you have
• 29:05
  Speaker 1: the Foresight platform that you brought aboard. Can you talk
• 29:08
  Speaker 1: a little bit about the differences in those architectures and
• 29:12
  Speaker 1: then how you decide which architecture is right for which histology?
• 29:17
  Speaker 2: Right. So first of all, I'll talk about tumor naive. And,
• 29:22
  Speaker 2: you know, many years ago, there was this question about
• 29:25
  Speaker 2: whether you know, tumor informed or tumor naive was going
• 29:29
  Speaker 2: to be the right approach. And I think we've answered that. Yeah.
• 29:32
  Speaker 2: I think tumor informed generally in the marketplace is sort
• 29:36
  Speaker 2: of seen as being the leading test from a utilization standpoint.
• 29:43
  Speaker 2: And so with tumor-informed, you actually get a piece of
• 29:45
  Speaker 2: the tissue, you sequence it with whole genome or whole exome,
• 29:49
  Speaker 2: and then you design a personalized test for that patient.
• 29:51
  Speaker 2: It's more complicated, but generally the studies show very positive
• 29:57
  Speaker 2: results using that type of technology. Tumor naive is where
• 30:02
  Speaker 2: you have a fixed panel that's the same for every patient. Now,
• 30:07
  Speaker 2: we developed a technology that we think works really well
• 30:10
  Speaker 2: in that setting, and it's a product that we call Latitude. Now,
• 30:14
  Speaker 2: it doesn't work as well as Signatera from a performance standpoint,
• 30:18
  Speaker 2: but it does work very well. And if you can't
• 30:22
  Speaker 2: get tissue... That's a great alternative.
• 30:25
  Speaker 1: The reflex back to that.
• 30:27
  Speaker 2: Reflexing back to that. So I would say in colorectal,
• 30:30
  Speaker 2: you know, probably like 3% or 4% of the patients,
• 30:33
  Speaker 2: you just can't get tissue or the tissue that comes
• 30:36
  Speaker 2: in is not usable for some reason or it's been exhausted.
• 30:39
  Speaker 2: And so in those cases, we can take the same
• 30:42
  Speaker 2: plasma tube that has been sent to us and just
• 30:44
  Speaker 2: reflex it to the tumor naive option. Now, some people
• 30:48
  Speaker 2: want just a tumor naive test right out of the gate.
• 30:52
  Speaker 2: They don't want to deal with like shipping the tissue
• 30:54
  Speaker 2: or having to set up. And if that's what the
• 30:56
  Speaker 2: doctor wants or they think is right for the patient,
• 30:58
  Speaker 2: we have that option available. And we're initially today that's
• 31:02
  Speaker 2: available in colorectal. That's expanding into into other histologies in
• 31:06
  Speaker 2: the near future. But we focused. So that's a big
• 31:10
  Speaker 2: focus of our I think R & D effort is
• 31:13
  Speaker 2: making that available because we want to be able to
• 31:16
  Speaker 2: help every patient. Even those three or four or five
• 31:20
  Speaker 2: percent of patients that we can't get tissue. The other
• 31:23
  Speaker 2: area that has been a focus of innovation is this
• 31:26
  Speaker 2: idea of kind of ultra-sensitive MRD and pushing beyond the
• 31:32
  Speaker 2: limits of what you could get maybe with the kind
• 31:34
  Speaker 2: of traditional exome-based MRD testing that we initially launched. And
• 31:42
  Speaker 2: so with that technology, what we've done is two things.
• 31:47
  Speaker 2: The first is we launched a genome backbone rather than
• 31:51
  Speaker 2: an exome backbone. Mm-hmm. And what that allows you to
• 31:53
  Speaker 2: do is to pick more variants, pick from a larger
• 31:59
  Speaker 2: subset of variants. So you imagine if you're like drafting,
• 32:02
  Speaker 2: you know, you're picking your basketball team for like a
• 32:05
  Speaker 2: pickup game of basketball. And there's, you know, say 50
• 32:10
  Speaker 2: players that you can pick from or there's, you know,
• 32:14
  Speaker 2: 2000 players that you can pick from. You're going to
• 32:15
  Speaker 2: be able to put a better team together if you
• 32:18
  Speaker 2: have 2000 people that you can pick from. So you
• 32:20
  Speaker 2: think about genome kind of in that same way. You
• 32:23
  Speaker 2: just have more variants that you can select from. And then,
• 32:27
  Speaker 2: you know, on that, we've expanded the number of variants.
• 32:31
  Speaker 2: Very soon it will be available as like a 256
• 32:33
  Speaker 2: variant assay. And then the third thing that we did
• 32:37
  Speaker 2: is we incorporated the technology from Foresight, which is called
• 32:40
  Speaker 2: a phase variant technology. And phase variant technology is super
• 32:46
  Speaker 2: exciting because it allows you to get below the sequencer
• 32:49
  Speaker 2: error rate. And one of the biggest problems with sequencing
• 32:52
  Speaker 2: is that there's errors made by the sequencing, just the
• 32:56
  Speaker 2: process itself. And when you put in a kind of
• 32:59
  Speaker 2: a filtering layer of software to try to filter out
• 33:02
  Speaker 2: some of those errors, you also filter out some of
• 33:04
  Speaker 2: the true positive results. So with this phase variant technology,
• 33:07
  Speaker 2: we can get below that error threshold rate. And we've
• 33:11
  Speaker 2: just seen incredible data now on this genome assay with
• 33:15
  Speaker 2: phase variants getting down below one part per 10 million.
• 33:20
  Speaker 2: and an LOD95 of one part per million, which is
• 33:25
  Speaker 2: really incredible and super exciting. But I think ultimately what
• 33:30
  Speaker 2: we will see, I think, is with the signetary genome test,
• 33:34
  Speaker 2: I think you're going to get an improvement in sensitivity
• 33:37
  Speaker 2: versus what you would get versus maybe an exome test. Now,
• 33:42
  Speaker 2: there are some tumors that are lower shedding tumors where
• 33:47
  Speaker 2: you really do want to get that kind of exquisite
• 33:49
  Speaker 2: level of sensitivity. But there's, you know, a lot of
• 33:52
  Speaker 2: other tumors where maybe, you know, it doesn't make sense.
• 33:56
  Speaker 2: And so what we're doing right now is we're letting
• 33:58
  Speaker 2: the doctor choose which technology they want. If they want genome,
• 34:03
  Speaker 2: they can have genome. If they want exome, they can
• 34:06
  Speaker 2: have exome. And so what that results in is, you know,
• 34:10
  Speaker 2: today we're still seeing, I think the vast majority of
• 34:12
  Speaker 2: tests come in as exome-based orders, but there is a
• 34:15
  Speaker 2: trend towards genome over time. And I think if you
• 34:17
  Speaker 2: look long-term, you know, if you look five years from now,
• 34:20
  Speaker 2: I think the majority, probably all the new orders will
• 34:23
  Speaker 2: be kind of coming in on this genome platform.
• 34:26
  Speaker 1: What's the cost differential roughly between doing exome or genome?
• 34:31
  Speaker 2: Yeah, I mean, it can be expensive, but because... we're
• 34:37
  Speaker 2: operating at such an incredible scale. Um, it, it really
• 34:41
  Speaker 2: isn't as significant as you might think. Um, you know, so,
• 34:45
  Speaker 2: you know, especially when you kind of, when you think
• 34:47
  Speaker 2: about the way that technology works, um, where you were doing,
• 34:52
  Speaker 2: say for an average patient, you know, we have patients
• 34:55
  Speaker 2: that we've been monitoring for five plus years now at
• 34:58
  Speaker 2: this point.
• 34:58
  Speaker 1: Right.
• 34:58
  Speaker 2: So, you know, if you say an average patient's going
• 35:00
  Speaker 2: to get maybe 14 tests or something like that throughout
• 35:02
  Speaker 2: the course, the test, you know, if you say genome
• 35:05
  Speaker 2: is maybe costing, you know, $ 500 more, $ 1, 000 more, you're
• 35:09
  Speaker 2: spreading that over the cost, like the 14 tests, it's,
• 35:12
  Speaker 2: you know, it's relatively, you know, it's relatively doable. Now,
• 35:17
  Speaker 2: there is this sort of trade-off that I think the
• 35:20
  Speaker 2: doctors are making on, well, do they really want to
• 35:23
  Speaker 2: get this ultra-sensitive performance or, you know, do they want
• 35:27
  Speaker 2: to use really like the workhorse product that is kind
• 35:30
  Speaker 2: of have all this amazing outcomes data? And I think
• 35:33
  Speaker 2: that's why we're seeing this slow shift over time, which
• 35:36
  Speaker 2: will probably continue.
• 35:38
  Speaker 1: What are some of the cancers that, you know, don't
• 35:40
  Speaker 1: shed a lot of tumor? Are those things like breast
• 35:42
  Speaker 1: and prostate where this would be more applicable? And do
• 35:45
  Speaker 1: I have that right?
• 35:46
  Speaker 2: Yeah, I mean, I think one that, you know, we
• 35:48
  Speaker 2: hear a lot is like renal. There is, I think
• 35:51
  Speaker 2: for us, is up there. You know, prostate, I have
• 35:55
  Speaker 2: to go back and check on. I think melanoma is
• 36:00
  Speaker 2: another area. I think things like colorectal, for example, I
• 36:06
  Speaker 2: think they're generally considered to be one of the higher shedders.
• 36:09
  Speaker 1: You know, maybe switching gears here, we've spent a ton
• 36:11
  Speaker 1: of time on MRD, but maybe let's talk about your
• 36:14
  Speaker 1: early cancer detection platform and why you're so excited about
• 36:18
  Speaker 1: what's going on there.
• 36:19
  Speaker 2: Yeah, so many years ago now, probably like five or
• 36:23
  Speaker 2: six years ago, we started working on early cancer detection.
• 36:27
  Speaker 2: And the idea was that just from a simple blood draw,
• 36:31
  Speaker 2: we could develop a signature that we could identify colorectal
• 36:37
  Speaker 2: cancer or really all types of cancers within the patient.
• 36:43
  Speaker 2: And we've taken an approach where initially we're focusing on colorectal,
• 36:47
  Speaker 2: and then we're going to augment that and add kind
• 36:50
  Speaker 2: of an MSED-type product. And so we kicked off a
• 36:53
  Speaker 2: study called the FIND study, which had a goal of
• 36:57
  Speaker 2: collecting about 30,000 prospectively collected colonoscopy-matched blood draws. And we're
• 37:04
  Speaker 2: actually now done collecting. We've collected the number of patients
• 37:07
  Speaker 2: that we needed to collect. We're going to kind of
• 37:10
  Speaker 2: let the trial continue rolling a little bit when we
• 37:14
  Speaker 2: pass the threshold of what we think we needed to
• 37:16
  Speaker 2: achieve from a significant standpoint. So that's super exciting. We're
• 37:20
  Speaker 2: moving now towards locking down the assay, and then we
• 37:24
  Speaker 2: will be finishing the development work running the clinical validation
• 37:28
  Speaker 2: in the kind of summer slash fall of 2027, reading
• 37:32
  Speaker 2: out the results. You'll probably, you know, if you think
• 37:36
  Speaker 2: like at this time next year, we'll be like getting
• 37:38
  Speaker 2: ready to read out the results. And it'll be submitted
• 37:41
  Speaker 2: to the FDA. And so we think we can launch
• 37:43
  Speaker 2: in 2028, early, you know, early 28.
• 37:46
  Speaker 1: How do you think about pricing in that market? Because
• 37:49
  Speaker 1: we've got some players there now between Karras and Grail,
• 37:53
  Speaker 1: you know, who have wildly different price points.
• 37:55
  Speaker 2: Right.
• 37:55
  Speaker 1: And I guess Exact is there as well. How are
• 37:58
  Speaker 1: you thinking about pricing and what the market can bear
• 38:00
  Speaker 1: for that?
• 38:01
  Speaker 2: Yeah, so, you know, I think probably the closest comparator
• 38:05
  Speaker 2: to what we're doing is the Shield test from Garden
• 38:10
  Speaker 2: or the kind of Freenome test that Exact Science is launching. And,
• 38:15
  Speaker 2: you know, I think Medicare has put out a rate
• 38:18
  Speaker 2: that's kind of around like the $ 1, 000 price point or
• 38:21
  Speaker 2: something like that. And I think Garden is seeing maybe
• 38:25
  Speaker 2: like $ 750 or $ 800 collected. Mm-hmm. You know, generally, we've
• 38:28
  Speaker 2: seen these types of things kind of settle out over time. And,
• 38:32
  Speaker 2: you know, I think something in that kind of ASP
• 38:34
  Speaker 2: of like some $ 5, 800 price point over time probably makes sense,
• 38:39
  Speaker 2: where there's some patients where you get paid, there's other
• 38:41
  Speaker 2: patients where, you know, they're not meeting coverage criteria and
• 38:44
  Speaker 2: so forth.
• 38:45
  Speaker 1: And would that be on an every-year basis or on
• 38:47
  Speaker 1: every three-year basis, you think?
• 38:49
  Speaker 2: You know, I think it's kind of trending towards this
• 38:52
  Speaker 2: idea of every three years. But, you know, I think...
• 38:57
  Speaker 2: Of course, you know, it's going to be up to
• 38:58
  Speaker 2: kind of the societies and kind of guidelines and recommendations,
• 39:02
  Speaker 2: depending on how people want to offer the test.
• 39:06
  Speaker 1: Staying in the world of oncology and technology, you guys
• 39:10
  Speaker 1: announced a partnership with NVIDIA earlier this year. And I think,
• 39:13
  Speaker 1: you know, now in retrospect with the Merck Moderna announcement,
• 39:17
  Speaker 1: can you talk a little bit about the capabilities that
• 39:19
  Speaker 1: you have in that area?
• 39:21
  Speaker 2: Yeah. So... So Natera's actually got a lot of exciting
• 39:25
  Speaker 2: things going on, both on the AI side, the data side,
• 39:29
  Speaker 2: and online. on the personalized cancer vaccine side. And, you know,
• 39:34
  Speaker 2: these are not areas of the business that we've spent
• 39:37
  Speaker 2: a lot of time highlighting, but, you know, we like
• 39:40
  Speaker 2: to do a lot of things behind the scenes, you know,
• 39:44
  Speaker 2: and not always sort of lay out our exact roadmap
• 39:46
  Speaker 2: for everybody. And I think that that's smart but it
• 39:50
  Speaker 2: also makes it exciting for the employees at the company.
• 39:54
  Speaker 2: And it's, you know, it's great to have these kind
• 39:55
  Speaker 2: of surprise opportunities. But yeah, on the data side, I
• 40:00
  Speaker 2: think we really have something novel at Natera where, you know,
• 40:05
  Speaker 2: traditionally companies that have been able to deliver like clinical
• 40:08
  Speaker 2: insights from their data sets are generally, you know, working
• 40:15
  Speaker 2: in the kind of later stages. But, a lot of
• 40:18
  Speaker 2: Natera's work is in earlier stage patients. So neoadjuvant, adjuvant,
• 40:23
  Speaker 2: surveillance setting, you know, patients are in remission. I mean,
• 40:27
  Speaker 2: these are patients we're maybe monitoring. And I think that's
• 40:30
  Speaker 2: what makes our, you know, data set like whole genome,
• 40:34
  Speaker 2: whole exome sequencing on the tumor tissue with, you know,
• 40:38
  Speaker 2: matched digital pathology and then longitudinal time points. That's unique.
• 40:43
  Speaker 2: Nobody else has that. We now have, you know, millions
• 40:47
  Speaker 2: of time points. And I think that's going to be
• 40:51
  Speaker 2: super valuable for both delivering more information of value back
• 40:56
  Speaker 2: to patients, but also in partnering with pharma companies to
• 40:59
  Speaker 2: help them design clinical trials, to help them enroll patients
• 41:04
  Speaker 2: in clinical trials. And that's an area that's super exciting.
• 41:07
  Speaker 2: On the other side of things, we have kind of
• 41:10
  Speaker 2: the ability to use AI and to improve healthcare and
• 41:16
  Speaker 2: to improve just the company. And so kind of the
• 41:20
  Speaker 2: boring stuff, becoming more efficient within the business. I think
• 41:24
  Speaker 2: we're really one of the leaders in implementing AI within
• 41:28
  Speaker 2: the business to improve efficiency, not necessarily to get rid
• 41:34
  Speaker 2: of jobs, but to make the people that are working
• 41:38
  Speaker 2: at the company more successful, more efficient, and like their
• 41:41
  Speaker 2: job better, and ability to scale up. And we're seeing
• 41:45
  Speaker 2: that working really well. Another area is patient experience and
• 41:50
  Speaker 2: physician experience. So the idea is, how do we use
• 41:54
  Speaker 2: AI to deliver more information to the patient and to
• 41:58
  Speaker 2: the physician that's relevant? And one of the cool things
• 42:01
  Speaker 2: we've been able to do, like in oncology, is you know,
• 42:04
  Speaker 2: rather than just deliver the signatera result back, is actually
• 42:08
  Speaker 2: within the patient portal and physician portal be able to
• 42:11
  Speaker 2: display the result in the context of what else is
• 42:14
  Speaker 2: happening for them at the time. So, you know, over
• 42:18
  Speaker 2: the last, you know, you could see like a kind
• 42:20
  Speaker 2: of a 12-month snapshot. Is the patient received chemotherapy or not?
• 42:24
  Speaker 2: Have they gotten a scan? What happened with their signatera trend?
• 42:27
  Speaker 2: And how does it fit in the context of all
• 42:30
  Speaker 2: those things happening? And the doctors really like that where we've,
• 42:33
  Speaker 2: piloted it, and I think it really is going to
• 42:35
  Speaker 2: help patients. And then the third area of AI is
• 42:38
  Speaker 2: how do we improve healthcare?
• 42:41
  Speaker 1: That's a simple one.
• 42:42
  Speaker 2: That's a simple one, right? But that's probably the most exciting,
• 42:46
  Speaker 2: which is, you know, are there ways that we can
• 42:50
  Speaker 2: just improve the signatory results? Right. I mean, the test
• 42:53
  Speaker 2: is not perfect. You know, can we use AI to
• 42:57
  Speaker 2: deliver like an augmented result? And that's something that we've announced,
• 43:01
  Speaker 2: you know, that we've generated data on and we're going
• 43:04
  Speaker 2: to be presenting. And then there's this question of, you know,
• 43:08
  Speaker 2: based on the information that we have, can we use
• 43:12
  Speaker 2: AI to develop our own large language models? Can we
• 43:16
  Speaker 2: use AI to develop personalized cancer vaccine technology, like, for example,
• 43:24
  Speaker 2: neoantigen prediction algorithms? And there we've actually developed something that
• 43:28
  Speaker 2: I think is super exciting, where we've shown we can
• 43:33
  Speaker 2: identify new antigens. And I think we can do it
• 43:37
  Speaker 2: at a level that I think is better than anybody else.
• 43:41
  Speaker 2: That's amazing. Which is exciting.
• 43:42
  Speaker 1: When do you think we'll see more commercial announcements around
• 43:47
  Speaker 1: some of this stuff?
• 43:48
  Speaker 2: Yeah, I would say hopefully some this year. And, you know,
• 43:52
  Speaker 2: as we scale into 27, you know, I think we...
• 43:57
  Speaker 2: you know, one of the things we try to do
• 44:01
  Speaker 2: is to actually have something to announce before announcing it
• 44:04
  Speaker 2: versus just talking about what we're working on. And, you know,
• 44:07
  Speaker 2: I think we're getting to the point where there's some
• 44:09
  Speaker 2: really meaty topics that we can announce that I think
• 44:13
  Speaker 2: will be exciting for, you know, for the community.
• 44:16
  Speaker 1: I only have a couple more questions here because we're
• 44:18
  Speaker 1: running out of time, but You know, if you think
• 44:20
  Speaker 1: about the data and the longitudinal data that you have,
• 44:23
  Speaker 1: is there something, are there some use cases that you
• 44:25
  Speaker 1: maybe didn't imagine five years ago that you can now,
• 44:29
  Speaker 1: you know, use the data for today?
• 44:30
  Speaker 2: Yeah, I mean, I think, you know, this idea of,
• 44:35
  Speaker 2: you know, therapy effectiveness monitoring and helping pharma companies, you know, run,
• 44:40
  Speaker 2: you know, more effective clinical trials, you know, maybe using
• 44:44
  Speaker 2: the signature MRD result as a surrogate endpoint in clinical trials,
• 44:49
  Speaker 2: I think, You know, a lot of the initial concept
• 44:53
  Speaker 2: of why you should do signatories around decision making for patients. Right.
• 44:57
  Speaker 2: But now we have this biopharma opportunity where there's a
• 45:02
  Speaker 2: question around, can we make trials more efficient? Can people
• 45:07
  Speaker 2: run trials in settings where historically it was going to
• 45:11
  Speaker 2: be too expensive or too risky to run the trial?
• 45:13
  Speaker 2: But now with an MRD guided strategy, it makes sense.
• 45:16
  Speaker 2: You know, can they get a sneak peek at what's
• 45:18
  Speaker 2: happening with the drug efficacy by looking at the signature result?
• 45:22
  Speaker 2: And so we're seeing really an explosion in interest in
• 45:26
  Speaker 2: biopharma right now. And I think this is the beginning
• 45:29
  Speaker 2: of a very significant trend of MRD strategy and MRD-guided
• 45:34
  Speaker 2: trials and pharma companies bringing their drugs earlier in the
• 45:39
  Speaker 2: care paradigm and treating patients based on molecular data. recurrence
• 45:43
  Speaker 2: and molecular presence rather than clinical outcomes. And that's exciting.
• 45:48
  Speaker 1: If you think back to your, you know, first inklings
• 45:51
  Speaker 1: about applying the technology to oncology in 10 plus years ago,
• 45:54
  Speaker 1: did you imagine you would be here, you know, where
• 45:57
  Speaker 1: everything is this innovative?
• 45:59
  Speaker 2: You know, it's quite amazing to see, you know, the
• 46:02
  Speaker 2: progress that we've made and the trajectory that the company
• 46:06
  Speaker 2: has been on. And I can't say that, you know,
• 46:11
  Speaker 2: we didn't expect to be successful because, you know, we
• 46:14
  Speaker 2: were very excited about the potential of the technology. But
• 46:18
  Speaker 2: seeing a whole new field develop real time has been
• 46:21
  Speaker 2: incredibly exciting. You know, I think we've tried to generally
• 46:25
  Speaker 2: focus and keep focusing on four main things for the company.
• 46:30
  Speaker 2: Like one is always be focused on technology development and
• 46:34
  Speaker 2: being a very technology driven company. And we invest a
• 46:38
  Speaker 2: lot in that. The second is to back everything that
• 46:41
  Speaker 2: we do with an extensive amount of peer reviewed evidence
• 46:44
  Speaker 2: and let the evidence really guide the strategy. The third
• 46:47
  Speaker 2: is to have good user experience because this is diagnostics
• 46:51
  Speaker 2: is a service business and we have to always be
• 46:55
  Speaker 2: focused on new, new user experience. And then the fourth
• 46:58
  Speaker 2: is to have a great team. And, you know, we've hired,
• 47:01
  Speaker 2: I think we have now more than 6,000 employees at
• 47:04
  Speaker 2: the company. I mean, we've, we have like incredible group
• 47:07
  Speaker 2: of people now they're leading all of these different areas
• 47:10
  Speaker 2: of the business.
• 47:11
  Speaker 1: Wow. From 10 to 15, when you started the 6,000 plus,
• 47:14
  Speaker 1: that's amazing.
• 47:15
  Speaker 2: Yeah.
• 47:15
  Speaker 1: I mean, I think that's a great, a great wrap on,
• 47:17
  Speaker 1: on where the company's going. And I look forward to
• 47:19
  Speaker 1: maybe chatting down the road in a year or two
• 47:21
  Speaker 1: to see where you guys stand. The way I like
• 47:23
  Speaker 1: to wrap these conversations up, Steve, is to ask the
• 47:25
  Speaker 1: guest about something from their personal or professional life that
• 47:28
  Speaker 1: maybe it's a lesson learned or something a mentor taught them,
• 47:31
  Speaker 1: but you know, what do you see as your mission
• 47:32
  Speaker 1: or a North star in life?
• 47:35
  Speaker 2: Yeah, I mean, I would say, you know, for the company,
• 47:38
  Speaker 2: we've always had this motto that there's a patient behind
• 47:41
  Speaker 2: every sample. And, you know, I think when I think
• 47:44
  Speaker 2: back to maybe when I started like 20 years ago,
• 47:47
  Speaker 2: you know, I think I was, you know, focused on
• 47:50
  Speaker 2: sort of creating an awesome business or, you know, winning
• 47:54
  Speaker 2: in the marketplace. But as I've had more life experience
• 47:58
  Speaker 2: myself and really taken on this patient behind every sample,
• 48:04
  Speaker 2: you start to realize really what that means. And when
• 48:08
  Speaker 2: you have a family member that has cancer, that is
• 48:11
  Speaker 2: really having a tough time, or you go through some
• 48:14
  Speaker 2: challenges with building a family, or you have friends that
• 48:23
  Speaker 2: come and say, hey, I have colorectal cancer. I saw
• 48:27
  Speaker 2: about your company. I need help. I mean, that really...
• 48:31
  Speaker 2: brings home what it means, you know, patient about every
• 48:34
  Speaker 2: sample and are patient behind every sample. And we try
• 48:37
  Speaker 2: to really, you know, live that at the company. And
• 48:40
  Speaker 2: I think that's what makes it exciting to come to
• 48:42
  Speaker 2: work every day is everybody has this very mission oriented
• 48:47
  Speaker 2: focus and we can all rally around what the company's doing.
• 48:51
  Speaker 1: No, it's a fantastic ethos. And thank you so much
• 48:55
  Speaker 1: for sharing the story of Natera and your own personal journey.
• 48:58
  Speaker 2: Yeah. Thank you very much.
• 49:00
  Speaker 1: That's Steve Chapman, CEO of Natera. Thank you for listening
• 49:03
  Speaker 1: to this episode of the Vanguards of Healthcare podcast. And
• 49:06
  Speaker 1: don't forget to click the follow button on your favorite
• 49:08
  Speaker 1: podcast app or website so you never miss an interview
• 49:11
  Speaker 1: with the leaders rewriting the playbook on healthcare innovation. Until
• 49:15
  Speaker 1: next time, take care.
• 49:39
  Speaker 2: Thank you.