8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 8, 2018

Natera, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-37478	01-0894487
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

201 Industrial Road, Suite 410

San Carlos, California 94070

(Address of principal executive offices, including zip code)

(650) 249-9090

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x

Item 2.02.Results of Operations and Financial Condition.

On November 8, 2018, Natera, Inc. (“Natera”) issued a press release announcing its results for its third quarter ended September 30, 2018 and provided a related investor presentation. A copy of the press release and a copy of the investor presentation are furnished herewith as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

The information in this Current Report on Form 8-K and the accompanying Exhibit 99.1 and Exhibit 99.2 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by reference in such filing.

Item 9.01.Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release dated November 8, 2018.
99.2	Investor Presentation.

2

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated November 8, 2018.
99.2	Investor Presentation.

3

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Natera, Inc.
	By:	/s/ Michael Brophy
		Michael Brophy
		Chief Financial Officer (Principal Financial and Accounting Officer)
Dated: November 8, 2018

4

EX-99.1

Exhibit 99.1

Natera Reports Third Quarter 2018 Financial Results

SAN CARLOS, Calif., November 8, 2018 /PRNewswire/ — Natera, Inc. (NASDAQ:  NTRA), a leader in non-invasive genetic testing and the analysis of circulating cell-free DNA, today reported financial results for the third quarter ended September 30, 2018 and provided an update on recent business progress.

Recent Accomplishments & Highlights

·Generated total revenues of $65.3 million in the third quarter of 2018 compared to $55.9 million in the third quarter of 2017, an increase of 17%.

·Processed 167,172 tests in the third quarter of 2018, compared to approximately 130,400 tests processed in the third quarter of 2017, an increase of approximately 28%.

·Processed approximately 115,000 Panorama tests in the third quarter of 2018, compared to approximately 91,200 Panorama tests processed in the third quarter of 2017, an increase of approximately 26%.

·Accessioned approximately 44,400 Horizon carrier screening (HCS) tests in the third quarter of 2018 compared to approximately 32,800 Horizon carrier screening tests accessioned in the third quarter of 2017, an increase of approximately 36%.

·Signed Phase 2 lung cancer study with Bristol-Myers Squibb to investigate our Signatera (RUO) assay as a potential biomarker for Opdivo.

·Announced Phase 1 study with Neon Therapeutics to evaluate its personalized cancer vaccine.

·More than 25 deals signed with leading pharmaceutical companies for Signatera (RUO).

·Completed enrollment of 20,000 patients in SMART trial for microdeletions.

·Successful completion of pre-submission meeting with CMS for kidney transplant rejection assay.

“We were very pleased to see our pipeline of initial studies with pharma evolving to multiple prospective clinical trials” said Matt Rabinowitz, Natera’s Chief Executive Officer. “With core business growth, enrollment of the 20,000th patient in our SMART trial, progress along our planned reimbursement pathway in transplant, and new data to be released at the San Antonio Breast Cancer Symposium, we continue to make strong progress across the business.”

Third Quarter Ended September 30, 2018 Financial Results

Total revenues were $65.3 million for the third quarter of 2018 compared to $55.9 million in the same period of the prior year, which represents an increase of 17%. Natera processed 167,172 tests in the third quarter of 2018, including approximately 156,600 tests accessioned and 9,500 processed through the Constellation software platform (Constellation units), compared to approximately 130,400 tests processed in the third quarter of 2017, including approximately 122,600 tests accessioned and 7,800 Constellation units, an overall increase of approximately 28%.

In the three months ended September 30, 2018, Natera recognized revenue on 154,900 tests for which results were reported to customers in the period (tests reported), including approximately 145,700 tests accessioned and 9,200 Constellation units, compared to 121,700 tests reported, including approximately 114,300 tests accessioned and 7,400 Constellation units, in the third quarter of 2017, which represents an increase in tests reported of approximately 27%. Natera recognized revenues on approximately 100,900 Panorama tests accessioned and 7,800 Panorama Constellation units in the three months ended September 30, 2018, compared to approximately 80,600 Panorama tests accessioned and 5,800 Panorama Constellation units in the same period in 2017. Natera recognized revenue on approximately 41,000 HCS tests accessioned in the three months ended September 30, 2018, compared to approximately 30,300 HCS tests accessioned in the same period in 2017.

Gross profit for the three months ended September 30, 2018 was $23.6 million, representing a 36% gross margin, compared to $21.3 million, representing a 38% gross margin in the same period of the prior year.* The decrease in gross margin was primarily due to a one-time release of $3.7 million of revenue reserves in the third quarter of 2017, which increased gross margins in the period by approximately 6.5%.

Total operating expenses, representing research and development expenses and selling, general and administrative expenses, for the third quarter of 2018 were $50.8 million, an increase of approximately 8% compared to $47.1 million in the same period of the prior year. The increase was driven primarily by higher corporate-related expenses incurred due to increased collection efforts, higher personnel related expenses attributable to health benefit plans and stock-based compensation recognized for additional stock-based awards to employees, higher external services costs including legal expenses, and higher facilities and related expenses driven by the expanded occupancy at our San Carlos, California headquarters.

Loss from operations for the third quarter of 2018 was $27.2 million compared to $25.8 million for the same period of the prior year.

Net loss for the third quarter of 2018 was $29.6 million, or $(0.49) per diluted share, compared to net loss of $27.9 million, or $(0.52) per diluted share for the same period in 2017. Weighted average shares outstanding were 60.6 million in the third quarter of 2018.

At September 30, 2018, Natera held $170.0 million in cash, cash equivalents, short-term investments and restricted cash, compared to $89.2 million as of June 30, 2018. As of September 30, 2018, Natera had a total outstanding debt balance of $123.4 million, comprised of $50.1 million with accrued interest under its $50.0 million line of credit with UBS at a variable interest rate of 30-day LIBOR plus 110 bps and a net carrying amount of $73.3 million under its $100.0 million debt facility with OrbiMed Advisors, compared to $50.1 million with accrued interest and the net carrying amount of $73.2 million as of June 30, 2018. The UBS line of credit is secured by Natera’s investment portfolio, which is designed to yield higher returns than the borrowing rate Natera incurs in order to fund current operations. The debt facility with OrbiMed Advisors is secured by substantially all of Natera’s assets, including its intellectual property, subject to certain customary exclusions.

2018 Financial Outlook

Natera anticipates 2018 total revenue of $250 million to $260 million**; 2018 cost of revenues to be approximately 64% to 67% of revenues; selling, general and administrative costs to be approximately $150 million to $155 million; research and development costs to be approximately $50 million to $55 million, and net cash burn to be approximately $65 million to $75 million***.

* Gross profit is calculated as GAAP total revenues less GAAP cost of revenues. Gross margin is calculated as gross profit divided by GAAP total revenues.

** Our 2018 revenue guidance is based on the new revenue recognition guidance, ASC 606, which was effective for us in the first quarter of 2018.

*** Cash burn is calculated as the sum of GAAP net cash used by operating activities (estimated for 2018 to be between $60 million and $70 million) and GAAP net purchases of property and equipment (estimated for 2018 to be approximately $5 million).

About Natera

Natera is a genetic testing company that develops and commercializes non-invasive methods for analyzing DNA. The mission of the company is to transform the diagnosis and management of genetic disease. Natera operates an ISO 13485-certified and CAP-accredited laboratory certified under the Clinical Laboratory Improvement Amendments (CLIA) in San Carlos, Calif. It offers a host of proprietary genetic testing services to inform physicians who manage pregnant women, researchers in cancer including biopharmaceutical companies, and genetic laboratories through its cloud-based Constellation™ software platform.

Product offerings include Spectrum®, a preimplantation genetic test for embryo selection during in vitro fertilization (IVF); Anora® to understand the genetic causes of a pregnancy loss; Horizon™ to detect risk of inherited mutations such as cystic fibrosis and spinal muscular atrophy; Panorama®, a non-invasive pregnancy test (NIPT) to screen for common chromosomal anomalies in a fetus as early as nine weeks of gestation; Vistara to screen for single-gene disorders that represent total incidence greater than Down syndrome; Evercord™, a cord blood and tissue banking service offered at birth to expectant parents; and Signatera™ (RUO), a personalized cell-free DNA test that can identify minimal residual disease, treatment response, and cancer recurrence to aid researchers in oncology.

Each test described above except Signatera™ (RUO) has been developed and its performance characteristics determined by the CLIA-certified laboratory performing the test. These tests have not been cleared or approved by the U.S. Food and Drug Administration (FDA). Although FDA does not currently clear or approve laboratory-developed tests in the U.S., certification of the laboratory is required under CLIA to ensure the quality and validity of the tests. Signatera™ is for research use only at this time.

Conference Call Information

Event:	Natera’s Third Quarter 2018 Results Conference Call
Date:	Thursday, November 8, 2018
Time:	1:30 p.m. PT (4:30 p.m. ET)
Live Dial-In:	(877) 823-0171, Domestic
	(617) 500-6932, International
Conference ID:	1980757
Webcast:	investor.natera.com

A webcast replay will be available at investor.natera.com.

Forward-Looking Statements

This release contains forward-looking statements, including quotations of management, statements under the heading “2018 Financial Outlook,” and statements regarding Natera’s current and new products and services, commercial partners, user experience, clinical trials, future financial outlook and financial performance, opportunities and strategies, and general business conditions. Any forward-looking statements contained in this release are based upon Natera’s current plans, estimates, and expectations, as of the date of this release, and are not a representation that such plans, estimates, or expectations will be achieved. Subsequent events may cause these expectations to change, and Natera disclaims any obligation to update the forward-looking statements in the future.

These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially, including: we face numerous uncertainties and challenges in achieving the financial guidance provided; we derive most of our revenues from Panorama, and if our efforts to further increase the use and adoption of Panorama or to develop and commercialize new products and services in the future do not succeed, our business will be harmed; we have incurred losses since our inception and we anticipate that we will continue to incur losses for the foreseeable future; uncertainty in the development and commercialization of our enhanced or new tests or services, for example if the results of our clinical studies do not support the use of our tests, could materially adversely affect our business, financial condition and results of operations; our quarterly results may fluctuate significantly; we may be unable to compete successfully with either existing or future products or services; our cloud-based distribution model may be difficult to implement, and we may not be able to commercialize this model if we do not comply with ongoing regulatory requirements; we may be subject to increased compliance risks as a result of our rapid growth, including our dependence on our direct sales force; we rely on a limited number of suppliers or, in some cases, single suppliers, for some of our laboratory instruments and materials and may not be able to find replacements or immediately

transition to alternative suppliers; we may be unable to expand third-party payer coverage and reimbursement for Panorama and our other tests, or we may be required to refund reimbursements already received; third-party payers may withdraw coverage or provide lower levels of reimbursements due to changing policies, billing complexities or other factors; our estimates of total addressable market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates; and we are subject to litigation, which may require us to incur substantial costs, could divert the time and attention of our management and other employees and could result in substantial damages if unsuccessfully defended.

Additional risks and uncertainties that could affect Natera’s financial results are included under the captions, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Natera’s most recent filings on Forms 10-K and 10-Q and in other filings Natera makes with the SEC from time to time. These documents are available on Natera’s website at www.natera.com under the Investor Relations section and on the SEC’s website at www.sec.gov.

Contacts

Natera, Inc.

Investor Relations
Mike Brophy, CFO, Natera, Inc., 650-249-9090

Media
Barbara Sullivan, Sullivan & Associates, 714-374-6174, bsullivan@sullivanpr.com

Natera, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

	September 30,			December 31,
	2018			2017
				(As Revised) (1)
Assets
Current assets:
Cash and cash equivalents	$	34,535		$	12,620
Restricted cash, current portion	4,222			59
Short-term investments	130,891			106,247
Accounts receivable, net of allowance of $1,980 in 2018 and $2,000 in 2017	60,397			44,089
Inventory	12,244			8,998
Prepaid expenses and other current assets	6,399			8,612
Total current assets	248,688			180,625
Property and equipment, net	24,833			29,667
Restricted cash, long-term portion	342			342
Other assets	3,446			3,979
Total assets	$	277,309		$	214,613
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	9,884		$	8,529
Accrued compensation	9,587			9,599
Other accrued liabilities	31,067			33,257
Deferred revenue, current portion	1,156			1,420
Short-term debt financing	50,135			50,112
Warrants	—			2,644
Total current liabilities	101,829			105,561
Long-term debt financing	73,284			73,065
Deferred rent, net of current portion	8,775			9,241
Deferred revenue, long-term portion	36,850			—
Other long-term liabilities	—			1,329
Total liabilities	220,738			189,196
Stockholders’ equity:
Common stock (2)	7			6
Additional paid in capital	600,146			472,552
Accumulated deficit	(542,688		)	(446,375		)
Accumulated other comprehensive loss	(894		)	(766		)
Total stockholders’ equity	56,571			25,417
Total liabilities and stockholders’ equity	$	277,309		$	214,613

(1)Natera adopted Financial Accounting Standards Board Accounting Standards Update No. 2014-09 effective January 1, 2018 with full retrospective application to January 1, 2016. Results for periods prior to January 1, 2018 have been revised accordingly.

(2)As of September 30, 2018, there were approximately 61,673,000 shares of common stock issued and outstanding.

Natera, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(In thousands, except per share data)

	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
				(As Revised) (1)						(As Revised) (1)
Revenues
Product revenues	$	62,662		$	54,512		$	177,284		$	153,835
Licensing and other revenues	2,618			1,398			13,405			3,740
Total revenues	65,280			55,910			190,689			157,575
Cost and expenses
Cost of product revenues	39,477			33,558			117,736			100,355
Cost of licensing and other revenues	2,202			1,054			5,530			2,516
Research and development	12,393			12,609			38,585			37,045
Selling, general and administrative	38,374			34,478			113,739			106,369
Total cost and expenses	92,446			81,699			275,590			246,285
Loss from operations	(27,166		)	(25,789		)	(84,901		)	(88,710		)
Interest expense	(2,781		)	(1,477		)	(7,730		)	(1,878		)
Interest and other income (expense), net	449			(437		)	(3,347		)	450
Loss before income taxes	(29,498		)	(27,703		)	(95,978		)	(90,138		)
Income tax expense	(118		)	(162		)	(335		)	(273		)
Net loss	$	(29,616	)	$	(27,865	)	$	(96,313	)	$	(90,411	)
Unrealized (loss) gain on available-for-sale securities, net of tax	(36		)	67			(128		)	329
Comprehensive loss	$	(29,652	)	$	(27,798	)	$	(96,441	)	$	(90,082	)
Net loss per share:
Basic	$	(0.49	)	$	(0.52	)	$	(1.71	)	$	(1.70	)
Diluted	$	(0.49	)	$	(0.52	)	$	(1.71	)	$	(1.70	)
Weighted-average number of shares used in computing basic and diluted net loss per share:
Basic	60,570			53,447			56,462			53,100
Diluted	60,570			53,447			56,462			53,100

(1)Natera adopted Financial Accounting Standards Board Accounting Standards Update No. 2014-09 effective January 1, 2018 with full retrospective application to January 1, 2016. Results for periods prior to January 1, 2018 have been revised accordingly.

EX-99.2

Exhibit 99.2

November 8, 2018 Natera, Inc. Q3 2018 Earnings Call

Safe harbor This presentation contains forward-looking statements. All statements other than statements of historical facts contained in this presentation, including statements regarding the market opportunity, products, commercial partners, user experience, clinical trials, financial performance, strategies, anticipated future performance and general business conditions of Natera, Inc. (“Natera”, the “Company”, “we” or “us”), are forward-looking statements. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially, including: we face numerous uncertainties and challenges in achieving the financial guidance provided; we may be unable to further increase the use and adoption of Panorama, through our direct sales efforts or through our laboratory partners, or to develop and successfully commercialize new products, including our cancer products; we have incurred losses since our inception and we anticipate that we will continue to incur losses for the foreseeable future; our quarterly results may fluctuate significantly; our estimates of market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates; we may be unable to compete successfully with either existing or future prenatal testing or oncology diagnostic products or other test methods; we may not be successful in commercializing our cloud-based distribution model; our products may not perform as expected; the results of our clinical studies may not support the use of our tests, particularly in the average-risk pregnancy population or for microdeletions screening, or may not be able to be replicated in later studies required for regulatory approvals or clearances; if our sole CLIA-certified laboratory facility becomes inoperable, we will be unable to perform our tests and our business will be harmed; we rely on a limited number of suppliers or, in some cases, single suppliers, for some of our laboratory instruments and materials and may not be able to find replacements or immediately transition to alternative suppliers; if we are unable to successfully scale our operations, our business could suffer; our cord blood and tissue banking activities are subject to regulations that may impose significant costs and restrictions on us; the marketing, sale, and use of Panorama and our other products could result in substantial damages arising from product liability or professional liability claims that exceed our resources; we may be unable to expand third-party payer coverage and reimbursement for Panorama and our other tests, and we may be required to refund reimbursements already received; third-party payers may withdraw coverage or provide lower levels of reimbursement due to changing policies, billing complexities or other factors, such as the increased focus by third-party payers on requiring that prior authorization be obtained prior to conducting a test; if the FDA were to begin actively regulating our tests, we could incur substantial costs and delays associated with trying to obtain premarket clearance or approval and incur costs associated with complying with post-market controls; we could be subject to third party claims of intellectual property infringement, which could result in litigation or other proceedings and could limit our ability to commercialize our products or services; and any failure to obtain, maintain, and enforce our intellectual property rights could impair our ability to protect our proprietary technology and our brand. We discuss these and other risks and uncertainties in greater detail in the sections entitled “Risk Factors” and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-Q for the quarter ended September 30, 2018. Further information on potential risks that could affect actual results will be included in other filings we make with the SEC from time to time. Given these uncertainties, you should not place undue reliance on the forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this presentation may not occur and actual results could differ materially and adversely from those anticipated or implied. Except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this presentation to conform these statements to actual results or to changes in our expectations. We file reports, proxy statements, and other information with the SEC. Such reports, proxy statements, and other information concerning us can be read and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549 or on the Internet at http://www.sec.gov. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. Our common stock is listed on the NASDAQ Global Select Market, and these reports, proxy statements and other information are also available for inspection at the offices of the NASDAQ Stock Market, Inc. located at 1735 K Street, NW, Washington, D.C. 20006. We will provide without charge upon written or oral request a copy of any or all of the documents that are incorporated by reference into this prospectus, other than exhibits which are specifically incorporated by reference into such documents. Requests should be directed to our Investor Relations department at Natera, Inc., 201 Industrial Road, Suite 410, San Carlos, California 94070. Our telephone number is (650) 249-9090. 2

Enrolled 20,000 patients in SMART trial for microdeletions Trial designed to drive reimbursement for high-volume microdeletions offering Recent highlights Processed 167,172 tests in Q3 2018, 28% growth vs. Q3 2017 Panorama®: approximately 115,000 tests processed, 26% growth YoY HorizonTM: approximately 44,400 tests accessioned, 36% growth YoY >25 pilot studies signed with leading pharmaceutical companies for SignateraTM (RUO) Roughly $8 million in contracted revenues with pharmaceutical companies expected by EOY Multiple breast cancer studies to be read out at San Antonio Breast Cancer Symposium Total revenues of $65.3M in Q3 2018, up 17% from Q3 2017 3 Announced multiple prospective clinical trials with leading pharma partners Phase 2 study in NSCLC with Bristol-Myers Squibb as a potential biomarker for Opdivo (nivolumab) Phase 1 study with Neon Therapeutics evaluating personalized cancer vaccine or Transplant activities remain on track for launch Successful completion of pre-submission meeting with CMS

Core technology driving $18 billion opportunity validated with NYS, CAP, CLIA and published in 46 peer reviewed publications* PRENATAL $4 Billion ONCOLOGY $12 Billion TRANSPLANT $2 Billion NOVEL MOLECULAR METHOD POWERFUL BIOINFORMATICS *peer reviewed product and method publications 4

2018 volume growth accelerating 5 Total tests processed Year-on-year growth 15% 28% 113,517 130,381 167,172 Q3 2016 Q3 2017 Q3 2018 121,335 125,731 130,381 137,773 164,355 162,807 167,172 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018

Study shows stronger performance in a larger cohort 1 Based on SNP-based dd-cfDNA analyses described here (292 plasma specimens from 193 unique kidney transplant recipients) 2 Bloom RD, et al. J Am Soc Nephrol. 2017;28(7):2221-2232 LARGER SAMPLE SIZE STRONGER PERFORMANCE Natera study1 Bloom et al2 Natera study1 Bloom et al2 SAMPLE SIZE AREA UNDER THE CURVE (AUC) a combined indicator of sensitivity and specificity 6 0.9 0.74 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Transplant reimbursement pathway Completed analytical validation Submitted clinical validation Successful pre-submission meeting Obtain Z-code Complete CLIA validation Formal LCD submission Draft LCD release Establish coding and pricing Launch registry study Final LCD published 2018 / 2019 2019 7

SignateraTM Near-term milestones 8 Data development update: CRC podium presentation at ESMO Breast cancer podium presentation at SABCS: Leicester, ISPY-2 data RCC study with Fox Chase CLIA launch 1H 2019 Prospective observational studies in colon, lung and breast Continued growth in pharma pipeline: 26 signed deals

Phase 2 lung cancer trial with Bristol-Myers Squibb Signatera results used for treatment decision-making prior to randomization in early stage NSCLC, to assess the benefit of adding Opdivo to standard of care Addressable patient population up to 75,000 per year in the U.S. De-risk pharma strategy of moving approved therapies from metastatic to adjuvant setting, opening up larger market opportunities 9 Metastatic cancer patients Early stage cancer patients Label extension to adjuvant setting Approved treatments in the metastatic setting

Collaboration with Neon Therapeutics Phase I study that utilizes NEO-PV-01 + Keytruda + chemo in untreated NSCLC patients Correlate Signatera data with treatment response First time a patient-specific therapeutic has been combined with a patient-specific diagnostic in the clinical setting 10

Average selling prices stable as expected Multi-year, fixed price payer contracts Increasing average risk NIPT coverage Increasing coverage for microdeletions Broader Medicaid coverage Total revenues / tests reported* Pricing drivers going forward 11 *Q1 2018 pricing excludes one-time revenue recognition of $5.5M from Qiagen partnership, $411 $432 $447 Q1 2018 Q2 2018 Q3 2018

Blended COGS targets driving strong returns Blended COGS Trajectory $122 savings per unit X 626,000 tests / year = $76M annual savings ~59% ROIC on all R&D spend since 2015 ~ 12 $388 $282 $266 $200 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 Q1 2015 Q3 2017 Q3 2018 Funded projects

Q3 2018 financial overview Growth in Panorama and Horizon volumes is primary driver of change vs Q3 2017 P&L Q3’18 Q3’17 Change Horizon Revenue $ 23.5 $ 17.9 $ 5.6 Panorama Revenue $ 36.0 $ 33.9 $ 2.1 Total Revenue $ 65.3 $ 55.9 $ 9.4 Gross Margin% 1 36% 38% (200) bps R&D $ 12.4 $ 12.6 $ (0.2) SG&A $ 38.4 $ 34.5 $ 3.9 Net Loss Per Diluted Share $(0.49) $(0.52) $0.03 Balance Sheet Sep 30, 2018 June 30, 2018 Change Cash & Investments 2 $ 170.0 $ 89.2 $80.8 UBS Line of Credit $ 50.1 $ 50.1 $ -- OrbiMed Debt Facility $ 73.3 $ 73.2 $ 0.1 ($ in millions, except for per share data) 1. Gross margin is calculated as gross profit divided by GAAP total revenues. Gross profit is calculated as GAAP total revenues less GAAP cost of revenues. 2. Cash and investments also include short-term and long-term restricted cash. 13

2018 guidance update ($ in millions) Revenue $250 – $260 Gross Margin % revenue 33% – 36% SG&A $150 – $155 R&D $50 – $55 Cash Burn $65 – $75 14

[LOGO]