Natera Joins Quest in Four-Way Battle for Prenatal Genetic Tests

2/20/13Follow @xconomy

[Corrected: 9:10 am PT] Parents have long wanted to know whether they are about to bring a child into the world with a chromosomal abnormality like Down syndrome. There’s never been a noninvasive, simple, and highly accurate way to make that call at an early stage of pregnancy. But after a flurry of innovation in high-speed DNA sequencing, four companies are slugging it out to offer such tests in what is becoming a fast-emerging market for genetic information.

San Carlos, CA-based Natera is the latest company to enter the fray, as it has started selling its non-invasive prenatal genetic screening test. The test, called Panorama, is going up against competing services from San Diego-based Sequenom (NASDAQ: SQNM), San Diego-based Illumina’s Verinata unit (NASDAQ: ILMN), and San Jose, CA-based Ariosa Diagnostics. Several of the emerging non-invasive prenatal genetic test companies have already paired up with distribution partners—Illumina with PerkinElmer, Ariosa with LabCorp of America. Natera is also announcing today it will get distribution help from Quest Diagnostics, one of a handful of high-volume diagnostic providers.

The list price for the new Natera test is $1,495. That’s more than Ariosa, but significantly less than Sequenom’s test, which entered the market first in October 2011. [Correction: An earlier version said the Natera test was priced at $1,295.]

The companies will start to find out this year just how much demand there is from expectant parents for the new DNA-based prenatal genetic tests. There are more than 4 million live births each year in the U.S., and more than 500,000 are considered “high-risk” pregnancies, based on the age of the mother, prior childbirth experience or some other factor. Last year, the American College of Obstetrics and Gynecology and Society of Maternal and Fetal Medicine issued guidelines which encouraged members to use prenatal DNA testing in pregnant women considered at high-risk.

That opinion, from influential physician groups, is part of what drove Illumina to pay $350 million upfront to acquire Redwood City, CA-based Verinata Health in January. Illumina, the market-leading maker of high-speed DNA sequencers, said it sees a $600 million market for such tests forming in 2013 based on screening of high-risk pregnancies. Longer term, the market could get much bigger as prenatal genetic tests become part of mainstream maternal medicine.

Gautam Kollu, Natera's vice president of marketing and business development

“We are really excited,” says Gautam Kollu, Natera’s vice president of marketing and business development. “Years of work is finally culminating. We think this is just the start of what can be done to help people manage their pregnancies.”

Pregnant women have long had the ability to find out if they are carrying a fetus with a chromosomal abnormality. There are blood-based tests that look at protein markers of chromosomal abnormalities, and when combined with ultrasound, they can typically detect Down syndrome 60-80 percent of the time. To get a definitive answer, parents turn to procedures known as Chorionic villus sampling (CVS) and amniocentesis. The catch is that those tests are invasive, and come with some risk of miscarriage, so they aren’t done routinely. Switching to a simple blood draw, which is easy and carries no risk of miscarriage, with accuracy rates in the high 90 percent range, changes the dynamic in a big way. Suddenly, the new DNA based tests are becoming more of a typical consumer choice based on the patient’s desire to know the answer, the accuracy/quality of the service, and cost.

Natera has been around since 2004, and already makes money from a test that helps people select embryos for implantation through in vitro fertilization. But the company raised $20 million last year to pursue this much bigger opportunity.

The competition on all key parameters is intense. Natera is seeking … Next Page »

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