HEADQUARTERS: San Carlos, CA
YEAR FOUNDED: 2004
2016 REVENUE: $217 Million
Fourteen years ago, Matthew Rabinowitz's sister gave birth to a child with Down syndrome, who died six days later. The family was devastated--and entirely blindsided, as the screening tests available at the time had missed the baby's condition.
Rabinowitz, who had previously co-founded an online merchandising firm and a location-based service technology company, knew exactly what he wanted to do next. "There were inventions to be made in the area of biology," he says. "It was so much more meaningful than what I had been doing."
His San Carlos, California-based company is now a player in the crowded field of noninvasive prenatal testing, a $665-million-plus global market, according to Persistence Market Research. Natera's flagship product, Panorama, can pick up on fetal chromosomal issues at nine weeks, by analyzing traces of fetal cells that circulate in the mother's blood. The screening test requires only a blood draw, and can be performed at a much earlier stage in the pregnancy than more invasive diagnostic procedures like amniocentesis.
With that ease comes a downside: These tests, known as NIPTs, assess risk but are not as definitive as more traditional diagnostics. As a result, false positives do occur.
Yet "Natera is a master innovator," with the recent patents to match, says Nitin Naik, the global vice president for life sciences for consultancy Frost & Sullivan. He calls Natera's version of this test generally more accurate than many others in the space, which gives it an edge in the highly competitive market. Rivals like Sequenom and Illumina examine fragments of conserved DNA sequences, which does not permit them to separate the maternal and fetal strands. Natera's technology instead relies on targeting what's called a single nucleotide polymorphism, a part of a DNA sequence that distinguishes mother and child.
Panorama is currently responsible for about 60 percent of Natera's revenue, but the company has developed several other tests around pregnancy and prenatal health. It's also pushing into the market for cancer diagnostics, and is hoping one of its tests for cancers of the breasts, ovaries, and lungs will be available by the end of 2017.
"We're going after the opportunities that will really make a difference to patients in the long term," says Rabinowitz, who co-founded the company with chief technology officer Jonathan Sheena in 2004.
Natera and its NIPT competitors face less federal regulation than pharmaceutical companies, which need to go through extensive clinical trials and receive FDA approval before they can sell their products to the general public. The agency exempts lab-developed tests from this process; still, that lack of regulation is a double-edged sword for biotech startups, as shown by Theranos--which exploited that loophole--and its very public implosion. Efforts to tighten the rules are ongoing in Washington, though change is unlikely in the near future. Rabinowitz claims he would welcome more regulation and, when asked about Theranos, says that Natera "has and continues to share our data with the broader scientific and medical community," which Theranos did not.
Last year, Natera's annual revenue was nearly 10 times the median tracked for biotech firms--and consultancy Research and Markets believes Panorama will remain a market leader, with a 25 percent share of the NIPT market by 2021. Perhaps most important, Rabinowitz feels he has lived up to his vow to find more meaningful work in his startup. "People are spending a lot of time on their cell phones. It's kind of cool, but I don't think that's changed the quality of life," he says. "What we have done is really profound to health care, and trying to make life and the world a better place."