Perfect. Good morning, everyone. This is Rachel Vatnsdal with the Life Science Tools and Diagnostics team. Thank you so much for joining us today. As a reminder, this is a 40-minute session. Roughly the first half will be a prepared presentation, followed by roughly 20 minutes of Q&A. With that, I will pass it off to Steve.
Great. Thank you, Rachel. This is the standard safe harbor information. So the mission of our company is to transform the management of disease worldwide. And we do that through a proprietary technology that combines molecular biology techniques with bioinformatics to look at extremely tiny quantities of DNA. Today, Natera is the leader in cell-free DNA technology. We launched our first flagship product, Panorama, in 2013, looking at cell-free fetal DNA to detect chromosomal aneuploidies. Now, we were the fourth company to market, but today we're the market leader with roughly 50% market share. In 2019, we expanded the same technology to look at circulating tumor DNA in oncology patients and donor-derived cell-free DNA in organ transplant patients. Now, across all these business areas, we follow the same formula for success. We combine leading-edge technology with constant innovation.
We strive to be the leader in peer-reviewed evidence and published clinical data. We provide excellent customer service with an extreme focus on the patient experience. And we hire broad and talented commercial teams. Now, looking at our Q4 performance, we had an excellent quarter across the board. We processed 793,000 tests, which was a growth of 26% over Q4 of last year. This was a record quarter across all of the flagship products for the business: Panorama, Prospera, Signatera, driven by new features, new publications, and new guidelines. Revenue was up 52% from Q4 of last year, which you can see on the right-hand side at $472 million. And on the left, you can see the excellent sequential quarter-over-quarter growth that we've had over the last six quarters. And finally, on cash flow, we were pleased to generate $46 million of cash flow in Q4.
You can see our progression here from just a few years ago of burning cash, but we stuck with the strategy of increasing average selling prices, reducing COGS, growing volume, and being smart about our operating expenses. Now you can see we're generating free cash flow. In fact, in Q4, we actually generated $65 million in free cash flow, but we made a $20 million technology investment, bringing it down to this roughly $46 million range. The strategy is working, and we're sticking with it. Now I want to talk for a minute about our portfolio and give you an innovation update. Signatera clinical units were up about 14,500 units in Q4, which is one of the fastest sequential quarter-on-quarter growth quarters we've ever had in the company.
This was driven by the strength of our team, the strength of our peer-reviewed evidence, and the moat that we're building for this business. So there are several first-mover advantages that we have at this stage after being on the market for five+ years. First, we have more than 100 peer-reviewed papers, and we have multiple randomized trials and clinical utility trials that have either published or are underway to generate even more definitive evidence. We are leading in reimbursement and market access initiatives, where we've now received broad Medicare coverage across many different indications. We have a robust pipeline of additional submissions that are going in to Medicare and to private payers.
And importantly, we've received the unique Advanced Diagnostic Laboratory Test status, which is only awarded to one laboratory in the space, which allows us to price our test at $3,900 on the Medicare fee schedule, which was just increased in 2025 from $3,500. We built out an extensive laboratory and customer experience platform that allows us to deliver at scale, fast turnaround time, provide thousands, hundreds of thousands of mobile phlebotomy blood draws, patient and physician portals, push-button EMR connectivity across the country. And we have more than 100 people that just simply acquire tissue and bring that into the laboratory for our assay. So we're really scaled up for the assay that we're delivering at scale. And then last, we focus very extensively on innovation and also developing intellectual property. You'll see some of the innovation today, but we're increasing our spend on research and development.
And we have been because we believe MRD is just at the very early stages and has a long way to go. We also have a very strong patent portfolio of over 450 issued or allowed patents. So I want to touch for a second on data leadership in oncology. You can see on the left side here that we've now published more than 100 peer-reviewed publications on Signatera and the Signatera technology. Now, when you're in the very early stages of developing a product and you don't have a lot of clinical data, you focus on analytical validation, doing mixture experiments or contrived experiments, and you look at the analytical performance metrics. We've moved beyond that now, beyond clinical validation, into clinical utility data, which is what doctors really care about.
So if I treat the patient based on your Signatera result, are they going to respond to the adjuvant chemotherapy or not? Or if I use MRD to guide my treatment, will the patient have longer overall survival? The doctors don't care about analytical validation. They care about clinical utility data. And that's what we've generated with Signatera. And we think that's what's driving our continued leadership position. Now, one of the great examples of that was the GALAXY study that we read out in late Q3 that powered some of the growth we saw in Q4. So this was the first readout of up to 36 months overall survival data in colorectal cancer. And it was received very well by the community, showing that Signatera is predictive and prognostic of overall survival in a prospective setting.
Now, coming up, we have a big readout actually next week at the ASCO GI Conference. We're pleased to announce that the 702 study has been awarded an oral presentation at ASCO GI. And I'm going to talk in a minute about this study, but we think this is a very significant study. And the physicians and academics are telling us that by selecting it as an oral presentation for all of their members. And then last, another clinical utility study that's going to be reading out soon is the IMvigor011 study, which is being done in partnership with Genentech. This is an FDA phase III trial looking at giving a atezolizumab in the adjuvant setting in muscle-invasive bladder cancer. So we're excited for this readout, which will be coming up.
On the 702 study, again, we think this is a really exciting study that's going to be reading out next week. It's a phase III randomized study in colorectal cancer with a pre-specified endpoint. The objective is to see if Signatera can identify which patients may benefit from the addition of celecoxib to standard adjuvant chemotherapy. Effectively comparing standard adjuvant chemotherapy to adjuvant chemotherapy plus celecoxib to see do the patients have improved disease-free survival and do they have improved overall survival. We've already answered the question largely of whether MRD-positive patients should get adjuvant chemotherapy or not. Now we're answering a new question, which is should MRD-positive patients escalate their adjuvant chemotherapy in colorectal cancer? We think this is going to be a very big readout and look forward to reporting it next week.
So I want to touch for a second before I talk about some of the new launches on the Signatera multiplex PCR NGS capability. So what we do is we sequence the tumor tissue to identify unique signatures in the tumor mutations. We then custom design a multiplex PCR assay for each patient, targeting only the very, very top clonal mutations found in the tumor. And then we sequence the targets at an extremely deep depth of read, over 100,000x coverage at each of the variants that we select. Now, this enables exquisite single-variant detection, which is unique compared to all the other assays that are available. Now, our chosen approach, which we've intentionally selected, is to be highly curated at only the best variants and to go extremely deep at those variants.
Now, this is very different from some of the other hybrid capture approaches that you see today from groups that are coming in, where they sequence at a very, I guess I would say, at a shallower level across a broad set of variants. So we've intentionally chosen this other approach because we think it's the best approach. Now, I want to introduce Signatera developed on the genome. For this assay, we're using the same proven multiplex PCR NGS method that we've used for the past five, six years. And we're following the same principle, which is intentionally curating a targeted set of the best variants and sequencing at an extremely deep level. Now, this allows us to offer the assay in a very efficient way, which we also think is important. Now, we have detection in the ultra-sensitive range down to low single-digit parts per million.
Now, there's some open clinical utility questions on really what that means. What's the impact of detecting something in this ultra-sensitive range or extremely low limits of detection? And what's the impact of detecting something early? We still need to understand really what it means to the patient's outcome. Does it actually improve overall survival? Does it increase the chance that the patient's going to respond to adjuvant chemotherapy if you're detecting patients in that range? One of the things we've seen from one of our competitors recently is that at these extremely low levels of VAF, you're actually seeing some biological false positives. And what they reported is that some of these patients actually clear on their own.
So if the doctor's trying to make a decision about whether to give chemotherapy to the patient, it's kind of difficult if the patient is highly likely to clear on their own. So some of these questions need to be answered. And the good news is we're actually at Natera in the best position to answer these questions because we have this extensive data sets that we've reported out and this extensive history where we have biobanks and additional samples where we can run concordant studies and generate a lot of new clinical utility data on the genome test. Now, in addition, we're leveraging our commercial and operational infrastructure with this assay. We think that's incredibly important. We've heard reports of very long turnaround time, clunky operations from some of the competitors. We'll be offering this at scale right out of the gate.
Same fast turnaround time, same scaled-up phlebotomy network, customer service, tissue procurement network plugged into the EMR networks. So we think that that's a differentiator. Sometimes it's about more than just the assay. It's about the service that you can provide to patients and physicians. And then lastly, we have a broad portfolio of intellectual property that includes early priority dates that apply to both exome and genome MRD. So now I want to talk about tissue-naive MRD. We have done extensive in-house discovery to look for methylation targets. And we have the capability to do this because now we've processed over 250,000 tumor exomes. Now we can leverage this data combined with other information we have to develop our own biomarker discovery platform to find novel targets that just simply aren't available in the literature.
So this data set that is unique to us has now gone through a rigorous training and test evaluation process where we separated the test from the training set on over 800 samples. The data is going to be reported out next week at ASCO GI. But what we're seeing is really solid performance here, excellent performance that we think is competitive with other tumor-naive assays in the field. And we're going to follow up the ASCO GI data, but with additional data sets that will be read out later in the year. Excuse me. The RUO test is now available for pharma companies. And as I said, the commercial clean launch will be later this year. So an MRD, we now have the complete portfolio.
We have the workhorse Signatera exome test that has been proven that has all the overall survival data, 100 peer-reviewed papers, all the data that doctors really want. We think that's going to be the test that is used in the majority of cases. We now have the Signatera on genome, clinically available, available for pharma. If doctors want it, if they want to get to extremely low limits of detection, they can do that. They can order it. We think it's mostly going to be used initially in clinical trials and physicians that want to do investigation, further investigation. But it's available clinically. If the doctor wants to order it today, they can order it, and then last, we have the tumor-naive test for physicians that want that.
So we really believe in this portfolio approach having options where we don't have to debate about which approach is the best as long as they buy the approach from us. Now I want to talk about early cancer detection. And again, we have a unique data set of over 250,000 exomes that have been sequenced. Now, these are early stage in the vast majority of cases. So nobody has this type of data that we have of these early stage patients. And we're able to leverage this biological depth to do discovery platforms that we built over the past two years to look at deep and broad methylation discovery that includes not just cancers, but premalignant lesions and also other conditions which can be important and can skew the results.
We developed, in addition to CRC, an algorithm that's specific to advanced adenoma, just given the importance of that disorder with targets and samples specific to advanced adenoma. We're using a methylation technology that has refinement that really reduces the noise floor and we think is the best approach. I want to talk about our validation strategy for ECD. Our goal here is to be very transparent so you can see extreme levels of detail into how we're validating the test. We have the CIRCULATE-CRC study, which the goal is to establish a clinical performance in CRC. We have over 5,000 confirmed CRC cases. What's great about this data set is that 30% of the patients are asymptomatic CRC patients, meaning they were screened detected by colonoscopy.
We think that's unique and that provides some value because that would be similar to what you would see in an FDA enabling study. This includes stage one through four patients. We have robust clinical data annotation. We also have circulating tumor DNA measurements from Signatera on all these patients, which we think helps us in the development. We have the PROCEED-CRC study where the goal is to establish the performance in a screening population, basically mirroring the FDA enabling study. Now, we wanted to collect 3,000 patients. Good news is we've already collected 2,600 patients and rolled them into the study. We're almost done enrolling in the trial. We'll probably have around 10 CRC cases, about 240 advanced adenoma cases. Again, this is an average risk cohort, pre-colonoscopy blood draws matched with colonoscopy that really de-risks the FDA study.
And we're going to talk about some of that data today and some in the future. And then we have the FIND-CRC study, which would be our FDA enabling study. And we actually can move right into this after PROCEED-CRC reads out if it's positive because we're using the same infrastructure. So we don't have to spend a year spooling up the FDA study. We just continue on and ramp up PROCEED-CRC. So to show you the analysis, we had an independent training and testing cohorts on the left, which included 432 prospective samples from both CIRCULATE-CRC and PROCEED-CRC. There were 127 confirmed colorectal cancer cases. Importantly, and most other companies haven't disclosed this information in their case-control studies, we have 34 screen-detected CRC cases between stage one through three. We had 80 symptomatic CRC cases. That's similar to what others included in their case control.
And then we have 13 with unknown diagnosis. Then we have 305 patients from the PROCEED study that were colonoscopy screen negative controls. Overall, combining the screen-detected and symptomatic patients as others have done in their case-control studies, we had a 95% sensitivity at 91% specificity. And you can see across the stages, stage one and two, 92%, stage three and four, above 98%, which we think is very good performance. But of course, there's this issue of deterioration, which I think everyone asks about. And as you go do your FDA enabling trial, there's always some deterioration. So what we did is we called out specifically the screen-detected CRC cases. So these are the colonoscopy-detected CRC cases that have no other symptoms. And these tend to be more in line with what you would see in an FDA enabling study. And we did see a little bit of deterioration.
But in this cohort, we're still seeing 91.4% sensitivity with a 91% specificity. So we think this is excellent performance. We plan on following this up with an advanced adenoma readout that will be coming sometime in the first half, we believe, of 2025, maybe sooner. Now, the advanced adenoma readout is in line with the FDA enabling research. So these are all screen-detected. They're all blood draws that have been done pre-colonoscopy, matched with a colonoscopy. So the data that we read out on advanced adenoma will mirror what we expect to see in the FDA enabling trial. And so stay tuned for that. We'll announce that when it's ready.
And then later this year, we'll be reading out the full readout from the PROCEED trial, which will include another cohort of advanced adenomas plus more negative controls, plus screen-detected prospective CRC samples from PROCEED, plus additional added CRC samples just because we're only enrolling 3,000 patients in PROCEED. So we need to augment with additional CRC patients. But we're excited about this roadmap. We're doing it in a cost-effective way. And we're going to get to all the way through PROCEED without impacting our cash burn in any way. We have a significant amount of cash on the balance sheet. We have free cash flow. And we actually even think we can get through the FDA enabling trial without even really making a significant dent or issue in our cash burn. So last, I want to talk about future catalysts. Next week, stay tuned for the 702 study.
And then coming up after that, IMvigor in muscle-invasive bladder. We're ramping our investments in R&D and ramping our investments in infrastructure so we can win an MRD. We are launching new women's health products, which will be announced later this year. We expect and hope to see continued growth in ASP and volumes across the different business areas. There's a large list of potential opportunities on new guidelines. We don't like to predict when those might come out. But there are opportunities ahead of us which could be very meaningful for Natera. We are hoping for additional coverage decisions in oncology. And then we're making progress towards getting reimbursed and being on market for Signatera in Japan, which, as a reminder, is about the same size as the U.S. market for colorectal cancer. So with that, we'll open it up for questions.
I'd like to invite our company president, Solomon Moshkovich, and the general manager of our oncology business, Dr. Alexey Aleshin, to come up on the stage as well.
Okay. Thanks.
Awesome.
Perfect. So thank you, Steve. Maybe just to kick it off here, just unpacking the solid top line and cash flow beat that you guys announced on Monday. Can you walk us through what were really the main drivers that drove that strong performance this quarter?
Yeah. No, hey, thanks for the question. It's great to be here. I mean, really, it was sorry for the boring answer, but it was really kind of across the board performance. I mean, we had very strong volume growth, as Steve alluded to. I think ASPs were, again, incrementally stronger sequentially versus Q3. And that's really across the board in women's health and in oncology. I think that when we get to the Q4 print, we'll be able to talk about oncology ASPs kind of continue to grow. And I expect that to be a trend continuing on through 2025.
Perfect. And then, obviously, a lot of new product announcements today. I think that's the highlight of this presentation. So first up, just on the tumor-naive MRD offering, can you talk more about the decision to launch that product? How do you envision this offering coexisting with the current standard of Signatera? And then how should we think about the performance of Signatera versus that other tumor-naive test that are on the market today?
Yeah. So I think the answer to that is pretty simple. If the doctor wants tumor-naive, they can get tumor-naive. We'll give it to them, and we think that's a great approach. If they want Signatera tumor-informed, they can have that. If they want tissue-naive, they can have that. There might be circumstances where it may make sense for them to order a tumor-naive test, or that might just be their preference. We see it kind of panning out. We think probably 85% of the business will end up being Signatera exome, which has all the overall survival data. It's involved in over 100 studies, has 100+ peer-reviewed papers, and then we think kind of genome and tumor-naive will be on the other 15%.
Helpful.
Over time, of course.
Perfect. Then, just on the early cancer detection test, can you talk about how that early data that you showed shook out really relative to your internal expectations, and then where do we go from here in terms of pursuing an FDA-grade validation study?
Yeah. So we're really excited about this. I think what we've seen from a lot of case-control studies that have come out, they sometimes haven't given the stage breakdown or they haven't given the breakdown of symptomatic versus asymptomatic. But they've all sort of included a similar number of symptomatic patients. And so we think our data is very good in comparison to some of the other case-control studies that we've seen. And we actually are, I think, excited that we've been as transparent as we have breaking out the screen-detected cases and still seeing that good performance there. And I think that can give you maybe more confidence going into some of the more definitive readouts because, really, those screen-detected cases are going to be driving the definitive performance. I think people are probably surprised about how far ahead we are on the PROCEED study.
Having 3,000 collected probably here this month, we'll have the full 3,000 enrolled, so having a 3,000-patient prospective colonoscopy-matched screening set in our hands is, I think, something people didn't expect, so we're excited about that, and then the fact that we've set up this infrastructure and we can kind of roll directly into the FDA enabling study, I think, is great. In addition, something that's unique for us compared to others in the space is the advanced adenoma set that we're going to be reading out is 100% screen-detected, so we did the work. This isn't case control. This is advanced adenoma colonoscopy-matched screen-detected from PROCEED, and we're going to have that first readout coming up soon here.
Perfect. That's helpful. Then maybe shifting over to the whole genome version of Signatera that you announced. Can you walk us through how should investors be thinking about the margin profile of this test and anything we should be aware of on the margin front as you launch it?
Obviously, it's a little more expensive to sequence genome than an exome. I think the good news is that that's sort of amortized over the sequential blood draws of the patient. Really, while it is more upfront over time, I think it sort of can kind of reduce over the number of blood draws that you do. I think there's a potential opportunity to get reimbursement increases. We're going to have to see about that. It won't impact our COGS profile in a very significant way, especially because we think the vast majority of doctors are going to want the proven utility of the exome, which has all the overall survival data. I highlighted some of the limitations that have already been presented by competitors that I think really raise questions about some of the clinical utility aspects of the tests.
Perfect. Then maybe stepping back across these three new product launches that you talked about today, should we expect any of them to meaningfully contribute to 2025, or is this more of a 2026 and beyond story?
I think a lot of it is going to depend just on how kind of things play out. I think we're gearing up to have a good year. I think we're doing the right things. We have our strategic planning in sort of Q3. And we kind of go over all the stuff that we need to do and tune that up in Q4. And I can tell you I'm pretty excited right now about what I'm seeing as far as excitement on the team, energy in the field coming from physicians and from our sales team and from our medical affairs team, engagement that we're seeing with top KOLs, principal investigators around new studies. And it's important to remember that we're just at the very early stages of MRD. So this is going to be like an opportunity that has never been seen before in cancer diagnostics.
We're at the low single digits penetration right now.
Perfect. That's helpful. Maybe shifting to 2025 volume growth expectations. You guys have talked about how you expect to be able to at least expand volumes at the same level that you did in 2024, excluding some of the one-time impacts, obviously. So given where 4Q landed, can you just talk about your confidence? Is that still in play for 2025?
Take that, Mike.
Yeah. I mean, we're off to a great start so far in 2025. I think it's worth just noting that we're kind of at a scale now where every receiving day, just for clinical oncology for Signatera, let's pick that as an example, it's worth something like 2,000 units. And so as you kind of go through the year, you'll have the variations in kind of number of receiving days, which will affect kind of your sequential growth that folks like to really monitor. But underlying that is real momentum that you've seen. If you look back over the last few quarters, you see us grow 11,000 units in Q3, 14,500 units in Q4. So we feel great about where the momentum is pointing to us in 2025.
For sure. That's helpful. Maybe shifting to a few Signatera-specific questions then. Signatera saw really strong volume growth again throughout 2024. You've exceeded your historical guidance of that 8,000-10,000 units of sequential improvement on Signatera. So given the past approach, just given some potential one-time fluctuations in order trends, are you planning to continue embedding that same 8,000-10,000 level, or is it time to kind of update that range as we look throughout 2024?
Yeah. I mean, I still think that's the right baseline range just because of what I just said. I mean, there's 2,000 units come in every receiving day. So if you have an extra holiday or whatever, you can have those kind of quarterly fluctuations, which is fine. I think that still portends a very strong year for us going into 2025, and we'll have quarters where we clearly exceed that, just like we just did in Q4.
Yeah. And I do think one of the catalysts we have driving growth is new data readouts. We saw that a little bit with GALAXY. And we have this 702 study coming up. I don't know, Alex, if you want to talk about, from a physician perspective, the significance of the 702 study. I think that would be great.
Yeah, absolutely. So I think the biggest question in CRC has always been, how can we prevent recurrence? And a few studies have established the standard of care, which is currently two chemotherapy drugs, a fluoropyrimidine and an oxaliplatin. But for the last 20 years, there's been no new approvals, no new drugs that have really moved the needle in preventing people's cancer from coming back. A few studies have looked at, for example, things like celecoxib. And that was actually in the 702 study. And even though there was sort of a signal in all comers, it did not meet statistical significance. So for the first time, tests like Signatera can really subsegment patients to those super high risk, and those are individuals who are low risk.
So with this readout, we're really trying to see if in that high-risk Signatera-positive group, can drugs like celecoxib actually improve outcomes, both decreasing risk of recurrence and overall survival. So I think that data is going to be presented in a few weeks. And we're super excited to see how it's received.
Perfect. Maybe more broadly, if we look at MRD penetration, can you give us the latest view on how penetrated do you think this market is? Where do you think it can really go to in terms of what percentage of U.S. physicians do you anticipate using Signatera by the end of this year?
Solomon, you want to take that?
Yeah.
Yeah. Great question. We've seen very strong growth through 2023 and 2024, and I think that's been driven by new physician users, existing physicians who are comfortable using the test in more and more of their patients, maybe initially often in colorectal cancer, and then expanding to other disease indications as they gain experience with it, and at this point, we have continued to grow the user base and continue to grow kind of the share of each patient's number of patients as well. We expect that to continue. Certainly, on the side of physicians using the test more and more broadly within their practices, I think there's a huge amount of runway for that. I think the 702 study and other results that are going to be read out this year will juice that growth.
I think we've previously presented in our Q3 call that about over 40% of oncologists in the country are ordering the test. We see that number continuing to grow. Obviously, that's not going to grow forever. At some point, that does level off. But we don't see that leveling off in 2025.
Perfect. That's helpful. Maybe just on the topic of ASPs for Signatera, can you spend a minute talking about the traction that you've seen on the ASP front? We had some noise earlier this month as well with the CLFS on the payment rate there. But you've also talked about improved coverage from Medicare Advantage. So walk us through some of the puts and takes on the Signatera ASP front.
Yeah. Maybe I'll just give you the quick history over 2024 and where we're going in 2025. So first, on the fee schedule issue, there was some kind of administrative issue that got fixed within a couple of days. And so we're very pleased to see the ADLT rate updated to actually just above $3,900, up from $3,500 in 2024. So that will actually be an incremental driver for 2025, which we're very excited about. Over the course of kind of the second half of 2023 and 2024, within our Medicare Advantage book of patients, we went from getting reimbursed about 20% of the time from Medicare Advantage patients up to we're kind of exiting the year at kind of mid-60s, mid- to high-60s% reimbursed for covered services within the Medicare Advantage population. And that's been a big driver.
I mean, that's really helped us go from the 800-900 range up to the 1,050 range as of Q3. As we look at Q4, kind of preliminary estimate would indicate we're probably in the 1,100+ range. And that points to a couple of topics. I mean, that's just cleaner execution and just making sure that we're getting reimbursed when we should from Medicare Advantage. Traditional fee-for-service Medicare continues to flow kind of smoothly as expected. And it's early days, but I do think that we're starting to see some green shoots from reimbursement via the state biomarker laws. And we're actually kind of excited about that as a potential driver for future ASPs into 2025 and beyond.
That's helpful. Maybe just going alongside that, then, gross margins on Signatera, given some of the ASP lift that you're expecting, but also on the COGS side as well. Can you walk us through? You've talked about that Signatera will be accretive to corporate margins and contribute to overall gross margin improvement. So how should we think about that margin lift in 2025 and beyond?
Yeah. I mean, you really saw it in 2024. I mean, you saw a massive change in our gross margin profile. Even ex-true-ups were in the high 50s% now. Signatera is clearly margin accretive to the overall business. And so you see a real dynamic happening as the volume ramps for Signatera now, where just as a % of mix of the total revenues, the cancer business is really becoming competitive, if you will, with the size of the women's health business. And that mix shift will also tend to drive corporate margins higher. So it's really kind of in line with what we've talked about and what we've expected. And I do think that there's ample opportunity over the course of the next several years to massively expand gross margins once again.
Perfect. Maybe shifting over to women's health, just on the competitive front, can you walk us through what you're seeing from market dynamics given some of these competitor exits? What areas of the market are you most excited about for 2025 in women's health?
Yeah, so we continue to do really well in women's health. I think we're looking to increase our share above 50%. We have some new product launches that are coming up. We had great reception to the Rhesus D test. The run rate on that's now 150,000+ patients. We don't count that in our numbers when we report out because it's on the same patient, although we could break that out separately as an additional test because that has its own PLA code now and is listed on the Clinical Lab Fee Schedule. But the exciting thing, too, about women's health is historically, we've been focused largely on volume growth.
Now, I think you get to a point where you start to say, "Okay, are there real ASP improvement opportunities?" And when you look at things like 22q, we're probably doing a million 22q tests this year that's not reimbursed today. There's a CPT code, a tier-one CPT code awarded by the AMA. There's a prospective seven-year peer-reviewed publication. If that were to get guidelines, it's priced by CMS around $700. If you got $200 a test on average, that'd be 200 million directly to the bottom line in revenue. So I think those types of opportunities, these sort of big opportunities, not only to help patients, but I think to grow the business in women's health are there. Same with Rh testing. Run rate of now 150,000-200,000 tests. It's priced on the CMS fee schedule, I think $700, something in that range.
If you got $250, I mean, that would be very meaningful to the bottom line and from a revenue standpoint. So those opportunities exist. But we're still obviously trying to take share, to help as many patients as possible with our technology.
Maybe sticking on the topic of some of these ASP dynamics, Natera has benefited from some of these true-ups over the last few quarters. So can you spend a minute talking about how should we see the durability of these true-ups going forward and the impact there?
Yeah. I expect the true-ups to moderate over the course of 2025. As everyone knows, I mean, the way that we accrue revenues, we've got to make an estimate of what our revenues are going to be from units that we've performed in the quarter. It usually takes three to four, five months to actually get the reimbursement submitted and kind of get the payment back. So that's what requires the estimate.
When we make that estimate, we're just looking further back into our history and just looking, "Hey, what is kind of the median reimbursement we're getting kind of per product and per payer?" So when you're in a dynamic like we've been in the last 18-24 months where the reimbursement experience is getting a lot better, you're just increasing the fraction of time you're getting paid across the portfolio of businesses, you're going to have some true-ups because your estimate is going to undershoot what your true collections experience has been. And you've seen that in the business. We have increased ASPs very meaningfully in terms of our accrued ASPs every single quarter. And you'll see that again in Q4.
So I do think that this is something that represents good execution, represents a lot of hard work and effort from the team, and is something that we'll get caught up to as the historical experience kind of matches our current trends.
Maybe a last question, the last minute or so, just on profitability. This was a very great year for inflection for Natera in 2024. We've also talked about wanting to reinvest cash flow back into the business, hence some of the product launches that we received today. So can you talk about how you're kind of balancing cash flow generation versus reinvesting back into the business in 2025 and beyond?
Yeah. I'll just make kind of a general comment. I mean, we think there's a lot of innovation. We've always driven our success by continued innovation. If you look at Panorama, we're on version six or seven. And that's part of what has helped us drive to get up 50%+ market share. So we think innovation is important. We think generating clinical data is important. Most of our R&D investment is in the core business. Now, we have a couple of these side bets, but the vast majority is in the core business. And we think it's better to focus on winning because we're so underpenetrated than it is on just trying to rush to become profitable.
I think the Q4 results give us a lot of confidence that the underlying business model is working beautifully. Despite our desire to be kind of full-on reinvesting in the business, we still generated about $65 million in free cash flow in the quarter. Okay? So as we try and reinvest into next year, I feel very good that as you build the platform, you're getting very high ROIC investments there.
Yeah. Perfect, and with that, we are out of time, so thank you, everyone, so much for joining us today.
Thanks.
Thank you.