In the third quarter, Druckenmiller continued to bet on the "number one heavy stock" Natera.

In the latest disclosed third quarter position documents, legendary investor and founder of Duquesne Capital Stanley Druckenmiller's global top family office, Duquesne Family Office, significantly increased its shareholding in the clinical genetic testing company Natera, adding 1.592 million shares to a total of 3.57 million shares, resulting in a substantial increase of 80.61% in its hold positions to 15.34%, with a market value of 0.453 billion USD.

What kind of company is Natera that allows Druckenmiller to spend nearly 0.2 billion?

Significant clinical value and strong potential demand: the tumor detection business has broad prospects.

Public information shows that Natera is a clinical genetic testing platform company founded in 2003, focusing on non-invasive, circulating cell-free DNA (cfDNA) testing technology.

Over the past five years, Natera's revenue has grown rapidly, with a compound annual growth rate (CAGR) of 37.6% from 2019 to 2023, while its expense ratio has continued to decline, and cash flow has turned positive.

According to Huayuan Securities, to date, Natera's business has evolved into three main sectors: tumor (MRD), organ health (organ transplant rejection detection), and women's health (NIPT, etc.), all of which are in leading positions in the industry.

Currently, natera's women’s health business holds about 50% of the market share in the usa. Although it is in a leading position, its development has become quite mature, with a penetration rate of around 50%. The organ health business is in an early development stage, with a penetration rate of only 10%-15%, and the competitive landscape is favorable. The company is actively positioning itself and is in a rapid growth phase; in comparison, the development prospects for the MRD business are the most promising.

Huayuan Securities stated that considering the continuously proven clinical value and the broad potential market demand, natera's MRD testing business has significant competitive advantages.

The report mentioned that current adjuvant therapy options post-tumor surgery lack sufficient precision, necessitating the participation of MRD testing in treatment guidance—MRD testing refers to detecting tumor-derived molecular abnormalities through liquid biopsy to detect cancer recurrence early and guide precise postoperative treatment.

Currently, the MRD testing market in the usa stands at less than 1 billion dollars, far from the theoretical peak of 20 billion dollars, with a penetration rate of less than 5%. On the commercialization front, no company has yet obtained approval from the usa Food and Drug Administration (FDA).

Meanwhile, natera's Signatera is currently the most comprehensively verified MRD testing method, with a rich clinical pipeline and first-mover advantages in research and commercialization.

Despite not yet receiving FDA approval, the volume of Signatera tests has rapidly grown from 0.035 million in Q2 2022 to 0.118 million in Q2 2024, with 0.305 million tests conducted in the year 2023 alone. At the same time, the penetration rate among doctors has quickly increased, with over 40% of oncologists in the usa ordering Signatera in just Q2 2024.

Thanks to the company's improved operational execution and the expected medical insurance and commercial insurance for new indications, the average selling price (ASP) of Signature has risen from the initial launch price of around 400 dollars to over 1000 dollars by Q2 2024.

Huayuan Securities believes that as an industry leader, natera's Signatera product is expected to become the core driving force for the company's rapid performance improvement.