First Quarter 2025 Earnings Conference Call Safe Harbor This presentation has been prepared by Adaptive Biotechnologies Corporation ("we," "us," "our," "Adaptive" or the "Company") and is made for informational purposes only. The information set forth herein does not purport to be complete or to contain all relevant information. Statements contained herein are made as of the date of this presentation unless stated otherwise. This presentation shall not constitute an offer to sell or the solicitation of an o ...

Financial Performance - Revenue for Q1 2025 was $52,443,000, representing a 25.5% increase from $41,873,000 in Q1 2024[13] - Net loss for Q1 2025 was $29,830,000, a reduction of 37.4% compared to a net loss of $47,533,000 in Q1 2024[21] - Operating expenses for Q1 2025 totaled $82,047,000, down 9.6% from $90,635,000 in Q1 2024[13] - Total shareholders' equity decreased to $190,221,000 as of March 31, 2025, down from $202,485,000 at the end of 2024, a decline of 6.0%[11] - Total revenue for the three months ended March 31, 2025, was $52.443 million, a 25.1% increase from $41.873 million in the same period of 2024[41] - The company reported a net cash used in operating activities of $28,484,000 for Q1 2025, compared to $38,353,000 in Q1 2024, a reduction of 25.7%[21] - Total share-based compensation expense for the three months ended March 31, 2025, was $12.1 million, down from $14.3 million in 2024, representing a 15% reduction[99] Revenue Breakdown - MRD revenue for the three months ended March 31, 2025, was $43.721 million, up from $32.626 million in the prior year, representing a 34.0% increase[41] - Immune Medicine revenue decreased to $8.722 million in Q1 2025 from $9.247 million in Q1 2024, a decline of 5.7%[41] - The company recognized $2.0 million in MRD service revenue related to Medicare reimbursements during Q1 2025, compared to $1.5 million in Q1 2024[41] - MRD revenue increased by $11,095,000 (34%) to $43,721,000, driven by a $9,900,000 increase in revenue from clonoSEQ reports and a $1,000,000 increase from MRD sample testing services[139] - clonoSEQ test volume rose by 36% to 23,117 tests delivered in Q1 2025, up from 17,040 tests in Q1 2024[139] Expenses and Costs - Research and development expenses were $24,203,000 in Q1 2025, a decrease of 19.9% from $30,245,000 in Q1 2024[13] - Cost of revenue decreased by $1,072,000 (6%) to $16,979,000, with cost of materials down by $1,200,000 and labor and overhead costs reduced by $1,400,000[141] - Research and development expenses decreased by $6,042,000 (20%) to $24,203,000, representing 46% of total revenue compared to 72% in the prior year[142] - General and administrative expenses decreased by $2.2 million, mainly due to a $2.2 million reduction in personnel costs[146] Assets and Liabilities - Total current assets decreased to $256,489,000 as of March 31, 2025, down from $283,752,000 at the end of 2024, a decline of 9.6%[11] - Cash and cash equivalents increased to $50,646,000 from $47,920,000, reflecting a growth of 5.1%[11] - Total liabilities decreased to $320,631,000 as of March 31, 2025, down from $336,891,000 at the end of 2024, a decrease of 4.8%[11] - The company reported a restricted cash balance of $2.7 million as of March 31, 2025[30] - Total financial assets as of March 31, 2025, amounted to $213.6 million, including $31.5 million in money market funds and $161.2 million in U.S. government treasury securities[56] Future Prospects and Collaborations - The company has the potential to receive up to $412.0 million in future milestone payments contingent on regulatory approvals for therapeutics related to MRD data[42] - Under the Genentech collaboration agreement, the company may receive up to $1.8 billion in additional payments, including $65.0 million for regulatory milestones and $300.0 million for development milestones[44] - The company anticipates long-term growth in MRD revenue through increased clinical testing volume and optimized payor coverage[123] - Immune Medicine revenue is expected to grow as therapies advance to commercialization, although it may fluctuate due to various factors including collaboration expenses[124] Stock and Equity - The weighted-average shares used in computing net loss per share increased to 149,195,028 in Q1 2025 from 145,787,527 in Q1 2024[13] - As of March 31, 2025, the total shares of common stock reserved for future issuance amounted to 45,862,767[80] - The total shares available for grant decreased from 18,018,312 at December 31, 2024 to 10,957,287 at March 31, 2025[83] - Stock options outstanding as of March 31, 2025 totaled 11,936,635, with a weighted average exercise price of $15.37[85] Accounting and Compliance - The company’s financial statements are prepared in accordance with GAAP, and interim results may not be indicative of full-year performance[28] - The company has prepared unaudited condensed consolidated financial statements in accordance with GAAP, requiring estimates and judgments that may differ materially from actual results[176] - The company's disclosure controls and procedures were deemed effective as of March 31, 2025, with no changes that materially affected internal control over financial reporting during the three months ended[180] - There have been no material changes to the critical accounting policies and estimates as previously disclosed in the Annual Report for the year ended December 31, 2024[177] Risks and Legal Matters - The company operates in a rapidly changing environment with various risks that could materially affect its business and financial condition, with no material changes to risk factors since the last report[184] - The company is not currently involved in any legal proceedings that would have a material adverse effect on its business or financial condition[183]

Financial Data and Key Metrics Changes - Total revenue for the first quarter was $52.4 million, representing a 25% growth from the same period last year [19] - MRD revenue grew 34% year-over-year to $43.7 million, with clinical and pharma contributions of 65% and 35% respectively [19] - Sequencing gross margin improved by 17 percentage points year-over-year to 62% [6][21] - Operating expenses decreased by 9% to $82 million, driven by lower R&D spending [21] - Cash burn for the quarter was $23 million, a 38% improvement compared to the same period last year [6] Business Line Data and Key Metrics Changes - ClonoSEQ clinical revenue grew 55% year-over-year, with test volume reaching over 23,000, a 36% increase [8] - Blood-based testing contributed 44% of MRD tests in the US, up from 39% a year ago [9] - MRD Pharma revenue grew 11% year-over-year, with $4.5 million recognized in regulatory milestones [12] - Immune medicine revenue was $8.7 million, down 6% from a year ago, primarily due to a decrease in Genentech amortization [20] Market Data and Key Metrics Changes - The number of ordering healthcare providers grew 31% year-over-year, now exceeding 3,400 [10] - EMR integrations accelerated, with 27 live integrations including five of the top 10 accounts [10] - The contribution of DLBCL and MCL in MRD tests increased to 12% from 10% a year ago [9] Company Strategy and Development Direction - The company is focused on increasing the lifetime value of each clonoSEQ Medicare patient and expanding its market presence in blood-based testing [6][14] - Strategic goals include achieving over 45% of clonoSEQ testing done in blood, launching Onco EMR with Flatiron, and beginning phase one testing with NeoGenomics [14] - The company aims to be adjusted EBITDA positive in the second half of the year [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving raised full-year guidance due to strong first-quarter performance and sustained momentum [24] - The company anticipates approximately 30% growth in clonoSEQ test volumes for 2025 compared to 2024 [22] - Management noted minimal exposure to tariffs and NIH funding pressures, highlighting a solid cash position of $233 million [7] Other Important Information - The company is raising its full-year MRD revenue guidance to a range of $180 million to $190 million [22] - Operating expense guidance has been lowered to a range of $335 million to $345 million [23] - Cash burn guidance has also been reduced to a range of $50 million to $60 million [23] Q&A Session Summary Question: Specific indications seeing growth and contribution trends - Management noted strong sequential growth across all indications, particularly in lymphoma indications like DLBCL and MCL [26][27] Question: Updates on EMR integration and growth quantification - Management reported significant growth in accounts that have been live for at least a year, with six of seven accounts exceeding 75% year-over-year growth [30][31] Question: Drivers of clonoSEQ volume growth and weather impact - Management confirmed no notable weather impacts and attributed growth to DLBCL and MCL, along with EMR integrations [36][37] Question: Milestone payments and funnel growth - Management indicated that more milestones are becoming available, providing clarity and confidence in the 2025 outlook [41][43] Question: Pricing and contracting discussions - Management emphasized discipline in pricing, ensuring contracted rates are close to Medicare rates [45][46] Question: Multiple myeloma trials and testing intervals - Management acknowledged increased interest in more frequent testing, particularly in multiple myeloma and other indications [50][52] Question: Technology improvements and addressing market adjacencies - Management is actively looking for ways to enhance technology and improve sensitivity in assays [54][56] Question: EMR integration and operational efficiencies - Management noted potential operational efficiencies from EMR integrations, with significant reductions in callbacks reported [60][61] Question: NeoGenomics partnership progress - Management provided updates on the selection of phase one accounts and preparations for the pilot launch in the second half of the year [106][108]

Revenue Performance - Revenue for Q1 2025 was $52.4 million, a 25% increase from Q1 2024[5] - MRD revenue was $43.7 million, representing a 34% increase year-over-year, contributing 83% of total revenue[8] - Total revenue for Q1 2025 was $52,443 thousand, up from $41,873 thousand in Q1 2024, representing a year-over-year increase of approximately 25%[26] - The revenue from the MRD segment in Q1 2025 was $43,721 thousand, compared to $32,626 thousand in Q1 2024, marking an increase of approximately 34%[26] - The Immune Medicine segment reported a revenue of $8,722 thousand in Q1 2025, compared to $9,247 thousand in Q1 2024, indicating a decline of about 5.7%[26] Operating Expenses - Operating expenses decreased by 9% to $82.0 million from $90.6 million in Q1 2024[6] - Operating expenses for Q1 2025 totaled $82,047 thousand, a decrease from $90,635 thousand in Q1 2024, showing a reduction of about 9%[26] - Share-based compensation expense in Q1 2025 was $12,147 thousand, down from $14,298 thousand in Q1 2024, reflecting a decrease of approximately 15%[25] - The company reported no restructuring expenses in Q1 2025, compared to $1,044 thousand in Q1 2024, indicating a strategic shift in operational focus[25] Financial Performance - Net loss for Q1 2025 was $29.8 million, an improvement from a net loss of $47.5 million in the same period last year[7] - The net loss attributable to Adaptive Biotechnologies Corporation decreased to $(29,852) thousand in Q1 2025 from $(47,507) thousand in Q1 2024, indicating a significant improvement in financial performance[25] - Adjusted EBITDA loss was $12.7 million, compared to a loss of $28.2 million in Q1 2024[9] - Adjusted EBITDA for Q1 2025 was $(12,748) thousand, an improvement from $(28,180) thousand in Q1 2024, reflecting a reduction in net loss[25] - The total adjusted EBITDA for the Immune Medicine segment in Q1 2025 was $(5,446) thousand, an improvement from $(6,927) thousand in Q1 2024[26] Guidance and Projections - Full year 2025 MRD revenue guidance raised to $180 million to $190 million, implying annual growth of 24% to 31%[8] - Full year total company operating expenses guidance updated to $335 million to $345 million[10] - Expected full year total company cash burn reduced to $50 million to $60 million[11] Cash Position - Cash, cash equivalents, and marketable securities totaled $232.8 million as of March 31, 2025[9] Test Volume - clonoSEQ test volume grew 36% to 23,117 tests delivered compared to Q1 2024[8] Interest Expense - Interest expense for Q1 2025 was $2,905 thousand, slightly down from $2,993 thousand in Q1 2024[25]

Core Insights - Adaptive Biotechnologies reported a strong start to 2025 with a 34% growth in MRD revenue, driven by increased clonoSEQ test volume and effective execution [2][4] - The company raised its full-year MRD revenue guidance to a range of $180 million to $190 million, while reducing operating expenses and cash burn targets [2][7][8] Recent Highlights - Revenue for Q1 2025 was $52.4 million, a 25% increase from Q1 2024 [4] - MRD revenue was $43.7 million, reflecting a 34% increase year-over-year, while Immune Medicine revenue decreased by 6% to $8.7 million [4] - clonoSEQ test volume grew by 36% to 23,117 tests delivered compared to Q1 2024 [9] Financial Performance - Operating expenses for Q1 2025 were $82.0 million, down 9% from $90.6 million in Q1 2024 [5] - Net loss for Q1 2025 was $29.8 million, an improvement from a net loss of $47.5 million in the same period of 2024 [6] - Adjusted EBITDA for Q1 2025 was a loss of $12.7 million, compared to a loss of $28.2 million in Q1 2024 [6][27] Updated Financial Guidance - Full-year MRD revenue guidance was updated to $180 million to $190 million, implying annual growth of 24% to 31% [9] - Total company operating expenses are expected to be between $335 million and $345 million, down from the previous range of $340 million to $350 million [7] - Full-year cash burn is now projected to be between $50 million and $60 million, reduced from the earlier range of $60 million to $70 million [8]

SEATTLE, April 10, 2025 (GLOBE NEWSWIRE) -- Adaptive Biotechnologies Corporation (Nasdaq: ADPT), a commercial stage biotechnology company that aims to translate the genetics of the adaptive immune system into clinical products to diagnose and treat disease, today announced it will report financial results for the first quarter 2025 after market close on Thursday, May 1, 2025. Company management will webcast a corresponding conference call beginning at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time. Live au ...

SEATTLE, April 08, 2025 (GLOBE NEWSWIRE) -- Adaptive Biotechnologies Corporation (NASDAQ:ADPT), a commercial stage biotechnology company that aims to translate the genetics of the adaptive immune system into clinical products to diagnose and treat disease, today announced that Palmetto GBA, a Medicare Administrative Contractor (MAC) that assesses diagnostic technologies through its Molecular Diagnostic Services Program (MolDX), has expanded coverage of clonoSEQ® to include single time point testing to monit ...

Core Viewpoint - Adaptive Biotechnologies has launched an enhanced version of its clonoSEQ assay for measurable residual disease (MRD) detection in diffuse large B-cell lymphoma (DLBCL), which is now approved for clinical use in New York State and covered by Medicare [1][4]. Group 1: Product Enhancements - The enhanced clonoSEQ assay features an optimized DNA extraction methodology and maximizes sample input, resulting in a 7-fold increase in sensitivity [2]. - The assay maintains its proprietary approach by reading the full immune receptor sequence of malignant B cells, which improves sensitivity while preserving specificity, thus minimizing the risk of overtreatment due to false positives [2][4]. Group 2: Clinical Impact - The enhanced assay was previously available for research use and is being incorporated into biopharma-sponsored and investigator-initiated trials, with data indicating that MRD negativity post-cycle six is highly prognostic of progression-free survival [3][6]. - The assay has been used to manage and inform patient care for over 2,800 DLBCL patients, with more than 640 providers utilizing it in 2024 alone [4]. Group 3: Market Context - DLBCL is the most common form of non-Hodgkin lymphoma in the U.S., accounting for about 1 in 3 NHL patients, with over 18,000 new diagnoses each year [5]. - Approximately 30-40% of DLBCL patients experience relapse, primarily within the first two years, highlighting the importance of MRD testing for assessing treatment response and adjusting treatment plans [5][6]. Group 4: Regulatory and Clinical Guidelines - The New York State Department of Health has approved the enhanced clonoSEQ ctDNA assay for MRD detection in DLBCL, aligning with updated National Comprehensive Cancer Network (NCCN) guidelines recommending ctDNA testing for MRD assessment in PET-positive DLBCL patients [4].

Revenue and Financial Performance - In 2024, the company's revenue was $179.0 million, a 5.0% increase from $170.3 million in 2023, primarily driven by the MRD business[23]. - The MRD business generated $145.5 million in revenue in 2024, representing a 42% growth from 2023, which included $12.5 million in milestone revenue[28]. - Operating expenses were reduced to $341.5 million in 2024 from $397.3 million in 2023, reflecting ongoing operational streamlining[23]. - For the year ended December 31, 2024, the company incurred a net loss of $159.6 million, compared to $225.3 million in 2023 and $200.4 million in 2022, with an accumulated deficit of $1.3 billion[169]. - As of December 31, 2024, the company had cash, cash equivalents, and marketable securities totaling $256.0 million[23]. - The company expects to continue incurring significant expenses and operating losses as it invests in the development of products and services utilizing its immune medicine platform[169]. Product Development and Clinical Trials - The clonoSEQ assay is utilized in over 170 active trials by more than 40 biopharmaceutical partners, with 85 trials using MRD as a clinical endpoint[28]. - A phase 3 study showed that the MRD negativity rate at 10⁻⁵ was significantly higher with D-VRd (60.9%) compared to VRd (39.4%) in newly diagnosed MM patients[45]. - The company aims to expand clonoSEQ's clinical utility in NHL, which represents approximately 50% of newly diagnosed lymphoid malignancies in the U.S.[51]. - The company is developing TCR-based cell therapies under the Genentech Agreement, but has limited experience in commercialization, which may hinder future success[197]. - The company is developing a pipeline of immune-based diagnostics and therapeutics, including TCR-based cellular therapies in oncology and antibodies in autoimmunity, but significant additional research and development, validations, and clinical trials are required before achieving commercially viable products[204]. Regulatory and Compliance - The company must comply with HIPAA and HITECH regulations, which govern the privacy and security of protected health information[127]. - The IVDR requires systematic post-market surveillance and performance evaluations to enhance health and safety[115]. - The FDA's final rule on May 6, 2024, amended the definition of IVDs, requiring compliance with medical device regulatory requirements starting May 6, 2025[125]. - The company is subject to various federal and state fraud and abuse laws, including the Anti-Kickback Statute, which imposes severe penalties for violations[137]. - The company holds required licenses for Maryland, Rhode Island, Pennsylvania, New York, and California, ensuring compliance with state regulations[120]. Strategic Partnerships and Collaborations - The company entered a multi-year exclusive strategic collaboration with NeoGenomics to integrate clonoSEQ with their offerings in complex blood cancers[52]. - The company received a $300 million upfront payment from Genentech and a $10 million milestone payment for FDA IND acceptance of the first cell therapy product candidate[71]. - The company is developing therapeutic product candidates under a collaboration agreement with Genentech, leveraging its platform to identify TCRs for personalized cellular therapeutic products[180]. - The company is exposed to risks associated with the Genentech Agreement, including Genentech's sole control over clinical development and commercialization[193]. Market and Competitive Landscape - The company faces substantial competition in the biotechnology and pharmaceutical industries, with many competitors having greater financial resources and expertise[105]. - The company’s diagnostic revenue is dependent on achieving broad coverage and reimbursement for its clonoSEQ tests from both private and government payors[174]. - The company anticipates ongoing proposals at federal and state levels aimed at reducing healthcare costs and expanding individual healthcare benefits, which could impact demand for its products[152]. Innovation and Intellectual Property - The company has filed 847 patent applications, with 416 active patents as of December 31, 2024, covering improvements in sequencing methods and adaptive immune receptors[72]. - The patent portfolio includes 124 applications from the Sequenta Acquisition, with 62 patents granted, focusing on T cell-based immune responses using NGS[89]. - The company has developed a therapeutic antibody discovery process called TruAB, with pending patent applications across 11 patent families targeting various conditions[95]. Workforce and Organizational Culture - As of December 31, 2024, the company had 619 full-time employees, with 94 holding medical or doctoral degrees[160]. - The company was recognized as one of Washington State's Best Places to Work from 2018 to 2022 and received national certification as a Great Place to Work in 2021 and 2022[161]. - The company has reduced its workforce last year as part of restructuring plans, indicating potential challenges in scaling operations to meet future demand[212]. Risks and Challenges - The company faces complex reimbursement and billing requirements from various payors, including Medicare and Medicaid, which may lead to reduced payments[155]. - The company may face significant costs and delays if it needs to transition to alternative suppliers or equipment due to reliance on single suppliers[186]. - The company may abandon current or future products if they are deemed unlikely to succeed, which could impair growth potential[183]. - The company faces a high rate of failure in therapeutic product development as it progresses through clinical trials, which could significantly impact its financial condition and prospects[205].

Core Viewpoint - Adaptive Biotechnologies (ADPT) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system reflects changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - For the fiscal year ending December 2025, Adaptive Biotechnologies is expected to earn -$0.91 per share, representing a 15.7% change from the previous year's reported number [8]. - Over the past three months, the Zacks Consensus Estimate for Adaptive Biotechnologies has increased by 2.7% [8]. Investment Implications - The upgrade to Zacks Rank 2 positions Adaptive Biotechnologies in the top 20% of Zacks-covered stocks, suggesting potential for higher stock prices in the near term due to improved earnings outlook [10]. - Rising earnings estimates and the corresponding rating upgrade imply an enhancement in the company's underlying business, which could lead to increased investor interest and stock appreciation [5].