Core Insights - Adaptive Biotechnologies Corporation announced the inclusion of its clonoSEQ® test for measurable residual disease (MRD) assessment in presentations at major oncology conferences, ASCO and EHA, highlighting its significance in blood cancer treatment [1][2] Company Overview - Adaptive Biotechnologies is a commercial-stage biotechnology company focused on translating the genetics of the adaptive immune system into clinical products for disease diagnosis and treatment [1][13] - The company leverages its proprietary immune medicine platform to develop diagnostics and therapeutics, particularly in the areas of MRD and immune medicine [13] Product Significance - The clonoSEQ test is recognized as the gold standard for MRD assessment, providing reliable insights for clinicians and aiding drug developers in advancing therapeutics [2] - MRD status is a critical predictor of outcomes in blood cancers, enabling personalized treatment monitoring and early relapse detection [2][12] Clinical Evidence - Data to be presented at ASCO and EHA will reinforce the clinical benefits of clonoSEQ, including: - A study showing strong correlation between bone marrow and peripheral blood MRD assessments in pediatric acute lymphoblastic leukemia (ALL), suggesting a less invasive monitoring method [3] - Evidence supporting the importance of sustained MRD negativity in multiple myeloma (MM) for predicting overall survival (OS) and progression-free survival (PFS) [3] - Findings from the MRD2STOP study indicating that clonoSEQ testing may help identify patients who can safely discontinue maintenance therapy while maintaining MRD negativity [3] Presentation Highlights - Key presentations at ASCO and EHA will cover various topics, including: - Efficacy and safety of CAR-T therapies in blood cancers [4][5] - Analysis of MRD in multiple myeloma treatment regimens [6][7] - Studies on chronic lymphocytic leukemia (CLL) and follicular lymphoma [8][10] Regulatory Status - clonoSEQ is the first and only FDA-cleared in vitro diagnostic test for detecting MRD in specific blood cancers, including multiple myeloma and B-cell acute lymphoblastic leukemia [11]

SEATTLE, May 31, 2024 (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, announced that its next-generation sequencing (NGS)-based clonoSEQ® test for measurable residual disease (MRD) assessment will be included in several oral and poster presentations at the American Society of Clinical Oncology (ASCO) Annual Meeting taking pl ...

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A double beat on earnings, plus positive adjustments to certain guidance items, lifted the company's shares.Adaptive Biotechnologies (ADPT 2.25%), a company that, in its own words, "aims to translate the genetics of the adaptive immune system into clinical products to diagnose and treat disease," was the cure for the stock market blahs on Wednesday. The commercial-stage biotech reported encouraging quarterly results, and investors signaled approval by trading the stock up by more than 2%. By contrast, the S ...

Investor Relations Presentation 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 offer to buy ...

Financial Data and Key Metrics Changes - Total revenue for Q1 2024 was $41.99 million, with MRD contributing 78% and Immune Medicine 22% [15] - MRD revenue grew to $32.6 million, up 52% year-over-year, while Immune Medicine revenue was $9.2 million, down 43% year-over-year [15][16] - Net loss for the quarter was $47.5 million, an improvement from $57.7 million in the previous year, with adjusted EBITDA loss of $28.2 million compared to $37.1 million in Q1 2023 [16] Business Line Data and Key Metrics Changes - MRD business saw a 52% revenue growth driven by clinical and pharma, with over 17,000 tests delivered, a 41% increase year-over-year [8][15] - Immune Medicine revenue decreased largely due to lower genetic amortization and a shift in focus towards targeted discovery efforts [15][16] - The MRD pharma business reported a 71% revenue growth, with sequencing revenue up 17% [10][15] Market Data and Key Metrics Changes - The preliminary gap bill rate set by Medicare is $1,823 per test, expected to take effect in January 2025, which may enhance pricing negotiations with commercial payers [9][28] - Blood-based testing now represents nearly 40% of tests, with multiple myeloma in blood accounting for 20% following positive data [10] Company Strategy and Development Direction - The company is focusing on two distinct business segments: MRD aiming for profitability and Immune Medicine developing therapeutic programs [6][7] - The strategy includes reducing operating expenses in Immune Medicine by over 50% compared to the previous year while maintaining a strong capital position of approximately $309 million [7][14] - The company is engaging with strategic partners to offset cash burn and is prioritizing investments based on expected data readouts throughout the year [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to bridge the MRD business to profitability while supporting investments in Immune Medicine [20] - The ODAC vote is seen as a significant milestone for myeloma, with expectations of increased clinical trial activity and potential new bookings [24][26] - Management anticipates a cash burn averaging approximately $30 million for the remaining three quarters, representing a 14% reduction from previous estimates [19] Other Important Information - The company is actively integrating EMR systems to enhance customer experience, with nine active integrations and plans to add 20-25 accounts by year-end [62] - The transition to NovaSeq and LIMS overhaul are ongoing initiatives aimed at improving gross margins over time [65] Q&A Session Summary Question: Impact of FDA ODAC meeting on clinical trials - Management noted that the ODAC vote is a huge milestone, with ongoing discussions with pharma partners about its implications, including upgrades of trials to primary endpoint status [24][25] Question: Commercial payer negotiations related to new Medicare rate - Management confirmed that they are leveraging the new Medicare rate in negotiations with commercial payers, which could lead to improved pricing [28] Question: Clarification on MRD milestones and guidance - Management clarified that the increase in guidance was related to the realization of milestones, and they remain conservative in estimating future milestones [30][31] Question: Differences in MRD usage in clinical trials versus clinical settings - Management indicated that while there are no definitive differences, the use of MRD testing is customized to the needs of the investigator or clinician, with blood-based testing gaining traction [40] Question: Progress on EMR integration and feedback - Positive feedback has been received regarding EMR integration, with plans to continue increasing the speed of account integration [62]

Core Insights - Adaptive Biotechnologies reported $41.87 million in revenue for Q1 2024, an 11.2% year-over-year increase, with an EPS of -$0.33 compared to -$0.40 a year ago [1] - The revenue was a slight miss of -0.78% against the Zacks Consensus Estimate of $42.2 million, while the EPS exceeded expectations by +5.71% [1] Financial Performance Metrics - ClonoSEQ test volume reached 17,040, surpassing the average estimate of 16,386 [2] - Total MRD revenues were $32.63 million, exceeding the average estimate of $28.04 million, reflecting a year-over-year increase of +52.3% [2] - Total Immune Medicine revenues were $9.25 million, below the average estimate of $11.11 million, indicating a year-over-year decline of -43% [2] Stock Performance - Shares of Adaptive Biotechnologies have increased by +13.8% over the past month, contrasting with a -0.4% change in the Zacks S&P 500 composite [2] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [2]

Adaptive Biotechnologies (ADPT) came out with a quarterly loss of $0.33 per share versus the Zacks Consensus Estimate of a loss of $0.35. This compares to loss of $0.40 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 5.71%. A quarter ago, it was expected that this lifesciences research company would post a loss of $0.32 per share when it actually produced a loss of $0.30, delivering a surprise of 6.25%. Over the last four qua ...

PART I. FINANCIAL INFORMATION This section presents the company's unaudited financial statements, management's discussion, and disclosures on market risk and internal controls [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements for the quarter ended March 31, 2024, reporting total revenue of **$41,873 thousand**, a net loss of **$47,507 thousand**, and **$308,900 thousand** in cash, cash equivalents, and marketable securities [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $71,233 | $65,064 | | Short-term marketable securities | $237,639 | $281,337 | | **Total current assets** | **$374,034** | **$410,188** | | **Total assets** | **$620,323** | **$661,134** | | **Total current liabilities** | **$82,952** | **$88,015** | | **Total liabilities** | **$345,557** | **$352,856** | | **Total shareholders' equity** | **$274,766** | **$308,278** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance over a period, detailing revenues, expenses, and net loss Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue | $41,873 | $37,647 | | Total operating expenses | $90,635 | $94,840 | | Loss from operations | $(48,762) | $(57,193) | | Net loss attributable to Adaptive | $(47,507) | $(57,699) | | Net loss per share, basic and diluted | $(0.33) | $(0.40) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities over a period Summary of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(38,353) | $(59,152) | | Net cash provided by investing activities | $44,509 | $62,979 | | Net cash provided by financing activities | $44 | $672 | | **Net increase in cash, cash equivalents and restricted cash** | **$6,200** | **$4,499** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures supporting the financial statements, covering significant accounting policies, revenue recognition, segment information, collaborations, and other financial details - In 2024, the company realigned its business into two operating and reportable segments: Minimal Residual Disease (MRD) and Immune Medicine[23](index=23&type=chunk)[84](index=84&type=chunk) - The collaboration with Genentech, aimed at developing cellular therapies in oncology, is a significant component of Immune Medicine revenue, recognized over an estimated nine-year period using a proportional performance model based on costs incurred[35](index=35&type=chunk)[38](index=38&type=chunk) - The company has a revenue interest purchase agreement with OrbiMed, accounted for as debt, with an effective interest rate of **9.2%** as of March 31, 2024[52](index=52&type=chunk)[54](index=54&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Q1 2024 financial results, highlighting an **11%** year-over-year revenue increase to **$41,873 thousand**, driven by a **52%** increase in MRD revenue, partially offset by a **43%** decline in Immune Medicine revenue, and confirms **$308,900 thousand** in liquidity is sufficient for the next 12 months [Results of Operations](index=33&type=section&id=Results%20of%20Operations) This section analyzes the company's revenue and expense trends, highlighting key drivers of financial performance Revenue by Business Area (in thousands) | Revenue Category | Q1 2024 | Q1 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Total MRD revenue** | **$32,626** | **$21,427** | **$11,199** | **52%** | | Service revenue | $28,126 | $21,427 | $6,699 | 31% | | Regulatory milestone revenue | $4,500 | $— | $4,500 | N/A | | **Total Immune Medicine revenue** | **$9,247** | **$16,220** | **$(6,973)** | **(43%)** | | Service revenue | $4,559 | $7,102 | $(2,543) | (36%) | | Collaboration revenue | $4,688 | $9,118 | $(4,430) | (49%) | | **Total revenue** | **$41,873** | **$37,647** | **$4,226** | **11%** | - The increase in MRD revenue was driven by a **41%** increase in clonoSEQ test volume (from **12,079** to **17,040** tests) and the recognition of a **$4,500 thousand** regulatory milestone payment from a biopharmaceutical customer[107](index=107&type=chunk) - The decrease in Immune Medicine revenue was primarily due to a **$4,400 thousand** decrease in revenue from the Genentech Agreement resulting from lower collaboration expenses[107](index=107&type=chunk) - Research and development expenses decreased by **$2,400 thousand** (**7%**) year-over-year, mainly due to reduced costs for collaboration studies and decreased investment in drug discovery efforts, including the Genentech collaboration and TCR-Antigen Map development[113](index=113&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, funding sources, and ability to meet short-term and long-term obligations - As of March 31, 2024, the company had **$308,900 thousand** in cash, cash equivalents, and marketable securities[123](index=123&type=chunk) - Management believes that existing cash, cash equivalents, and marketable securities will be sufficient to fund operating expenses and capital expenditure requirements for at least the next 12 months[123](index=123&type=chunk) - The company is entitled to receive up to an additional **$125,000 thousand** in subsequent installments under its Purchase Agreement with OrbiMed, subject to certain funding conditions[123](index=123&type=chunk) [Cash Flows](index=46&type=section&id=Cash%20Flows) This section provides a detailed breakdown of cash movements across operating, investing, and financing activities - Net cash used in operating activities decreased to **$38,400 thousand** in Q1 2024 from **$59,200 thousand** in Q1 2023, primarily due to a lower net loss and a smaller net use of cash from changes in operating assets and liabilities[127](index=127&type=chunk) - Net cash provided by investing activities was **$44,500 thousand**, resulting from **$99,500 thousand** in proceeds from maturities of marketable securities, partially offset by **$53,500 thousand** in purchases of new securities[128](index=128&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure relates to changes in interest rates affecting its cash, cash equivalents, and marketable securities, with no material changes to this risk profile since the end of 2023 - The company is exposed to market risk from changes in interest rates, primarily related to its cash and investment portfolio, and does not use derivative financial instruments to manage this risk[135](index=135&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2024, with no material changes to internal controls over financial reporting during the quarter - Based on an evaluation as of the end of the period, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[136](index=136&type=chunk) PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, and other miscellaneous disclosures pertinent to the company's operations [Item 1. Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not currently a party to any legal proceedings that it believes would have a material adverse effect on its business, financial condition, or results of operations - As of the reporting date, the company was not party to any material legal proceedings[137](index=137&type=chunk) [Item 1A. Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2023 - There have been no material changes to the risk factors described in the company's 2023 Form 10-K[138](index=138&type=chunk) [Other Items (Items 2, 3, 4, 5)](index=50&type=section&id=Other%20Items) Items 2 (Unregistered Sales of Equity Securities and Use of Proceeds), 3 (Defaults Upon Senior Securities), 4 (Mine Safety Disclosures), and 5 (Other Information) are all reported as 'Not applicable' for this reporting period - Items 2, 3, 4, and 5 of Part II are not applicable for the quarter ended March 31, 2024[139](index=139&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act of 2002, and interactive data files - The report includes required certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk)

[Executive Summary & Recent Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Recent%20Highlights) Adaptive Biotechnologies reported Q1 2024 revenue of $41.9 million, driven by 52% MRD business growth, and strategically reorganized to separate MRD and Immune Medicine operations - Implemented a strategic reorganization to operate MRD and Immune Medicine businesses with dedicated resources, separate segment reporting, and disciplined capital allocation[1](index=1&type=chunk)[2](index=2&type=chunk) - The FDA's Oncologic Drug Advisory Committee (ODAC) unanimously supported using MRD as a primary endpoint for accelerated approval of new multiple myeloma therapies[2](index=2&type=chunk) - Initiated antibody discovery campaigns in Immune Medicine for multiple sclerosis and type 1 diabetes to generate preclinical data in 2024[2](index=2&type=chunk) Q1 2024 Key Performance Indicators | Metric | Value | YoY Growth | | :--- | :--- | :--- | | Total Revenue | $41.9 million | 11% | | MRD Business Revenue | $32.6 million | 52% | | clonoSEQ Test Volume | 17,040 tests | 41% | [Q1 2024 Financial Performance](index=1&type=section&id=Q1%202024%20Financial%20Performance) Q1 2024 total revenue increased 11% to $41.9 million, with operating expenses decreasing 4% to $90.6 million, resulting in a reduced net loss and improved Adjusted EBITDA loss [Consolidated Results](index=1&type=section&id=Consolidated%20Results) Q1 2024 total revenue increased to $41.9 million, while operating expenses decreased to $90.6 million, narrowing the net loss to $47.5 million or ($0.33) per share Q1 2024 Consolidated Statement of Operations Summary (in millions, except per share data) | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $41.9 | $37.6 | +11% | | Total Operating Expenses | $90.6 | $94.8 | -4% | | Net Loss | ($47.5) | ($57.7) | Improved | | Net Loss Per Share | ($0.33) | ($0.40) | Improved | [Non-GAAP Measures (Adjusted EBITDA)](index=2&type=section&id=Non-GAAP%20Measures%20(Adjusted%20EBITDA)) The company's non-GAAP Adjusted EBITDA loss for Q1 2024 improved to $28.2 million from $37.1 million in Q1 2023, reflecting better cost management Adjusted EBITDA (Non-GAAP) (in millions) | Period | Adjusted EBITDA Loss | | :--- | :--- | | Q1 2024 | ($28.2) | | Q1 2023 | ($37.1) | [Segment Performance](index=1&type=section&id=Segment%20Performance) In Q1 2024, the MRD business achieved 52% revenue growth and narrowed its operating loss, while the Immune Medicine business saw a 43% revenue decline despite reduced expenses [MRD Business](index=1&type=section&id=MRD%20Business) The MRD business revenue surged 52% to $32.6 million in Q1 2024, driven by a 41% increase in clonoSEQ test volumes, and its Adjusted EBITDA loss improved to $17.3 million MRD Business Performance (in millions) | Metric | Q1 2024 | Q1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $32.6 | $21.4 | +52% | | Operating Expenses | $59.9 | $56.0 | +7% | | Adjusted EBITDA Loss | ($17.3) | ($26.4) | +34% Improvement | [Immune Medicine Business](index=1&type=section&id=Immune%20Medicine%20Business) The Immune Medicine business revenue decreased 43% to $9.2 million in Q1 2024, with operating expenses reduced by 25% to $23.8 million, and its Adjusted EBITDA loss narrowed to $6.9 million Immune Medicine Business Performance (in millions) | Metric | Q1 2024 | Q1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $9.2 | $16.2 | -43% | | Operating Expenses | $23.8 | $31.7 | -25% | | Adjusted EBITDA Loss | ($6.9) | ($7.4) | +7% Improvement | [Financial Position](index=2&type=section&id=Financial%20Position) As of March 31, 2024, Adaptive Biotechnologies maintained a solid liquidity position with $308.9 million in cash, cash equivalents, and marketable securities, with total assets at $620.3 million Key Balance Sheet Items (in millions) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash, cash equivalents & marketable securities | $308.9 | $346.4 | | Total Assets | $620.3 | $661.1 | | Total Liabilities | $345.6 | $352.9 | [2024 Updated Financial Guidance](index=2&type=section&id=2024%20Updated%20Financial%20Guidance) The company updated its full-year 2024 financial guidance, raising the lower end of MRD business revenue forecast and lowering total company operating expense expectations - MRD business full-year revenue guidance was updated to a range of **$135 million to $140 million**, from the previous range of **$130 million to $140 million**[5](index=5&type=chunk) - Full-year total company operating expenses are now expected to be between **$350 million and $360 million**, down from the previous range of **$360 million to $370 million**[5](index=5&type=chunk) - No revenue guidance is provided for the Immune Medicine business[5](index=5&type=chunk) [Appendix: Financial Statements and Reconciliations](index=5&type=section&id=Appendix%3A%20Financial%20Statements%20and%20Reconciliations) This appendix provides detailed unaudited financial statements for Q1 2024, including consolidated statements of operations, balance sheets, and Adjusted EBITDA reconciliations [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Presents the company's unaudited condensed consolidated statements of operations for the period ended March 31, 2024 [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Details the company's unaudited condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023 [Adjusted EBITDA Reconciliation](index=7&type=section&id=Adjusted%20EBITDA%20Reconciliation) Provides a reconciliation of GAAP net loss to non-GAAP Adjusted EBITDA for the reported periods [Segment Information](index=8&type=section&id=Segment%20Information) Presents detailed financial information for the company's MRD and Immune Medicine business segments