Financial Data and Key Metrics Changes - Total company revenue for Q4 2025 was $71.7 million, representing a 63% year-over-year increase, while full-year revenue was $277 million, reflecting a 55% growth compared to the previous year [20][21] - Adjusted EBITDA for Q4 was $4.1 million, a significant improvement from a loss of $16.4 million in the same quarter last year, and for the full year, adjusted EBITDA was $12.2 million compared to a loss of $80.4 million in 2024 [21][22] - The net loss for Q4 was $13.6 million, and for the full year, it was $59.5 million [22] Business Line Data and Key Metrics Changes - In the MRD business, full-year revenue grew 46% year-over-year, with clinical testing revenue increasing 64% for the full year and 59% in Q4 [5][8] - clonoSEQ test volume reached 30,038 tests in Q4, up 43% year-over-year, with blood-based testing accounting for 47% of total tests [8][9] - Immune Medicine revenue was $9.8 million in Q4, up from $3.8 million a year ago, primarily driven by data licensing agreements with Pfizer [22][23] Market Data and Key Metrics Changes - The MRD pharma business saw a revenue growth of 20% year-over-year, with multiple myeloma accounting for roughly 70% of sequencing revenue [12] - The average ASP in the U.S. for clonoSEQ tests was $1,307, up 17% year-over-year, and the company expects to reach approximately $1,400 per test in 2026 [10][11] Company Strategy and Development Direction - The company aims to continue driving top-line growth while expanding margins, focusing on MRD revenue growth and profitability [14][27] - In 2026, the company expects clonoSEQ test volumes to grow by more than 30% year-over-year, with a significant shift towards blood-based testing [15][16] - The Immune Medicine business is focusing on generating large-scale proprietary immune receptor data and monetizing this data through partnerships [18][19] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive adjusted EBITDA and free cash flow by the end of 2026, with a focus on disciplined spending and operational efficiency [26] - The company is optimistic about the momentum in MRD and the potential for continued growth in the Immune Medicine sector [27] Other Important Information - The company ended the year with a strong cash position of $227 million, providing flexibility for future investments [22][24] - The company plans to maintain a disciplined capital allocation strategy, with a target net cash burn of $15 million to $20 million for the Immune Medicine business in 2026 [19] Q&A Session Summary Question: Discussion on clonoSEQ volume trends and seasonality - Management acknowledged Q4's strong results and noted that Q1 typically experiences some seasonality due to holidays and weather, but they remain confident in achieving strong sequential growth in Q1 [30][32] Question: Penetration rates in DLBCL and competition - Management highlighted the importance of data generation, guideline advancements, and deepening penetration with pharma to increase market share in DLBCL, where current penetration is low [34][36] Question: Competitive flow cytometry assay and pricing - Management emphasized that flow-based methods are inherently less sensitive than clonoSEQ, which maintains a significant advantage in sensitivity for myeloma testing [40][42] Question: ASP pacing and payer negotiations - Management indicated that ASP growth is expected to be linear, with ongoing negotiations with key payers that could impact ASP realization [43][44] Question: EBITDA guidance for 2026 - Management clarified that they expect to achieve positive adjusted EBITDA by the end of Q4 2026, with MRD expected to contribute positively [46][47] Question: Community and blood-based testing growth assumptions - Management expressed confidence in the potential for further growth in blood-based testing and community penetration, with ongoing investments to drive these areas [50][51] Question: Monetization of the Immune Medicine data - Management discussed the potential for additional data licensing deals and the value of their proprietary dataset in various immunology applications [72][73]

Summary of Adaptive Biotechnologies FY Conference Call Company Overview - **Company**: Adaptive Biotechnologies (NasdaqGS:ADPT) - **Founded**: 16 years ago at Fred Hutchinson Cancer Research Institute - **Employees**: Approximately 620 - **Revenue**: Over $275 million - **Cash Position**: Approximately $227 million [2][2] Core Business Segments Minimal Residual Disease (MRD) Business - **Market Size**: Global addressable market of approximately $5.5 billion, with a U.S. clinical testing market of roughly $1.8 billion [4][4] - **Growth Opportunity**: Potential to increase testing frequency from 2.5 to 3.5 tests per patient per year, expanding the U.S. market by approximately $700 million [4][4] - **Technology**: clonoSEQ test measures MRD with high sensitivity and specificity, detecting one cancer cell in every million healthy cells [6][6] - **Regulatory Approval**: clonoSEQ is the only FDA-cleared MRD assay in lymphoid malignancies [6][6] - **Financial Performance**: Achieved positive adjusted EBITDA in 2025, with revenue surpassing $200 million and a 34% cumulative average growth rate from 2021 to 2025 [8][9] Immune Medicine (IM) Business - **Focus**: Understanding T-cell receptor interactions with antigens to drive insights across various diseases [26][26] - **Data Generation**: Mapped over 5 million T-cell receptors to antigens, generating biological insights for autoimmune diseases [27][27] - **Partnerships**: Recent agreements with Pfizer for data licensing and target discovery in rheumatoid arthritis [28][28] Key Financial Metrics - **Revenue Growth**: Clinical revenue grew at a 53% CAGR, with gross margins improving significantly due to lab efficiencies [9][9] - **Testing Volume**: Clinical volumes grew at a 44% CAGR since 2021, with over 100,000 patients tested using clonoSEQ [10][10] - **Average Selling Price (ASP)**: Reached approximately $1,310 in 2025, with a target of $1,700-$1,800 by 2029 [19][20] Growth Drivers Clinical Testing - **Volume Growth Factors**: Blood-based testing, community presence, clinical guideline inclusion, ongoing data generation, and EMR integration [11][11] - **Community Testing**: Expected to grow from 30% to over 35% of clonoSEQ testing [12][12] - **Guideline Updates**: Significant updates in 2025, elevating MRD to a clinical decision-making tool [13][14] Biopharma Partnerships - **MRD Pharma Portfolio**: Anchored in multiple myeloma, with 70% of sequencing revenue from this indication [22][22] - **Diversification**: Tripled bookings in CLL in 2025, with ongoing pipeline development [22][22] Future Outlook - **2026 Expectations**: - Clinical testing volume expected to grow by more than 30% year-over-year [25][25] - ASP projected at approximately $1,400 [25][25] - Continued improvement in sequencing gross margins, targeting over 70% [25][25] - **Cash Burn**: Expected to decrease to between $15 million and $20 million while investing in data generation [30][30] Competitive Landscape - **Market Position**: Adaptive maintains a strong competitive moat in MRD testing, particularly in DLBCL, where it has seen significant growth [41][41][42] - **Emerging Competition**: Natera's acquisition of Foresight Diagnostics highlights the nascent market for NGS MRD testing, but Adaptive's established reimbursement and technology position it favorably [41][41] Conclusion - **Key Takeaways**: - Strengthening leadership in MRD testing for blood cancers - Advancing immune receptor data platform - Expectation of positive adjusted EBITDA and free cash flow for the entire company in 2026 [31][31]

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]