Adaptive Biotechnologies Reports First Quarter 2022 Financial Results

Rhea-AI Summary

Adaptive Biotechnologies reported a Q1 2022 revenue of $38.6 million, a slight 0.5% increase year-over-year. The clonoSEQ test volume surged by 45% compared to Q1 2021. However, MRD revenue saw a 3% decline to $17.8 million. Operating expenses rose significantly by 28% to $101.7 million, resulting in a net loss of $62.8 million, compared to $40.6 million in Q1 2021. The company maintains its full-year revenue guidance of $185 million to $195 million.

Positive

• Revenue of $38.6 million for Q1 2022, up 0.5% YOY.
• ClonoSEQ test volume grew 45% compared to Q1 2021.
• Recognized $3.0 million in MRD regulatory milestone revenue.
• New T-MAP collaboration with Janssen for RSV vaccine support.

Negative

• MRD revenue declined by 3% to $17.8 million.
• Operating expenses increased by 28% to $101.7 million.
• Net loss increased to $62.8 million from $40.6 million YOY.

SEATTLE, May 04, 2022 (GLOBE NEWSWIRE) -- Adaptive Biotechnologies Corporation (“Adaptive Biotechnologies”) (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 reported financial results for the quarter ended March 31, 2022.

“We started the year strong and completed a strategic reorganization of our company around two key business areas: MRD and Immune Medicine,” said Chad Robins, chief executive officer and co-founder of Adaptive Biotechnologies. “I am encouraged by the solid momentum across both business areas as we optimize our resource allocation to capitalize on the multiple opportunities ahead.”

Recent Highlights

• Revenue of $38.6 million for the first quarter 2022, representing a 0.5% increase from the first quarter 2021.
• clonoSEQ test volume in the first quarter 2022 grew 45% versus the first quarter of prior year and 12% over the fourth quarter of 2021. 
• Signed expanded MRD pan-portfolio agreement with major partner in MM and CLL for the use of MRD status as a clinical endpoint.
• Recognized $3.0 million in MRD regulatory milestone revenue resulting from a biopharmaceutical partner who used data from our MRD assay to support its drug approval. 
• Completed analysis from immuneSense Lyme blinded data from 990 participants, confirming T-Detect Lyme is nearly twice as sensitive as the current standard of care (54% T-Detect Lyme vs 30% STTT sensitivity, both at 99% specificity). T-Detect Lyme offering to be made available during 2022 Lyme season. 
• Entered a new T-MAP collaboration with the Janssen Pharmaceutical Companies of Johnson & Johnson to map T cell responses to RSV to support Janssen’s RSV vaccine program. 
• Announced the appointment of Tycho Peterson as chief financial officer, who brings several decades of financial leadership and experience within the life science and diagnostic industries.
  

First Quarter 2022 Financial Results

Revenue was $38.6 million for the quarter ended March 31, 2022, representing a 0.5% increase from the first quarter in the prior year. Immune Medicine revenue was $20.8 million for the quarter, representing a 4% increase from the first quarter in the prior year. MRD revenue was $17.8 million for the quarter, representing a 3% decrease from the first quarter in the prior year.

Operating expenses were $101.7 million for the first quarter of 2022, compared to $79.7 million in the first quarter of the prior year, representing an increase of 28%.

Net loss was $62.8 million for the first quarter of 2022, compared to $40.6 million for the same period in 2021.

Cash, cash equivalents and marketable securities was $500.7 million as of March 31, 2022.

2022 Financial Guidance

Adaptive Biotechnologies reiterates full year 2022 revenue to be in the range of $185 million to $195 million.

Webcast and Conference Call Information

Adaptive Biotechnologies will host a conference call to discuss its first quarter 2022 financial results after market close on Wednesday, May 4, 2022 at 4:30 PM Eastern Time. The conference call can be accessed at http://investors.adaptivebiotech.com. The webcast will be archived and available for replay at least 90 days after the event.

About Adaptive Biotechnologies

Adaptive Biotechnologies (“we” or “our”) is a commercial-stage biotechnology company focused on harnessing the inherent biology of the adaptive immune system to transform the diagnosis and treatment of disease. We believe the adaptive immune system is nature’s most finely tuned diagnostic and therapeutic for most diseases, but the inability to decode it has prevented the medical community from fully leveraging its capabilities. Our proprietary immune medicine platform reveals and translates the massive genetics of the adaptive immune system with scale, precision and speed to develop products in life sciences research, clinical diagnostics and drug discovery. We have three commercial products and a robust clinical pipeline to diagnose, monitor and enable the treatment of diseases such as cancer, autoimmune disorders, and infectious diseases. Our goal is to develop and commercialize immune-driven clinical products tailored to each individual patient.

Forward-Looking Statements

This press release contains forward-looking statements that are based on management’s beliefs and assumptions and on information currently available to management. All statements contained in this release other than statements of historical fact are forward-looking statements, including statements regarding our ability to develop, commercialize and achieve market acceptance of our current and planned products and services, our research and development efforts and other matters regarding our business strategies, use of capital, results of operations and financial position and plans and objectives for future operations.

In some cases, you can identify forward-looking statements by the words “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. These risks, uncertainties and other factors are described under "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in the documents we file with the Securities and Exchange Commission from time to time. We caution you that forward-looking statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. As a result, the forward-looking statements may not prove to be accurate. The forward-looking statements in this press release represent our views as of the date hereof. We undertake no obligation to update any forward-looking statements for any reason, except as required by law.

ADAPTIVE MEDIA
Laura Cooper
205-908-5603
media@adaptivebiotech.com

ADAPTIVE INVESTORS
Karina Calzadilla, Vice President, Investor Relations
201-396-1687
Carrie Mendivil, Gilmartin Group
investors@adaptivebiotech.com

Adaptive Biotechnologies Condensed Consolidated Statements of Operations (in thousands, except share and per share amounts) (unaudited)
		Three Months Ended March 31,
		2022				2021
Revenue		$	38,620			$	38,442
Operating expenses
Cost of revenue			13,192				9,991
Research and development			37,839				33,772
Sales and marketing			26,093				20,604
General and administrative			24,144				14,936
Amortization of intangible assets			419				419
Total operating expenses			101,687				79,722
Loss from operations			(63,067	)			(41,280	)
Interest and other income, net			271				638
Net loss			(62,796	)			(40,642	)
Add: Net loss attributable to noncontrolling interest			60				—
Net loss attributable to Adaptive Biotechnologies Corporation		$	(62,736	)		$	(40,642	)
Net loss per share attributable to Adaptive Biotechnologies Corporation common shareholders, basic and diluted		$	(0.44	)		$	(0.29	)
Weighted-average shares used in computing net loss per share attributable to Adaptive Biotechnologies Corporation common shareholders, basic and diluted			141,697,252				138,967,754

Adaptive Biotechnologies Condensed Consolidated Balance Sheets (in thousands, except share and per share amounts)
		March 31, 2022				December 31, 2021
		(unaudited)
Assets
Current assets
Cash and cash equivalents		$	114,805			$	139,065
Short-term marketable securities (amortized cost of $250,448 and $214,115, respectively)			248,757				213,996
Accounts receivable, net			22,518				17,409
Inventory			21,002				19,263
Prepaid expenses and other current assets			12,038				13,015
Total current assets			419,120				402,748
Long-term assets
Property and equipment, net			85,994				85,262
Operating lease right-of-use assets			85,634				87,678
Long-term marketable securities (amortized cost of $140,202 and $218,163, respectively)			137,110				217,145
Restricted cash			2,382				2,138
Intangible assets, net			8,107				8,526
Goodwill			118,972				118,972
Other assets			874				875
Total assets		$	858,193			$	923,344
Liabilities and shareholders’ equity
Current liabilities
Accounts payable		$	5,959			$	3,307
Accrued liabilities			10,407				9,343
Accrued compensation and benefits			6,651				15,642
Current portion of operating lease liabilities			8,545				5,055
Current portion of deferred revenue			83,504				80,460
Total current liabilities			115,066				113,807
Long-term liabilities
Operating lease liabilities, less current portion			104,978				106,685
Deferred revenue, less current portion			84,894				98,750
Total liabilities			304,938				319,242
Commitments and contingencies
Shareholders’ equity
Preferred stock: $0.0001 par value, 10,000,000 shares authorized at March 31, 2022 and December 31, 2021; no shares issued and outstanding at March 31, 2022 and December 31, 2021			—				—
Common stock: $0.0001 par value, 340,000,000 shares authorized at March 31, 2022 and December 31, 2021; 142,183,258 and 141,393,865 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively			14				14
Additional paid-in capital			1,339,601				1,324,006
Accumulated other comprehensive loss			(4,783	)			(1,137	)
Accumulated deficit			(781,627	)			(718,891	)
Total Adaptive Biotechnologies Corporation shareholders’ equity			553,205				603,992
Noncontrolling interest			50				110
Total shareholders’ equity			553,255				604,102
Total liabilities and shareholders’ equity		$	858,193			$	923,344

Revenue Reclassification and clonoSEQ Test Volume

We previously disclosed revenue bifurcated into sequencing and development financial statement captions and now present total revenue on our unaudited condensed consolidated statements of operations.

The following table presents the amount of sequencing revenue and development revenue recognized under our Immune Medicine and MRD market opportunities for the periods presented (in thousands, unaudited):

		Three Months Ended
		December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021
Immune Medicine revenue
Sequencing revenue		$	6,860			$	8,170			$	5,404			$	4,048
Development revenue			14,514				15,445				17,635				16,057
Total Immune Medicine revenue			21,374				23,615				23,039				20,105
MRD revenue
Sequencing revenue			16,201				13,936				13,151				11,126
Development revenue			355				1,916				2,315				7,211
Total MRD revenue			16,556				15,852				15,466				18,337
Total revenue		$	37,930			$	39,467			$	38,505			$	38,442

		Three Months Ended
		December 31, 2020				September 30, 2020				June 30, 2020				March 31, 2020
Immune Medicine revenue
Sequencing revenue		$	3,310			$	3,691			$	2,036			$	3,170
Development revenue			17,155				12,438				12,856				11,077
Total Immune Medicine revenue			20,465				16,129				14,892				14,247
MRD revenue
Sequencing revenue			9,399				7,585				5,949				6,299
Development revenue			321				2,585				147				364
Total MRD revenue			9,720				10,170				6,096				6,663
Total revenue		$	30,185			$	26,299			$	20,988			$	20,910

We also previously disclosed the number of clonoSEQ reports provided to ordering physicians in the United States, referred to as “clinical sequencing volume” or “clinical sequencing volume, excluding T-Detect COVID volume” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of certain of our SEC filings. We now present the number of clonoSEQ reports and results we have provided to ordering physicians in the United States and international technology transfer sites, collectively referred to as “clonoSEQ test volume.” Our clonoSEQ test volume does not include sample results from our biopharmaceutical customers or academic institutions utilizing our MRD services.

The following table presents our clonoSEQ test volume for the periods presented:

		Three Months Ended
		December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021
Clinical sequencing volume, excluding T-Detect COVID volume			6,356				5,928				5,475				4,757
clonoSEQ reports or results provided to international technology transfer sites			494				413				422				543
clonoSEQ test volume			6,850				6,341				5,897				5,300

		Three Months Ended
		December 31, 2020				September 30, 2020				June 30, 2020				March 31, 2020
Clinical sequencing volume			4,509				4,023				3,136				3,518
clonoSEQ reports or results provided to international technology transfer sites			704				375				310				238
clonoSEQ test volume			5,213				4,398				3,446				3,756

FAQ

What were Adaptive Biotechnologies' Q1 2022 earnings results?

Adaptive Biotechnologies reported Q1 2022 revenue of $38.6 million, a 0.5% increase compared to the prior year.

What is the revenue outlook for Adaptive Biotechnologies in 2022?

Adaptive Biotechnologies maintains its revenue guidance for 2022 in the range of $185 million to $195 million.

Did Adaptive Biotechnologies experience any revenue declines in Q1 2022?

Yes, MRD revenue declined by 3% to $17.8 million in Q1 2022.

What were the operating expenses for Adaptive Biotechnologies in Q1 2022?

Operating expenses increased to $101.7 million in Q1 2022, a 28% rise from the previous year.

How much was the net loss for Adaptive Biotechnologies in Q1 2022?

The net loss for Q1 2022 was $62.8 million, up from $40.6 million in the same quarter last year.