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Adaptive Biotechnologies Reports Third Quarter 2024 Financial Results
Source: Nasdaq GlobeNewswire / 07 Nov 2024 15:05:01 America/Chicago
SEATTLE, Nov. 07, 2024 (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 September 30, 2024.
“Our focus on execution and disciplined capital allocation are driving MRD growth with a clear path to profitability while we continue to advance our targeted Immune Medicine programs,” said Chad Robins, chief executive officer and co-founder of Adaptive Biotechnologies. “The increased clonoSEQ® Medicare Gapfill rate and the extension of coverage to Mantle Cell Lymphoma underscore clonoSEQ’s value to patients. I look forward to a strong finish to the year and continued progress toward our strategic goals.”
Recent Highlights
- Revenue for the third quarter of 2024 was $46.4 million. The MRD business, which contributed 81% of revenue, grew 52% versus the third quarter of 2023.
- clonoSEQ test volume in the third quarter of 2024 grew 30% to 19,600 tests delivered versus the third quarter of 2023.
- Obtained updated Medicare Clinical Laboratory Fee Schedule (CLFS) Gapfill Determination for clonoSEQ of $2,007 per test, a 17% increase from the previous implied rate under the episode structure.
- Received expanded Medicare coverage of clonoSEQ for assessing measurable residual disease in Mantle Cell Lymphoma.
- Recognized $5.0 million in MRD pharma regulatory milestone revenue.
- Updated full year guidance to reflect an increase to the bottom end of the previous MRD revenue range, a decrease in operating spend and a reduction in annual cash burn.
Third Quarter 2024 Financial Results
Revenue was $46.4 million for the quarter ended September 30, 2024, representing a 22% increase from the third quarter in the prior year. MRD revenue was $37.5 million for the quarter, representing a 52% increase from the third quarter in the prior year. Immune Medicine revenue was $9.0 million for the quarter, representing a 32% decrease from the third quarter in the prior year.
Operating expenses for the third quarter of 2024 were $79.1 million, compared to $88.9 million in the third quarter of the prior year, representing a decrease of 11%. MRD operating expenses for the third quarter of 2024 were $52.5 million, representing a 6% decrease from the third quarter in the prior year. Immune Medicine operating expenses for the third quarter of 2024 were $20.7 million, representing a 22% decrease from the third quarter in the prior year.
Interest and other income, net was $3.5 million for the third quarter of 2024, compared to $4.3 million in the third quarter of the prior year. Interest expense from our revenue interest purchase agreement was $2.9 million in the third quarter of 2024, compared to $3.7 million in the third quarter of the prior year.
Net loss was $32.1 million for the third quarter of 2024, compared to $50.3 million for the same period in 2023.
Adjusted EBITDA (non-GAAP) was a loss of $14.3 million for the third quarter of 2024, compared to a loss of $29.8 million for the third quarter of the prior year. MRD Adjusted EBITDA (non-GAAP) was a loss of $6.1 million for the quarter, compared to a loss of $21.6 million for the third quarter of the prior year. Immune Medicine Adjusted EBITDA (non-GAAP) was a loss of $5.2 million for the quarter, compared to a loss of $5.0 million for the third quarter of the prior year.
Cash, cash equivalents and marketable securities was $267.2 million as of September 30, 2024.
2024 Updated Financial Guidance
Adaptive Biotechnologies expects full year revenue for the MRD business to be between $143 million and $145 million, updated from the previous range between $140 million and $145 million. No revenue guidance is provided for the Immune Medicine business.
We expect full year total company operating expenses, including cost of revenue and excluding one-time costs from asset impairments and other restructuring charges, to be between $335 million and $340 million, updated from the previous range between $340 million and $350 million.
Management will provide further details on the outlook during the conference call.
Webcast and Conference Call Information
Adaptive Biotechnologies will host a conference call to discuss its third quarter 2024 financial results after market close on Thursday, November 7, 2024 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. We apply our platform to partner with biopharmaceutical companies, inform drug development, and develop clinical diagnostics across our two business areas: Minimal Residual Disease (MRD) and Immune Medicine. Our commercial products and clinical pipeline enable the diagnosis, monitoring, and 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.
Use of Non-GAAP Financial Measure
To supplement our unaudited condensed consolidated statements of operations and unaudited condensed consolidated balance sheets, which are prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”), this press release also includes references to Adjusted EBITDA, which is a non-GAAP financial measure that we define as net loss attributable to Adaptive Biotechnologies Corporation adjusted for interest and other income, net, interest expense, income tax (expense) benefit, depreciation and amortization expense, impairment costs for long-lived assets, restructuring expense and share-based compensation expense. We define our segment Adjusted EBITDA in the same way to the extent the net loss attributable to Adaptive Biotechnologies Corporation and adjustments are allocable to each segment. We have provided reconciliations of net loss attributable to Adaptive Biotechnologies Corporation, the most directly comparable GAAP financial measure, to Adjusted EBITDA at the end of this press release.
Management uses Adjusted EBITDA, including segment Adjusted EBITDA, to evaluate the financial performance of our business and segments and to evaluate the effectiveness of our strategies. We present these figures because we believe it is frequently used by analysts, investors and other interested parties to evaluate companies in our industry and it facilitates comparisons on a consistent basis across reporting periods. Further, we believe it is helpful in highlighting trends in our operating results because it excludes items that are not indicative of our core operating performance.
Adjusted EBITDA, including segment Adjusted EBITDA, has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. We may in the future incur expenses similar to the adjustments we make. In particular, we expect to incur meaningful share-based compensation expense in the future. Other limitations include that Adjusted EBITDA, including segment Adjusted EBITDA, does not reflect:
- all expenditures or future requirements for capital expenditures or contractual commitments;
- changes in our working capital needs;
- interest expense, which is an ongoing element of our costs to operate;
- income tax (expense) benefit, which may be a necessary element of our costs and ability to operate;
- the costs of replacing the assets being depreciated and amortized, which will often have to be replaced in the future;
- the noncash component of employee compensation expense;
- long-lived assets impairment costs; and
- the impact of earnings or charges resulting from matters we consider not to be reflective, on a recurring basis, of our ongoing operations, such as our restructuring activities and reductions in workforce.
In addition, Adjusted EBITDA may not be comparable to similarly titled measures used by other companies in our industry or across different industries.
ADAPTIVE INVESTORS
Karina Calzadilla, Vice President, Investor Relations
201-396-1687
investors@adaptivebiotech.comADAPTIVE MEDIA
Erica Jones, Associate Corporate Communications Director
206-279-2423
media@adaptivebiotech.comAdaptive Biotechnologies
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Revenue $ 46,435 $ 37,919 $ 131,498 $ 124,492 Operating expenses Cost of revenue 16,667 19,346 54,035 55,937 Research and development 24,163 28,533 79,761 93,371 Sales and marketing 20,551 20,493 63,184 66,673 General and administrative 17,258 20,075 54,750 63,208 Amortization of intangible assets 428 428 1,275 1,270 Impairment of long-lived assets — — 7,205 — Total operating expenses 79,067 88,875 260,210 280,459 Loss from operations (32,632 ) (50,956 ) (128,712 ) (155,967 ) Interest and other income, net 3,474 4,282 11,462 10,918 Interest expense (2,939 ) (3,652 ) (8,628 ) (10,788 ) Net loss (32,097 ) (50,326 ) (125,878 ) (155,837 ) Add: Net loss attributable to noncontrolling interest 26 26 78 28 Net loss attributable to Adaptive Biotechnologies Corporation $ (32,071 ) $ (50,300 ) $ (125,800 ) $ (155,809 ) Net loss per share attributable to Adaptive Biotechnologies Corporation common shareholders, basic and diluted $ (0.22 ) $ (0.35 ) $ (0.86 ) $ (1.08 ) Weighted-average shares used in computing net loss per share attributable to Adaptive Biotechnologies Corporation common shareholders, basic and diluted 147,516,398 144,704,868 146,908,234 144,208,940 Adaptive Biotechnologies
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)September 30, 2024 December 31,
2023(unaudited) Assets Current assets Cash and cash equivalents $ 38,084 $ 65,064 Short-term marketable securities (amortized cost of $204,757 and $281,122, respectively) 205,245 281,337 Accounts receivable, net 40,814 37,969 Inventory 11,955 14,448 Prepaid expenses and other current assets 12,247 11,370 Total current assets 308,345 410,188 Long-term assets Property and equipment, net 51,314 68,227 Operating lease right-of-use assets 46,530 52,096 Long-term marketable securities (amortized cost of $23,857) 23,866 — Restricted cash 2,978 2,932 Intangible assets, net 3,853 5,128 Goodwill 118,972 118,972 Other assets 2,648 3,591 Total assets $ 558,506 $ 661,134 Liabilities and shareholders’ equity Current liabilities Accounts payable $ 7,351 $ 7,719 Accrued liabilities 6,062 8,597 Accrued compensation and benefits 12,337 13,685 Current portion of operating lease liabilities 10,021 9,384 Current portion of deferred revenue 51,856 48,630 Total current liabilities 87,627 88,015 Long-term liabilities Operating lease liabilities, less current portion 81,804 89,388 Deferred revenue, less current portion 32,781 44,793 Revenue interest liability, net 132,700 130,660 Other long-term liabilities 20 — Total liabilities 334,932 352,856 Commitments and contingencies Shareholders’ equity Preferred stock: $0.0001 par value, 10,000,000 shares authorized at September 30, 2024 and December 31, 2023; no shares issued and outstanding at September 30, 2024 and December 31, 2023 — — Common stock: $0.0001 par value, 340,000,000 shares authorized at September 30, 2024 and December 31, 2023; 147,561,586 and 145,082,271 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively 14 14 Additional paid-in capital 1,493,394 1,452,502 Accumulated other comprehensive gain 497 215 Accumulated deficit (1,270,132 ) (1,144,332 ) Total Adaptive Biotechnologies Corporation shareholders’ equity 223,773 308,399 Noncontrolling interest (199 ) (121 ) Total shareholders’ equity 223,574 308,278 Total liabilities and shareholders’ equity $ 558,506 $ 661,134 Adjusted EBITDA
The following is a reconciliation of net loss attributable to Adaptive Biotechnologies Corporation, the most directly comparable GAAP financial measure, to Adjusted EBITDA for the periods presented (in thousands, unaudited):
Three Months Ended September 30, Nine Months Ended
September 30,2024 2023 2024 2023 Net loss attributable to Adaptive Biotechnologies Corporation $ (32,071 ) $ (50,300 ) $ (125,800 ) $ (155,809 ) Interest and other income, net (3,474 ) (4,282 ) (11,462 ) (10,918 ) Interest expense 2,939 3,652 8,628 10,788 Depreciation and amortization expense 4,591 5,763 14,808 16,839 Impairment of long-lived assets — — 7,205 — Restructuring expense 193 — 1,917 — Share-based compensation expense 13,522 15,336 40,778 47,352 Adjusted EBITDA $ (14,300 ) $ (29,831 ) $ (63,926 ) $ (91,748 ) Segment Information (Including Segment Adjusted EBITDA)
The following tables set forth our segment information for the three and nine months ended September 30, 2024 and 2023, respectively (in thousands, unaudited):
Three Months Ended September 30, 2024 MRD Immune Medicine Unallocated Corporate Total Revenue $ 37,470 $ 8,965 $ — $ 46,435 Operating expenses 52,538 20,689 5,840 79,067 Adjusted EBITDA (6,120 ) (5,212 ) (2,968 ) (14,300 ) Reconciliation of Net Loss to Adjusted EBITDA: Net loss $ (15,068 ) $ (11,724 ) $ (5,305 ) $ (32,097 ) Net loss attributable to noncontrolling interest — — 26 26 Net loss attributable to Adaptive Biotechnologies Corporation (15,068 ) (11,724 ) (5,279 ) (32,071 ) Interest and other income, net — — (3,474 ) (3,474 ) Interest expense — — 2,939 2,939 Depreciation and amortization expense 2,428 1,728 435 4,591 Restructuring expense 167 26 — 193 Share-based compensation expense 6,353 4,758 2,411 13,522 Adjusted EBITDA $ (6,120 ) $ (5,212 ) $ (2,968 ) $ (14,300 ) Three Months Ended September 30, 2023 MRD Immune Medicine Unallocated Corporate Total Revenue $ 24,668 $ 13,251 $ — $ 37,919 Operating expenses 55,977 26,400 6,498 88,875 Adjusted EBITDA (21,616 ) (4,986 ) (3,229 ) (29,831 ) Reconciliation of Net Loss to Adjusted EBITDA: Net loss $ (31,309 ) $ (13,148 ) $ (5,869 ) $ (50,326 ) Net loss attributable to noncontrolling interest — — 26 26 Net loss attributable to Adaptive Biotechnologies Corporation (31,309 ) (13,148 ) (5,843 ) (50,300 ) Interest and other income, net — — (4,282 ) (4,282 ) Interest expense — — 3,652 3,652 Depreciation and amortization expense 2,489 2,546 728 5,763 Share-based compensation expense 7,204 5,616 2,516 15,336 Adjusted EBITDA $ (21,616 ) $ (4,986 ) $ (3,229 ) $ (29,831 ) Nine Months Ended September 30, 2024 MRD Immune Medicine Unallocated Corporate Total Revenue $ 105,380 $ 26,118 $ — $ 131,498 Operating expenses 170,785 70,663 18,762 260,210 Adjusted EBITDA (34,668 ) (19,172 ) (10,086 ) (63,926 ) Reconciliation of Net Loss to Adjusted EBITDA: Net loss $ (65,405 ) $ (44,545 ) $ (15,928 ) $ (125,878 ) Net loss attributable to noncontrolling interest — — 78 78 Net loss attributable to Adaptive Biotechnologies Corporation (65,405 ) (44,545 ) (15,850 ) (125,800 ) Interest and other income, net — — (11,462 ) (11,462 ) Interest expense — — 8,628 8,628 Depreciation and amortization expense 7,733 5,777 1,298 14,808 Impairment of long-lived assets 2,819 4,386 — 7,205 Restructuring expense 1,195 722 — 1,917 Share-based compensation expense 18,990 14,488 7,300 40,778 Adjusted EBITDA $ (34,668 ) $ (19,172 ) $ (10,086 ) $ (63,926 ) Nine Months Ended September 30, 2023 MRD Immune Medicine Unallocated Corporate Total Revenue $ 71,977 $ 52,515 $ — $ 124,492 Operating expenses 170,946 88,753 20,760 280,459 Adjusted EBITDA (71,081 ) (11,149 ) (9,518 ) (91,748 ) Reconciliation of Net Loss to Adjusted EBITDA: Net loss $ (98,969 ) $ (36,236 ) $ (20,632 ) $ (155,837 ) Net loss attributable to noncontrolling interest — — 28 28 Net loss attributable to Adaptive Biotechnologies Corporation (98,969 ) (36,236 ) (20,604 ) (155,809 ) Interest and other income, net — — (10,918 ) (10,918 ) Interest expense — — 10,788 10,788 Depreciation and amortization expense 6,812 7,907 2,120 16,839 Share-based compensation expense 21,076 17,180 9,096 47,352 Adjusted EBITDA $ (71,081 ) $ (11,149 ) $ (9,518 ) $ (91,748 ) 
