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Adaptive Biotechnologies Reports First Quarter 2020 Financial Results

SEATTLE, May 12, 2020 (GLOBE NEWSWIRE) -- Adaptive Biotechnologies Corporation (“Adaptive Biotechnologies”) (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, 2020.

“Adaptive’s immune medicine platform was built to decode the specific immune response to any disease, which we are now applying in full force to COVID-19,” said Chad Robins, chief executive officer and co-founder of Adaptive Biotechnologies. “Importantly, we are able to do this while maintaining focus on our current products and future pipeline.”

Recent Highlights

  • Revenue of $20.9 million for the first quarter of 2020, representing a 65% increase over the corresponding period in 2019
  • Clinical tests for clonoSEQ increased 75% to 3,518 clinical tests in the first quarter of 2020, compared to the first quarter 2019
  • Extended existing partnership with Microsoft to decode the adaptive immune response to COVID-19 and potentially develop an improved diagnostic; data to be made publicly available
  • Announced strategic partnership with Amgen to leverage Adaptive’s immune medicine platform to discover and develop therapeutic antibodies for COVID-19
  • Executed South San Francisco lease expansion to construct personalized cell therapy prototyping lab for Genentech collaboration

First Quarter 2020 Financial Results

Revenue was $20.9 million for the quarter ended March 31, 2020, representing a 65% increase from the first quarter in the prior year. Sequencing revenue was $9.5 million for the quarter, representing a 56% increase from the first quarter in the prior year. Development revenue increased to $11.4 million for the quarter, representing a 74% increase from the first quarter in the prior year.

Operating expenses were $55.5 million for the first quarter of 2020, compared to $32.7 million in the first quarter of the prior year, representing an increase of 70%.

Net loss was $31.4 million for the first quarter of 2020, compared to $18.4 million for the same period in 2019.

Adjusted EBITDA (non-GAAP) was a loss of $28.0 million for the first quarter of 2020, compared to a loss of $15.2 million for the first quarter of the prior year.

Cash, cash equivalents and marketable securities was $655.8 million as of March 31, 2020.

2020 Financial Guidance

Given the ongoing uncertainty of the scope, duration and impact of the COVID-19 pandemic, Adaptive Biotechnologies is withdrawing its previously announced annual revenue guidance for 2020, which was issued on February 26, 2020.

Webcast and Conference Call Information

Adaptive Biotechnologies will host a conference call to discuss its first quarter financial results after market close on Tuesday, May 12, 2020 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 two commercial products, and a robust clinical pipeline to diagnose, monitor and enable the treatment of diseases such as cancer, autoimmune conditions and infectious diseases. Our goal is to develop and commercialize immune-driven clinical products tailored to each individual patient. For more information, please visit adaptivebiotech.com.       

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

This press release includes references to Adjusted EBITDA, which is a non-GAAP financial measure that we define as net loss adjusted for interest and other income, net, income tax benefit (expense), depreciation and amortization and share-based compensation expenses. We have provided a reconciliation of net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA at the end of this press release.

Management uses Adjusted EBITDA to evaluate the financial performance of our business and the effectiveness of our business strategies. We present Adjusted EBITDA 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 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 in the presentation of Adjusted EBITDA. In particular, we expect to incur meaningful share-based compensation expense in the future. Other limitations include that Adjusted EBITDA does not reflect:

  • all expenditures or future requirements for capital expenditures or contractual commitments;
  • changes in our working capital needs;
  • income tax benefit (expense), 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 non-cash component of employee compensation expense; and
  • the impact of earnings or charges resulting from matters we consider not to be reflective, on a recurring basis, of our ongoing operations.

In addition, Adjusted EBITDA may not be comparable to similarly titled measures used by other companies in our industry or across different industries.

Investor Contact

Carrie Mendivil
investors@adaptivebiotech.com

Media Contact

Beth Keshishian
media@adaptivebiotech.com


Adaptive Biotechnologies
Condensed Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)

  Three Months Ended March 31,
    2020       2019  
Revenue      
Sequencing revenue $    9,469     $    6,083  
Development revenue     11,441         6,583  
Total revenue     20,910         12,666  
Operating expenses      
Cost of revenue     5,343         4,988  
Research and development     23,935         12,483  
Sales and marketing     14,007         7,817  
General and administrative     11,821         7,004  
Amortization of intangible assets     424         419  
Total operating expenses     55,530         32,711  
Loss from operations     (34,620 )       (20,045 )
Interest and other income, net     2,894          1,659  
Income tax benefit     323         —  
Net loss     (31,403 )       (18,386 )
Fair value adjustment to Series E-1 convertible preferred stock options     —          (254 )
Net loss attributable to common shareholders $   (31,403 )   $   (18,640 )
Net loss per share attributable to common shareholders, basic and diluted $    (0.25 )   $   (1.45 )
Weighted-average shares used in computing net loss per share attributable to common shareholders, basic and diluted     126,058,389         12,886,087  

Adaptive Biotechnologies
Condensed Balance Sheets
(in thousands, except share and per share amounts)


 
   
    March 31,
2020
  December 31,
2019
    (unaudited)    
Assets        
Current assets        
Cash and cash equivalents   $    212,688      $   96,576  
Short-term marketable securities (amortized cost of $340,952 and $479,791, respectively)        342,485          480,290  
Accounts receivable, net       9,382         12,676  
Inventory     10,518         9,069  
Prepaid expenses and other current assets       9,573         14,079  
Total current assets       584,646         612,690  
Long-term assets        
Property and equipment, net     24,952         60,355  
Operating lease right-of-use assets     31,058        
Long-term marketable securities (amortized cost of $98,847 and $105,263, respectively)       100,618        105,435   
Restricted cash       2,138         2,138  
Intangible assets, net       11,504         11,928  
Goodwill       118,972         118,972  
Other assets       998         784  
Total assets   $   874,886     $   912,302  
Liabilities and shareholders’ equity        
Current liabilities        
Accounts payable   $   3,895     $   4,453  
Accrued liabilities       3,804         4,371  
Accrued compensation and benefits       4,177         8,124  
Current portion of deferred rent       —         371  
Current operating lease liabilities     1,502        
Current deferred revenue       64,572         60,994  
Total current liabilities       77,950         78,313  
Long-term liabilities        
Deferred rent liability, less current portion        —         6,918  
Operating lease liabilities, less current portion       36,545         —  
Financing obligation       —       36,607   
Deferred revenue, less current portion       208,828       219,332   
Other long-term liabilities     —          93  
Total liabilities       323,323         341,263  
Commitments and contingencies        
Shareholders’ equity        
Preferred stock: $0.0001 par value, 10,000,000 shares authorized at March 31, 2020 and December 31, 2019; no shares issued and outstanding at March 31, 2020 and December 31, 2019          —         —  
Common stock: $0.0001 par value, 340,000,000 shares authorized at March 31, 2020 and December 31, 2019; 126,621,829 and 125,238,142 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively       12         12  
Additional paid-in capital       945,026         935,834  
Accumulated other comprehensive gain       3,313         671  
Accumulated deficit       (396,788 )       (365,478 )
Total shareholders’ equity       551,563         571,039  
Total liabilities and shareholders’ equity   $   874,886     $   912,302  
         

Adjusted EBITDA

The following table sets forth a reconciliation between our Adjusted EBITDA and our net loss, the most directly comparable GAAP financial measure, for each of the periods presented (in thousands):

     

Three Months Ended  March 31, 
      2020       2019  
                 
    (unaudited)
Net loss   $   (31,403 )   $   (18,386 )
Interest and other income, net       (2,894 )       (1,659 )
Income tax benefit       (323 )       —  
Depreciation and amortization expense       1,978         1,783  
Share-based compensation expense       4,675         3,046  
Adjusted EBITDA   $  (27,967 )   $   (15,216 )