Adaptive Biotechnologies Corp

Previous wording

Our current product and service offerings in MRD related to the MRD market are our clonoSEQ clinical diagnostic test, offered to clinicians, and our clonoSEQ or MRD assay, offered to biopharmaceutical partners to advance drug development efforts (“MRD Pharma”). Our first clinical diagnostic product, clonoSEQ, is the first test authorized by the Food and Drug Administration for the detection and monitoring of MRD in patients with multiple myeloma, B cell acute lymphoblastic leukemia and chronic lymphocytic leukemia, and is also available as a CLIA-validated laboratory developed test for patients with other lymphoid cancers, including diffuse large B-cell lymphoma. With the use of clonoSEQ, we are transforming how lymphoid cancers are treated by working with providers, pharmaceutical partners and payors.

Current wording

Our current product and service offerings in MRD related to the MRD market are our clonoSEQ clinical diagnostic test, offered to clinicians, and our clonoSEQ or MRD assay, offered to biopharmaceutical partners to advance drug development efforts. Our first clinical diagnostic product, clonoSEQ, is the first test authorized by the Food and Drug Administration for the detection and monitoring of MRD in patients with multiple myeloma, B cell acute lymphoblastic leukemia and chronic lymphocytic leukemia, and is also available as a CLIA-validated laboratory developed test for patients with other lymphoid cancers, including diffuse large B-cell lymphoma and mantle cell lymphoma (“MCL”). In the fourth quarter of 2024, we obtained Medicare coverage for MCL and initiated promotional efforts in MCL. We also recently obtained a new Medicare Clinical Laboratory Fee Schedule rate of $2,007 per test for clonoSEQ and MolDX updated the clonoSEQ episode pricing to $8,029 for all covered indications. This represents a 17% increase from the previous episode price and the previous implied per test rate under the episode structure. In April 2025, Palmetto GBA expanded coverage of clonoSEQ to include single time point testing to monitor for recurrence in patients with a history of MCL. This expanded coverage is in addition to the existing Medicare episode payment structure for clonoSEQ. With the use of clonoSEQ, we are transforming how lymphoid cancers are treated by working with providers, pharmaceutical partners and payors. In an effort to enable easier test ordering, we have worked to integrate the clonoSEQ clinical diagnostic test via Epic System Corporation's comprehensive electronic medical record system into the records systems of numerous accounts, and continue to make more progress.

Previous wording

Immune Medicine leverages our proprietary ability to sequence, map, pair and characterize T cell receptors (“TCRs”) and B cell receptors (“BCRs”) at scale to drive opportunities in cancer, autoimmune disorders, infectious diseases and neurodegenerative disorders. Our core research product, Adaptive Immunosequencing, serves as our underlying research and development engine and generates revenue from biopharmaceutical and academic customers. Leveraging our collaboration with Microsoft Corporation, we are creating the TCR-Antigen Map. We are using the TCR-Antigen Map to identify and validate disease signatures to improve the diagnosis and treatment of many diseases. In Drug Discovery, we use our proprietary capabilities to discover new drug targets and leverage our validated TCR and BCR discovery approaches to discover and develop TCR or antibody therapeutic assets. Drug Discovery includes our worldwide collaboration and license agreement with Genentech (the “Genentech Agreement”).

Current wording

Immune Medicine leverages our proprietary ability to sequence, map, pair and characterize T cell receptors (“TCRs”) and B cell receptors (“BCRs”) at scale to drive opportunities in cancer and autoimmune disorders. Our immunosequencing technology, which includes our Adaptive Immunosequencing research product, serves as the research and development engine driving our immune medicine platform and generates revenue from biopharmaceutical and academic customers. We are applying artificial intelligence and machine learning models to map at scale TCR sequences to the diseases they bind to enable our drug discovery efforts. Also in our drug discovery programs, we use our proprietary capabilities to discover new drug targets and leverage our validated TCR and BCR discovery approaches to discover and develop TCR or antibody therapeutic assets. Our drug discovery efforts include our worldwide collaboration and license agreement with Genentech (the “Genentech Agreement”) under which we support Genentech in the development of cancer antigen-directed TCR-based cancer cell therapies for the treatment of patients with solid tumors.

Previous wording

We recognized revenue of $46.4 million and $37.9 million for the three months ended September 30, 2024 and 2023, respectively, and $131.5 million and $124.5 million for the nine months ended September 30, 2024 and 2023, respectively. Net loss attributable to Adaptive Biotechnologies Corporation was $32.1 million and $50.3 million for the three months ended September 30, 2024 and 2023, respectively, and $125.8 million and $155.8 million for the nine months ended September 30, 2024 and 2023, respectively. We have funded our operations to date principally from the sale of convertible preferred stock and common stock and, to a lesser extent, revenue and proceeds from the revenue interest purchase agreement we entered into in September 2022 with OrbiMed Royalty & Credit Opportunities IV, LP, an affiliate of OrbiMed Advisors LLC, as collateral agent and administrative agent for the purchasers party thereto (the “Purchase Agreement”). As of September 30, 2024 and December 31, 2023, we had cash, cash equivalents and marketable securities of $267.2 million and $346.4 million, respectively.

Current wording

We recognized revenue of $52.4 million and $41.9 million for the three months ended March 31, 2025 and 2024, respectively. Net loss attributable to Adaptive Biotechnologies Corporation was $29.9 million and $47.5 million for the three months ended March 31, 2025 and 2024, respectively. We have funded our operations to date principally from the sale of convertible preferred stock and common stock, including the sale of common stock in our initial public offering and follow-on offering, and, to a lesser extent, revenue and proceeds from the revenue interest purchase agreement we entered into in September 2022 (the “Purchase Agreement”). As of March 31, 2025 and December 31, 2024, we had cash, cash equivalents and marketable securities of $232.8 million and $256.0 million, respectively.

Previous wording

We derive revenue by providing diagnostic and research services in our MRD and Immune Medicine business areas. Our MRD revenue consists of revenue generated from (1) providing our clonoSEQ report to clinical customers; (2) providing MRD sample testing services to biopharmaceutical customers and certain academic institutions, including investigator-led clinical trials; and (3) providing our clonoSEQ report or results to certain international laboratory sites through technology transfers. We disclose our clonoSEQ test volume, which includes the number of clonoSEQ reports and results we have provided to ordering physicians in the United States (“U.S.”) and international technology transfer sites. These volumes do not include sample results from our biopharmaceutical customers or academic institutions utilizing our MRD services. Our Immune Medicine revenue consists of revenue generated from (1) providing sample testing services for our commercial research product, Adaptive Immunosequencing, to biopharmaceutical customers and academic institutions; and (2) our collaboration agreements with Genentech and other biopharmaceutical customers in areas of drug and target discovery.

Current wording

We derive revenue by providing diagnostic and research services in our MRD and Immune Medicine business areas. Our MRD revenue consists of revenue generated from (1) providing our clonoSEQ report to clinical customers; (2) providing MRD sample testing services to biopharmaceutical customers and certain academic institutions, including investigator-led clinical trials; and (3) providing our clonoSEQ report or results to certain international laboratory sites through technology transfers. We disclose our clonoSEQ test volume, which includes the number of clonoSEQ reports and results we have provided to ordering physicians in the United States (“U.S.”) and international technology transfer sites. These volumes do not include sample results from our biopharmaceutical customers or academic institutions utilizing our MRD services. Our Immune Medicine revenue consists of revenue generated from (1) providing sample testing services for our commercial research product, Adaptive Immunosequencing, to biopharmaceutical customers and academic institutions; and (2) our collaboration agreement with Genentech.

Previous wording

Under certain agreements with our biopharmaceutical customers who seek access to our platform to support their therapeutic development activities, revenues are generated from research and development support services that we provide. These agreements may include substantial non-refundable upfront payments, which we recognize over time as we perform the respective services. Revenue recognized from these activities relate primarily to the Genentech Agreement.

Current wording

Under certain agreements with our biopharmaceutical customers who seek access to our platform to support their therapeutic development activities, revenues are generated from research and development support services that we provide. These agreements may include substantial non-refundable upfront payments, which we recognize over time as we perform the respective services. Revenue recognized from these activities relate to the Genentech Agreement.

Previous wording

We expect our MRD revenue to increase in the long term as we continue to increase our MRD clinical testing volume through increased penetration in our existing covered patient populations, expand into new patient populations and optimize payor coverage. Our MRD revenue may fluctuate period to period due to the uncertain timing of receipt of our biopharmaceutical customer samples, which may cause uncertainty in the delivery of our products and services, the recognition of milestones related to regulatory approvals of our biopharmaceutical customers’ therapeutics and changes in estimates of our clinical revenue reimbursement rates.

Current wording

We expect our MRD revenue to increase in the long term as we continue to increase our MRD clinical testing volume through enhanced penetration in our existing covered patient populations, expand into new patient populations and optimize payor coverage. Our MRD revenue may fluctuate period to period due to the uncertain timing of receipt of our biopharmaceutical customer samples, which may cause uncertainty in the delivery of our products and services, the recognition of milestones related to regulatory approvals of our biopharmaceutical customers’ therapeutics and changes in estimates of our clinical revenue reimbursement rates.

Previous wording

We expect sales and marketing expenses to experience moderate increases in the short term. In the long term, we expect sales and marketing expenses to increase in absolute dollars as we increase marketing activities to drive awareness and adoption of our products and services. However, we expect sales and marketing expenses to decrease as a percentage of revenue in the long term, subject to fluctuations from period to period due to the timing and magnitude of these expenses.

Current wording

We expect sales and marketing expenses to increase in the short term. In the long term, we expect sales and marketing expenses to increase in absolute dollars as we increase marketing activities to drive awareness and adoption of our products and services. However, we expect sales and marketing expenses to decrease as a percentage of revenue in the long term, subject to fluctuations from period to period due to the timing and magnitude of these expenses.

Previous wording

We expect general and administrative expenses to remain relatively consistent in the short term and to decrease as a percentage of revenue in the long term.

Current wording

We expect general and administrative expenses to moderately increase in the short term and to decrease as a percentage of revenue in the long term.

Previous wording

The $12.8 million increase in MRD revenue was primarily due to a $5.6 million increase in revenue generated from providing clonoSEQ to clinical customers, a $5.0 million increase in revenue recognized upon the achievement of certain regulatory milestones by one of our biopharmaceutical customers, a $2.0 million increase in revenue generated from providing MRD sample testing services to biopharmaceutical customers and a $0.4 million increase in revenue generated from providing MRD sample testing services to investigator-led clinical trials. Our clonoSEQ test volume increased by 30% to 19,600 tests delivered in the three months ended September 30, 2024 from 15,072 tests delivered in the three months ended September 30, 2023.

Current wording

The $11.1 million increase in MRD revenue was primarily due to a $9.9 million increase in revenue generated from providing clonoSEQ to clinical customers and a $1.0 million increase in revenue generated from providing MRD sample testing services to biopharmaceutical customers. Our clonoSEQ test volume increased by 36% to 23,117 tests delivered in the three months ended March 31, 2025 from 17,040 tests delivered in the three months ended March 31, 2024.

Previous wording

The $4.3 million decrease in Immune Medicine revenue was primarily due to a $4.5 million decrease in revenue generated from the Genentech Agreement, which resulted from decreased collaboration expenses, partially offset by a $0.2 million increase in revenue generated from our biopharmaceutical and academic customers.

Current wording

The $0.5 million decrease in Immune Medicine revenue was primarily due to a $1.1 million decrease in revenue generated from the Genentech Agreement, which resulted from decreased collaboration expenses, partially offset by a $0.6 million increase in revenue generated from our biopharmaceutical and academic customers.

Previous wording

The $2.7 million decrease in cost of revenue was primarily attributable to a $4.0 million decrease in labor and overhead costs, which was largely driven by laboratory relocation and consolidation activities, a $0.3 million decrease in cost of materials primarily due to a reduction in inventory reserve expenseand a $0.2 million decrease in shipping and handling expenses. These decreases were partially offset by a $1.3 million increase related to higher usage of our production laboratory to process revenue samples versus research and development samples and a $0.7 million increase in materials cost resulting from increased revenue sample volume.

Current wording

The $1.1 million decrease in cost of revenue was primarily attributable to a $1.2 million decrease in cost of materials, which was due primarily to reductions in inventory reserve expense and assay costs, and a $1.4 million decrease in labor and overhead costs, which was largely driven by reduced headcount and a reduction in laboratory relocation and consolidation activities. These decreases were partially offset by a $0.6 million increase related to higher usage of our production laboratory to process revenue samples versus research and development samples, a $0.5 million increase in materials cost resulting from increased revenue sample volume and a $0.3 million increase in shipping and handling expenses for sample collection kits.

Previous wording

The $13.6 million decrease in research and development expenses was primarily attributable to a $7.8 million decrease in personnel costs and a $3.7 million decrease in cost of materials and allocated production laboratory expenses, which was driven primarily by decreased investments in drug discovery efforts, including collaboration efforts with Genentech, and TCR-Antigen Map development activities, partially offset by an increase in investments related to clonoSEQ. There was also a $2.7 million decrease in depreciation and other expenses, inclusive of a $1.9 million decrease in costs related to collaboration studies primarily related to Immune Medicine, and a $0.7 million decrease in allocable facilities expenses. These decreases were partially offset by a $1.3 million increase in software and cloud services expenses.

Current wording

The $6.0 million decrease in research and development expenses was primarily attributable to a $4.2 million decrease in personnel costs and a $1.3 million decrease in laboratory materials and allocated production laboratory expenses, which was driven primarily by decreased investments in drug discovery efforts, partially offset by an increase in investments related to the MRD business. There was also a $0.9 million decrease in allocable facility expenses.

Previous wording

The $0.1 million increase in sales and marketing expenses was primarily attributable to a $0.6 million increase in computer and software expenses and a $0.4 million increase in allocated overhead expenses. These increases were partially offset by a $0.5 million decrease in personnel costs and a $0.4 million decrease in marketing expenses, which was largely driven by reduced clonoSEQ and research marketing activities.

Current wording

The $0.7 million increase in sales and marketing expenses was primarily attributable to a $0.7 million increase in personnel costs, a $0.5 million increase in allocated facility and overhead expenses and a $0.4 million increase in consulting costs. These increases were partially offset by a $1.1 million decrease in marketing expenses, largely driven by reduced clonoSEQ and corporate marketing activities.

Previous wording

The $2.8 million decrease in general and administrative expenses was primarily attributable to a $1.2 million decrease in personnel costs, a $0.6 million decrease in building, facility, overhead and depreciation related expenses largely driven by office space transitions made to support laboratory consolidation activities and a $0.4 million decrease in legal fees. These decreases were partially offset by a $0.3 million increase in third-party billing service fees.

Current wording

The $2.2 million decrease in general and administrative expenses was primarily attributable to a $2.2 million decrease in personnel costs, a $0.4 million decrease in computer and software expenses and a $0.4 million decrease in accounting and tax fees. These decreases were partially offset by a $0.6 million increase in legal fees.

Previous wording

The $0.8 million decrease in interest and other income, net was primarily attributable to a decrease in net interest income and investment amortization driven by decreased interest rates and related yields of our invested cash and cash equivalents and marketable securities.

Current wording

The $1.5 million decrease in interest and other income, net was primarily attributable to a decrease in net interest income and investment amortization driven by decreased holdings of and interest rates pertaining to our cash, cash equivalents and marketable securities.

Previous wording

The $0.7 million decrease in interest expense was attributable to a change in our assumptions regarding the timeframe in which our Purchase Agreement will be fully repaid.

Current wording

The $0.1 million decrease in interest expense was attributable to a change in our assumptions regarding the timeframe in which our Purchase Agreement will be fully repaid.

Previous wording

(1)Adjusted EBITDA is a non-GAAP financial measure. See “Adjusted EBITDA” below for an explanation of how it is calculated and used by management.

Current wording

(1)Adjusted EBITDA is a non-GAAP financial measure. See “Adjusted EBITDA” below for an explanation of how it is calculated and used by management. Adjusted EBITDA related to our unallocated corporate category is included in the calculation of consolidated Adjusted EBITDA but not shown above in the breakout of segment Adjusted EBITDA.

Previous wording

The $36.4 million reduction in MRD Adjusted EBITDA deficit was primarily attributable to a $33.4 million increase in MRD revenue and a reduction in operating expenses, excluding those identified as reconciling items between net loss and adjusted EBITDA. The primary driver of the operating expense reduction relates to general and administrative activities.

Current wording

The $13.1 million reduction in MRD Adjusted EBITDA deficit was primarily attributable to a $11.1 million increase in MRD revenue and a reduction in operating expenses, excluding those identified as reconciling items between net loss and adjusted EBITDA. The primary driver of the operating expense reduction relates to research and development activities.

Previous wording

The $8.0 million increase in Immune Medicine Adjusted EBITDA deficit was primarily attributable to a $26.4 million reduction in Immune Medicine revenue, which was partially offset by a reduction in operating expenses, excluding those identified as reconciling items between net loss and adjusted EBITDA. The primary driver of the operating expense reduction relates to research and development activities.

Current wording

The $1.5 million reduction in Immune Medicine Adjusted EBITDA deficit was primarily attributable to a reduction in operating expenses, excluding those identified as reconciling items between net loss and adjusted EBITDA, partially offset by a $0.5 million reduction in Immune Medicine revenue. The primary driver of the operating expense reduction relates to research and development activities.

Previous wording

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

Current wording

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

Previous wording

(2) Represents expenses recognized in conjunction with restructuring activities. See Note 12, Restructurings of the accompanying notes to the unaudited condensed consolidated financial statements included elsewhere in this report for details on our restructuring expenses.

Current wording

(2) Represents expenses recognized in conjunction with restructuring activities. See Note 12, Restructuring of the accompanying notes to the unaudited condensed consolidated financial statements included elsewhere in this report for details on our restructuring expense.

Previous wording

We have funded our operations to date principally from the sale of convertible preferred stock and common stock, and, to a lesser extent, revenue and proceeds from the Purchase Agreement. Pursuant to the Purchase Agreement entered into in September 2022, we received net cash proceeds of $124.4 million, after deducting issuance costs. We are also entitled to receive up to $125.0 million in subsequent installments as follows: (i) $75.0 million upon our request occurring no later than September 12, 2025 and (ii) $50.0 million upon our request in connection with certain permitted acquisitions occurring no later than September 12, 2025, in each case subject to certain funding conditions. As of September 30, 2024, we had cash, cash equivalents and marketable securities of $267.2 million.

Current wording

We have funded our operations to date principally from the sale of convertible preferred stock and common stock, and, to a lesser extent, revenue and proceeds from the Purchase Agreement. Pursuant to the Purchase Agreement entered into in September 2022, we received net cash proceeds of $124.4 million, after deducting issuance costs. We are also entitled to receive up to $125.0 million in subsequent installments as follows: (i) $75.0 million upon our request occurring no later than September 12, 2025 and (ii) $50.0 million upon our request in connection with certain permitted acquisitions occurring no later than September 12, 2025, in each case subject to certain funding conditions. As of March 31, 2025, we had cash, cash equivalents and marketable securities of $232.8 million.

Previous wording

We plan to utilize the existing cash, cash equivalents and marketable securities on hand primarily to fund our commercial and marketing activities associated with clonoSEQ, our continued investments in streamlining our laboratory operations and our continued research and development initiatives related to drug discovery. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to capital preservation and liquidity. Currently, our funds are held in money market funds and marketable securities consisting of U.S. government treasury and agency securities, corporate bonds and commercial paper.

Current wording

We plan to utilize the existing cash, cash equivalents and marketable securities on hand primarily to fund our commercial and marketing activities associated with clonoSEQ, our continued investments in streamlining our laboratory operations and our continued research and development initiatives related to drug discovery. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to capital preservation and liquidity. Currently, our funds are held in money market funds and marketable securities consisting of U.S. government treasury securities and corporate bonds.

Previous wording

There have been no material changes outside the ordinary course of business to our contractual obligations and commitments as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 29, 2024.

Current wording

In March 2025, we entered into a three-year, $17.5 million commitment for certain cloud services. There have been no other material changes outside the ordinary course of business to our contractual obligations and commitments as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 3, 2025.

Previous wording

The following table summarizes our uses and sources of cash for the nine months ended September 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our uses and sources of cash for the three months ended March 31, 2025 and 2024 (in thousands):

Previous wording

Cash provided by financing activities during the nine months ended September 30, 2024 was $0.1 million, which was attributable to proceeds from the exercise of stock options.

Current wording

Cash provided by financing activities was $5.5 million as compared to a nominal amount for the three months ended March 31, 2025 and 2024, respectively. This increase was due to an increase in proceeds from the exercise of stock options.

Previous wording

We have prepared the unaudited condensed consolidated financial statements in accordance with GAAP. Our preparation of these unaudited condensed consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities and related disclosures at the date of the unaudited condensed consolidated financial statements, as well as revenue and expense recorded during the reporting periods. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and other relevant assumptions that we believe to be reasonable under the circumstances. Estimates are used in several areas, including, but not limited to, estimates of progress to date for certain performance obligations and the transaction price for certain contracts with customers, imputing interest for the Purchase Agreement, the provision for income taxes, including related reserves, the analysis of goodwill impairment and the recoverability and impairment of long-lived assets, among others. These estimates generally involve complex issues and require judgments, involve the analysis of historical results and prediction of future trends, can require extended periods of time to resolve and are subject to change from period to period. Actual results may differ materially from management’s estimates.

Current wording

We have prepared the unaudited condensed consolidated financial statements in accordance with GAAP. Our preparation of these unaudited condensed consolidated financial statements requires us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the unaudited condensed consolidated financial statements, as well as the reported amounts of revenues and expenses recorded during the periods presented. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and other relevant assumptions that we believe to be reasonable under the circumstances. Estimates are used in several areas, including, but not limited to, estimates of progress to date for certain performance obligations and the transaction price for certain contracts with customers, imputing interest for the Purchase Agreement, the provision for income taxes, including related reserves, the analysis of goodwill impairment and the recoverability and impairment of long-lived assets, among others. These estimates generally involve complex issues and require judgments, involve the analysis of historical results and prediction of future trends, can require extended periods of time to resolve and are subject to change from period to period. Actual results may differ materially from management’s estimates.