Adaptive Biotechnologies Corp

Previous wording

our expected and potential reliance on collaborators for development and clinical testing of therapeutic product candidates, which may fail at any time due to a number of possible unforeseen events;

Current wording

our expected and potential reliance on biopharmaceutical collaborators for development and clinical testing of drug candidates, which may fail at any time due to a number of possible unforeseen events;

Previous wording

We have incurred significant losses since our inception. For the year ended December 31, 2024, 2023 and 2022, we incurred a net loss of $159.6 million, $225.3 million and $200.4 million, respectively. As of December 31, 2024, we had an accumulated deficit of $1.3 billion. 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 as well as transactions pursuant to the Purchase Agreement. We expect to continue to incur significant expenses and operating losses as we continue to invest in the development of products and services utilizing our immune medicine platform to support the validation of additional clinical therapeutic and diagnostic products and services. We will need to generate significant additional revenue to achieve and sustain profitability.

Current wording

We have incurred significant losses since our inception. For the year ended December 31, 2025, 2024 and 2023, we incurred a net loss of $59.5 million, $159.6 million, and $225.3 million, respectively. As of December 31, 2025, we had an accumulated deficit of $1.4 billion. 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, revenue and transactions pursuant to the Purchase Agreement. We expect to continue to incur significant expenses and operating losses as we continue to invest in the development of products and services utilizing our immune medicine platform to support the validation of additional products and services. We will need to generate significant additional revenue to achieve and sustain profitability.

Previous wording

our ability to obtain positive coverage decisions for our tests from additional commercial payers;

Current wording

our ability to obtain positive coverage decisions for our tests from additional commercial payors;

Previous wording

the timing of upfront payments from our collaborators;

Current wording

the timing of upfront payments from our customers and collaborators;

Previous wording

our ability and that of our collaborators to develop and successfully commercialize our products, including therapeutic products;

Current wording

our ability and that of our collaborators to develop and successfully commercialize products, including drug candidates;

Previous wording

availability and extent of reimbursement by governmental and private payors for our products;

Current wording

availability, extent and pricing of reimbursement by governmental and private payors for our products;

Previous wording

business interruptions such as power outages, strikes, acts of terrorism or natural disasters; and

Current wording

business interruptions such as laboratory disruptions, power outages, strikes, acts of terrorism or natural disasters; and

Previous wording

Our strategy is to leverage our immune medicine platform to discover, develop and potentially commercialize additional therapeutic and diagnostic products and services for various disease states. In particular, for clonoSEQ we are attempting to generate sufficient clinical evidence to support the utility of MRD in additional lymphoid cancers beyond ALL, MM, CLL, DLBCL and MCL while also demonstrating the clinical utility of blood as a sample type for all lymphoid cancers. If we are unable to generate compelling evidence supporting clonoSEQ use in other indications or sample types, we may not succeed in expanding our clonoSEQ product platform.

Current wording

Our strategy is to leverage our immune medicine platform to discover, develop and potentially commercialize additional products and services to diagnose and treat various disease states. In particular, for clonoSEQ we are attempting to generate sufficient clinical evidence to support the utility of MRD in additional lymphoid cancers beyond ALL, MM, CLL, DLBCL and MCL while also demonstrating the clinical utility of blood as a sample type for all lymphoid cancers. If we are unable to generate compelling evidence supporting clonoSEQ use in other indications or sample types, we may not succeed in expanding our clonoSEQ product platform.

Previous wording

In our immune medicine business, our focus on target antigen discovery and development of therapeutic products, including antibodies and cellular therapies, faces significant challenges in the identification, validation, development, clinical testing and marketing approval of new products. If we or our collaborators are unable to discover novel targets and develop transformative immune-based therapies, we may not succeed in commercializing new therapeutic products.

Current wording

In our immune medicine business, our focus on immune-repertoire sequencing, target antigen discovery, data licensing and TCR-antigen prediction models faces significant challenges in the identification, validation, development and adoption of products and services. If we are unable to discover novel targets for our collaborators or demonstrate the value in our datasets and models, we may not succeed in developing, offering and commercializing new products and services and growing our immune medicine business.

Previous wording

We are seeking to leverage our immune medicine platform to develop a pipeline of future disease-specific research, therapeutic and diagnostic products. For example, we continually expand our immunomics database and TCR-antigen binding with a view toward advancing target antigen discovery to leverage in developing therapies such as prophylactic or therapeutic antibodies. In addition, we are developing certain therapeutic product candidates under our collaboration agreement with Genentech by leveraging our platform to identify TCRs that can be engineered into personalized cellular therapeutic products.

Current wording

We are seeking to leverage our immune medicine platform to develop a pipeline of future disease-specific research and diagnostic products. For example, we continually expand our immunomics database and TCR-antigen binding with a view toward advancing target antigen discovery to enable our collaborators to develop therapeutics.

Previous wording

Developing new products is a speculative and risky endeavor. Products or services that initially show promise may fail to achieve the desired results or may not achieve acceptable levels of analytical accuracy or clinical utility. We may need to alter our products in development and repeat clinical studies before we identify a potentially successful product or service. Therapeutic product development is expensive, may take years to complete and can have uncertain outcomes. Failure can occur at any stage of the development. If, after development, a product or service appears successful, we or our collaborators (if any) may, depending on the nature of the product or service, still need to obtain FDA and other regulatory clearances, authorizations or approvals before we can market it. The clearance, authorization or approval pathways at the FDA and other regulatory authorities are likely to involve significant time, as well as additional research, development and clinical study expenditures. The FDA or other regulatory authorities may not clear, authorize or approve any future product we develop. Even if we develop a product that receives regulatory clearance, authorization or approval, we or our collaborators would need to commit substantial resources to commercialize, sell and market it before it could be profitable, and the product may never be commercially successful. Additionally, development of any product may be disrupted or made less viable by the development of competing products.

Current wording

Developing new products is a speculative and risky endeavor. Products or services that initially show promise may fail to achieve the desired results or may not achieve acceptable levels of analytical accuracy or clinical utility. We may need to alter our products in development and repeat clinical studies before we identify a potentially successful product or service. Failure can occur at any stage of the development. If, after development, a product or service appears successful, we or our collaborators (if any) may, depending on the nature of the product or service, still need to obtain FDA and other regulatory clearances, authorizations or approvals before we can market it. The clearance, authorization or approval pathways at the FDA and other regulatory authorities are likely to involve significant time, as well as additional research, development and clinical study expenditures. The FDA or other regulatory authorities may not clear, authorize or approve any future product we develop. Even if we develop a product that receives regulatory clearance, authorization or approval, we or our collaborators would need to commit substantial resources to commercialize, sell and market it before it could be profitable, and the product may never be commercially successful. Additionally, development of any product may be disrupted or made less viable by the development of competing products.

Previous wording

For example, we have purchased and rely on the Illumina NextSeq System and plan to rely in the future on the NovaSeq X system. Illumina supplies us with reagents that have been designed for use solely with this sequencer and Illumina is the sole provider of maintenance and repair services for the Illumina NextSeq System. We also license our laboratory information management software from Illumina and receive services from Illumina related to that software. In addition, Illumina is not obligated to meet all of our requirements for reagent supply. In the event Illumina ceases or slows its production of, or is otherwise unwilling or unable to continue to supply the sequencer reagents necessary for and currently used in our business at or near current pricing, we may be required to purchase different reagents from Illumina or to purchase from a different reagent vendor under terms and conditions which could be less favorable to us. Any disruption in Illumina’s operations or the suppliers of our reagents, materials or other equipment could impact our ability to do business.

Current wording

For example, we have purchased and rely on the Illumina NextSeq System and the NovaSeq X Plus System. Illumina supplies us with reagents that have been designed for use solely with these sequencers and Illumina is the sole provider of maintenance and repair services for the Illumina NextSeq System and the NovaSeq X Plus System. We also license our laboratory information management software from Illumina and receive services from Illumina related to that software. In addition, Illumina is not obligated to meet all of our requirements for reagent supply. In the event Illumina ceases or slows its production of, or is otherwise unwilling or unable to continue to supply the sequencer reagents necessary for and currently used in our business at or near current pricing, we may be required to purchase different reagents from Illumina or to purchase from a different reagent vendor under terms and conditions which could be less favorable to us. Any disruption in Illumina’s operations or the suppliers of our reagents, materials or other equipment could impact our ability to do business.

Previous wording

In addition, our development laboratory operations could result in any number of errors or defects. Our quality assurance system or product development processes may fail to prevent us from inadvertent problems with samples, sample quality, lab processes including sequencing, software, data upload or analysis, raw materials, reagent manufacturing, assay quality or design, or other components or processes. In addition, our assays may have quality or design errors, and we may have inadequate procedures or instrumentation to process samples, assemble our proprietary primer mixes and commercial materials, upload and analyze data, or otherwise conduct our development laboratory operations. If we provide products or services with undiscovered errors to our customers, our clinical diagnostics may falsely indicate a patient has a disease or fail to detect disease in a patient who requires treatment. We believe our customers are likely to be particularly sensitive to product and service defects, errors and delays, including if our products and services fail to indicate the presence of residual disease with high accuracy from clinical specimens or if we fail to list or inaccurately indicate the presence or absence of disease in our test report. In drug discovery, such errors may interfere with our collaborators’ clinical studies or result in adverse safety or efficacy profiles for their products in development. This may harm our customers’ businesses and may cause us to incur significant costs, divert the attention of key personnel, encourage regulatory enforcement action against us, create a significant customer relations problem for us and cause our reputation to suffer. We may also be subject to liability claims for damages related to errors or defects in our products. Any of these developments could harm our business and operating results.

Current wording

In addition, our development laboratory operations could result in any number of errors or defects. Our quality assurance system or product development processes may fail to prevent us from inadvertent problems with samples, sample quality, lab processes including sequencing, software, data upload or analysis, raw materials, reagent manufacturing, assay quality or design, or other components or processes. In addition, our assays may have quality or design errors, and we may have inadequate procedures or instrumentation to process samples, assemble our proprietary primer mixes and commercial materials, upload and analyze data, or otherwise conduct our development laboratory operations. If we provide products or services with undiscovered errors to our customers, our clinical diagnostics may falsely indicate a patient has a disease or fail to detect disease in a patient who requires treatment. We believe our customers are likely to be particularly sensitive to product and service defects, errors and delays, including if our products and services fail to indicate the presence of residual disease with high accuracy from clinical specimens or if we fail to list or inaccurately indicate the presence or absence of disease in our test report. Such errors may interfere with our collaborators’ clinical studies or result in adverse safety or efficacy profiles for their products in development. This may harm our customers’ businesses and may cause us to incur significant costs, divert the attention of key personnel, encourage regulatory enforcement action against us, create a significant customer relations problem for us and cause our reputation to suffer. We may also be subject to liability claims for damages related to errors or defects in our products. Any of these developments could harm our business and operating results.

Previous wording

Our efforts to develop products leveraging our TCR-antigen binding data may not be successful, and it may not yield the insights that we expect or on a timetable that allows development or commercialization of new therapeutic or diagnostic products.

Current wording

Our efforts to develop products leveraging our TCR-antigen binding data may not be successful, and it may not yield the insights that we expect or on a timetable that allows development or commercialization of new products or services.

Previous wording

We are using our immunosequencing capabilities, proprietary computational analyses and machine learning models to map and computationally predict at scale binding of TCR sequences to disease antigens, which we believe has multiple high-value therapeutic applications and is relevant to our drug discovery work. However, we may not be successful in developing a sufficiently comprehensive data set or the performance of our ‘digital’ TCR-antigen prediction models may be insufficient for any number of reasons, which may include difficulty in validating signals and challenges in making progress toward algorithmic-based methods that accurately define TCR-antigen signatures of disease. In addition, we may not succeed in accelerating the development of a ‘digital’ TCR-antigen binding prediction model that will allow us to pursue multiple high-value therapeutic applications and achieve our business goals in a timetable that is commercially viable for our products or our collaborators’ products, or at all. As we continue to grow our immunomics database and advance our prediction modeling activities, we may be unable to translate these efforts into commercialization opportunities. Moreover, as our collaboration activities under the Microsoft Agreement are winding down, we may be less successful in pursuing these opportunities.

Current wording

We are using our immunosequencing capabilities, proprietary computational analyses and machine learning models to map and computationally predict at scale binding of TCR sequences to disease antigens, which we believe has multiple high-value therapeutic applications and is relevant to our drug discovery work. However, we may not be successful in developing a sufficiently comprehensive data set or the performance of our ‘digital’ TCR-antigen prediction models may be insufficient for any number of reasons, which may include difficulty in validating signals and challenges in making progress toward algorithmic-based methods that accurately define TCR-antigen signatures of disease. In addition, we may not succeed in accelerating the development of a ‘digital’ TCR-antigen binding prediction model that will allow us to achieve our business goals in a timetable that is commercially viable for our products or our collaborators’ products, or at all. As we continue to grow our immunomics database and advance our prediction modeling activities, we may be unable to translate these efforts into commercialization opportunities. Moreover, as our collaboration activities under the Microsoft Agreement have concluded, we may be less successful in pursuing these opportunities in the future.

Previous wording

If the performance of our computational and machine learning modeling efforts do not meet our expectations or our needs to accurately validate TCR to antigen associations in a reasonable timeframe, our business model may not be commercially viable. Even if we accelerate our efforts, products derived from our platform technologies may have product specific limitations. If we are unable to make meaningful progress in leveraging our prediction models to successfully develop and in the future commercialize new therapeutic products, diagnostic products or services, our business results will be negatively impacted.

Current wording

If the performance of our computational and machine learning modeling efforts do not meet our expectations or our needs to accurately validate TCR to antigen associations in a reasonable timeframe, our business model may not be commercially viable. Even if we accelerate our efforts, products derived from our platform technologies may have product specific limitations. If we are unable to make meaningful progress in leveraging our prediction models to successfully develop and in the future commercialize new products or services, our business results will be negatively impacted.

Previous wording

We have limited resources to conduct our operations in both the MRD business and IM business areas, and have not yet fully established infrastructure for sales, marketing or distribution in connection with all of our current or future potential products. We have entered into collaboration agreements under which our collaborators have provided, and may in the future provide, funding and other resources for developing and potentially commercializing our products and services.

Current wording

We have limited resources to conduct our operations in both the MRD business and IM business areas, and have not yet fully established infrastructure for sales, marketing or distribution in connection with all of our current or future potential products. We have entered into agreements under which our collaborators have provided, and may in the future provide, funding and other resources for developing and potentially commercializing our products and services. For example, we recently entered into two non-exclusive immune receptor data agreements with Pfizer, pursuant to which we will use our immune medicine platform and T-cell biology capabilities to identify disease-causing TCRs as potential therapeutic targets in RA, and Pfizer has sole control over clinical development and commercialization of any products developed under the agreements.

Previous wording

We are pursuing potential drug discovery and development opportunities with pharmaceutical companies to develop and commercialize therapeutic products that leverage our immune medicine platform, including TCR-based and antibody-based therapeutic modalities, among others. We may not succeed in discovering targets or advancing therapeutic product candidates in these collaborations and our collaborators may not succeed in developing and commercializing such products, which may cause us not to realize the expected monetary benefits of the collaborations.

Current wording

We are pursuing potential drug discovery and development opportunities with pharmaceutical companies to develop and commercialize therapeutic products that leverage our immune medicine platform. We may not succeed in discovering targets and our collaborators may not succeed in developing and commercializing therapeutic product candidates, which may cause us not to realize the expected monetary benefits of the collaborations.

Previous wording

regulatory authorities or ethical review boards, including IRBs, may not authorize commencement of a clinical trial or conduct a clinical trial at a prospective trial site;

Current wording

regulatory authorities or ethical review boards, including institutional review boards (“IRBs”), may not authorize commencement of a clinical trial or conduct a clinical trial at a prospective trial site;

Previous wording

As of December 31, 2024, we had 619 full-time employees, and we reduced our workforce last year as part of restructuring plans. See Note 15, Restructurings. If demand for our products and services increases in the future, we may need to expand our workforce, commercial infrastructure and laboratory operations to support demand for our products. If we are unable to support fluctuations in the demand for our products and services, including ensuring that we have adequate capacity to meet potential increased demand as well as other customer requirements (such as turnaround time and service level), our business could suffer. Consequently, we may be required to increase the number of employees, including potential contingent employees as needed, to address demand fluctuations. As we and our collaborators commercialize additional products and services, we may need to incorporate new equipment, implement new technology systems and laboratory processes and hire new personnel with different qualifications. Failure to manage this growth or transition could result in turnaround time delays, higher service costs, declining service quality, deteriorating customer service and slower responses to competitive challenges. A failure in any one of these areas could make it difficult for us to meet market expectations for our products and services and could damage our reputation and the prospects for our business.

Current wording

As of December 31, 2025, we had 624 full-time employees. If demand for our products and services increases in the future, we may need to expand our workforce, commercial infrastructure and laboratory operations to support demand for our products. If we are unable to support fluctuations in the demand for our products and services, including ensuring that we have adequate capacity to meet potential increased demand as well as other customer requirements (such as turnaround time and service level), our business could suffer. Consequently, we may be required to increase the number of employees, including potential contingent employees as needed, to address demand fluctuations. As we and our collaborators commercialize additional products and services, we may need to incorporate new equipment, implement new technology systems and laboratory processes and hire new personnel with different qualifications. Failure to manage this growth or transition could result in turnaround time delays, higher service costs, declining service quality, deteriorating customer service and slower responses to competitive challenges. A failure in any one of these areas could make it difficult for us to meet market expectations for our products and services and could damage our reputation and the prospects for our business.

Previous wording

Our success depends on the market’s confidence that we can provide immune-driven research, therapeutic and diagnostic products and services that improve clinical outcomes, lower healthcare costs and enable better biopharmaceutical development. Failure of our products and services, or those jointly developed with our collaborators, to perform as expected could significantly impair our operating results and our reputation. We believe patients, clinicians, academic institutions and biopharmaceutical companies are likely to be particularly sensitive to defects, errors, inaccuracies, delays and toxicities in or associated with our products and services. Furthermore, inadequate performance of these products or services may result in lower confidence in our immune medicine platform in general.

Current wording

Our success depends on the market’s confidence that we can provide immune-driven research and products and services that improve clinical outcomes, lower healthcare costs and enable better biopharmaceutical development. Failure of our products and services, or those jointly developed with our collaborators, to perform as expected could significantly impair our operating results and our reputation. We believe patients, clinicians, academic institutions and biopharmaceutical companies are likely to be particularly sensitive to defects, errors, inaccuracies, delays and toxicities in or associated with our products and services. Furthermore, inadequate performance of these products or services may result in lower confidence in our immune medicine platform in general.

Previous wording

We could be adversely affected if we do not develop our drug discovery and clinical diagnostic products, obtain required regulatory and other clearances, authorizations or approvals, obtain or enforce patents covering our discoveries and launch our products before our competitors. Moreover, our competitors may succeed in developing clinical diagnostics and therapies that circumvent our intellectual property rights. Our competitors may succeed in developing and commercializing therapies or diagnostic products that are more accurate, more convenient to use or more cost-effective than our products or could prove to be safer, more effective, more convenient to administer or more cost-effective than any therapeutic products we may develop with our collaborators or that would render our products less competitive or obsolete. We expect competition to intensify in the fields in which we are involved as technical advances in these fields occur and become more widely known. For additional information regarding our competition, see the “Business—Competition” section of this Annual Report on Form 10-K.

Current wording

We could be adversely affected if we do not develop our drug discovery and clinical diagnostic products, obtain required regulatory and other clearances, authorizations or approvals, obtain or enforce patents covering our discoveries and launch our products before our competitors. Moreover, our competitors may succeed in developing clinical diagnostics that circumvent our intellectual property rights. Our competitors may succeed in developing and commercializing diagnostic products that are more accurate, more convenient to use or more cost-effective than our products or could prove to be safer, more effective, more convenient to administer or more cost-effective than any products we may develop with our collaborators or that would render our products less competitive or obsolete. We expect competition to intensify in the fields in which we are involved as technical advances in these fields occur and become more widely known. For additional information regarding our competition, see the “Business—Competition” section of this Annual Report on Form 10-K.

Previous wording

We have licensed our technology to certain international sites including but not limited to France, Germany, Italy, the United Kingdom, Spain, and Australia for research use only of our clonoSEQ assay and in some cases, for clinical use of clonoSEQ. In August 2024, clonoSEQ received IVDR certification in the EU, but our collaborators are only beginning to use clonoSEQ as an IVDR-compliant test in local EU clinical trials. We do not know how long we will be able to retain IVDR certification if regulatory requirements change or necessitate additional validations or approvals. Additionally, aside from this achievement, we have limited experience in obtaining regulatory clearance, authorization or approval in international markets. If we or our collaborators fail to comply with regulatory requirements in international markets or to obtain and maintain required regulatory clearances, authorizations or approvals in international markets, or if those approvals are delayed, our target market will be reduced and our ability to realize the full market potential of our products and services will be unrealized.

Current wording

We have completed a technology transfer process for research use and in some cases clinical use of our clonoSEQ assay to certain international sites including but not limited to sites in France, Germany, Italy, the United Kingdom, Spain, Australia, Japan and Israel. In August 2024, clonoSEQ received IVDR certification in the EU, but our collaborators are only beginning to use clonoSEQ as an IVDR-compliant test in local EU clinical trials. We do not know how long we will be able to retain IVDR certification, including if regulatory requirements change or necessitate additional validations or approvals.

Previous wording

increase our sales and marketing efforts to drive market adoption of our life sciences research, clinical diagnostics and therapeutics;

Current wording

increase our sales and marketing efforts to drive market adoption of our life sciences research, immune medicine platform and clinical diagnostics;

Previous wording

Our results of operations could be adversely affected by general conditions in the global economy and financial markets. Changes in these economic conditions can arise suddenly, such as in the case of recent inflation fluctuations. A severe or prolonged economic downturn, as result of a global pandemic or otherwise, could result in a variety of risks to our business, including weakened demand for our products and services and our ability to raise additional capital when needed on favorable terms, if at all. A weak or declining economy could also strain our collaborators, possibly resulting in supply disruption, or cause delays in their payments to us.

Current wording

Our results of operations could be adversely affected by general conditions in the global economy and financial markets. Changes in these economic conditions can arise suddenly, such as in the case of recent inflation fluctuations. A severe or prolonged economic downturn, as result of a global pandemic or otherwise, could result in a variety of risks to our business, including weakened demand for our products and services and our ability to raise additional capital when needed on favorable terms, if at all. A weak or declining economy could also strain our collaborators, possibly resulting in supply disruption, or cause delays in their payments to us. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

Previous wording

The marketing, sale and use of our products and services could lead to the filing of product or professional liability claims were someone to allege that our products or services failed to perform as designed or intended. We could also be potentially exposed to claims relating to therapeutic failures of products commercialized under our collaborations, such as a cellular therapy marketed by Genentech that is manufactured based on TCR-related sequences and data we provide. We may also be subject to liability for errors in, a misunderstanding of or inappropriate reliance upon, the information we provide in the ordinary course of our business activities. A product liability or professional liability claim could result in substantial damages and be costly and time-consuming for us to defend. Regardless of merit or eventual outcome, product liability and professional liability claims may result in:

Current wording

The marketing, sale and use of our products and services could lead to the filing of product or professional liability claims were someone to allege that our products or services failed to perform as designed or intended. We could also be potentially exposed to claims relating to therapeutic failures of products developed and commercialized by our collaborators. We may also be subject to liability for errors in, a misunderstanding of or inappropriate reliance upon, the information we provide in the ordinary course of our business activities. A product liability or professional liability claim could result in substantial damages and be costly and time-consuming for us to defend. Regardless of merit or eventual outcome, product liability and professional liability claims may result in:

Previous wording

The use of artificial intelligence (“AI”) and machine learning is increasingly being embedded in standard business processes, including in the life sciences and healthcare industries. While we do not use AI or machine learning as an element of any product or service, we do use them to assist in a range of other contexts, such as to enhance our operations, technology, and internal workflows. We also anticipate AI to be adopted more broadly throughout our organization to manage operational efficiencies, particularly as the technology evolves and improves. However, the use of AI and machine learning presents risks and challenges that could impact our business. For example, the improper use of data (including personal information, PHI or confidential information) to train AI algorithms could result in violations of our privacy and confidentiality obligations, jeopardize our intellectual property rights, or put us at risk of violating applicable laws and regulations. Furthermore, AI models may be poorly trained or compromised. This could create output from AI tools that might be flawed without appropriate human oversight, resulting in biased data, misinformation or disinformation or the introduction of cybersecurity threats such as malware. AI practices and machine learning tools used by our commercial partners could present similar risks, and any of these outcomes could have a material adverse effect on our business, results of operations, or financial condition.

Current wording

The use of AI and machine learning is increasingly being embedded in standard business processes, including in the life sciences and healthcare industries. We use AI and machine learning to assist in a range of business contexts, such as to enhance our operations, technology, prediction models, and internal workflows. We also anticipate AI to be adopted more broadly throughout our organization to manage operational efficiencies, particularly as the technology evolves and improves. However, the use of AI and machine learning presents risks and challenges that could impact our business, including as a result of changing regulations and laws. For example, the improper use of data (including personal information, PHI or confidential information) to train AI algorithms could result in violations of our privacy and confidentiality obligations, jeopardize our intellectual property rights, or put us at risk of violating applicable laws and regulations. Furthermore, AI models may be poorly trained or compromised. This could create output from AI tools that might be flawed without appropriate human oversight, resulting in biased data, misinformation or disinformation or the introduction of cybersecurity threats such as malware. AI practices and machine learning tools used by our commercial partners could present similar risks, and any of these outcomes could have a material adverse effect on our business, results of operations, or financial condition.

Previous wording

The insurance coverage and reimbursement status of newly approved products, in a new category of diagnostics and therapeutics, is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for current or future products could limit our ability, and that of our collaborators, to fully commercialize our products and decrease our ability to generate revenue.

Current wording

The insurance coverage and reimbursement status of newly approved products, in a new category of diagnostics, is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for current or future products could limit our ability, and that of our collaborators, to fully commercialize our products and decrease our ability to generate revenue.

Previous wording

The availability and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford the clinical diagnostic tests and therapeutics that we and our collaborators plan to develop and sell. In addition, because our clinical diagnostics and some of our potential therapeutic products will represent new approaches to the research, diagnosis, detection and treatment of diseases, we cannot accurately estimate how our products and services, and those jointly created with our collaborators, would be priced, whether reimbursement could be obtained or any potential revenue generated. Sales of our products will depend substantially, both domestically and internationally, on the extent to which the costs of our products and services are paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors. If reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize some of our products or services. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment in any of our products or services. If we adopt a self-pay strategy with respect to any products or services, we may experience similar difficulties in the establishment or maintenance of sufficiently high pricing. Changes in the reimbursement landscape may occur, which are outside of our control, and may impact the commercial viability of our products and services.

Current wording

The availability and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford the clinical diagnostic tests and drug candidates that we and our collaborators plan to develop and sell. In addition, because our clinical diagnostics will represent new approaches to the research, diagnosis, detection and treatment of diseases, we cannot accurately estimate how our products and services, and those jointly created with our collaborators, would be priced, whether reimbursement could be obtained or any potential revenue generated. Sales of our products will depend substantially, both domestically and internationally, on the extent to which the costs of our products and services are paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors. If reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize some of our products or services. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment in any of our products or services. If we adopt a self-pay strategy with respect to any products or services, we may experience similar difficulties in the establishment or maintenance of sufficiently high pricing. Changes in the reimbursement landscape may occur, which are outside of our control, and may impact the commercial viability of our products and services.

Previous wording

Moreover, increasing efforts by governmental and third-party payors, in the U.S. and abroad, to cap or reduce healthcare costs may cause such organizations to limit both coverage and level of reimbursement for newly cleared, authorized or approved devices and medicines and, as a result, they may not cover or provide adequate payment for our clinical diagnostics or the cellular therapies to be sold by us or our collaborators. For example, the U.S. government introduced the Lower Drug Costs Now Act of 2019 to reduce the cost of drugs. This blueprint contains certain measures that HHS is already working to implement. In addition, the No Surprises Act (“NSA”) took effect in January 2022. One of the goals of the NSA is to protect patients from “surprise” medical bills resulting from gaps in coverage for services provided by out-of-network providers, such as laboratories, related to patient visits at in-network facilities. The NSA limits the amount out-of-network laboratories may charge a patient for laboratory services ordered during an in-network facility visit and establishes an independent dispute resolution process for determining the amount of reimbursement for the laboratory service in the event that the laboratory and insurer cannot agree on a rate. To the extent the NSA limits the price charged for our diagnostic products or cellular therapeutics, the commercial viability of those products may be adversely affected.

Current wording

Moreover, increasing efforts by governmental and third-party payors, in the U.S. and abroad, to cap or reduce healthcare costs may cause such organizations to limit both coverage and level of reimbursement for newly cleared, authorized or approved devices and medicines and, as a result, they may not cover or provide adequate payment for our clinical diagnostics or the therapies to be sold by us or our collaborators. For example, the U.S. government introduced the Lower Drug Costs Now Act of 2019 to reduce the cost of drugs. This blueprint contains certain measures that HHS is already working to implement. In addition, the NSA is intended to protect patients from “surprise” medical bills resulting from gaps in coverage for services provided by out-of-network providers, such as laboratories, related to patient visits at in-network facilities. The NSA limits the amount out-of-network laboratories may charge a patient for laboratory services ordered during an in-network facility visit and establishes an independent dispute resolution process for determining the amount of reimbursement for the laboratory service in the event that the laboratory and insurer cannot agree on a rate. Moreover, PAMA changed the payment methodology for clinical diagnostic laboratory tests under the CLFS to use the weighted median of private payor rates, as reported by certain laboratories that receive a majority of their Medicare revenue from the CLFS and PFS. To the extent the NSA or PAMA limits the payment for our diagnostic products, the commercial viability of those products may be adversely affected.

Previous wording

We expect to experience pricing pressures on our clinical diagnostics and cellular therapies sold by us and our collaborators due to the trend toward value-based pricing and coverage, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products.

Current wording

We expect to experience pricing pressures on our clinical diagnostics and therapies sold by us and our collaborators due to the trend toward value-based pricing and coverage, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products.

Previous wording

Products and services offered RUO may be subject to regulatory scrutiny.

Current wording

Products and services offered on an RUO basis may be subject to regulatory scrutiny.

Previous wording

Under Medicare Part B, payment for most diagnostic laboratory tests is made under the Clinical Laboratory Fee Schedule (“CLFS”), which assigns payment amounts to tests based on billing codes. Under the Protecting Access to Medicare Act of 2014 (“PAMA”), certain laboratories that receive the majority of their Medicare revenue from payments made under the CLFS or Medicare’s Physician Fee Schedule are required to report to CMS every three years, or annually for “advanced diagnostic laboratory tests,” commercial payor payment rates and volumes for tests they perform and that are assigned specific billing codes. PAMA has special provisions relating to “advanced diagnostic laboratory tests,” as defined by the statute, and these provisions affect the rate-setting at the time of launch and the periodicity of rate reporting and revision. Laboratories that fail to report the required payment information may be subject to substantial civil monetary penalties. If, in the future, clonoSEQ or any of our tests are assigned a specific code we would be required to report commercial payor payment data on those tests. Payments for tests billed under miscellaneous codes are determined by the MACs, which also have discretion to change those payment rates.

Current wording

Under Medicare Part B, payment for most diagnostic laboratory tests is made under the CLFS, which assigns payment amounts to tests based on billing codes. Under PAMA, CLIA-certified laboratories that receive the majority of their Medicare revenue from payments made under the CLFS or PFS and that have CLFS revenue more than $12,500 in the relevant period (“applicable laboratories”) are required to report to CMS every three years, or annually for “advanced diagnostic laboratory tests,” commercial payor payment rates and volumes for tests they perform and that are assigned specific billing codes in the reporting period (“applicable information”). PAMA has special provisions relating to “advanced diagnostic laboratory tests,” as defined by the statute, and these provisions affect the rate-setting at the time of launch and the periodicity of rate reporting and revision. Laboratories that fail to report the required payment information may be subject to substantial civil monetary penalties. If we meet the requirements for an applicable laboratory with applicable information to report for a particular test, then we would be required to report commercial payor payment data for that test.

Previous wording

CMS uses the data reported by laboratories to calculate a payment rate for each CLFS test, other than those coded with miscellaneous codes and certain others, based on the volume-weighted median of the private payor rates. These rates apply for three years, except that payment rates for advanced diagnostic laboratory tests apply for one year. If we offer tests with specific codes, this apparatus will apply. Under these circumstances, Medicare’s payment rates would be determined by the rates we and other laboratories, if any, with tests that share the specific codes we use, obtain from commercial payors. In that case, if we are unable to obtain and maintain adequate reimbursement rates from commercial payors, this may adversely affect our Medicare rates.

Current wording

CMS uses the data reported by laboratories to calculate a payment rate for each CLFS test, other than those tests coded with miscellaneous codes and certain others (including those for which no applicable information is reported), based on the volume-weighted median of the private payor rates. These rates apply for three years, except that payment rates for advanced diagnostic laboratory tests apply for one year. Payments for tests billed under miscellaneous codes are determined by the Medicare Administrative Contractors (“MACs”), which also have discretion to change those payment rates.

Previous wording

In some circumstances, our tests may be furnished to hospital inpatients and paid by Medicare under different rules. For example, when a specimen is obtained from a patient who is at the time classified by Medicare as a hospital inpatient, Medicare would not make a separate payment for the test and we would have to look to the hospital for payment. We do not know how often this will occur or whether hospitals will resist paying us for our tests. In this situation, Medicare coverage would be determined by the MAC for the jurisdiction where the hospital is located, which may not cover our tests.

Current wording

In some circumstances, our tests may be furnished to hospital inpatients and paid by Medicare under different rules. For example, when a specimen is obtained from a patient who is at the time classified by Medicare as a hospital inpatient, Medicare would not make a separate payment for the test and we would have to look to the hospital for payment. We do not know how often this will occur or whether hospitals will resist paying us for our tests. In this situation, Medicare coverage would be determined by the MACs for the jurisdiction where the hospital is located, which may not cover our tests.

Previous wording

As of December 31, 2024, we own or have rights to 416 active patents and patent applications filed in the U.S., Europe and elsewhere. Of these, there are 70 pending patent applications. Our pending patent applications may not result in issued patents in a timely fashion or at all. Even if patents are granted, they may not provide a basis for intellectual property protection of commercially viable products or services, may not provide us with any competitive advantages, or may be challenged and invalidated by third parties. It is also possible that others will design around our current or future patented technologies.

Current wording

As of December 31, 2025, we own or have rights to 416 active patents in the U.S., Europe and elsewhere. In addition, 64 patent applications are pending in the U.S., Europe and elsewhere. Our pending patent applications may not result in issued patents in a timely fashion or at all. Even if patents are granted, they may not provide a basis for intellectual property protection of commercially viable products or services, may not provide us with any competitive advantages, or may be challenged and invalidated by third parties. It is also possible that others will design around our current or future patented technologies.

Previous wording

The market price of our common stock has been and is likely to continue to be highly volatile, with a 52-week high closing price of $8.52 and a 52-week low closing price of $2.34, in each case as of February 26, 2025, and may fluctuate substantially due to many factors, many of which are beyond our control. These factors include:

Current wording

The market price of our common stock has been and is likely to continue to be highly volatile, with a 52-week high closing price of $20.46 and a 52-week low closing price of $6.67, in each case as of February 20, 2026, and may fluctuate substantially due to many factors, many of which are beyond our control. These factors include:

Previous wording

In addition, the Purchase Agreement contains customary affirmative and negative non-financial covenants and events of default, including covenants and restrictions that, among other things, grant a first-position security interest in our core assets and restrict our ability to incur liens, incur additional indebtedness, make loans and investments, make certain restricted payments or transfer core assets. Additionally, the Purchasers under the Purchase Agreement have an option (the "Put Option") to terminate the Purchase Agreement and to require us to repurchase future Revenue Interests at a price of 120% to 175% of Cumulative Purchaser Payments, less the sum of all Revenue Interest Payments made by us to the Purchasers prior to such date, upon enumerated events such as a bankruptcy event, a material judgment against us, a material divestiture or a change of control. The triggering of the Put Option, including by our failure to comply with these covenants, could permit the Purchasers to declare certain amounts to be immediately due and payable.

Current wording

In addition, the Purchase Agreement contains customary affirmative and negative non-financial covenants and events of default, including covenants and restrictions that, among other things, grant a first-position security interest in our core assets and restrict our ability to incur liens, incur additional indebtedness, make loans and investments, make certain restricted payments or transfer core assets. Additionally, the Purchasers under the Purchase Agreement have an option (the "Put Option") to terminate the Purchase Agreement and to require us to repurchase future Revenue Interests at a price of 165% to 175% of the Purchaser Payment, less the sum of all Revenue Interest Payments made by us to the Purchasers prior to such date, upon enumerated events such as a bankruptcy event, a material judgment against us, a material divestiture or a change of control. The triggering of the Put Option, including by our failure to comply with these covenants, could permit the Purchasers to declare certain amounts to be immediately due and payable.