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Adaptive Biotechnologies Reports Third Quarter 2022 Financial Results
Source: Nasdaq GlobeNewswire / 03 Nov 2022 16:05:01 America/New_York
SEATTLE, Nov. 03, 2022 (GLOBE NEWSWIRE) -- Adaptive Biotechnologies Corporation (“Adaptive Biotechnologies”) (Nasdaq: ADPT), a commercial stage biotechnology company that aims to translate the genetics of the adaptive immune system into clinical products to diagnose and treat disease, today reported financial results for the quarter ended September 30, 2022.
“We continue to deliver solid growth in both of our business areas quarter over quarter, and are confident in our long-term outlook,” said Chad Robins, chief executive officer and co-founder of Adaptive Biotechnologies. “With a bolstered cash position from our recent financing, we are focused on driving growth and innovation across our businesses with a clear path to profitability.”
Recent Highlights
- Revenue of $47.8 million for the third quarter 2022, representing a 21% increase from the third quarter 2021.
- clonoSEQ test volume in the third quarter 2022 grew 52% versus the third quarter of prior year.
- Signed partnership with Epic to integrate the clonoSEQ® Assay into Epic’s comprehensive electronic medical record (EMR) system.
- Immune Medicine business grew 18% in the third quarter 2022 versus the third quarter 2021, driven by drug discovery and pharma services.
- Signed non-dilutive royalty financing agreement with OrbiMed for up to $250 million.
- Provided long-term guidance including revenue CAGR from 2022-2027 at 20%-30%, positive adjusted EBITDA in 2025 and cash flow breakeven in 2026.
Third Quarter 2022 Financial Results
Revenue was $47.8 million for the quarter ended September 30, 2022, representing a 21% increase from the third quarter in the prior year. Immune Medicine revenue was $27.9 million for the quarter, representing an 18% increase from the third quarter in the prior year. MRD revenue was $20.0 million for the quarter, representing a 26% increase from the third quarter in the prior year.
Operating expenses were $93.3 million for the third quarter of 2022, compared to $95.8 million in the third quarter of the prior year, representing a decrease of 3%. Interest expense from our revenue interest purchase agreement entered into during the third quarter of 2022 was $0.7 million.
Net loss was $45.3 million for the third quarter of 2022, compared to $56.0 million for the same period in 2021.
Adjusted EBITDA (non-GAAP) was a loss of $25.9 million for the third quarter of 2022, compared to a loss of $41.1 million for the third quarter of the prior year.
Cash, cash equivalents and marketable securities was $527.8 million as of September 30, 2022.
2022 Financial Guidance
Adaptive Biotechnologies narrows full year 2022 revenue to be in the range of $185 million to $190 million compared to the previous expectation of $185 million to $195 million.
We now expect full year 2022 operating expenses to be below $400 million compared to the previous expectation of between $410 million and $415 million.
Webcast and Conference Call Information
Adaptive Biotechnologies will host a conference call to discuss its third quarter 2022 financial results after market close on Thursday, November 3, 2022 at 4:30 PM Eastern Time. The conference call can be accessed at http://investors.adaptivebiotech.com. The webcast will be archived and available for replay at least 90 days after the event.
About Adaptive Biotechnologies
Adaptive Biotechnologies (“we” or “our”) is a commercial-stage biotechnology company focused on harnessing the inherent biology of the adaptive immune system to transform the diagnosis and treatment of disease. We believe the adaptive immune system is nature’s most finely tuned diagnostic and therapeutic for most diseases, but the inability to decode it has prevented the medical community from fully leveraging its capabilities. Our proprietary immune medicine platform reveals and translates the massive genetics of the adaptive immune system with scale, precision and speed to develop products in life sciences research, clinical diagnostics and drug discovery. We have commercial products and a robust clinical pipeline to diagnose, monitor and enable the treatment of diseases such as cancer, autoimmune disorders, and infectious diseases. Our goal is to develop and commercialize immune-driven clinical products tailored to each individual patient.
Forward-Looking Statements
This press release contains forward-looking statements that are based on management’s beliefs and assumptions and on information currently available to management. All statements contained in this release other than statements of historical fact are forward-looking statements, including statements regarding our ability to develop, commercialize and achieve market acceptance of our current and planned products and services, our research and development efforts and other matters regarding our business strategies, use of capital, results of operations and financial position and plans and objectives for future operations.
In some cases, you can identify forward-looking statements by the words “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. These risks, uncertainties and other factors are described under "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in the documents we file with the Securities and Exchange Commission from time to time. We caution you that forward-looking statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. As a result, the forward-looking statements may not prove to be accurate. The forward-looking statements in this press release represent our views as of the date hereof. We undertake no obligation to update any forward-looking statements for any reason, except as required by law.
Use of Non-GAAP Financial Measure
To supplement our unaudited condensed consolidated statements of operations and unaudited condensed consolidated balance sheets, which are prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”), this press release also includes references to Adjusted EBITDA, which is a non-GAAP financial measure that we define as net loss attributable to Adaptive Biotechnologies Corporation adjusted for interest and other income, net, interest expense, income tax (expense) benefit, depreciation and amortization expense, restructuring expense and share-based compensation expense. We have provided a reconciliation of net loss attributable to Adaptive Biotechnologies Corporation, the most directly comparable GAAP financial measure, to Adjusted EBITDA at the end of this press release.
Management uses Adjusted EBITDA 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;
- interest expense, which may be a necessary and ongoing element of our costs and ability to operate;
- income tax (expense) benefit, which may be a necessary element of our costs and ability to operate;
- the costs of replacing the assets being depreciated and amortized, which will often have to be replaced in the future;
- the noncash component of employee compensation expense; and
- the impact of earnings or charges resulting from matters we consider not to be reflective, on a recurring basis, of our ongoing operations, such as our March 2022 restructuring and reduction in workforce.
In addition, Adjusted EBITDA may not be comparable to similarly titled measures used by other companies in our industry or across different industries.
ADAPTIVE MEDIA
Mary Pat Lancelotta, Senior Vice President, Corporate Affairs & Communications
646-382-4912
media@adaptivebiotech.comADAPTIVE INVESTORS
Karina Calzadilla, Vice President, Investor Relations
201-396-1687
investors@adaptivebiotech.comAdaptive Biotechnologies
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenue $ 47,830 $ 39,467 $ 130,110 $ 116,414 Operating expenses Cost of revenue 14,907 14,189 41,320 34,945 Research and development 35,658 36,072 110,534 107,644 Sales and marketing 21,513 24,949 71,887 68,769 General and administrative 20,755 20,154 66,099 51,156 Amortization of intangible assets 428 428 1,270 1,270 Total operating expenses 93,261 95,792 291,110 263,784 Loss from operations (45,431 ) (56,325 ) (161,000 ) (147,370 ) Interest and other income, net 765 327 1,454 1,429 Interest expense (653 ) — (653 ) — Net loss (45,319 ) (55,998 ) (160,199 ) (145,941 ) Add: Net loss attributable to noncontrolling interest 38 95 136 95 Net loss attributable to Adaptive Biotechnologies Corporation $ (45,281 ) $ (55,903 ) $ (160,063 ) $ (145,846 ) Net loss per share attributable to Adaptive Biotechnologies Corporation common shareholders, basic and diluted $ (0.32 ) $ (0.40 ) $ (1.12 ) $ (1.04 ) Weighted-average shares used in computing net loss per share attributable to Adaptive Biotechnologies Corporation common shareholders, basic and diluted 142,928,654 140,833,564 142,334,342 140,060,379 Adaptive Biotechnologies
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)September 30, 2022 December 31, 2021 (unaudited) Assets Current assets Cash and cash equivalents $ 217,552 $ 139,065 Short-term marketable securities (amortized cost of $295,689 and $214,115, respectively) 290,527 213,996 Accounts receivable, net 26,549 17,409 Inventory 17,345 19,263 Prepaid expenses and other current assets 12,407 13,015 Total current assets 564,380 402,748 Long-term assets Property and equipment, net 86,662 85,262 Operating lease right-of-use assets 82,605 87,678 Long-term marketable securities (amortized cost of $20,507 and $218,163, respectively) 19,698 217,145 Restricted cash 2,433 2,138 Intangible assets, net 7,256 8,526 Goodwill 118,972 118,972 Other assets 2,202 875 Total assets $ 884,208 $ 923,344 Liabilities and shareholders’ equity Current liabilities Accounts payable $ 4,163 $ 3,307 Accrued liabilities 10,702 9,343 Accrued compensation and benefits 12,733 15,642 Current portion of operating lease liabilities 8,528 5,055 Current portion of deferred revenue 67,892 80,460 Total current liabilities 104,018 113,807 Long-term liabilities Operating lease liabilities, less current portion 100,521 106,685 Deferred revenue, less current portion 67,300 98,750 Revenue interest liability, net 124,555 — Total liabilities 396,394 319,242 Commitments and contingencies Shareholders’ equity Preferred stock: $0.0001 par value, 10,000,000 shares authorized at September 30, 2022 and December 31, 2021; no shares issued and outstanding at September 30, 2022 and December 31, 2021 — — Common stock: $0.0001 par value, 340,000,000 shares authorized at September 30, 2022 and December 31, 2021; 142,987,127 and 141,393,865 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively 14 14 Additional paid-in capital 1,372,751 1,324,006 Accumulated other comprehensive loss (5,971 ) (1,137 ) Accumulated deficit (878,954 ) (718,891 ) Total Adaptive Biotechnologies Corporation shareholders’ equity 487,840 603,992 Noncontrolling interest (26 ) 110 Total shareholders’ equity 487,814 604,102 Total liabilities and shareholders’ equity $ 884,208 $ 923,344 Adjusted EBITDA
The following table sets forth a reconciliation between our Adjusted EBITDA and net loss attributable to Adaptive Biotechnologies Corporation, the most directly comparable GAAP financial measure, for each of the periods presented (in thousands, unaudited):
Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net loss attributable to Adaptive Biotechnologies Corporation $ (45,281 ) $ (55,903 ) $ (160,063 ) $ (145,846 ) Interest and other income, net (765 ) (327 ) (1,454 ) (1,429 ) Interest expense 653 — 653 — Depreciation and amortization expense 5,383 3,528 15,634 9,104 Restructuring expense — — 2,023 — Share-based compensation expense 14,142 11,643 41,183 31,376 Adjusted EBITDA $ (25,868 ) $ (41,059 ) $ (102,024 ) $ (106,795 ) 
