Adaptive Biotechnologies Reports Fourth Quarter and Full Year 2022 Financial Results


SEATTLE, Feb. 14, 2023 (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 fourth quarter and full year ended December 31, 2022.

“We finished the year with 20% revenue growth, driven by both our MRD and Immune Medicine business areas,” said Chad Robins, chief executive officer and co-founder of Adaptive Biotechnologies. “2023 has started strong and I am encouraged to see how momentum is building. We are growing revenue, advancing our pipeline and managing operating expenses with the capital to fuel sustainable growth and execute towards our goals.”

Recent Highlights

  • Revenue of $55.2 million for the fourth quarter and $185.3 million for the full year of 2022, representing a 46% increase and 20% increase over the corresponding periods in 2021, respectively.
  • clonoSEQ test volume increased 54% to 10,526 tests delivered in the fourth quarter of 2022, compared to the fourth quarter 2021 and ended the year with 36,871 tests delivered, up 51% versus 2021.
  • Launched clonoSEQ to assess MRD in patients with diffuse large B-cell lymphoma (DLBCL), the most common type of non-Hodgkin’s lymphoma, with Medicare coverage.
  • Delivered 2 additional TCR data packages to Genentech.
  • Strengthened our capital position, ending the year with $498.2 million in cash, cash equivalents and marketable securities.
  • Provided long-term guidance including a 20%-30% revenue CAGR, positive adjusted EBITDA in 2025 and cash flow breakeven in 2026.

Fourth Quarter 2022 Financial Results

Revenue was $55.2 million for the quarter ended December 31, 2022, representing a 46% increase from the fourth quarter in the prior year. Immune Medicine revenue was $27.1 million for the quarter, representing a 27% increase from the fourth quarter in the prior year. MRD revenue was $28.1 million for the quarter, representing a 70% increase from the fourth quarter in the prior year.

Operating expenses were $94.4 million for the fourth quarter of 2022, compared to $99.5 million in the fourth quarter of the prior year, representing a decrease of 5%. Interest expense from our revenue interest purchase agreement was $3.6 million in the fourth quarter of 2022.

Net loss was $40.2 million for the fourth quarter of 2022, compared to $61.4 million for the same period in 2021.

Adjusted EBITDA (non-GAAP) was a loss of $19.6 million for the fourth quarter of 2022, compared to a loss of $44.9 million for the fourth quarter of the prior year.

Full Year 2022 Financial Results

Revenue was $185.3 million for the year ended December 31, 2022, representing a 20% increase from the prior year. Immune Medicine revenue was $98.2 million in 2022, representing an 11% increase from 2021. MRD revenue was $87.1 million in 2022, representing a 32% increase from the prior year.

Operating expenses for 2022 were $385.5 million, compared to $363.3 million for 2021, representing an increase of 6%. Interest expense from our revenue interest purchase agreement was $4.2 million in 2022.

Net loss was $200.4 million in 2022, compared to $207.3 million in 2021.

Adjusted EBITDA (non-GAAP) was a loss of $121.6 million for 2022, compared to a loss of $151.7 million in the prior year.

Cash, cash equivalents and marketable securities was $498.2 million as of December 31, 2022.

2023 Financial Guidance

Adaptive Biotechnologies expects full year 2023 revenue to be in the range of $205 million to $215 million.

We expect operating expenses, including cost of revenue, to be below full year 2022 operating expenses of $385.5 million.

Management will provide further details on the 2023 outlook during the conference call.

Webcast and Conference Call Information

Adaptive Biotechnologies will host a conference call to discuss its fourth quarter and full year 2022 financial results after market close on Tuesday, February 14, 2023 at 4:30 PM Eastern Time. The conference call can be accessed at http://investors.adaptivebiotech.com. The webcast will be archived and available for replay at least 90 days after the event.

About Adaptive Biotechnologies

Adaptive Biotechnologies (“we” or “our”) is a commercial-stage biotechnology company focused on harnessing the inherent biology of the adaptive immune system to transform the diagnosis and treatment of disease. We believe the adaptive immune system is nature’s most finely tuned diagnostic and therapeutic for most diseases, but the inability to decode it has prevented the medical community from fully leveraging its capabilities. Our proprietary immune medicine platform reveals and translates the massive genetics of the adaptive immune system with scale, precision and speed. We apply our platform to partner with biopharmaceutical companies, inform drug development, and develop clinical diagnostics across our two business areas: Minimal Residual Disease (MRD) and Immune Medicine. Our commercial products and clinical pipeline enable the diagnosis, monitoring, and treatment of diseases such as cancer, autoimmune disorders, and infectious diseases. Our goal is to develop and commercialize immune-driven clinical products tailored to each individual patient.

Forward-Looking Statements

This press release contains forward-looking statements that are based on management’s beliefs and assumptions and on information currently available to management. All statements contained in this release other than statements of historical fact are forward-looking statements, including statements regarding our ability to develop, commercialize and achieve market acceptance of our current and planned products and services, our research and development efforts and other matters regarding our business strategies, use of capital, results of operations and financial position and plans and objectives for future operations.

In some cases, you can identify forward-looking statements by the words “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. These risks, uncertainties and other factors are described under "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in the documents we file with the Securities and Exchange Commission from time to time. We caution you that forward-looking statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. As a result, the forward-looking statements may not prove to be accurate. The forward-looking statements in this press release represent our views as of the date hereof. We undertake no obligation to update any forward-looking statements for any reason, except as required by law.

Use of Non-GAAP Financial Measure

To supplement our unaudited consolidated statements of operations and unaudited 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 is an ongoing element of our costs to operate;
  • income tax (expense) benefit, which may be a necessary element of our costs and ability to operate;
  • the costs of replacing the assets being depreciated and amortized, which will often have to be replaced in the future;
  • the noncash component of employee compensation expense; 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
Erica Jones, Associate Director, Product Communications
206-279-2423
media@adaptivebiotech.com

ADAPTIVE INVESTORS
Karina Calzadilla, Vice President, Investor Relations
201-396-1687
investors@adaptivebiotech.com

Adaptive Biotechnologies 
Consolidated Statements of Operations 
(in thousands, except share and per share amounts) 
(unaudited) 
  
  Three Months Ended December 31,  Year Ended December 31, 
  2022  2021  2022  2021 
Revenue $55,198  $37,930  $185,308  $154,344 
Operating expenses            
Cost of revenue  16,589   14,356   57,909   49,301 
Research and development  31,222   34,699   141,756   142,343 
Sales and marketing  23,716   26,696   95,603   95,465 
General and administrative  22,428   23,346   88,527   74,502 
Amortization of intangible assets  429   429   1,699   1,699 
Total operating expenses  94,384   99,526   385,494   363,310 
Loss from operations  (39,186)  (61,596)  (200,186)  (208,966)
Interest and other income, net  2,602   239   4,056   1,668 
Interest expense  (3,585)     (4,238)   
Net loss  (40,169)  (61,357)  (200,368)  (207,298)
Add: Net loss attributable to noncontrolling interest  41   (76)  177   19 
Net loss attributable to Adaptive Biotechnologies Corporation $(40,128) $(61,433) $(200,191) $(207,279)
Net loss per share attributable to Adaptive Biotechnologies Corporation common shareholders, basic and diluted $(0.28) $(0.43) $(1.40) $(1.48)
Weighted-average shares used in computing net loss per share attributable to Adaptive Biotechnologies Corporation common shareholders, basic and diluted  143,054,722   141,228,918   142,515,917   140,354,915 



Adaptive Biotechnologies 
Consolidated Balance Sheets 
(in thousands, except share and per share amounts) 
(unaudited) 
  
  December 31, 
  2022  2021 
Assets      
Current assets      
Cash and cash equivalents $90,030  $139,065 
Short-term marketable securities (amortized cost of $412,282 and $214,115, respectively)  408,166   213,996 
Accounts receivable, net  40,057   17,409 
Inventory  14,453   19,263 
Prepaid expenses and other current assets  9,440   13,015 
Total current assets  562,146   402,748 
Long-term assets      
Property and equipment, net  83,447   85,262 
Operating lease right-of-use assets  80,763   87,678 
Long-term marketable securities (amortized cost of $218,163)     217,145 
Restricted cash  2,398   2,138 
Intangible assets, net  6,827   8,526 
Goodwill  118,972   118,972 
Other assets  2,064   875 
Total assets $856,617  $923,344 
Liabilities and shareholders’ equity      
Current liabilities      
Accounts payable $8,084  $3,307 
Accrued liabilities  12,424   9,343 
Accrued compensation and benefits  15,935   15,642 
Current portion of operating lease liabilities  9,230   5,055 
Current portion of deferred revenue  64,115   80,460 
Total current liabilities  109,788   113,807 
Long-term liabilities      
Operating lease liabilities, less current portion  98,772   106,685 
Deferred revenue, less current portion  58,599   98,750 
Revenue interest liability, net  125,360    
Total liabilities  392,519   319,242 
Commitments and contingencies      
Shareholders’ equity      
Preferred stock: $0.0001 par value, 10,000,000 shares authorized at December 31, 2022 and 2021; no shares issued and outstanding at December 31, 2022 and 2021      
Common stock: $0.0001 par value, 340,000,000 shares authorized at December 31, 2022 and 2021; 143,105,002 and 141,393,865 shares issued and outstanding at December 31, 2022 and 2021, respectively  14   14 
Additional paid-in capital  1,387,349   1,324,006 
Accumulated other comprehensive loss  (4,116)  (1,137)
Accumulated deficit  (919,082)  (718,891)
Total Adaptive Biotechnologies Corporation shareholders’ equity  464,165   603,992 
Noncontrolling interest  (67)  110 
Total shareholders’ equity  464,098   604,102 
Total liabilities and shareholders’ equity $856,617  $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 December 31,  Year Ended December 31, 
  2022  2021  2022  2021 
Net loss attributable to Adaptive Biotechnologies Corporation $(40,128) $(61,433) $(200,191) $(207,279)
Interest and other income, net  (2,602)  (239)  (4,056)  (1,668)
Interest expense  3,585      4,238    
Depreciation and amortization expense  5,286   4,849   20,920   13,953 
Restructuring expense        2,023    
Share-based compensation expense  14,294   11,875   55,477   43,251 
Adjusted EBITDA $(19,565) $(44,948) $(121,589) $(151,743)