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 MEDIAErica Jones, Associate Director,
Product Communications206-279-2423media@adaptivebiotech.com
ADAPTIVE INVESTORSKarina Calzadilla, Vice
President, Investor
Relations201-396-1687investors@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 |
) |
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