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Adaptive Biotechnologies Reports Fourth Quarter and Full Year 2022 Financial Results
Source: Nasdaq GlobeNewswire / 14 Feb 2023 16:05:01 America/New_York
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.comADAPTIVE INVESTORS
Karina Calzadilla, Vice President, Investor Relations
201-396-1687
investors@adaptivebiotech.comAdaptive 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 ) 
