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, 2020.
“Over the last quarter, we have demonstrated the unique
capability of our platform to translate the immune response at
scale into data that informs the development of best-in-class,
differentiated diagnostic and therapeutic solutions,” said Chad
Robins, chief executive officer and co-founder of Adaptive
Biotechnologies. “This pandemic has highlighted the key role of the
immune response in our understanding of disease. COVID-19 is a
prime example of the power of our platform to rapidly generate
immune-driven solutions to any disease, including what we believe
are best-in-class antibodies against the virus.”
Recent Highlights
- Revenue was $26.3 million for the
quarter ended September 30, 2020, representing a 25% increase from
the second quarter 2020 and a 1% increase from the third quarter in
the prior year.
- Clinical sequencing volume increased
58% to 4,023 clinical tests delivered in the third quarter of 2020
compared to the third quarter 2019 and increased 28% compared to
the second quarter 2020.
- Identified two antibodies against
SARS-CoV-2 that neutralize the virus at very low
concentrations.
- immunoSEQ T-MAP™ COVID to be
used in a subset of patients from clinical trials of two top tier
vaccine developers.
- Top-line results from a second
real-world study, conducted in Italy, demonstrated T-cell
testing outperforms serology in identifying past SARS-CoV-2
infections (97% sensitivity versus 77%) supporting launch of
T-Detect™ COVID, a clinical T-cell based test for past
infection.
- Identified clinical signal for Crohn’s
disease for T-Detect pipeline.
Third Quarter 2020 Financial
Results
Revenue was $26.3 million for the quarter ended September 30,
2020, representing a 1% increase from the third quarter in the
prior year. Sequencing revenue was $11.3 million for the quarter,
representing a 3% decrease from the third quarter in the prior
year. Development revenue increased to $15.0 million for the
quarter, representing a 5% increase from the third quarter in the
prior year.
Operating expenses were $63.3 million for the third quarter of
2020, compared to $44.1 million in the third quarter of the prior
year, representing an increase of 44%.
Net loss was $36.7 million for the third quarter of 2020,
compared to $14.0 million for the same period in 2019.
Adjusted EBITDA (non-GAAP) was a loss of $28.4 million for the
third quarter of 2020, compared to a loss of $12.7 million for the
third quarter of the prior year.
Cash, cash equivalents and marketable securities was $851.5
million as of September 30, 2020.
2020
Financial
Guidance
Adaptive Biotechnologies is not providing 2020 financial
guidance due to the continued uncertainties from the impact of
COVID-19.
Webcast and Conference Call Information
Adaptive Biotechnologies will host a conference call to discuss
its third quarter financial results after market close on Tuesday,
November 10, 2020 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 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 two commercial products and a robust clinical
pipeline to diagnose, monitor and enable the treatment of diseases
such as cancer, autoimmune conditions 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
This press release includes references to Adjusted EBITDA, which
is a non-GAAP financial measure that we define as net loss adjusted
for interest and other income, net, income tax (expense) benefit,
depreciation and amortization and share-based compensation
expenses. We have provided a reconciliation of net loss, 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;
- 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 non-cash 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.
In addition, Adjusted EBITDA may not be comparable to similarly
titled measures used by other companies in our industry or across
different industries.
ADAPTIVE MEDIABeth
Keshishian917-912-7195media@adaptivebiotech.com
ADAPTIVE INVESTORSKarina Calzadilla, Vice
President, Investor Relations201-396-1687Carrie Mendivil, Gilmartin
Groupinvestors@adaptivebiotech.com
|
Adaptive BiotechnologiesCondensed Statements of
Operations(in thousands, except share and per share
amounts)(unaudited) |
|
|
|
|
|
|
|
Three Months Ended
September 30, |
|
|
Nine Months Ended
September 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sequencing revenue |
$ |
11,276 |
|
|
$ |
11,683 |
|
|
$ |
28,730 |
|
|
$ |
29,631 |
|
Development revenue |
|
15,023 |
|
|
|
14,375 |
|
|
|
39,467 |
|
|
|
31,231 |
|
Total revenue |
|
26,299 |
|
|
|
26,058 |
|
|
|
68,197 |
|
|
|
60,862 |
|
Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
6,053 |
|
|
|
5,601 |
|
|
|
16,308 |
|
|
|
16,323 |
|
Research and development |
|
30,314 |
|
|
|
20,506 |
|
|
|
80,241 |
|
|
|
49,516 |
|
Sales and marketing |
|
14,474 |
|
|
|
9,099 |
|
|
|
42,813 |
|
|
|
25,813 |
|
General and administrative |
|
12,079 |
|
|
|
8,477 |
|
|
|
36,138 |
|
|
|
22,143 |
|
Amortization of intangible assets |
|
428 |
|
|
|
428 |
|
|
|
1,275 |
|
|
|
1,270 |
|
Total operating expenses |
|
63,348 |
|
|
|
44,111 |
|
|
|
176,775 |
|
|
|
115,065 |
|
Loss from operations |
|
(37,049 |
) |
|
|
(18,053 |
) |
|
|
(108,578 |
) |
|
|
(54,203 |
) |
Interest and other income,
net |
|
1,018 |
|
|
|
4,103 |
|
|
|
5,805 |
|
|
|
6,208 |
|
Income tax (expense) benefit |
|
(688 |
) |
|
|
— |
|
|
|
1,116 |
|
|
|
— |
|
Net loss |
|
(36,719 |
) |
|
|
(13,950 |
) |
|
|
(101,657 |
) |
|
|
(47,995 |
) |
Fair value adjustment to Series
E-1 convertible preferred stock options |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(964 |
) |
Net loss attributable to common
shareholders |
$ |
(36,719 |
) |
|
$ |
(13,950 |
) |
|
$ |
(101,657 |
) |
|
$ |
(48,959 |
) |
Net loss per share attributable
to common shareholders, basic and diluted |
$ |
(0.27 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.79 |
) |
|
$ |
(0.97 |
) |
Weighted-average shares used in
computing net loss per share attributable to common
shareholders, basic and diluted |
|
134,372,026 |
|
|
|
124,285,686 |
|
|
|
129,289,948 |
|
|
|
50,552,389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adaptive BiotechnologiesCondensed Balance
Sheets(in thousands, except share and per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
September 30,
2020 |
|
|
December 31,
2019 |
|
|
|
(unaudited) |
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
497,076 |
|
|
$ |
96,576 |
|
Short-term marketable securities (amortized cost of $336,840 and
$479,791, respectively) |
|
|
338,004 |
|
|
|
480,290 |
|
Accounts receivable, net |
|
|
11,858 |
|
|
|
12,676 |
|
Inventory |
|
|
10,736 |
|
|
|
9,069 |
|
Prepaid expenses and other current assets |
|
|
19,684 |
|
|
|
14,079 |
|
Total current assets |
|
|
877,358 |
|
|
|
612,690 |
|
Long-term assets |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
31,156 |
|
|
|
60,355 |
|
Operating lease right-of-use assets |
|
|
37,733 |
|
|
|
— |
|
Long-term marketable securities (amortized cost of $16,203 and
$105,263, respectively) |
|
|
16,466 |
|
|
|
105,435 |
|
Restricted cash |
|
|
2,138 |
|
|
|
2,138 |
|
Intangible assets, net |
|
|
10,653 |
|
|
|
11,928 |
|
Goodwill |
|
|
118,972 |
|
|
|
118,972 |
|
Other assets |
|
|
997 |
|
|
|
784 |
|
Total assets |
|
$ |
1,095,473 |
|
|
$ |
912,302 |
|
Liabilities and
shareholders’
equity |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
5,412 |
|
|
$ |
4,453 |
|
Accrued liabilities |
|
|
5,346 |
|
|
|
4,371 |
|
Accrued compensation and benefits |
|
|
7,913 |
|
|
|
8,124 |
|
Current portion of deferred rent |
|
|
— |
|
|
|
371 |
|
Current operating lease liabilities |
|
|
3,969 |
|
|
|
— |
|
Current deferred revenue |
|
|
78,192 |
|
|
|
60,994 |
|
Total current liabilities |
|
|
100,832 |
|
|
|
78,313 |
|
Long-term liabilities |
|
|
|
|
|
|
|
|
Deferred rent liability, less current portion |
|
|
— |
|
|
|
6,918 |
|
Operating lease liabilities, less current portion |
|
|
42,366 |
|
|
|
— |
|
Financing obligation |
|
|
— |
|
|
|
36,607 |
|
Deferred revenue, less current portion |
|
|
174,853 |
|
|
|
219,332 |
|
Other long-term liabilities |
|
|
2,375 |
|
|
|
93 |
|
Total liabilities |
|
|
320,426 |
|
|
|
341,263 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
|
|
|
|
Preferred stock: $0.0001 par value, 10,000,000 shares authorized at
September 30, 2020 and December 31, 2019; no shares issued
and outstanding at September 30, 2020 and December 31,
2019 |
|
|
— |
|
|
|
— |
|
Common stock: $0.0001 par value, 340,000,000 shares authorized at
September 30, 2020 and December 31, 2019; 136,392,256 and
125,238,142 shares issued and outstanding at September 30,
2020 and December 31, 2019, respectively |
|
|
13 |
|
|
|
12 |
|
Additional paid-in capital |
|
|
1,240,649 |
|
|
|
935,834 |
|
Accumulated other comprehensive gain |
|
|
1,427 |
|
|
|
671 |
|
Accumulated deficit |
|
|
(467,042 |
) |
|
|
(365,478 |
) |
Total shareholders’ equity |
|
|
775,047 |
|
|
|
571,039 |
|
Total liabilities and shareholders’ equity |
|
$ |
1,095,473 |
|
|
$ |
912,302 |
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
The following table sets forth a reconciliation between our
Adjusted EBITDA and our net loss, 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, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net loss |
|
$ |
(36,719 |
) |
|
$ |
(13,950 |
) |
|
$ |
(101,657 |
) |
|
$ |
(47,995 |
) |
Interest and other income,
net |
|
|
(1,018 |
) |
|
|
(4,103 |
) |
|
|
(5,805 |
) |
|
|
(6,208 |
) |
Income tax expense (benefit) |
|
|
688 |
|
|
|
— |
|
|
|
(1,116 |
) |
|
|
— |
|
Depreciation and amortization
expense |
|
|
2,144 |
|
|
|
2,063 |
|
|
|
6,120 |
|
|
|
5,716 |
|
Share-based compensation
expense |
|
|
6,470 |
|
|
|
3,335 |
|
|
|
17,518 |
|
|
|
9,713 |
|
Adjusted EBITDA |
|
$ |
(28,435 |
) |
|
$ |
(12,655 |
) |
|
$ |
(84,940 |
) |
|
$ |
(38,774 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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