ADPT - Earnings call transcript Q4 2019 | Adaptive Biotechnologies Corporation

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Operator

Good day, ladies and gentlemen, and welcome to Adaptive Biotechnologies’ Fourth Quarter Financial Results Call. [Operator Instructions] I would now like to turn the call over to Carrie Mendivil. Ma’am, the floor is yours.

Carrie Mendivil

Thank you. Earlier today, Adaptive Biotechnologies released financial results for the fourth quarter and full year ended December 31, 2019.

received added release list, to an to not like if please have e-mail be to the investors@Adaptivebiotech.com. you this or news you’d send If company’s distribution

from will to forward-looking cause are within actual anticipated. that – involve the those securities events you like material call federal statements I’d results of risk to These begin, during this or we that Before materially or could management laws. make meaning risks statements that uncertainties differ remind events statements and

Additional in Adaptive appears Forward-Looking information and the in uncertainties regarding these the risks section titled issued Statements release press today.

more other XX-K. company’s please when see prospectus filings report from time the a January with recent the the connection list annual on in Form on of its company Securities including with makes section For Commission, and time and Exchange filed secondary filed to complete and Risk the company’s XXXX, description, the offering Factors XX,

to Adaptive financial obligation disclaims otherwise, revise forward-looking events required future new except any or whether or as any by projections intention because information, law. of or update or statements,

measures call non-GAAP and accurate a most will February broadcast, reconciliation only comparable of the discussed This call. Please during financial information visit release the to addition, In directly measure. the live GAAP for contains this time-sensitive aforementioned conference press be as is XX, XXXX.

Chad Cofounder and Adaptive’s Robins, Chief I’d that, to Chad? the to like Officer. over With call turn Executive

Chad Robins

and results this year joining fourth I’m XXXX. earnings the welcome for Thanks, pleased thank to to us afternoon. call for everyone Carrie full our you and quarter of Adaptive’s you very review to

Financial our and President; our Officer. Rubinstein, Cohen, Julie is today me Chief Joining Chad

questions. available Officer In and addition, Scientific Adaptive’s Harlan Co-Founder will be Robins, for Chief

life this clinical enabling how the the mission system goal, adaptive system, is that we the product an to immune and medicine across translates developed achieve and research, platform to genetics reads drug diseases clinical discovery. transform At science diagnostics products of immune the treated. immune genetics applications To and of diagnosed Adaptive, have our translate adaptive are into

and Our of because the approach detects one largest global represents same the the genomics exactly markets and system treats healthcare, in clinical addressable adaptive immune way. both applications one of of diseases most the largest in

experienced million with revenue, and the up commercialization year During the XX% in and critical ended XXXX, made revenue Even clinical the $XX in that more development our over over just growth products. incredible XXXX. progress we growth is of our we current important

the MRD throughout that Starting are no MRD investments as The patients. the if how possible with many firsthand field, to the about I conversation to going how around We In but ensure rather seeing as clinical diagnostics. made can talking patients manage their they doctors foundational to am from longer are clonoSEQ. year progressing. use benefit is

the for will are continues As become this we clonoSEQ the that certain to interest of measurement management confident of MRD cancers. patients with clinical grow, standard blood

Today across believe to used been unique more is XXX MRD monitor this for XX,XXX just beginning. clonoSEQ And we more has the than institutions. than patients

having hearing time clonoSEQ about patients. impact from real We are their increasingly is physicians already on the

through detailed life disease. have patient clonoSEQ from therapy on disease patient’s of therapy recently eventually patient a like on effect UCSF, clonoSEQ did This For used with patients which to from example, Dr. usage he many this multiple placed to decreased the side maintenance evaluate standard MRD transplant not Jeffrey was burden, patient by myeloma. went ultimately was Wolf he and persisted he off the detectable Wolf maintenance experienced therapy. negative, side effects. a and followed meaning induction indicated that which Dr. at Even requested altering dose, come

they cancers believe for confident years was We issues negative with that has status as in treatment measured their annual every may treatment patient’s patient. maintenance for better discontinue alternatives. with confidence Having life of Wolf decisions and this need inform to blood in better to who therapy by MRD their quality that a and Dr. about treatment along several can MRD testing. result day similar result, continuum patient since face for decisions crucial throughout many make this on physicians patients Based a patient’s remained

In In XX% evidence test the longitudinal our monitoring progress received was around on medical in XXXX, CMS grew important the and field-based volumes coverage clonoSEQ January myeloma and driven growing body efforts both This reimbursement tests. we regulatory to the XXXX, of by clonoSEQ and XX,XXX teams, growth ALL. of for and multiple fronts. of increasing

XXXX. policies coverage from private We million. to of increased total ended addition the the to health in coverage. Bringing five in more insurers rapidly the lives States agreements with Medicare or course covered private year contractual significant the largest XXX of Following United the insurance secure over regional coverage, medical positive than national

to from CLL New be CMS patients for receive During year, monitor FDA first used CLL, in to completing XXXX. expansion January our also would our patients XXXX, label with we for State announced In blood early CLEP of York this by to the coverage achieved approval for we and clonoSEQ we first for samples. that filed milestone

our blood this FDA timeline to for Looking and half the for of from we expansion year. we well. ALL monitoring In MRD monitoring ahead, expect planning which are for blood FDA, launch label CLL as in to in first anticipate from the second finalizing to the clonoSEQ half and XXXX, the multiple myeloma we following file are clearance of second our

of the our timelines for Additionally, NHL are we basket expansion diseases. the into assessing

our product translate sample. of how Conference the Precision adaptive the January, Medicine can development proving diagnosis that signal the World was from We Data read disease and system Shifting clinical immunoSEQ immune at disease presented first in blood quarter in we pipeline to Lyme XXXX. diagnostic confirmed Dx. a our third for

clinical to our We findings Lyme have to already season. submitted validate this a suggested the during protocol summer’s FDA

expect an by end the important to FDA step XXXX, Dx. the submit results immunoSEQ commercializing to We of towards the marking

discovery cell in signatures states. in multiple T signature process systematizing receptor identified our of first a for TCR are we disease have successfully Now that disease, we the our

phase-gates in goal parallel additional five XXXX We confident have end. study through confirming year are the one clinical implemented validation can at disease diseases signal discovery with we in and from that by least of

We and continue importantly infrastructure team. be key support soon this announcing Dx build will we the to for immunoSEQ hires to

the for additional that therapy IND provide of shared FDA products to drug support shared GLP selection deliver The In multiple therapies. discovery. is receptor specific Genentech to tumors. cell into delivered selected XXXX, year a compliant of end. data tumor. in targeting In our T the to fourth a data that for with develop that expressed we Genentech the package possible In we XXXX, quarter patient’s patient, targets Turning to submission step development parallel, we their shared product to a we to solid to each package to packages are where identify Genentech a next continuing first will also first real to for for cancer GCRs antigen cellular plan with continue in time to personalized work data cellular the are candidate

our Finally, which life sciences research continue made we we to and platform, products product business, our completed channels. clinical will is to in current kitted our as pipeline core immunoSEQ CROs progress execute our Overall, labs, a distributed a for XXXX and in XXXX. across outstanding distribution in other and and we in use version for assay, available of lab the now own development upgraded

to expect to ahead, of aggressively we us. organization $XXX As front we market $XXX be of the massive and to the revenue in scaling look million the to are year our range we in capture million opportunity

will walk you who turn will now Julie, portfolio, over greater provide diagnostics our clinical our through Chad on to C it financials. will which details I on information more Julie? after

Julie Rubinstein

Starting with clonoSEQ. Chad. Thanks,

to MRD annual demonstrating patients MRD for was data important extraordinary With in presented, positioned and XXXX volumes pharma continue the gaining traction Society for meeting XXXX. and is in American The the focus remarkable. endpoint market the An significance during fourth the fourth trials. of on over as as tests amount clinical truly quarter share X,XXX increased past MRD in clinical was clonoSEQ growing diseases, XX% established at beyond. tool assessment Clinical interest validated Hematology its of of management is capturing clonoSEQ of many December the a and well to quarter to the across this of test trial compared an

burden, and burden in especially Along abstracts XX data from for The time if again our time clonoSEQ it more that many disease disease collaborators, a studies patients have emerging who abstracts were have prognosis presented for is there than higher more than of that worst over lower highlighting showing and those MRD. are for a with we clinical use time. up goes data who burden these growing disease is the

incorporated been protocols sponsored included sponsored continually expand into data partner prospective use than trials. reviewed XX To for we than more investigator the publications. clonoSEQ To trials are XX date, has generating cases and biopharma peer more and in investigator clonoSEQ, through

for of include as clonoSEQ Additionally, pharma are trials into has choice clinical a trials and that more clonoSEQ companies test many endpoint. of selected clinical incorporating these MRD than been as the XXX

clinical to In fact, clonoSEQ venetoclax. status we of use additional in pharma assess partnerships of MRD two that development support recently announced the

The AbbVie trials myeloma. venetoclax status across in multiple to use in with first clinical response to to is an agreement clonoSEQ MRD assess

Genentech used been This a study with trial in well of venetoclax response to diagnosed acceptance first the with endpoint a patients status for The a registrational CRISTALLO as as registrational CLL. and treatment of use marker in assess in studies the second venetoclax as trial primary Phase the to as endpoint to of future response X FDA. is in clonoSEQ is MRD as has represents a time primary its growing the newly MRD evidence CLL additional by

more for the significant support our team growing are in U.S. field With reimbursement demand to across the place, we doubling clonoSEQ than

multipronged roughly approach volumes and expect clonoSEQ double in XXXX clinical market for increasing We have our to to share. a

indications, the patients in creating diseases publicizing with First, more cases non-invasive finally blood the clinicians, using their are test world real evidence by importance who registry by accounts, by use of a status. new everyday MRD into educating expanding by testing clinical in enabling and third, second, multiple the training about knowing activating in and and practice, and

to Moving on immunoSEQ Dx.

that cells participants, testing of Lyme is serology to detecting than with more expanded two very is disease promising. first lower Lyme standard As from data rate. set a for well-defined times Lyme-specific Chad sensitive positive disease shared, XXX T cohort approximately In demonstrates false our Dx approach a our immunoSEQ

XXX over an The of patients in cohort from TCR independent signature been regions. U.S. multiple has confirmed

key the several can issues the appear. weeks of antibodies measures that is with the presence to serology for testing, antibodies standard of One Lyme-specific it take which

a acute lot there quite over infection has so antibody tend decrease significantly these cleared. levels been active time not negatives to often an in the even And after of are false Conversely, do setting.

lot are positives there so false also of a And quite overtime. patients’ in

or bite clones clones and first sign specific cell allows detection should to based expanded Lyme-specific on when that treated immediately presence disease weeks, disease the in T accurate infection and exposure later the response for in cell expands the diminish. tick T symptoms almost detection of has been Measuring accurate of after pathogenic presumably

approximately XX% not it estimated of disease of Importantly, the antibiotics. respond three-week cases is XXX,XXX do that standard to the year of each course treated Lyme

on in there to the in this While population acute patients, not test we symptoms our focused active confirm diagnosis initially are setting, an in experiencing we assess still future, or intend is who still infection. are the to whether of

we that will long proportion the expanded symptoms accuracy detecting antibiotic patients, for term in to continue clones and the looking significantly even T Lyme disease after short, treatment. In the at acute standard experience of believe setting, who cell of diagnosis by enhance

the we what the mentioned, T is have receptors. confidence cell As are of most specific overlap we excited about Lyme Chad in

across different from the regions U.S. patients in are We finding

result are so antigen states. lab, production multiple we increasing the in our throughput can that TCR of disease to made We being in connections this map exponentially replicate antigen

ultimately, Dx of clones finding one TCR diagnostic fed Microsoft’s disease machine add to sensitivity a statem algorithm each to these learning the immunoSEQ signatures continuously we for self-learning become connections Each more with antigen increasing TCR into is to are overtime. enabling

novel conceptually forward disease approach with We to look to with initial Lyme this our diagnosing FDA advance in and to disease. are such and in the continuing active FDA discussions regards about indications as the this work we specific both to

With the C to details more for on Chad I will financials. over that, our now Chad? call turn

Chad Cohen

Thanks, Julie.

to increase Turning the revenue results, fourth the from total year. million our XX% in fourth financial an quarter period in $XX.X last quarter million, same representing was of XXXX $XX.X

XX% XX% revenues quarter development mix category. consisted category for coming of fourth Our and from our our sequencing revenue of our coming from the

customers of the our in revenue XXXX. million the Sequencing well quarter driven same growth XX% fourth $XX.X through in as grew was as utilization This by clinical clonoSEQ. was primarily and adoption in biopharma revenue generated customers our period increased and revenue generated and from increase from

from quarter, the Research which revenue our increased approximately fourth volume and the both XX,XXX to sequences. due grew which development Development to revenues fourth up XX% sequencing $XX.X quarter year. includes the volume in for clinical the to fourth primarily customers of to was tests, sequences XXXX. last increased X,XXX biopharma in Clinical quarter, reported XX% million increase up academic comprised of in same Genentech The our $X to period partnership, the quarter. million the

from now operating our costs, of fourth increase, last $X quarter million during primarily million for down to higher to was represented $X.X total the were of XX% due expenses XXXX, representing the expenses, Shifting a cost quarter same volume. a the of million fourth operating revenue to compared the sequencing for quarter our operating XX% from $XX.X revenue XXXX our of Working quarter in $XX.X fourth last year. million, year,

were for XXXX, Research increase in aggressive second drug as investments represented to expenses million, our of and materials increase and and came $XX.X clonoSEQ to fourth in as the The headcount clinical Dx efforts $XX.X XXXX quarter consumption our with of online development well half it of the TCR lab an as of compared reflects Genentech. growth scaling of support types, new in discovery of our million and the quarter immunoSEQ in XXXX, indications ramping fourth development sample XX%. the of

and Sales primarily to in and fourth exposure related $X.X our as sales marketing XXXX the of $XX.X marketing quarter million our expenses investing in direct as expenses XX%. increase fourth The support an of representing was of sales team commercial quarter to million, XXXX, broaden clonoSEQ events. to scale were to increase due well compared customer for the

compared XX%. with headcount was associated in the by company. General primarily public quarter $X.X fourth as being and costs administrative increase to of quarter of expenses The for were increase million, the fourth XXXX, million represented XXXX of $X.X and driven a an

loss $XX.X diluted share, the shareholders diluted and of of $XX.X to fourth period common loss was XXXX $X.XX basic for for share or the quarter million. million per per to attributable quarter fourth and fourth loss XXXX. or $X.XX quarter in Net compared Net was net XXXX basic million, of million $XX.X compared a the to $XX.X

quarter weighted based approximately loss $X.X average for of XXXX of on million respectively. $XX.X outstanding of was the Our quarter are EBITDA the earnings prior to fourth a per in and share shares year. the million period XXXX a million the of $XXX.X XXXX million and $XX.X Adjusted of fourth same for compared loss

million, briefly million for $XX.X our total XXXX Turning increase representing to from annual results, financial an XX% revenue XXXX. the year in was $XX.X of

consisted Our the XX% revenue of XX% and from our coming sequencing from development our for category in category. mix year of revenues our coming

a February year. $XXX XX,XXX received The from XXXX Research in XXXX year $XX.X prior in of representing year. increased upfront the Development from from from last amortization and sequences. primarily million due XX,XXX $XX.X to to the grew tests, clinical XXXX, revenue XX% increase XX% million revenue million up in was volume Genentech. XXXX. for Sequencing volume grew increased to was Clinical XX% the increase sequencing

up to for million, Total last million expenses to Research million increase revenue were year. XXXX, XX%. were million, million a expenses XXXX million representing for representing compared $XX.X year $XX.X last from during XX% an operating $XX.X of and of the increase. year, XXXX, XX% $XXX.X $XX.X was Cost in development compared $XXX.X

of $XX.X to general million expenses million million, XXXX increase and marketing an $XX.X in representing in $XX.X for increase to $XX.X XXXX compared for as XXXX, XX%. and were And of XX%. compared million lastly, representing Sales expenses were XXXX, an administrative

basic shareholders or shareholders and was $XX.X to net share attributable share loss per $X.XX XXXX. diluted loss of net loss Net common diluted million loss million compared was or to to XXXX $XX.X for in a for $XX.X to a of and compared in attributable common XXXX million million net basic $XX.X $X.XX XXXX.

per earnings million $XX.X outstanding XXXX share XXXX million full average respectively. on year based weighted shares and approximately Our for were and XX.X

loss million, cash had year. $XXX.X to the million in of ended equivalents securities Adjusted compared with of EBITDA $XX.X loss XXXX debt. a we XXXX a million in marketable and $XX.X for no We and was cash, prior

follow-on comprised all shares. completed we Additionally, in offering of XXXX, secondary January a

Moving be our This range XX% test million, full of in year our our XXXX, the and all our on outlook roughly of expect to our the million growth includes $XXX expectation throughout the to for assessment volumes, to risks representing view us best of $XXX at opportunities midpoint. we to clonoSEQ alongside double and at today incorporates range year. business the available to revenue

be quarter we weighted by back historically increasing of as both deployment used customer the have seen clonoSEQ slower market prior revenue to well a penetration the the our more expect to half heavily primarily and first of XXXX trends years, of as biopharma driven with with we budgets Consistent product.

variability projects likely in to samples. We running of our the and corresponding primarily continue receipt also will research biopharma customer resulting timing and the from commencing quarter-to-quarter see business, of

Additionally, of drive as to sequencing portion and we teams commercial mix our make we become expect time. larger of aggressive our to revenues and a clinical investments in products, research revenue further our adoption over utilization

product moats operating advantage drug operating and for R&D critical broaden core expenses will drive discovery, developments for the technologies. immunoSEQ will for which and large of we expense indications investments growth. even mixed of to be larger expect be start perspective, year. operating at outpace a and toward From ramp and the development will a XXXX on the full XXXX to our sequencing we revenues basis, development new The for new competitive our roughly expenses investment, expect our development acceleration year and percentage and revenues create clinical around in validation significant even Dx and be XXXX scaling a into XX/XX split to of sequencing clonoSEQ, between our

provide market as our our penetrate and for headcount our marketing into massive prudent growth future opportunity. current investments we accelerating a commercial foundation commercial will for and products Additionally, revenues

we future excited entered are XXXX, As about incredibly for we the Adaptive.

that, with will the back turn for open I call the questions. to to And it operator Operator?

Operator

comes line William from Weinstein from [Operator Instructions] Blair. Brian of first Your question the

Your open, line sir. is

Brian Weinstein

guys, Hey thanks for the taking question.

to I’m want as everything, just to trying heard Just Chad, I I this make right. throwing type that there, were quickly just out you sure

or for be volume full you XX/XX revenue would year for end did split? sorry, of the it the On the be – year, the the year, would I’m say year that it the XX/XX on at for the split by

Chad Cohen

in a year, full the growing XX/XX off more about For of the starting a we’re with contemplating split split XX/XX of QX.

Brian Weinstein

the Okay, got really at in you there. that, on talk we been not what least projects. different making about paper side? everything with really on kind a the in steps in so little in of progress And you and about update this did little little platform you. for you’re of you of about talk for you more kind the bit that the I’ve were about in as the Thanks then the that a one all guys something project you clarification learn for kind about, could Can any across obviously, curious melanoma. with as the else implications opportunity line what business holistically and But haven’t to curious, I nature talked was was that a next if seems be thinking can be bit the bit far

Harlan Robins

is this Sure. Harlan. Brian,

we stage X.X with was basically So primary were molecularly, not XX% cell primary do with is found to less Dr. more recurrence what the collaboration in you five to at within the our – of years. And nature Hospital, melanomas, fraction than cell recur and count how T we had Women’s basically, likely world’s Brigham to years. times within melanomas fraction. cells a T the the of patients explore we’ve experts We use what one T medicine predict melanoma. five the And melanomas? that And publication metastatic, in assay is to Kupper’s likelihood who in basically group

other. T is been they staging. of them of it’s measure The for a And sick standard orthogonal while, tumor are do that’s is quite the Breslow decades, amount of each fortunately, cells both many thickness, method using the that independent literally Breslow so and people how thickness. of Effectively, is infiltrating a melanoma have how the to called a

can nice go separation to it really together used between So make won’t to a will and be metastasize. on who

And positive. We we’ll and on clinical tumor in working which are types, also are when those back community was presently very it get other actually hopefully complete. studies that the the feedback – a studies to from similar quite study

commercialize working to – – we’re we’re methods take this steps next on product. exploring exploring presently on So and

Brian Weinstein

then on last Julie, more one market for it you mean, things on talked about direction that to about Great. to Thanks. that give you’re do today, little you take overall additional actually is And volumes you of kind I are other sure some accelerate moving of making couple than specifically be, there. you and that in doubling is but hires obviously force XXXX. doubling in guys that obviously, us be want think faster that can you you of kind I of you the about being the contemplated? a where talked other are that, a steps can me can sales that. in penetration, you’ve things make But the order detail the to do specific to are bit potentially the efforts takes can focused even that? in Just place clonoSEQ the

Julie Rubinstein

Brian. Thanks, Sure.

high we’re driving usage new existing use level, and accounts even across incorporating we’ve cases number we on by at blood. enabled per and expanding accounts a as clinical among the departments ultimately, more to tests before, the on non-invasive signing focused within each the testing So and more workflow, in of discussed expect account, which be time, increasing in patients over into patient

So components. I’ll on of of each through you detail little bit those take a

them XX% have date, the the ordered X where of XXX is that treated. in relevant date for U.S., past population Tier remain XXXX. targeted XXX accounts, First in shared focused in we in To very about to and we these of and of patient Tier on X about foreseeable about future, of of the all, XXX clonoSEQ terms over of how think over ordered we institutions our universe the and

have to entry expand approximately really ordering first That’s XXXX the of We’re XX% that step. accounts first point. these in to looking

And XXXX interestingly, are starting of see we’re our now. that starting signed new volume were really now that in more drive to the accounts to

In some Tier of are X at that detail these in terms we Tier accounts, XX,XXX these population in given on approximately time institutions. the within then active patient and treatment more estimate patients X any

mentioned, used test in X,XXX been with XXXX. has to XX,XXX Chad in the patients of over with unique As date clonoSEQ over monitored those

So and that gives population of that Hopefully, bit within little clarity and where XX to we’re sense the really approximately beginning beginning we period you tests over detail. patient, little of helps XX tests step focused more per we’re time. of to an patient we where little is patient get are a a we’re more month a on the see information, terms final give number per of in and that four think these accounts. of And then the to

I you about field also asked guess, team.

generation area, throughout be in key and As we year, account doubling these on continue past, discussed. demand the we’ve in some the more number believe territory to areas adding we have of I But perhaps integrated on track the mentioned overall, focused networks. in in where are need other various to delivery who folks we’ve some and specialists field. penetrating more almost to managers in we the And just we’re completed additionally, the the process we’re – we’re reps

Brian Weinstein

guys. Thank Great. you,

Operator

Your line of Doug Schenkel from the next question from comes Cowen.

is sir. line Your open,

Subbu Nambi

January, there seems possibly you in but launching to announced we CLL is clear approval, expect for We Reimbursement FDA want the you launch to that until was an Thanks my This taking question. that opportunity lines. earlier? like time is it aren’t Is you place in on Subbu which right? just sure in for immediately Schenkel. it June. Is on are when Doug get make Nambi

Chad Robins

That’s correct.

careful with on given pre-promotional current very being activities, filing in we a have FDA. We’re that the

go have Of to But also few we course, process, to we FDA that know time you by have a product don’t approval, to the we have chosen And of that true back launch that, you the test. in in approval that the through line diagnostic on any we’ve pulled only approval until are we launch approval is given correct – you June. and of the case expect months. and in kind FDA need general, self-selected

Subbu Nambi

Got to or for it. additionally, different have do And for data FDA it additional approval? the bone-marrow expansion And generate based? non-Hodgkin of you would be for lymphoma, clonoSEQ blood-based

Julie Rubinstein

Sure.

doing. yes, have and we So we’re what of the that’s additional data, do process in to generate

So can cycle outline just high at you plan a I level. for life our maybe

know, with multiple and in bone blood. we for As marrow. filing myeloma actually ALL you we CLL is started recently The in that completed

we’ll We be diseases of that we’re time data will be and blood, data and we for also on NHL filing the for will as that generation based be will sharing months, confirming data it. determined that we blood, of various filing finalizing in and completing for various multiple additional and coming be ALL these this confirm are the in be the analysis which going and over line to soon in the the we’re our sample for types the the for timing myeloma year

Subbu Nambi

volume progress had specific you Got account to this, step-up made? a in reimbursement definitely And nice positive clinical lastly, drove anything like the you that have regulatory and Was there QX. growth it. that from – QX specific add, guys volume

Julie Rubinstein

in newer the back cohort year, of accounts the the we XXXX start saw began really in it’s QX. that believe we what of to think and half that’s signed We ordering we on really in

Subbu Nambi

Got it. you. Thank

Operator

Your Derik from the Bank Bruin America. of De from next comes question line of

Your line is open, sir.

Ivy Ma

around Can just it color revenue? share is a on the still on XX% total Hi. so Appreciate taking revenue. revenue the you bit of you for Thank clonoSEQ clonoSEQ question. far quarter? my on Derik This specifics for today. Is more Ivy for the

Chad Cohen

Yes.

than it less – hovering has So XX%. been around just XX%

our mentioned, our of a volume as for growth total effectively mix Julie to revenue the heard ASPs. And revenue. we’re in you component continue As bigger to to and double that year test our goal grow Obviously, this year. clinical expecting alongside, is

So it XX%. of north would be

Ivy Ma

meaning And commercialization revenue like Great. and all guide, that pacing, the in XX-XX That’s ramp-up volume, we then the helpful. meaningful a expansion, just regarding the in how what’s talk where ramp that throughout clinical about think efforts the more we label should year? can should given about the quarterly see the you

Chad Cohen

Sure.

first to So really of XXXX. revenue with accelerating thing of and development development start grow the year. implies, that would at doubling I And is sort our to and that you what quarter And a sequencing the I revenues think back that as revenues growth rate our see sort of throughout that how when modestly think And XX to just do an the model when throughout effectively. take revenue back about development of look sort effectively you what year grew is to then our off year. sort of out start of out, fourth XXXX to – the sort sort plus of is the side. We revenues, you to from will sequencing you percent that

will the that growth towards sort will come – through this which obviously, though year, of half the continue to clinical So revenue… test of will the volume – back come much drive of higher

Ivy Ma

Is by better get learned indication? or far Thank harder process? validate? one And really certain Can then to indications meaning done a to know question, the Thank you easier what side. you color. wanted looking immunoSEQ the different confirm signals you. elaborate so for be infectious do when that more immunoSEQ that on across cancer? what and you one of other Just Dx needs to understanding proving last the enough you maybe disease, across autoimmune have signal Harlan indication whole for to Dx, you on than for And have be to for

Harlan Robins

Sure.

two So parts. standard for our internal comes in validation

well case dependent. First, the what useful it’s the we diagnostic be as as disease In have understand what – would clinically. present to best diagnostic sense, is

in good then confirmed make mark – weren’t like yourself And make to cohort, times. to that And that that, independent how internal a before have of that an sure at we’re could so that was set to just overfitting we or we have relevant we have there is signal. diagnostic signal something no fool need an be we that, that to you we sure – so

so the infectious be are you’re disease different standards across for we’ve about at if certainly, far forward proved to those states, straightforward. point seen this our So two has in asking applying and so disease relatively signal moving what

are and finding, of – the dedication feeling it autoimmune we’re make but little development just this that have to lot early diagnostics. that results, to so that lot with we run scaling sure get now, start cohorts on we’re able to of space, a pig a number me sort a haven’t cancer, that we test everything a I signal but need put attacking in our there’s haven’t done other have through this, to there’s as but we Lyme we yet certainly yet. same And too think but the of we so mostly of guinea that answer collected significant we do the about we can it’s not so because kind line, question, first for good signals seeing for to of start our to

Ivy Ma

Great. That’s helpful. Thank you.

Chad Robins

Thanks.

Chad Cohen

Thank you.

Operator

line question next of BTIG. comes Amanda from Murphy from the Your

is open line Your ma’am.

Max Smock

taking Hi. This Thanks Max is on Amanda. questions. for my for

And an revenue. sequencing exact there your but to response clonoSEQ calculation, XX% revenue. your a Just that about that not around question it’s I of representing comment appreciate follow-up

of math. back math of of envelope – the quick Just doing kind some the back

the or around that’s with think if test. up disclose an case I’m think per on $XXX I based the ASP today that coming you I number volume previously,

that some just half should around clonoSEQ I moving terms And towards in was for seeing of and back ASP think to about make maybe just So sure dynamic XXXX? right? thinking XXXX that we into want you’re how commentary about the of get what

Chad Robins

right You’re in the zip code.

sort honed sort of those low-double-digit that I growing we percentage So brought the look sort sort I of where at in rest year. you just the through broadly. more are ASPs of now the of of would think into

to to disease to continue to you’re our going we into those states, an the throughout and existing with as in think penetrate covered policies continue continue contract see I year. ASPs uptick

that So I to model in up of sort range. would continue just low-double-digit the

just that of list grow little into are would We than take range. at as contracting in well. about discount XX-plus-percent a of $X,XXX $X,XXX mostly is given that potentially $X,XXX just are paid to and north I contracting point, And which our bit and this consideration price, slightly at then that lower to tests that our the a

Unidentified Analyst

around of last a efforts had we’ve quick to centers Got their couple calls just of That’s one implement that large with over some helpful. around questions the some then months And kind few – the of sequencing it. competition? trying general noticed uptick in centers in that Is replicate Or forward in of something are terms what about are some terms to that in-house. doing? thinking how this you other currently moving you’ve of you guys

Julie Rubinstein

Sure. diagnostics referring clonoSEQ? clinical to This is Julie. you Are like

Unidentified Analyst

exactly. Yes,

Julie Rubinstein

Yes.

that patients some as United level, So outside many we’re States making is run available really possible. the prefer as ability institutions the definitely focus our and to aware markets, And tests high some to locally. particularly the clonoSEQ

we us us But our this with States you we’re so determine having say option sending do absolutely time. to are we samples with something probably experience I of. we’re at the and and evaluating reimbursement institutions that currently that, landscape, great Illumina the forward. present it’s particularly most will path have aware United seen, outside regulatory available far As to to really

Unidentified Analyst

Thanks Great. taking again for my questions.

Chad Cohen

you. Thank

Operator

of comes Tycho Peterson question from Your from next line the JPMorgan.

Your line is open.

Unidentified Analyst

questions. Eleni for the Tycho. This on Hi. Thanks for is taking

you So was firstly, as the assay. last quarter the of waited a wondering, decrease a business investigators for version academic called I out new temporary immunoSEQ in

whether have wondering in business XQ recapture to or for you able this some lost see you Just whether the to XQ. headwind of may part of you continue were

Julie Rubinstein

Yes, our Absolutely. of in all that Sure. quarter was assay in is and new fourth running and today. XXXX, resolved up the the lab

Unidentified Analyst

investment modeling on terms then be year. Okay. appreciate OpEx, we each comments as quarterly of being I just increases progression, OpEx should in But $X another exit terms heavy would being helpful. a sort for $X it, to million of rate XXXX million sort how in right of of run That’s And XXXX implying ballpark linear – $XXX quarter? you million the and your with

Chad Cohen

comment first investments is Dx The quarter quarter like investments really deployment headcount and of on I we to immunoSEQ full projects around some only of have thing step that you’re think your and big a where would impact up increases the in a I you of at and looking had perspective, modeling that from numbers drug discovery.

year-over-year And you is then be towards move as quarter that sort for range of – of fourth the in of so sort going mid-double-digit much your the of sort sort to range. and of quarter higher of trail off the first sort to growth double-digit XXXX and rates more

about the best progression So of the year. I that’s think the throughout to our way OpEx of sort think

Unidentified Analyst

helpful. FDA you by super terms category. talked And previously That’s of then immunoSEQ Dx, the of one about in being in being pigeonholed – vary disease

information the mind? how going this with sessions wondering So in are

Harlan Robins

we’re have multiple We’ve really Yes. allow validation FDA chemistry. together over us we to together. we’ve hour could sessions gone the onto working information – The and have been them a last the there would being plan basically, that we’ve the quite with explain had technology put going month, had forward, and FDA where X.X-plus to our with – strategy tests plan helpful, to that has multiple really a to mobile different – work us so the create they help scale same that basic

be of so So obviously and – we all about here, positive excited far, seems but as have yes, work to well. we’re this excited the so do a lot but to FDA

Unidentified Analyst

opportunities vaccines? leveraging new wanted present trials one. as the and if sort areas drug new just first-line including to of sort then ink such themselves criteria you’re And focused in in newer one I �� applications on MRD partnerships? balancing And you’re that the these as and how could types about discovery follow-up of you new those most TCR-based and about your Great. antigen cell last therapies deal thinking talk across you discovery partnerships drug on and pharma for

Chad Robins

Yes.

deal. a drug Genentech immune of within So partnership with complementary and both additional of basically in medicine outside or our to support we’ve engaged we’re areas. we’re And platforms the couple platform of cell outside the therapy of different modality, already within One technologies that, what to separately, at looking of to prosecuting that space, cancer. looking can kind is at other be kind

So as I autoimmune – a companies body cell in from space. take these could being done examples you that a of and growing would There’s of give examples. therapy I in other just couple the mere work

to And that this so present time. one space at. another area cancer the other of the of technology And interest that’s at our interesting vaccine we’re looking that’s obviously application us that’s area to is

Unidentified Analyst

you. Thank Great.

Operator

David from comes question next Guggenheim Your the line Westenberg of Instructions] [Operator Securities. from

Your line is open.

David Westenberg

Thanks quarter. the for questions taking on and the congrats

payment first to there. Chad on the for guidance, I’m concentrate from line I but we So our – to not from for – want assumption one The did at it when a break the little Genentech line, by Cohen. payments asking you the down look XXXX bit and

that the you so, if missed give Did guidance? I be Genentech? guidance an in kind magnitude filing would include of us much of can this. how the And if IND sorry, And from

Chad Cohen

the file So acceptance. is based year, to IND expecting of we end on this milestone the are the at but

we when going not it’s do XXXX. so to be And in see that,

it we in therefore, earlier The And revenues to not the in. development amortize received respect the I so discussed we guidance just that we have modeled how XXXX. is and with earlier that in relation modeling to purely upfront

David Westenberg

a the lot the one million just because to including that of or then Genentech, sure on color, – from still $XX-or-so second the there’s right, – XX-XX the make I Got I give not. XX-XX get When that’s year that fact want these just it. And you in was on and given do this there. a payments the

make modeling So correctly? I’m I this sure just want to

Chad Cohen

Sure. Yes.

in mix $XX that that XX% XXXX, amortized million the numbers. our the included XXXX of we So is Genentech in from comp

David Westenberg

sequencing good Pretty next over revenue year. the All right.

to I autoimmune going it’s are I when with respect it market the about the the before? a of disease to terms And fact Is with after same going still aggressively? at. step indications there on tests, color little came more looking you’re that It’s year, later, of we of maybe out bit then map infectious road thoughts maybe as in kind the the So here, you’re appreciate – taking the Lyme back quickly. Lyme to going a maybe disease last disease to to then moving the really immunoSEQ. that maybe mean, be And talking just celiac. and way different

maybe there’s of the quietness us test, and strategic kind some I understand of give Just about a here? wave you help have to think

Harlan Robins

Yes.

of categories is quickly, different we’ll for we’re learn up tracking, that’s if absolutely the finding infectious sure success where I’m ramping board we’re signaling the because across going from after trying things. two obviously, And spaces efforts and a ramping that, quickly we to mix to of signal the learn, not be Lyme there’s separate and pretty expanding able that the both well disease. – – – important. One the as vastly came is probably cancer, you if parallel disease, – were example, as straightforward is So saying, across to in to cancer. we’re strategy say different really infectious in think autoimmune and then which up

does help? So that

David Westenberg

coming clonoSEQ I in the That’s sequential mean, that, I getting growth, sequential the I And certain would tests the growth that’s the pretty is ramp coming at but year. exciting of back then fine. But And here. just think I or of think half XX% half approvals volumes. have I see out out then, back when looked beating maybe I you kind also know the of

of – that or this. maybe So a jump then about I fairly as lower would be of you you then wrong, first half I would maybe cadence kind think thinking just get need the the these I’m but in – advertise cadence, to am how to I asked I little more there that, realized people test XXXX already steps thinking and would about have new couple think impact the on clarity that the a the just – trying there. a

Julie Rubinstein

Sure. It’s Julie.

for point expecting So inflection I be think clonoSEQ XXXX. the we’re in to really

some and know, it of but in of the while terms we’re in, take it really in CLL, will volumes. clonoSEQ takes thrilled to to really we approval change practice, expected about clinical months a As that kick for

And shared patient the total is multiple that because also point our our XXXX. myeloma, XX% of you the population. as we really believe in clonoSEQ to that will is So current and indications, be inflection remind we which ALL in that, the do past, for

as on serviceable whole as real-world of that peer-to-peer us the enabling volume engagement, add testing The patients of total XXXX patient to in kind is our what’s then in making of approval us in the real blood direct that the throughout patient to the time in we’re combined and lymphoid inflection investments malignancies. bring – population and XX% evidence the to when in you CLL top with the education U.S. happening will get well of XXXX. And all

David Westenberg

Thank you all very for the much color.

Operator

call turn CEO back now Robins, to will for I session. closing Q&A the the concludes That remarks. over Chad

Chad Robins

for year. you, a We us to great forward Thank look everyone, joining today.

Operator

This call. you, Thank conference everyone today’s joining. concludes for

You great Have day. now a may disconnect.

Adaptive Biotechnologies (ADPT) 26 Feb 202019 Q4 Earnings call transcript