Earnings call transcript Q4 2022

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Operator

Good day and thank you for standing by and welcome to the Fourth Quarter and Full Year 2022 Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Karina Calzadilla.

You may go ahead.

Karina Calzadilla

good and Justin, you, afternoon, everyone. Thank like quarter and would to conference welcome fourth Biotechnologies Adaptive to full you call. I year earnings XXXX results issued reporting and Earlier press year for financial full we quarter the 'XX. today, of fourth a Adaptive release available press www.adaptivebiotech.com. The at is release

a a the to Investors our website. presentation We section be are call will been webcast in live conducting that this has of and referencing slide to posted corporate

securities management call, the the make projections regarding forward-looking the other and within federal company. of will and meaning statements future of During laws performance events future the financial

the These differ as listed in statements with reflect statements, of management's current today's forth presentation. from this are today. perspective depending may filings of in results which SEC a public number business factors, the Actual and forward-looking on of materially set our

non-GAAP earnings addition, of reconciliation found to In during discussed measures be release. and in financial this can a call, GAAP be our metrics non-GAAP will

today Chad Co-founder; the Joining CEO Financial Peterson, our of Tycho and are Chief call Officer. Robins, our

In of Robins, MRD Benzeno, Sood, Sharon Nitin business; will and Officer Head Head Scientific addition, and Adaptive Medicine available for of business be Q&A. Harlan Immune Co-founder; Chief

I'll over Chad? call Chad Robins. turn that, the to With

Chad Robins

Karina. Thanks,

fourth earnings joining thank and And afternoon, our Good call. year everybody. us on full XXXX you for quarter

want dedication thank As and always, year. I Adaptive their our to strong all the employees for of execution throughout

by two was deliverables and with MRD of key each We against year areas, throughout these business for started Medicine. clear year. X, decisions a two We key of goals the executed reorganization goals As established XXXX the you the Slide areas for Immune these see can achievements Adaptive. company of hitting and on strategic business and around

to revenue our adjusted restructuring, long-range while in XXXX. financial Following reaching shared we achieve sustainable plan EBITDA profitability growth the

non-diluted a We financing with agreement. strengthened our cash position royalty also

our the position achieve profitability to we XXXX anticipate targets. our ending of capital need not given additional cash million, do XXX raise to Importantly,

sales In strong. year. the by XX% team, we volumes significant during MRD, areas XXXX which grew progress business trained year our and versus achieved of doubled fiscal fully clonoSEQ nearly Both supported finished year clinical our the

we growth launched for with addition, MRD the are EMR are to of and an agreement In signed key our and milestones integration. fundamental business. Epic clonoSEQ that Both DLBCL

we both XXXX. decision had to focus our services In In and discovery, the efforts Genentech and discovery. growth services made of around Medicine, therapy drug cell development Immune of had commercial our programs. strategic drug versus XX% our partnership progress Pharma substantial in significant with pharma

clinic. Genentech optimistic are potential the about first into the We candidate of advancing the

in leveraging our Genentech, capabilities are on In develop addition to internal to our focused we programs autoimmune disorders.

year of We growth a fiscal year finished in XXXX. XX% versus million strong prior significant of XXXX XXX.X quarter with versus a million total year. the And XX% a growth revenue of representing reflects our fourth revenue XX.X

momentum XXXX. We're sustainable long-range managing operating growing a off importantly, The fuel We're great and our expenses. to to advancing and we're in plan. revenue, is building. we our start the our on capital have execute growth And pipeline,

cancers. blood on with standard and I'm Slide going the X. is for start gold MRD clonoSEQ MRD to

advantages Over of uses we and in decade, endpoint significant the provide that sensitivity, clinical surrogate class strong clonoSEQ built in coverage, inclusion, pharma evidence, competitive including last trials. have guideline clinical around moats broad best

is sales the our it Now, having and integration, DLBCL, execution Epic nearly about doubled force into and penetration. with forthcoming expanded driving

volume XX%, XX% versus clonoSEQ to and significant consistently. and ordering quarter from Fourth test quarter X% year, grew and XX,XXX graph, healthcare are of the grew in volumes growth accounts unique respectively, tests providers Ordering delivered. third shown XX%. prior experienced patients As growing tested

mid-single to grow expect we in annually nearly $X,XXX digit. is it ASP and continue the per test to

agreements performance. payers collection we with non-contracted As improved pricing finalize and

milestones regulatory partnerships is business partnerships, MRD versus pharma prior component revenue key from also which of MRD a excluding quarter. versus our grew XX% year and these prior revenue from growing. XX% is Our Quarterly

milestones we quarter, which use myeloma another of a approval our therapy, recognized clonoSEQ multiple million from secondary the a endpoint. $X This assay as

off clinical month. past record in high orders a with this clonoSEQ We are for us a year at start to great the

on increase strategy clonoSEQ we further shown X. To penetration, are Slide a focused three-prong on

penetration First, testing. blood-based a testing catalyst to Blood-based will be increased testing increase of for the patients. the community and drive in frequency

accounts myeloma, blood and X/Xrd all MRD and of blood and the validated usage is quarter of for overall B clonoSEQ diffuse and reimbursed cell clonoSEQ fourth tests. CLL in ALL, lymphoma multiple currently in large approximately

we penetration increase and in to blood In increase the which usage volume quarter. will blood-based, overall which penetration represents in XX% CLL, addition, last community, versus as of catalyze in and the continue XX% will DLBCL, are now primarily just

of clonoSEQ drive anticipate growth a XXXX. December. with in aggressive Conference contributor second meaningful during We represents patients XX% DLBCL and half We in to a is and lymphoma DLBCL DLBCL launched in an with non-Hodgkin’s high rate. the ASH DLBCL. the Second, relapse be disease of

and Expanding detect a more for sooner each physicians to plan create access treatment allows clonoSEQ relapse patient. to precise

expect data pharma filed and generate and in We DLBCL usage. the clinical to FDA to adoption increased support additional with

cases further along continuum. care utility clinical used clinical patient expand demonstrating by the Third, points at multiple

surveillance, ASH on clonoSEQ patients offers snapshot abstracts and reinforced decision-making, continued can more presentations testing clonoSEQ's provide than valuable see X, MRD Slide the of demonstration to a the treatment in with developers. for and blood You value recently clinical featured multiple of XX insights to drug cancers of relevance ability at clonoSEQ-related that

can consecutive has have Particularly are evidence today. patients clonoSEQ for savings treatment of substantial also cancer incorporating multiple cases find patients clinical demonstrates can use with MRD of effects side and healthcare years. into outcome the specific two enable set that who that practice outstanding an driven negative risk master system. relief clinicians stop This free after trial XX% standard from the is who for rich results remain two A and treatment myeloma

time points out, are we setup business we clinic confident along multiple strong, read at year. studies resulting significant the adoption The growth greater MRD of is will in in treatment from more be that benefiting journey. MRD patients and will clonoSEQ achieve As this more there for the

turning Slide on Now, Medicine to Immune X. business

map, to characterize in services, and scale by indications. is our sequence, drug and Medicine Immune driven pharma cell proprietary discovery. two Our major opportunities cell Medicine Immune at and leverages drive areas, main Growth receptors to in business ability T platform B

we programs. services, and with goal our advance deliver receptor we either focused and our own pharma valuable and immune with cancer informs Through therapeutics disorders, drug rich on that their response the data to autoimmune on potential development to are discovery, of biomarkers partners. drug or customers, biopharma accelerates In

new cell therapeutic receptor and then and and those candidates targets targets. T or proprietary use As to drug is shown differentiated develop against our Slide antibody on our discovery strategy to X, discover capabilities drug

oncology are our in We already cell Genentech doing with this partner in therapy.

Genentech on cell shown Slide we're therapy good progress making As X, two with programs. on

targets. therapy grade characterizes development For those this TCRs validates to collaboration, potent Adaptive and both products cell identifies under and antigen therapeutic specific cancer and new then targets,

For the first TCR we by are to shared speed Genentech, candidates focused on clinic. selected the

addition, TCR shared Genentech's we In packages additional data two delivered consideration. for

fully established XX and characterized our personalized more patients, than patients having receptors tumor program On prototype T mutations. we specific to with the cell successfully identified

to development. process end-to-end also completed to We start define product early runs

optimizing year, readiness. towards This and clinical process are standardizing our focused we on future

known. partner internal therapeutic in I programs, specific our liked Genentech In this disorders. efforts Slide autoimmune not with our disease In antigens addition in area, well to cancer, XX, are

sclerosis, IBD and leveraging targets in among capabilities druggable multiple to We our unique are others. identify

those that to Next steps data are validate generate targets.

Genentech progress TCR excited with therapeutic discovery discovery strides Adaptive make making another believe can the we're antibody we internal driver and in major are and capabilities. assets So developing drug programs. by towards and using is We value our we our

now to update. I'll Tycho it pass our over financial for

Tycho Peterson

Thanks, Chad.

with XX, XX% million, XX% increase representing full quarter and year. the last from revenue Slide for revenue in MRD from immune XX% quarter and the the with same a year. Total on Starting was fourth fourth medicine, XX.X period from

approximately MRD of ago clinical each from a XX.X XX% growth, revenue partnerships, million milestones. MRD with along MRD a XX% $X regulatory grew million of in the and with pharma testing increase driving year

million from $X.X partially by by pharma academic This $X.X clonoSEQ tests change revenue last well test the Genentech XX.X delivered volume, decrease a same Immune $X.X offset from international as COVID. a in as year ago. driven XX% was tests XX% amortization, year. to including period and up a XXXX by from million increase million million medicine in increase from T-Detect customers, a was increased XX,XXX

XXXX representing year-over-year year million XX% increase. was revenue a Total XXX.X full

Looking year million MRD million $XX offset a closer from in increase at driven the ago, milestones. regulatory XX% MRD up and full revenue in a pharma a was by year, XX.X million by $X million clinical decrease testing $XX.X MRD increase clonoSEQ partially in

$X.X a grew revenue prior from driven year, by medicine million pharma offset partially T-Detect by COVID. $XX.X million million versus the to decrease from Immune XX% services up increase a XX.X

Total OpEx. year. were representing XX, Slide from in a to fourth leveraging Now XX.X place we operating the our same on decrease continue moving on XX.X strong to expenses last period on emphasis the quarter operating X% million, million for expenses

XX.X XX.X revenue decrease. increase. was Cost million a to XX% XX.X year, representing year XX% R&D were million to million XX.X of last compared expenses a million compared representing last

largely marketing million and year, to T-Detect last reduced XX.X to expenses compared Sales marketing XX% were an million XX.X due and representing decrease activities. clonoSEQ

year General and a Administrative expenses X% million ago compared were decrease. XX.X million representing to XX.X for a the quarter

expense from agreement a million. interest X.X was Lastly, financing royalty OrbiMed with

the for year. million XX.X XX.X to million was quarter loss Net compared last

year, XXX.X to XXX.X million For million in were compared operating the full expenses XXXX. total

by driven of X% higher increase primarily cost the With and G&A revenue.

from represents growth the increase revenue X% year, in our a reduction our XX% prior the while still revenue growth from meaningful of OpEx core Importantly, segments. achieving significant

in loss Full to million year million XXXX, XXXX. compared XXX.X XXX.X was net

XXXX. in of marketable the cash of a While adjusted us XXX.X over EBITDA on years million three in giving XXX cushion the ended sheet. equivalents was approximately a million, balance to with loss year compared and million XXX.X securities loss of We

having As before, through profitability raise will expect to capital. without carry us Chad this additional we noted to

XXX amortization a revenue lower We approximately MRD be Now for expect from driven contribution in XXX of contribution the immune from That's XXXX by XX% versus Genentech Slide upfront we anticipate year full a immune from prior with XX, outlook the million be the years. and mainly to lower businesses million. from medicine on the our significantly to to turning XX% to range our from medicine, midpoint.

business growth in in include estimates ASP volumes increase continued digit MRD mid-single clonoSEQ and the XX% test over Our range. a

anticipate millions. to high the digit In single addition, we milestones MRD in mid

clonoSEQ due respect year. several seasonality to including the and revenue Epic and and MRD, were by back we both in is expect to half reflected first quarter be of expected back expected factors immune high to to normal lowest the MRD in QX low launch year-end. milestones the in quarter. DLBCL This weighted trends are which year, and and over year, the be of the With the half from which Uptake fourth medicine the integration and in

drive operating below cost we returns. including revenue growth XXX.X ongoing be Regarding to to profile of while OpEx our of higher to behind efficiencies, XXXX million. OpEx expect operating reflects with our expenses, XXXX slightly support investing efforts This projects the our

We're per on continuing cash of expenses, XXXX. to goals. in be average a growth million burn position and had solid our our an and execute quarter. capital and We fuel thoughtful deployment be performance about operating strong have growing expect managing We're we revenues, our to to XX our

With back that, I'll it Chad. to over hand

Chad Robins

Hey. Thanks Tycho.

the key shown capabilities As milestone drug call, running confident and We're for XX, medicine. XXXX. discovery ability highlighted our start. several and had our Slide business we immune demonstrate accelerate in a our in in during clonoSEQ on penetration MRD And to to I'm to off

turn the for questions. operator open to like over up I'd back and to the that, With call

Operator

Bank our [Operator of Derik question from Bruin you. first thank Instructions]. And comes And America. from De

Your open. line is now

Derik De Bruin

seasonality bit revenues little things, a your be talk sort got but we the in pacing. half. coming about you've is progression, DLBCL quarter-to-quarter How going volumes, you should of if to of can back revenue and I there's would helpful. QX think realized lowest sort got about that the Obviously, reduced other on So be some just a and ramp, you've

Chad Robins

DLBCL out, be in the I'll of Yes. variables which as half and are there Epic a integration look on. launch back minute the maybe quarter some at noticed, then, we've drivers, range, for I if we are will you mean, spend first And the laid kind there, sure. the low,

it got we on On the side, milestones. conservatively MRD

a in things the XX% or XXX million to factor, to on guidance adjust depending year, go we the about as the that end got drive of talked low XX% roughly swing line a And those of about future to success. the range, magnitude could So as about milestones, be of could those. in through past we of we half high we've risk probability milestones, our with sight the

So that's one swing factors.

X a medicine, And for the milestone. acceptance we as million million the IND factor immune a of year. reminder, upfront swing the the fourth quarter. of big obviously, biggest that's factor in end the the The on Genentech, toward on recognized of swing acceptance that And XX

to some drivers the quarterly you, back as guidance, through not going that year. the the to the going half gives year, you accelerated give to to flavor of but progress that we as that lead we're So gives in are growth

Derik De Bruin

And Great. of of the patient volume like That's headwinds the trends, just residuals access, below on and clonoSEQ on hours commentary like XX% looking in or we of, were greater access, a what on trends. bit just patient growth sort basically, on any helpful. sort access, any some market than like commentary doc little volume for

Chad Robins

to we're Derik, Actually, start mentioned, seeing volumes No. the year. as of I kind record

of And be putting and both a to want so, upside than leaves on that too. conservative we XX% greater lot be out, room the

believe able to out, another a upside there. and achieve to that watermark feel was factor some number swing there be could be So, going confident We hit. that that we're very we're that to putting

Derik De Bruin

great. much. you Okay, very Thank

Operator

Westenberg And Sandler. from Piper our next question David from comes

is now line open. Your

David Westenberg

the we in talk of XX% here rate, you do talk here. I'm terms a of you're Derik mid-XXs tough comp volume on now one concept? about, a about coming growth the is in Because maybe XXXX. the on of Can have growth get side in of you so actually here. other Can at you volume comp same that kind battlegrounds

think I because the conceptualization maybe give a you really, that and in an comp? means from what do are overcome and back help DLBCL I mean, does Can contribute think of more I standpoint incremental Epic they comp? you DLBCL it half. bit us of little of tough that happening do that kind beating And Epic kind

Chad Robins

to Sood, who and going business this I'm David. our runs in from Hey, to turn Sure. Francisco. over Nitin MRD calling San

Nitin Sood

all, just our of Yes. remind I penetration everyone about is first to that mean, think I want I X%. current

us room a there's grow. So of to lot for

XXXX And very that that start. mentioned, XX% a volumes combined is that I we with a greater increase, ASP year. increase business am confident Chad see we're strong than XX%. larger base by very off to seeing we'll steadily, As off which grow And this revenue

you and penetration Few things in increase the know, our as business growth I to want to to drive community. And U.S. twofold, the deeper been and in point out. strategy to has focus

accounts we've few seen, our institutional by Over the quarters per XX%. orders last account and increase

all of indicators community grown HCPs Our XXXX accounts business And expect by grew myeloma year significant for business, of our XX%, to I by looking has our a be are us we've master total XX%. X% determination. growth XX%, business new from which to and driver XX% that leading unique continues patients is tested And grew some deliver. multiple to key favorable had very this data readouts

the effectiveness fully into is our finally, in and play XXXX. then, of And sort coming sales of team increased reach deliver will and

we there's and XX% and DLBCL very growth beyond. catalysts I above and over Epic, So even our that about year confidently lot in a growth expect, grow and this will of

David Westenberg

analysts Thank color. have XX it. here. you Got you for noticed I the

So here. lot one a questions just you I'm have to going probably more, ask more since

or basically rate for I you were probably are have bonuses, that their you flat, to means, sales sold going higher sales a goods which respect that just going I to burn have, think a keep associated of to did revenue, here. people expenses, numbers, that revenue natural with compensation said are cost You you hitting

the give holding year in where think on that given grow you sense So, remaining and fact XXXX, the can you on will, us have OpEx you a that steady? I little cuts you're

Tycho Peterson

Sure.

high the burn average quarter So for year, of income. guidance to low We things. was will be and is a higher on capital, There pretty a favorable QX investment CapEx the spending payouts. had cash bonus couple fourth Yes, low XX quarter. working due in million

XQ total a on kind step including will million, significant coming be burn off year. we're at we the spent we look a over overall, revenue cost fourth of If of pretty OpEx, up. quarter, but So low just XXX last

lot a initiatives. talked we've R&D, Similarly clono where then, extraction cloud on areas, gross all real lower work the opportunities. costs, mapped are estate, of prior We've there some doing of in sequencing And margin ongoing to DNA enhancement, that enhancement our with these seen. done calls as And work Some around leverage there's costs, about of revenue, G&A. compute, We've we're a lot margins. well. we've projects leveraging

in we'll do that, area but scale. where point at Now, some significant say we this have on see the an potential, as more we to is future,

coming OpEx are cows. a no So, it's the important at thing single shift not about there of from is, been it's all really, a parts Adaptive area, real company, and here there's cultural sacred the underway

get parts to for business. efficient to continue look company all forward, and across we better So the it's going as but of opportunities more a

David Westenberg

for you the Thank color.

Operator

Cowen. our comes from Daniel And Brennan question next from

line is now open. Your

Daniel Brennan

one first guide, and about would pharma. And on what's think well we XX pharma. be Maybe MRD academic just then just immunoSEQ, for as the as the implied

a implied outlook? underneath a of us obviously, are what's What's give lot pressed sense to in but that see the these And fast hard the growing hood, happening. businesses, obviously, on visibility Just of kind 'XX?

Chad Robins

Yes. you want take? Tycho, to

Tycho Petersen

Yes. we're immunoSEQ I guidance part going the immune anything you sub-segments. it, guide your but then on some or on Sharon we'll academic it give say of sub-segments. specifically we're I is well, over to as around to Nitin mean, of to not or maybe mean, going specific not for specifically there put want

Sharon Benzeno

expand Happy execution. Again, it's Yes. about to that.

increase really in pharma larger As portfolio companies, biotechs, four our with penetration trials, is later we strategy and said, in our major stage and to indications. clinical

so generate we're to revenue head focused And that guidance. down, on doing

Tycho Petersen

of is here, And the XX%. about medicine Dan, immune midpoint at range

XX versus business, Genentech XX big right, amortization that is year. implies XX of that headwind it's a last So million, year million XX north kind of for million. this

plus XX% long has at we've in CAGR be about that talked publicly pharma a services, at in. business And something that's run. growing factored So that to the

volume growth. mid-single it. toward pharma about with about at mentioned milestone midpoint. Milestones clonoSEQ the the there, I how XX% at range sequences the in sense mid year. XXX to XX the to gives the then, growth of And the be growth MRD that got digit implies ASP talked we high about you going end some then, the XX% are business earlier there's of we're about and MRD that millions. Genentech, you've earlier million. of And of the XX% million, about We kind the midpoint of thinking So kind for earlier is, talked of around

add Nitin, anything that. to you

Nitin Sood

driver pharma is will I is first time, No. be diagnostic out in MRD. business larger business clinical our to growth point than this the that it's for key going the our and

pretty for year XXXX. it's exciting a in us So

Daniel Brennan

to proven a just Maybe more lead these looking the adoption ability trials Okay. doctors, mature it of one in important that, would maybe any I not terms blood. quick you the follow-up, in and meaningful, in milestones greater trials, continued over that such few to see there in that spoke we terms events data a as of terms Are such clinical know milestone. of market time. But dollar could to and doctors? impact for to they're in

happening So ongoing will any an of just of it's that basis? 'XX, in or kind be

Chad Robins

ahead, Nitin. Go

Nitin Sood

Yes.

just tests that, marrow MRD first, ALL to in what used are I in are are blood. of primarily I to primarily all Myeloma think today XX% Multiple XX% and everyone all So of in we be test. want blood CLL bone are selling remind a blood. DLBCL tests, tests

there, multiple the annually myeloma, is positive patient, treat all and case XX% in for this the simple marrow. cancer negative the myeloma in in in and blood, is when is increasing. it of And multiple make verify in tests blood, blood is the in your test bone used then blood now However, case of

our and than blood we're we're in studies conducting of that evidence, biomarkers top On demonstrate better in to other this, strengthen to additional blood.

we in June. December. multiple September, data we CLL also International Myeloma major then, coming expect for ASH at have DLBCL, and out. data have the readout have for We conference And myeloma in reading and DLBCL in a Society to up

volumes we're and we'll data, additional expect have So executing commercially up. blood, our go and I to

Daniel Brennan

you very Thank Excellent. much.

Operator

sic from [JPMorgan]. question next Julia from Cheng our [Cowen] And comes

is now open. line Your

Julia Cheng

JPMorgan. is Julia from This

what your faster in XQ, than looks modeling. ASP were like we this So ramped of XXXX clonoSEQ up

it above So an far? possible that you're guiding so your could for mid-single us digit you see, not that update payer to give And ASP on growth to? accretion, us is maybe private conversation

Chad Robins

Go ahead, Nitin.

Nitin Sood

I anticipate the Yes. think growth a past per ASP And payers. [rate] steady we sort to we mean, private over have, three mid-single couple [ph] seen which I with years. towards of as years test, we've next two a that digit of range over contractor $XXXX the and for the to continue growth in trend clonoSEQ

where we also like to area we continue pricing Medicare we that private in improving this of We including coverage we've for then, going after on. invest plans, DLBCL, coverage year. invest some like expand agreements DLBCL. minor recently. are that of going We're clonoSEQ our so then, with payers. lot non-contracted coverage performance, to And have a CTCL, but We're And this the collection usage we're year, of in getting we MCL additional indications large seen need into we expanded have only, and that to payer new expect coverage. Medicaid indications

of ASP happening. in XXXX And So, few are we things steadily a years. expect the to next lot grow towards

Julia Cheng

up immune for packages, be the Genentech mentioned first what's making -- on Adaptive then, those And about? additional for data medicine clinic. speed TCR of on the year elaborate on you what kind should those? can of and this side, two timeline that to a your focus then, for what on, the to we you is kind do Can for And timeline process the Genentech, candidate decision thinking Great.

Sharon Benzeno

file. control with they do timing the Genentech, when for interactions So FDA, of directly they obviously the filing, and

very that's support we're We're so ongoing. And and working the closely to along optimistic way. it

update terms the last therapeutic packages potential to in those advance relates any at candidates. product to completed Those that progress year. we jointly being teams, data of and together working reviewed of are obviously by it we As two the end TCR the will and delivered additional

Julia Cheng

Okay. you. Thank

Operator

next BTIG. from question Massaro our And Mark comes from

open. now Your line is

Mark Massaro

competence, and to XX%. growth sort really we been So it's as question. a elite asked, relatively challenging I maybe know, but pretty follow-up know, diagnostics. I XX% wanted ask think is about of a anniversarying

from variable the key XX%, year me don't the I half exceed just that people give you the the can So launch, But of that to that again in year. DLBCL one think is confidence or the this it seems I've thing to back the think early access of of terms DLBCL. heard for about it think about or in anything way contribution interest And any is like, market incremental us penetration how to that should variety? we in

Chad Robins

to component, DLBCL I'm multi-pronged because really they're only is take going this But across one strategy it's while laid Mark, the Yes. in out. increasing not community board, major the the we just levers setting. including penetration that

has done defining team crack. of community practice late long larger pathways. in work a had that Our taken lot some And as to success time of accounts we've penetrating have done really of -- a and

right We that also your really of mentioned think should integration usage. and from are clonoSEQ, already the being the half think kind I go Epic that in accounts order should year, directly EHR accelerate able on there of ordering to especially that back we into

think and of stop therapy, continue utility, that maintenance out. we terms multiple myeloma cases coming, and will the kind are clinical on of use of kind from In additional increasing for the previous I MRD readouts trial get have that master data more to the more and as reading the the that blood-based and trial, question you other discontinuation of usage in

the a practice. where first, of more say, comment general MRD I'll we kind by kind to -- And would can make I and think malignancies just in hit that's starting the what a know, but that that are around I to understanding has of healthcare obviously else one to and tumors, one what do nomenclature more no seeing, this, trying kind that becoming where one it's patient to is I and no hematological noise of of is, be hitting applies took It wants to a kind of on then And long starting that, And and accepted but MRD be we're a become on these to providers. a overall And don't point an I'm much to, assay that actually agree solid get common lot time get to. we're of I even you wants it's just think something and every last. here.

So number able confidence going of in XX% think XXXX. I us be a factors that to hit variety gives we're that that it's to

Mark Massaro

Okay. Go ahead.

Nitin Sood

a We're penetrated. that which driver. biggest to in XX% than myeloma, Add less is little growth multiple our bit,

us of there's for So a penetrated. to lot than In X% we're grow. room CLL, less

think be extremely even than of we the lot to grow. low. room expect twice the I team. the then, to in productive of sales territories. existing we in last in as year the team year, is increased more deployed Last So diseases, lastly, year. And size our sales community, penetration them various And this a have we We

growth have best than So but XX% there's do, drivers in a what companies lot yes, other we and of [ph] And diagnostic [Hem-MRD] DLBCL. product I other have we is a you've above the comp in think the team great place.

Mark Massaro

Okay, excellent.

we to I arrive just assume also So I to the Because paused? growing. while guess, that's trying confirm how the is OpEx initiative, should can about at effectively also of top-line T-Detect lower the you to ask wanted kind be I'm

G&A walk assume any R&D little should us if through likely of Tycho, presumably could maybe up we little down. bit, maybe self-marketing maybe So you up buckets, bit, a a is the

Tycho Peterson

the look, some mean, I I to on point G&A we're company. sure, minute I marketing as double last for ago, working leverage getting sales said bit did leverage. Yes. mean, And earlier, a but year. across little we Dan's yes, force Sales we've a the got and

summer kind thorough And in very necessarily out So opportunities. wasn't keep the R&D mapping earlier, process we that every mapping went project. mentioned mind. some mind, through then, dropped margin And over with leverage. to that you've of that got in yes, that our stuff of out I there a R&D revenue was was to there

well. as leverage R&D have do we So

Chad Robins

directly then, And of just Mark. T-Detect in terms question on your

the physician path clear of our have change But said, and leverage have develop services in efforts both kind reimbursement. really in to mapping to As the can a enough in that XXXX, T-Detect commercialization drug we this nice to decision antigen behavior for continuing diagnostic that you that with discovery. as internal made a of data and pharma delay test, know, we we opportunity until to data signal data strong efforts

are If this therapies an deploy probability of you mapping at success biomarker signals. in of tied effective developing patient kind efforts antigen hoping strategy those of that that look exactly to with stratify the is we're populations, to can that our

Mark Massaro

guys. Excellent. me. Thanks, That's it for

Operator

from And Richter our from next comes Goldman Sachs. question Salveen

now is line open. Your

Elizabeth Webster

Do for curious upon for And then, therapy? you're When the the This of achieved T share acceptance could this you. be And the is we next efforts? that IND guess that? on Just could, remind for are I consider Salveen. think timelines cell drug there? first how being year around proof-of-concept would product? thinking should when proof-of-concept what generation a you Elizabeth discovery personalized for Thank the the that milestones of us you

Chad Robins

start over Yes. Sure. Sharon. I'll Hi, it and Elizabeth. I'll to pass then

I there's drug business. of in different points the two kind sets proof think discovery really, of

and therapy. filing The an IND product. is first a efforts. partnership our strong with making we're really is, oncology Genentech first on shared And with you'll in then, cell What see

describe. pass another point We I proof And working the internal to points, you But with have that then, proof-of-concept I'll haven't rapidly Sharon of on product. yet disclosed we the our we're we're towards a set towards, to timeline. programs, over can which validation moving that better private tell hard

Sharon Benzeno

Yes.

with in antibody all therapeutic capabilities a where a that validated least focus, goal once for internal deploy one program, and the sclerosis highlighted our and in that's So We've investments therapeutic confident disease those and IBD. or and our and we actual first our foremost that's clinic. an develop is focus and at goal advance our to target, And to into we're that's to advance to those ourselves multiple autoimmunity get programs, in efforts assets target, or the we'll TCR a we're the specific. have

Elizabeth Webster

Got you. helpful. That's it. Thank

Operator

And Andrew William from our question comes Brackmann Blair. next from

Your open. line is now

Andrew Brackmann

setting. Thanks. was commentary accounts want on you're you qualitatively, of clonoSEQ you large I Maybe and for progressing? to of a for funnel win talk sort the just follow-up tipping some the I about that just there some to can think of other that win maybe the just point how's that Maybe the talking community accounts referenced Chad, basis. on the

Chad Robins

on have to Sure. the -- Nitin, you being accounts. you I'll without necessarily do specific highlight want

point tipping the was. highlight to You what want kind of

can one our one them has pick accounts of signed community largest of recently that on? You practice

Nitin Sood

broadly account think a focus only speak, C have community I And year we but I'll a first not mean, additional approach hire with took multi-pronged do did have this here. accounts. large just education, with I community individuals individuals of We of a we works team was practices at what the physician of management sort Yes. we who strategic that sort sort level. on

patient So have And that's several after months, on over into account, them of diagnosed. multiple particular arrival standardized workflows one of engaging they clinical things their upon clonoSEQ in every came sort with place.

with XXXX went X% key of CLL. And trending become in academic accounts these example, upwards. business XX% as beginning we and our We that in of community institutional of contributor and be business our XXXX And our more from a of I happen to at For sort to to expect is And XXXX, while the expect growth. to also XX%. I in increases. penetration said,

Andrew Brackmann

frontier. macro one a just quick Okay. the that. And Thanks on for then,

act And the there. how month a headwind about maybe as thought to referenced that? reduction give the current think related ago, of conversations just I inflation and us thinking having about you some you pharma with you're Can a Thanks. potential that? you

Chad Robins

you and services as can can Nitin, maybe business well. from Sharon go Sure. comment first

Nitin Sood

Lots companies. Yes. pharma The on I'll there. them second out to many it And due myeloma, scrutiny many I of I at have increased conversations pass recently budgets. we've their seeing the over looking particularly pharma in hearing think continue That's mean, competition. IRA, for had there's a efficacy we're And we're aside. is, multiple drug with there's lot MRD I pharma high. programs programs play are are that of Sharon out think of thing from which the of medicine. which drugs sunset. with and to And that come immune going programs so to very out companies are the to

Sharon Benzeno

Yes.

mostly I but And watch we too top and monitor obviously, immediate mind. think as will no that's us. yet a for wait, of impact but of

Andrew Brackmann

Thank you.

Operator

Bank. Scotia question from Nam next our And Ji from comes Sung

now is line Your open.

Sung Ji Nam

housekeeping for Tycho. of questions couple a Just

IND Sorry, your I from guidance? it, including missed are payments the guys if -- you filing did potential Genentech you milestone but in

Tycho Peterson

are. We

of at that's end the So year. the

X million a remaining XX no earlier, longer. we so mentioned X take but filing that then milestones. is the recognized that And and days, by lag it I there's Genentech of As milestone we can recognize can million. minimum amortized upfront on acceptance the And of other

recognizing only in guidance. So the we're one

Sung Ji Nam

is the to you be would able then, for And the what you. Got break expense assumption out interest Okay. for your year?

Tycho Peterson

Yes.

income So into the expense. offsets actually interest is, thing good

I about, have we and interest income So now think it's XX model. over million in the

deal So that actually the itself. pays OrbiMed for

Sung Ji Nam

Thank Great. you.

Operator

And comes Suisse. Dan from Credit our Leonard from question next

Your line is open. now

Dan Leonard

that on for revenue $XX medicine the Tycho, guide. to immune map to Just a in I'm 'XX figure million 'XX. couple trying questions of

XX Genentech I is said think amortization you million.

driving number. -- mean math Is a the or And like 'XX or there looks million any book-to-bill even, could you So from it correct? year-on-year that of that is what's nearly double balance the bookings offer? pharma that's that? anything Is kind is would XX services. And that

Tycho Peterson

Yes.

I we partners XX% drug of Dan, of have potential services kind with that. right? range. ongoing about that discussions CAGR would There's pharma for other in be various talked drug earlier the long-term discovery So remainder discovery, So the being the

all So at it's services. not pharma

Chad Robins

milestone. And the

Tycho Peterson

the yes. milestone, And

Dan Leonard

revenue question And phasing. then on a

asked different think highlight I to start you year the but this a MRD. in was a strong very couple ways,

though low about Is second besides year when QX just anything this timing milestones flagging, You're thinking related point. the of in to a the the half is phasing? reconcile there

Tycho Peterson

Yes.

Genentech I So year. that's the headwind about the talked biggest the on headwind

On milestone million quarter recognize $X.X a year. alone, $X first last pharma a the about headwind. We did million MRD it's

as T-Detect revenue. that there's a so And from There's no well. comp

the would factors the relative the that to year. of some first are of those remainder the So impact quarter,

Dan Leonard

Helpful. Thank you.

Operator

concludes questions. I for call. today's Thank participating you This showing am may disconnect. now And conference no and further you

Adaptive Biotechnologies (ADPT) 14 Feb 232022 Q4 Earnings call transcript