NEW YORK – Adaptive Biotechnologies reported after the close of the market on Wednesday that its second quarter revenues rose 12 percent year over year.
For the three months ended June 30, the Seattle-based company reported total revenues of $48.9 million versus $43.7 million a year ago, beating analysts' consensus estimate of $44.9 million.
“This growth reflects strong performance from ClonoSeq clinical testing and the achievement of our first milestone in drug discovery, which more than offset anticipated reduction in our Genentech amortization,” Adaptive Biotechnologies CEO and Cofounder Chad Robins told investors in a conference call recapping the quarter's financial results.
Of total revenues, 53 percent were from the firm's minimal residual disease (MRD) business, supported by the ClonoSeq diagnostic and research assays, and 47 percent from the immune medicine business, which is spearheaded by Adaptive's T cell-based products.
Specifically, Q2 immune medicine revenue was $23.0 million, representing a 3 percent year-over-year increase. During the quarter, Robins said, Adaptive’s pharma services business was impacted by “macro factors affecting the broader biopharma industry, including strategic and/or budget reprioritization.”
Meanwhile, immune medicine revenue was boosted by the US Food and Drug Administration's acceptance of an investigational new drug (IND) application for a T-cell receptor (TCR)-based therapeutic candidate in oncology from the company’s cell therapy partnership with Genentech.
“This milestone represents a new revenue stream to help offset the decrease in the Genentech amortization this quarter,” Robins told investors.
Adaptive's MRD revenue, which includes clinical testing and pharma partnerships, was $25.9 million for the quarter, a 22 percent jump from Q2 2022. According to Robins, more than 13,660 ClonoSeq tests were delivered during the quarter, representing 52 percent growth year over year, with double-digit growth in all market indications.
In addition, he said ClonoSeq’s Epic integration is “progressing well,” and the company is “excited to bring the first pilot site live this month, with additional integration sites to follow.”
The firm's Q2 R&D spending decreased 13 percent to $32.2 million from $37.0 million a year ago. Its SG&A expenses grew 2 percent to $46.2 million from $45.5 million a year ago.
Adaptive’s Q2 net loss decreased to $47.8 million, or $.33 per share, from a net loss of $52.1 million, or $.37 per share, a year ago. On average, analysts had anticipated a loss per share of $.35.
Adaptive finished the quarter with $109.2 million in cash and cash equivalents and $308.0 million in short-term marketable securities, which is expected to sustain the company to profitability without the need for additional capital, according to CFO Tycho Peterson.
The company reiterated its full-year 2023 revenue projection of $205.0 million to $215.0 million. At the midpoint, the company is expecting its MRD and immune medicine businesses to contribute approximately 55 percent and 45 percent to revenues, respectively.
“We expect second-half revenues to be more heavily weighted toward the fourth quarter, mainly attributed to drug discovery deals that we expect to close by year-end,” Peterson noted.
In Thursday morning trading on the Nasdaq, Adaptive shares were down more than 6 percent at $7.44.