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Adaptive Biotechnologies Q2 Revenues Rise 91 Percent

NEW YORK – Adaptive Biotechnologies reported a 91 percent increase in second quarter revenues after the close of the market on Tuesday.

For the quarter ended June 30, 2019, Adaptive reported $22.1 million in revenues, up from $11.6 million during the year-ago period, and beating the consensus Wall Street estimate of $19.3 million.

Of those total revenues, $11.9 million came from sequencing, which included research fees for service testing and clinical clonoSeq testing, up 43 percent from $8.3 million in the prior-year period. Development revenue from biopharma partnerships was $10.3 million, up 213 percent from $3.3 million in Q2 2018.

"We are making important progress across on key catalysts that will enable near-term product applications across our life sciences research, clinical diagnostics, and drug discovery businesses, unlocking one of the largest global addressable markets in healthcare," Adaptive Biotechnologies CEO and Cofounder Chad Robins said in a statement.

On a conference call following the release of the Q2 results, Adaptive CFO Chad Cohen said that the increase in sequencing revenues was driven by organic growth generated by biopharma customers. He added that research sequencing volume grew to 9,084 tests, up from 7,457 tests a year ago. Clinical testing volume grew to 2,388 tests, up from 1,587 tests a year ago.

Adaptive officials noted that clonoSeq testing represented less than 10 percent of total revenues, but that the firm was seeing improvement in the number of tests paid in part or in full, receiving payment for more than 50 percent of tests.

The increase in development revenue was due to amortization of a $300 million up-front payment from Genentech.

Adaptive's net loss for the quarter totaled $15.7 million, or $1.23 per share, compared to a loss of $12.5 million, or $1.01 per share, in Q2 2018. On an adjusted basis, the loss was $10.9 million compared to a loss of $9.4 million a year ago. The weighted average number of shares used in computing net loss per share increased to 13.3 million from 12.4 million.

The firm's R&D expenses were $16.5 million in the quarter, up 75 percent from $9.5 million a year ago. Cohen attributed the increase to the cost of materials and an increase in personnel. Adaptive's SG&A expenses amounted to $15.6 million, up 56 percent from $10.0 million a year ago, driven by increased headcount and services to support growth and "public company preparedness."

As of June 30, Adaptive had $48.5 million in cash and cash equivalents, and $374.5 million in short-term marketable securities.

The Seattle-based immune cell sequencing company went public in June, raising approximately $321 million in net proceeds.

Adaptive provided full-year revenue guidance for 2019 in the range of $78 million to $81 million.

In morning trading on the Nasdaq, shares of Adaptive were down 12 percent at $37.78.