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Adaptive Biotechnologies Making Inroads in MRD, Immune Medicine Businesses

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BALTIMORE – Having completed a strategic reorganization around its minimal residual disease testing and immune medicine business areas earlier this year, Adaptive Biotechnologies said it is now making headway on both fronts.

As part of the restructuring, the Seattle-based company recently dismissed about 12 percent of its employees, downsizing the number of full-time staff to roughly 750 from 858 as of the end of last year.

In a conference call discussing the company's first quarter financial results on Wednesday, CEO Chad Robins assured investors that the "proactive steps" that the company has taken for business realignment and headcount reduction "will result in a more streamlined organization to fuel growth as we navigate this turbulent market."

Despite the layoffs, Robins said that Adaptive will continue to hire talent strategically in key growth areas, such as its ClonoSeq sales team and cell therapy group in South San Francisco, California. The company also recently appointed its new CFO, Tycho Peterson, who will start in June.

Adaptive's MRD business comprises the ClonoSeq test, offered to clinicians as a clinical diagnostic, and its ClonoSeq research assay, offered to pharma partners to support drug development and approvals, said Robins.

ClonoSeq test volume experienced 45 percent year-over-year growth this quarter, Robins said, highlighting growth in MRD test ordering by healthcare accounts and in the community setting. These metrics, he said, demonstrated "a strong start" by the company's expanded sales force that strives to increase reach beyond academic centers. Meanwhile, Robins added that the company's ClonoSeq sales team of 70 reps is now fully hired, trained, and being deployed to hit the field.

To that, Nitin Sood, who leads Adaptive's MRD business branch, said roughly 60 percent of the company's customer interactions remain virtual. But he said the company is seeing a positive trend in in-person interactions between Adaptive reps and researchers emerging from the pandemic, and he expects the ratio to be around 50 percent "very shortly."

As part of Adaptive's strategy to cement its capability in detecting lymphoid malignancies, the company plans to expand MRD testing to cover non-Hodgkin's lymphoma (NHL) using circulating tumor DNA (ctDNA), which is indicative of relapse risk, Robins said.

Sood said Adaptive plans to launch the NHL test later this year in its CLIA laboratory, and the company has already submitted a technology assessment of the test to MolDX for reimbursement. In addition, the company is rolling out a so-called clinical experience program ahead of the launch with about 30 physicians to promote the test.

Furthermore, Robins shared new data on ClonoSeq for pediatric acute lymphoblastic leukemia (ALL) patients from a recent study published in Blood Cancer Discovery. He said that of the 143 pediatric ALL patients receiving CAR-T therapies and tested for MRD at multiple time points using flow cytometry and ClonoSeq, the latter was able to detect diseases in the blood that were missed by flow cytometry in the marrow. Furthermore, he said the study showed ClonoSeq was able to predict MRD in 100 percent of patients prior to relapse, with a median lead time of 168 days versus 52 days for flow cytometry, affording the clinicians a significant time buffer to inform treatment decisions.

As for Adaptive's MRD pharma partnerships, Robins updated investors that the company continued to expand its partnership portfolio during the first quarter, striking a collaboration with "a major pharma partner" to use the company's MRD testing as a clinical endpoint for multiple myeloma and chronic lymphocytic leukemia (CLL).

In parallel to Adaptive's MRD business, the company's immune medicine branch is comprised of research, diagnostics, and drug discovery, all of which are spearheaded by its T-cell receptor antigen mapping efforts.

Although the company observed a decline of its first commercialized T-Detect franchise product, T-Detect COVID, in this quarter compared to last quarter due to the subsiding pandemic, Robins said Adaptive is leveraging the technology toward other immune diseases such as Lyme and autoimmune disorders.

Specifically, Robins said the company is focusing on making T-Detect Lyme available via its CLIA lab during this year's Lyme season, adding that data from a company study showed that T-Detect achieved sensitivity of 54 percent, nearly doubling that of standard-of-care serology at 30 percent.

Beyond that, Adaptive is also aiming to develop T-Detect assays for autoimmune disorders, such as multiple sclerosis, Crohn's disease, and rheumatoid arthritis. As Adaptive is researching how to increase the signals for these prospective assays, Harlan Robins said the company aims to reduce their false positivity rate. Particularly for the inflammatory bowel disease test, he said that the company is planning to initiate sample collection for clinical validation studies in the coming months.

On the drug discovery front, Robins highlighted that Adaptive inked a new collaboration with Johnson & Johnson to map T-cell responses to the respiratory syncytial virus for vaccine development. This partnership comes after Adaptive's existing major alliance with Genentech, a Roche subsidiary based in South San Francisco, since 2019 to develop cancer T-cell therapies.

Besides, Robins said over 100 pharmaceutical companies are using the company's ImmunoSeq or T-cell antigen mapping products, and the revenues generated from these immune medicine partnerships doubled year over year. As a result, he said these partnerships, which accounted for 30 percent of revenues for the entire immune medicine business arm, became the biggest contributor to revenue growth for the first quarter.

Adding to that, Robins told investors that the company is "well-positioned for continued growth as we expand the use of ImmunoSeq in multiple therapeutic areas and secure additional key-map deals beyond COVID."

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