NEW YORK – Adaptive Biotechnologies reported after the close of the market on Wednesday that its first quarter revenues were down 3 percent from Q1 last year, reflecting an expected $3.2 million reduction in amortization of an upfront payment from Genentech related to a 2019 deal between the companies.
For the three months ended March 31, the Seattle-based immune sequencing firm reported revenues of $37.6 million, compared to $38.6 million a year ago and above analysts' average estimate of $36.8 million.
"This quarter's results represent a solid start to the year, laying the foundation for us to deliver on our 2023 annual goals," Adaptive Biotechnologies CEO and Cofounder Chad Robins told investors in a conference call recapping this quarter's financial results.
First quarter immune medicine revenue was $16.2 million, down 22 percent from $20.8 million in Q1 2022. The decline was primarily driven by the reduced amortization of the Genentech upfront payment.
Minimal residual disease (MRD) revenue was $21.4 million for the quarter, representing a 20 percent increase from $17.8 million in Q1 2022 that was driven by strong growth from both clinical testing and pharma partnerships. ClonoSeq test volume in the first quarter rose 57 percent year over year to 12,079 tests delivered. In addition, a new ClonoSeq proprietary laboratory analyses (PLA) code was approved, which allows the company to uniquely identify the test in claim submissions, Robins said.
The company's Q1 R&D expenses declined 14 percent to $32.6 million from $37.8 million a year ago. Its SG&A spending decreased 14 percent to $43.1 million from $50.2 million.
The firm's first quarter net loss was $57.7 million, or $.40 per share, compared to a net loss of $62.8 million, or $.44 per share, in the same period a year ago. On average, analysts had been expecting a Q1 net loss of $.38 per share.
Adaptive finished the quarter with $94.6 million in cash and cash equivalents, $346.1 million in short-term marketable securities, and $2.3 million in restricted cash. "Cash preservation remains a priority," Adaptive CFO Tycho Peterson told investors. "We expect our burn for the remainder of 2023 to average around $40 million per quarter."
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.
During the quarter, Adaptive also announced the consolidation of the roles of president and chief operating officer under Julie Rubinstein. Robins told investors that there were "absolutely no performance issues or disagreements" with Mark Adams, the company’s former chief operating officer.
"The real reason that we did this [consolidation] is, we wanted to align our operations — our R&D and commercial efforts — across the company, so we can drive towards profitability and are really executing on all our goals," he said.
In afternoon trading on the Nasdaq on Thursday, Adaptive's shares were down about 14 percent at $6.46.