NEW YORK – Adaptive Biotechnologies reported after the close of the market on Wednesday that its fourth quarter revenues increased 41 percent year over year.
For the three months ended Dec. 31, 2019, the Seattle-based immune sequencing firm tallied revenues of $24.2 million compared to $17.2 million a year ago, and well above analysts' average estimate of $21.7 million.
Fourth quarter sequencing revenue increased 33 percent to $13.9 million from $10.5 million, while development revenue grew 53 percent to $24.2 million from $17.2 million a year ago.
Adaptive said that Q4 clinical testing volume for its ClonoSeq sequencing assay for minimal residual disease increased 66 percent to 3,218 tests. For the year, testing volume increased 48 percent to 10, 168 tests, driven by the firm's growing field-based and medical teams, the increasing body of evidence around ClonoSeq, and important progress on both the reimbursement and regulatory fronts, Adaptive CEO Chad Robins said during a conference call following release of the results.
Robins noted that in January 2019 the firm received Centers for Medicare and Medicaid Services coverage for ClonoSeq for longitudinal monitoring in multiple myeloma and acute lymphoblastic leukemia (ALL) patients. "Following Medicare coverage, private insurance coverage rapidly increased over the course of 2019," Robins added. "We ended the year with secured contractual agreements or positive medical policies from five of the largest national private health insurers, in addition to significant regional coverage, bringing the total covered lives in the US to more than 175 million."
During 2019 Adaptive also achieved New York State Clinical Laboratory Evaluation Program approval, and filed its first label expansion to the US Food and Drug Administration for ClonoSeq to be used to monitor patients with chronic lymphocytic leukemia (CLL) from blood samples.
"In early January of this year, we announced that we received coverage from CMS for CLL, completing our first milestone for 2020," Robins said. "Looking ahead, we are planning to launch ClonoSeq for monitoring MRD in CLL following clearance from the FDA, which we anticipate in the first half of this year. In the second half of 2020, we expect to file our second label expansion to the FDA for monitoring ALL from blood, and are finalizing our timeline for multiple myeloma in blood, as well."
Adaptive's Q4 R&D expenses shot up 91 percent to $21.2 million from $11.1 million a year ago, while its SG&A spending jumped 42 to $20.8 million from $14.6 million.
During the call Adaptive CFO Chad Cohen said that the R&D increase reflects "growth in headcount and consumption of materials to support our aggressive investments in the clinical development of ClonoSeq in new indications and sample types; scaling of our ImmunoSeq Dx lab as it came online in the second half of 2019; as well as ramping our [T-cell receptor] drug discovery efforts with Genentech."
Meanwhile, Cohen added, SG&A spending rose primarily due to "investing in direct sales and sales support to scale our commercial ClonoSeq team, as well as related marketing expenses to broaden our exposure at customer events."
The firm's fourth quarter net loss grew to $20.6 million, or $.17 per share, from $13.2 million, or $1.03 per share, a year ago. Adaptive used approximately 124.4 million shares to calculate per-share loss in the recently completed quarter compared to about 12.8 million shares in Q4 2018. On average, analysts had been expecting a Q4 net loss of $.20 per share.
The company went public in June 2019 raising about $321 million in net proceeds.
For full-year 2019, Adaptive reported total revenues of $85.1 million, a 53 percent increase from $55.7 million in 2018, and besting analysts' average estimate of $82.5 million.
Full-year sequencing revenues grew 32 percent to $43.5 million from $33.0 million, while development revenues grew 83 percent to $41.6 million from $22.7 million.
Adaptive's 2019 R&D expenses jumped 80 percent to $70.7 million from $39.2 million, while its SG&A expenses grew 53 percent to $68.8 million from $44.9 million.
Its full-year net loss was $69.6 million, or $1.01 per share, compared to a net loss of $46.3 million, or $3.67 per share, in 2018. Loss per share for 2019 was in line with the Wall Street estimate. Adaptive used about 69.2 million shares to calculate per-share loss in 2019 compared to about 12.6 million shares in 2018.
Adaptive finished the year with $96.6 million in cash and cash equivalents and $480.3 million in short-term marketable securities.
During the call, Adaptive CFO Chad Cohen said that the firm is expecting 2020 revenues in the range of $114 million to $119 million, representing growth of 37 percent at the midpoint. Consistent with prior years, the firm expects revenue to be more heavily weighted to the back half of the year, with a slower first quarter driven primarily by both historic customer budget trends and increasing market penetration of ClonoSeq, Cohen added.
On average, analysts are expecting revenues of $115.7 million for 2020.