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Adaptive Biotechnologies Q1 Revenues Grow 65 Percent

NEW YORK – Adaptive Biotechnologies reported a 65 percent year-over-year increase in first quarter revenues after the close of the market on Tuesday.

For the quarter ended March 31, Adaptive reported $20.9 million in revenues, up from $12.7 million during the year-ago period, missing the consensus Wall Street estimate of $22.7 million. By segment, sequencing revenues were $9.5 million, up 56 percent from $6.1 million in the prior-year period, driven by growth in revenue from clinical, biopharma, and academic customers. Meanwhile, development revenues from biopharma partnerships were $11.4 million, up 74 percent from $6.6 million in Q1 2019, driven by revenue generated by the firm's partnership with Genentech.

Clinical tests for clonoSeq, the firm's assay for minimal residual disease monitoring in several blood cancers, increased 75 percent to 3,518 tests from 2,551 tests in Q1 2019. Research sequencing volume, which includes tests from both biopharma and academic customers, increased to 6,030, up 23 percent from 4,891 tests in the year-ago period.

On a conference call following the release of results, company officials explained that first quarter clinical testing volumes started off strong, in line with expectations, but fell off in early march due to the COVID-19 pandemic, specifically because cancer patient visits to clinics dropped off to prevent exposure to the coronavirus.

Adaptive's net loss for the quarter totaled $31.4 million, or $.25 per share, compared to a net loss of $18.4 million, or $1.45 per share, in Q1 2019, missing analysts' consensus estimate for a loss of $.21 per share.

The weighted average number of shares used in computing net loss per share increased to approximately 126.1 million in the recently completed quarter compared to 12.9 million a year ago. The Seattle-based company went public in June 2019, raising about $321 million in net proceeds.

The firm's R&D expenses nearly doubled to $23.9 million in the quarter from $12.5 million a year ago, attributable to growth of employees and lab costs to support development of the overall platform, the immunoSeq Dx test, the T cell receptor antigen map, and drug discovery efforts. Adaptive's SG&A expenses totaled $25.8 million, up 74 percent from $14.8 million a year ago, driven by additional personnel costs, external marketing costs related to clonoSeq, and costs associated with being a public company.

As of March 31, Adaptive had $212.7 million in cash and cash equivalents, and $342.5 million in short-term marketable securities.

The company withdrew its previously issued 2020 revenue guidance, citing uncertainty created by the COVID-19 pandemic. Adaptive President Julie Rubinstein noted that research sequencing was down between 50 to 60 percent so far in the second quarter and clonoSeq volume was down about 30 percent. CFO Chad Cohen added that the second quarter "appears to be the bottom of the curve," and suggested the company might see a return to Q1 testing volumes sometime between the third and fourth quarters.

In after-hours trading on the Nasdaq, shares of Adaptive were down 5 percent at $36.00.