Adaptive Biotechnologies(ADPT) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for the first quarter was $52.4 million, representing a 25$43.7 million, with clinical and pharma contributions of 65% and 35% respectively [19] - Sequencing gross margin improved by 17 percentage points year-over-year to 62% [6][21] - Operating expenses decreased by 9% to 82 million, driven by lower R&D spending [21] - Cash burn for the quarter was 23 million, a 38% improvement compared to the same period last year [6] Business Line Data and Key Metrics Changes - ClonoSEQ clinical revenue grew 55% year-over-year, with test volume reaching over 23,000, a 36% increase [8] - Blood-based testing contributed 44% of MRD tests in the US, up from 39% a year ago [9] - MRD Pharma revenue grew 11% year-over-year, with $4.5 million recognized in regulatory milestones [12] - Immune medicine revenue was$8.7 million, down 6% from a year ago, primarily due to a decrease in Genentech amortization [20] Market Data and Key Metrics Changes - The number of ordering healthcare providers grew 31% year-over-year, now exceeding 3,400 [10] - EMR integrations accelerated, with 27 live integrations including five of the top 10 accounts [10] - The contribution of DLBCL and MCL in MRD tests increased to 12% from 10% a year ago [9] Company Strategy and Development Direction - The company is focused on increasing the lifetime value of each clonoSEQ Medicare patient and expanding its market presence in blood-based testing [6][14] - Strategic goals include achieving over 45% of clonoSEQ testing done in blood, launching Onco EMR with Flatiron, and beginning phase one testing with NeoGenomics [14] - The company aims to be adjusted EBITDA positive in the second half of the year [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving raised full-year guidance due to strong first-quarter performance and sustained momentum [24] - The company anticipates approximately 30% growth in clonoSEQ test volumes for 2025 compared to 2024 [22] - Management noted minimal exposure to tariffs and NIH funding pressures, highlighting a solid cash position of $233 million [7] Other Important Information - The company is raising its full-year MRD revenue guidance to a range of$180 million to $190 million [22] - Operating expense guidance has been lowered to a range of$335 million to $345 million [23] - Cash burn guidance has also been reduced to a range of$50 million to $60 million [23] Q&A Session Summary Question: Specific indications seeing growth and contribution trends - Management noted strong sequential growth across all indications, particularly in lymphoma indications like DLBCL and MCL [26][27] Question: Updates on EMR integration and growth quantification - Management reported significant growth in accounts that have been live for at least a year, with six of seven accounts exceeding 75% year-over-year growth [30][31] Question: Drivers of clonoSEQ volume growth and weather impact - Management confirmed no notable weather impacts and attributed growth to DLBCL and MCL, along with EMR integrations [36][37] Question: Milestone payments and funnel growth - Management indicated that more milestones are becoming available, providing clarity and confidence in the 2025 outlook [41][43] Question: Pricing and contracting discussions - Management emphasized discipline in pricing, ensuring contracted rates are close to Medicare rates [45][46] Question: Multiple myeloma trials and testing intervals - Management acknowledged increased interest in more frequent testing, particularly in multiple myeloma and other indications [50][52] Question: Technology improvements and addressing market adjacencies - Management is actively looking for ways to enhance technology and improve sensitivity in assays [54][56] Question: EMR integration and operational efficiencies - Management noted potential operational efficiencies from EMR integrations, with significant reductions in callbacks reported [60][61] Question: NeoGenomics partnership progress - Management provided updates on the selection of phase one accounts and preparations for the pilot launch in the second half of the year [106][108]