UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____to _____
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of October 31, 2019, the registrant had
Table of Contents
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Page |
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PART I. |
4 |
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Item 1. |
4 |
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4 |
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5 |
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6 |
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Condensed Statements of Convertible Preferred Stock and Shareholders’ (Deficit) Equity |
7 |
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9 |
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10 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
25 |
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Item 3. |
37 |
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Item 4. |
37 |
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PART II. |
38 |
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Item 1. |
38 |
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Item 1A. |
38 |
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Item 2. |
38 |
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Item 3. |
38 |
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Item 4. |
38 |
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Item 5. |
38 |
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Item 6. |
39 |
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40 |
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Adaptive Biotechnologies Corporation
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that are based on management’s beliefs and assumptions and on information currently available to management. All statements contained in this report other than statements of historical fact are forward-looking statements, including statements regarding our ability to develop, commercialize and achieve market acceptance of our current and planned products and services, our research and development efforts, and other matters regarding our business strategies, use of capital, results of operations and financial position, and plans and objectives for future operations. In some cases, you can identify forward-looking statements by the words “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. These risks, uncertainties and other factors are described under “Risk Factors,” “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this report and in other documents we file with the Securities and Exchange Commission from time to time. We caution you that forward-looking statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. As a result, the forward-looking statements may not prove to be accurate. The forward-looking statements in this report represent our views as of the date of this report. We undertake no obligation to update any forward-looking statements for any reason, except as required by law.
Unless otherwise stated or the context otherwise indicates, references to “we,” “us,” “our” and similar references refer to Adaptive Biotechnologies Corporation.
3
Adaptive Biotechnologies Corporation
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Balance Sheets
(in thousands, except share and per share amounts)
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September 30, |
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December 31, |
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2019 |
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2018 |
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(unaudited) |
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Assets |
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Current assets |
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Cash and cash equivalents |
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$ |
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$ |
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Short-term marketable securities |
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Accounts receivable, net |
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Inventory |
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Prepaid expenses and other current assets |
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Total current assets |
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Long-term assets |
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Property and equipment, net |
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Long-term marketable securities |
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— |
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Restricted cash |
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Intangible assets, net |
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Goodwill |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities, convertible preferred stock and shareholders’ equity (deficit) |
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Current liabilities |
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Accounts payable |
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$ |
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$ |
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Accrued liabilities |
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Accrued compensation and benefits |
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Current portion of deferred rent |
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Current deferred revenue |
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Total current liabilities |
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Long-term liabilities |
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Convertible preferred stock warrant liability |
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— |
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Deferred rent liability, less current portion |
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Financing obligation |
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— |
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Deferred revenue, less current portion |
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Other long-term liabilities |
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— |
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Total liabilities |
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Commitments and contingencies (Note 8) |
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Convertible preferred stock: $ September 30, 2019 and December 31, 2018, respectively; and outstanding at September 30, 2019 and December 31, 2018, respectively; aggregate liquidation preference of $ respectively |
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— |
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Shareholders’ equity (deficit) |
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Preferred stock: $ 2019 and December 31, 2018, respectively; September 30, 2019 and December 31, 2018 |
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Common stock: $ September 30, 2019 and December 31, 2018, respectively; shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively |
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Additional paid-in capital |
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Accumulated other comprehensive gain (loss) |
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( |
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Accumulated deficit |
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( |
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Total shareholders’ equity (deficit) |
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( |
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Total liabilities, convertible preferred stock and shareholders’ equity (deficit) |
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$ |
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$ |
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The accompanying notes are an integral part of these financial statements.
4
Adaptive Biotechnologies Corporation
Condensed Statements of Operations
(in thousands, except share and per share amounts)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2019 |
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2018 |
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2019 |
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2018 |
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(unaudited) |
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Revenue |
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Sequencing revenue |
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$ |
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$ |
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$ |
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$ |
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Development revenue |
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Total revenue |
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Operating expenses |
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Cost of revenue |
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Research and development |
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Sales and marketing |
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General and administrative |
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Amortization of intangible assets |
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Total operating expenses |
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Loss from operations |
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( |
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( |
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( |
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( |
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Interest and other income, net |
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Net loss |
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( |
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( |
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( |
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( |
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Fair value adjustment to Series E-1 convertible preferred stock options |
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— |
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( |
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( |
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( |
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Net loss attributable to common shareholders |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Net loss per share attributable to common shareholders, basic and diluted |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Weighted-average shares used in computing net loss per share attributable to common shareholders, basic and diluted |
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The accompanying notes are an integral part of these financial statements.
5
Adaptive Biotechnologies Corporation
Condensed Statements of Comprehensive Loss
(in thousands)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2019 |
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2018 |
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2019 |
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2018 |
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(unaudited) |
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Net loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Change in unrealized gain (loss) on investments |
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( |
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Comprehensive loss |
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$ |
( |
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$ |
( |
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$ |
( |
) |
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$ |
( |
) |
The accompanying notes are an integral part of these financial statements.
6
Adaptive Biotechnologies Corporation
Condensed Statements of Convertible Preferred Stock and Shareholders’ (Deficit) Equity
(in thousands, except share amounts)
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Convertible Preferred Stock |
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Common Stock |
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Additional Paid-In |
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Accumulated Other Comprehensive |
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Accumulated |
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Total Shareholders’ (Deficit) |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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(Loss) Gain |
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Deficit |
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Equity |
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Balance as of June 30, 2018 (unaudited) |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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Issuance of common stock for cash upon exercise of stock options (unaudited) |
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— |
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— |
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— |
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— |
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— |
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Change in redemption value for vested Series E-1 convertible preferred stock options (unaudited) |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Common stock option share-based compensation (unaudited) |
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— |
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— |
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— |
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— |
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— |
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— |
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Other comprehensive income (unaudited) |
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— |
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— |
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— |
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— |
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— |
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— |
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Net loss (unaudited) |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
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Balance as of September 30, 2018 (unaudited) |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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Balance as of June 30, 2019 (unaudited) |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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Proceeds from initial public offering, net of underwriters' discounts and commissions (unaudited) |
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— |
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— |
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— |
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— |
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Initial public offering costs (unaudited) |
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— |
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— |
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— |
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— |
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( |
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— |
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— |
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( |
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Conversion of convertible preferred stock to common stock (unaudited) |
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( |
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( |
) |
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— |
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— |
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Conversion of convertible preferred stock warrant to common stock warrant (unaudited) |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of common stock upon exercise of common stock warrants (unaudited) |
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— |
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— |
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— |
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— |
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— |
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Issuance of common stock for cash upon exercise of stock options (unaudited) |
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— |
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— |
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— |
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— |
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— |
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Common stock option and restricted stock unit share-based compensation (unaudited) |
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— |
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— |
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— |
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— |
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— |
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— |
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Other comprehensive income (unaudited) |
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— |
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— |
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— |
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— |
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— |
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— |
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Net loss (unaudited) |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
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Balance as of September 30, 2019 (unaudited) |
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— |
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$ |
— |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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7
Adaptive Biotechnologies Corporation
Condensed Statements of Convertible Preferred Stock and Shareholders’ (Deficit) Equity (Continued)
(in thousands, except share amounts)
|
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Convertible Preferred Stock |
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Common Stock |
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Additional Paid-In |
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Accumulated Other Comprehensive |
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Accumulated |
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Total Shareholders’ (Deficit) |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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(Loss) Gain |
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Deficit |
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Equity |
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Balance as of December 31, 2017 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
|
Adjustments to accumulated deficit for adoption of guidance on accounting for share-based payment transactions (unaudited) |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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Issuance of common stock for cash upon exercise of stock options (unaudited) |
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— |
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— |
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|
— |
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|
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|
|
— |
|
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|
— |
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|
Issuance of Series E-1 convertible preferred stock for cash upon exercise of Series E-1 convertible preferred stock options at fair value (unaudited) |
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— |
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— |
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— |
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— |
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— |
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— |
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Vested Series E-1 convertible preferred stock option forfeitures (unaudited) |
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— |
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|
( |
) |
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— |
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— |
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— |
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|
Series E-1 convertible preferred stock option share-based compensation (unaudited) |
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— |
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— |
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— |
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— |
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— |
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— |
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|
Adjustment to redemption value for vested Series E-1 convertible preferred stock options (unaudited) |
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— |
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— |
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— |
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|
( |
) |
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|
— |
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|
|
— |
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|
( |
) |
|
Change in redemption value for vested Series E-1 convertible preferred stock options (unaudited) |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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|
( |
) |
|
Common stock option share-based compensation (unaudited) |
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— |
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— |
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— |
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— |
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— |
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— |
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