8-K
0001478320False00014783202022-11-032022-11-03

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 3, 2022

 

ADAPTIVE BIOTECHNOLOGIES CORPORATION

(Exact name of Registrant as Specified in Its Charter)

 

 

Washington

001-38957

27-0907024

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

1165 Eastlake Avenue East

Seattle, Washington

 

98109

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (206) 659-0067

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common stock, par value $0.0001 per share

 

ADPT

 

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

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.

 


 

Item 2.02

Results of Operations and Financial Condition.

On November 3, 2022, Adaptive Biotechnologies Corporation (the “Company”) issued a press release regarding the Company’s financial results for the quarter ended September 30, 2022. A copy of the press release is attached as Exhibit 99.1 and incorporated herein by reference.

The information in this Item 2.02 and the press release attached as Exhibit 99.1 hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit

Number

 

Description

99.1

 

Press Release dated November 3, 2022

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

Adaptive Biotechnologies Corporation

 

 

 

 

Date: November 3, 2022

 

By:

/s/ Tycho Peterson

 

 

 

Tycho Peterson

 

 

 

Chief Financial Officer

 

 


EX-99.1

EXHIBIT 99.1

https://cdn.kscope.io/329438a8492a232f2c771880729d234c-img119828894_0.jpg 

Adaptive Biotechnologies Reports Third Quarter 2022 Financial Results

 

 

SEATTLE, Nov. 3, 2022 (GLOBE NEWSWIRE) – Adaptive Biotechnologies Corporation (“Adaptive Biotechnologies”) (Nasdaq: ADPT), a commercial stage biotechnology company that aims to translate the genetics of the adaptive immune system into clinical products to diagnose and treat disease, today reported financial results for the quarter ended September 30, 2022.

 

“We continue to deliver solid growth in both of our business areas quarter over quarter, and are confident in our long-term outlook,” said Chad Robins, chief executive officer and co-founder of Adaptive Biotechnologies. “With a bolstered cash position from our recent financing, we are focused on driving growth and innovation across our businesses with a clear path to profitability.”

Recent Highlights

Revenue of $47.8 million for the third quarter 2022, representing a 21% increase from the third quarter 2021.
clonoSEQ test volume in the third quarter 2022 grew 52% versus the third quarter of prior year.
Signed partnership with Epic to integrate the clonoSEQ® Assay into Epic’s comprehensive electronic medical record (EMR) system.
Immune Medicine business grew 18% in the third quarter 2022 versus the third quarter 2021, driven by drug discovery and pharma services.
Signed non-dilutive royalty financing agreement with OrbiMed for up to $250 million.
Provided long-term guidance including revenue CAGR from 2022-2027 at 20%-30%, positive adjusted EBITDA in 2025 and cash flow breakeven in 2026.

Third Quarter 2022 Financial Results

Revenue was $47.8 million for the quarter ended September 30, 2022, representing a 21% increase from the third quarter in the prior year. Immune Medicine revenue was $27.9 million for the quarter, representing an 18% increase from the third quarter in the prior year. MRD revenue was $20.0 million for the quarter, representing a 26% increase from the third quarter in the prior year.

Operating expenses were $93.3 million for the third quarter of 2022, compared to $95.8 million in the third quarter of the prior year, representing a decrease of 3%. Interest expense from our revenue interest purchase agreement entered into during the third quarter of 2022 was $0.7 million.

Net loss was $45.3 million for the third quarter of 2022, compared to $56.0 million for the same period in 2021.

Adjusted EBITDA (non-GAAP) was a loss of $25.9 million for the third quarter of 2022, compared to a loss of $41.1 million for the third quarter of the prior year.

Cash, cash equivalents and marketable securities was $527.8 million as of September 30, 2022.


2022 Financial Guidance

Adaptive Biotechnologies narrows full year 2022 revenue to be in the range of $185 million to $190 million compared to the previous expectation of $185 million to $195 million.

We now expect full year 2022 operating expenses to be below $400 million compared to the previous expectation of between $410 million and $415 million.

Webcast and Conference Call Information

Adaptive Biotechnologies will host a conference call to discuss its third quarter 2022 financial results after market close on Thursday, November 3, 2022 at 4:30 PM Eastern Time. The conference call can be accessed at http://investors.adaptivebiotech.com. The webcast will be archived and available for replay at least 90 days after the event.

About Adaptive Biotechnologies

Adaptive Biotechnologies (“we” or “our”) is a commercial-stage biotechnology company focused on harnessing the inherent biology of the adaptive immune system to transform the diagnosis and treatment of disease. We believe the adaptive immune system is nature’s most finely tuned diagnostic and therapeutic for most diseases, but the inability to decode it has prevented the medical community from fully leveraging its capabilities. Our proprietary immune medicine platform reveals and translates the massive genetics of the adaptive immune system with scale, precision and speed to develop products in life sciences research, clinical diagnostics and drug discovery. We have commercial products and a robust clinical pipeline to diagnose, monitor and enable the treatment of diseases such as cancer, autoimmune disorders, and infectious diseases. Our goal is to develop and commercialize immune-driven clinical products tailored to each individual patient.

Forward-Looking Statements

This press release 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 release 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 the 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 press release represent our views as of the date hereof. We undertake no obligation to update any forward-looking statements for any reason, except as required by law.

 


Use of Non-GAAP Financial Measure

To supplement our unaudited condensed consolidated statements of operations and unaudited condensed consolidated balance sheets, which are prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”), this press release also includes references to Adjusted EBITDA, which is a non-GAAP financial measure that we define as net loss attributable to Adaptive Biotechnologies Corporation adjusted for interest and other income, net, interest expense, income tax (expense) benefit, depreciation and amortization expense, restructuring expense and share-based compensation expense. We have provided a reconciliation of net loss attributable to Adaptive Biotechnologies Corporation, the most directly comparable GAAP financial measure, to Adjusted EBITDA at the end of this press release.

Management uses Adjusted EBITDA to evaluate the financial performance of our business and the effectiveness of our business strategies. We present Adjusted EBITDA because we believe it is frequently used by analysts, investors and other interested parties to evaluate companies in our industry and it facilitates comparisons on a consistent basis across reporting periods. Further, we believe it is helpful in highlighting trends in our operating results because it excludes items that are not indicative of our core operating performance.

Adjusted EBITDA has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. We may in the future incur expenses similar to the adjustments in the presentation of Adjusted EBITDA. In particular, we expect to incur meaningful share-based compensation expense in the future. Other limitations include that Adjusted EBITDA does not reflect:

all expenditures or future requirements for capital expenditures or contractual commitments;
changes in our working capital needs;
interest expense, which may be a necessary and ongoing element of our costs and ability to operate;
income tax (expense) benefit, which may be a necessary element of our costs and ability to operate;
the costs of replacing the assets being depreciated and amortized, which will often have to be replaced in the future;
the noncash component of employee compensation expense; and
the impact of earnings or charges resulting from matters we consider not to be reflective, on a recurring basis, of our ongoing operations, such as our March 2022 restructuring and reduction in workforce.

 

In addition, Adjusted EBITDA may not be comparable to similarly titled measures used by other companies in our industry or across different industries.

ADAPTIVE MEDIA
Mary Pat Lancelotta, Senior Vice President, Corporate Affairs & Communications

646-382-4912
media@adaptivebiotech.com 

ADAPTIVE INVESTORS
Karina Calzadilla, Vice President, Investor Relations

201-396-1687
investors@adaptivebiotech.com 

 


 

Adaptive Biotechnologies

Condensed Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

 

$

47,830

 

 

$

39,467

 

 

$

130,110

 

 

$

116,414

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

14,907

 

 

 

14,189

 

 

 

41,320

 

 

 

34,945

 

Research and development

 

 

35,658

 

 

 

36,072

 

 

 

110,534

 

 

 

107,644

 

Sales and marketing

 

 

21,513

 

 

 

24,949

 

 

 

71,887

 

 

 

68,769

 

General and administrative

 

 

20,755

 

 

 

20,154

 

 

 

66,099

 

 

 

51,156

 

Amortization of intangible assets

 

 

428

 

 

 

428

 

 

 

1,270

 

 

 

1,270

 

Total operating expenses

 

 

93,261

 

 

 

95,792

 

 

 

291,110

 

 

 

263,784

 

Loss from operations

 

 

(45,431

)

 

 

(56,325

)

 

 

(161,000

)

 

 

(147,370

)

Interest and other income, net

 

 

765

 

 

 

327

 

 

 

1,454

 

 

 

1,429

 

Interest expense

 

 

(653

)

 

 

 

 

 

(653

)

 

 

 

Net loss

 

 

(45,319

)

 

 

(55,998

)

 

 

(160,199

)

 

 

(145,941

)

Add: Net loss attributable to noncontrolling interest

 

 

38

 

 

 

95

 

 

 

136

 

 

 

95

 

Net loss attributable to Adaptive Biotechnologies Corporation

 

$

(45,281

)

 

$

(55,903

)

 

$

(160,063

)

 

$

(145,846

)

Net loss per share attributable to Adaptive Biotechnologies Corporation common shareholders, basic and diluted

 

$

(0.32

)

 

$

(0.40

)

 

$

(1.12

)

 

$

(1.04

)

Weighted-average shares used in computing net loss per share attributable to Adaptive Biotechnologies Corporation common shareholders, basic and diluted

 

 

142,928,654

 

 

 

140,833,564

 

 

 

142,334,342

 

 

 

140,060,379

 

 


Adaptive Biotechnologies

Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)

 

 

 

September 30, 2022

 

 

December 31, 2021

 

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

217,552

 

 

$

139,065

 

Short-term marketable securities (amortized cost of $295,689 and $214,115, respectively)

 

 

290,527

 

 

 

213,996

 

Accounts receivable, net

 

 

26,549

 

 

 

17,409

 

Inventory

 

 

17,345

 

 

 

19,263

 

Prepaid expenses and other current assets

 

 

12,407

 

 

 

13,015

 

Total current assets

 

 

564,380

 

 

 

402,748

 

Long-term assets

 

 

 

 

 

 

Property and equipment, net

 

 

86,662

 

 

 

85,262

 

Operating lease right-of-use assets

 

 

82,605

 

 

 

87,678

 

Long-term marketable securities (amortized cost of $20,507 and $218,163, respectively)

 

 

19,698

 

 

 

217,145

 

Restricted cash

 

 

2,433

 

 

 

2,138

 

Intangible assets, net

 

 

7,256

 

 

 

8,526

 

Goodwill

 

 

118,972

 

 

 

118,972

 

Other assets

 

 

2,202

 

 

 

875

 

Total assets

 

$

884,208

 

 

$

923,344

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

4,163

 

 

$

3,307

 

Accrued liabilities

 

 

10,702

 

 

 

9,343

 

Accrued compensation and benefits

 

 

12,733

 

 

 

15,642

 

Current portion of operating lease liabilities

 

 

8,528

 

 

 

5,055

 

Current portion of deferred revenue

 

 

67,892

 

 

 

80,460

 

Total current liabilities

 

 

104,018

 

 

 

113,807

 

Long-term liabilities

 

 

 

 

 

 

Operating lease liabilities, less current portion

 

 

100,521

 

 

 

106,685

 

Deferred revenue, less current portion

 

 

67,300

 

 

 

98,750

 

Revenue interest liability, net

 

 

124,555

 

 

 

 

Total liabilities

 

 

396,394

 

 

 

319,242

 

Commitments and contingencies

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

Preferred stock: $0.0001 par value, 10,000,000 shares authorized at September 30, 2022 and December 31, 2021; no shares issued and outstanding at September 30, 2022 and December 31, 2021

 

 

 

 

 

 

Common stock: $0.0001 par value, 340,000,000 shares authorized at September 30, 2022 and December 31, 2021; 142,987,127 and 141,393,865 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

 

 

14

 

 

 

14

 

Additional paid-in capital

 

 

1,372,751

 

 

 

1,324,006

 

Accumulated other comprehensive loss

 

 

(5,971

)

 

 

(1,137

)

Accumulated deficit

 

 

(878,954

)

 

 

(718,891

)

Total Adaptive Biotechnologies Corporation shareholders’ equity

 

 

487,840

 

 

 

603,992

 

Noncontrolling interest

 

 

(26

)

 

 

110

 

Total shareholders’ equity

 

 

487,814

 

 

 

604,102

 

Total liabilities and shareholders’ equity

 

$

884,208

 

 

$

923,344

 

 

 


Adjusted EBITDA

The following table sets forth a reconciliation between our Adjusted EBITDA and net loss attributable to Adaptive Biotechnologies Corporation, the most directly comparable GAAP financial measure, for each of the periods presented (in thousands, unaudited):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net loss attributable to Adaptive Biotechnologies Corporation

 

$

(45,281

)

 

$

(55,903

)

 

$

(160,063

)

 

$

(145,846

)

Interest and other income, net

 

 

(765

)

 

 

(327

)

 

 

(1,454

)

 

 

(1,429

)

Interest expense

 

 

653

 

 

 

 

 

 

653

 

 

 

 

Depreciation and amortization expense

 

 

5,383

 

 

 

3,528

 

 

 

15,634

 

 

 

9,104

 

Restructuring expense

 

 

 

 

 

 

 

 

2,023

 

 

 

 

Share-based compensation expense

 

 

14,142

 

 

 

11,643

 

 

 

41,183

 

 

 

31,376

 

Adjusted EBITDA

 

$

(25,868

)

 

$

(41,059

)

 

$

(102,024

)

 

$

(106,795

)