Release Date: May 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Adaptive Biotechnologies Corp (ADPT, Financial) reported a 34% increase in MRD revenue year-over-year, demonstrating strong growth in clinical volumes, ASP, and pharma sequencing.
- The company achieved a significant improvement in sequencing gross margin, which increased by 17 percentage points to 62% year-over-year.
- Operating expenses decreased by 9%, highlighting disciplined cost management while maintaining growth.
- Adaptive Biotechnologies Corp (ADPT) raised its full-year guidance for MRD revenue, operating expenses, and cash burn, reflecting strong performance and sustained momentum.
- The company has a solid cash position of $233 million, providing ample runway to achieve strategic objectives without needing additional capital.
Negative Points
- Immune Medicine revenue decreased by 6% year-over-year, driven by a 23% decrease in Genentech amortization.
- Despite improvements, the MRD adjusted EBITDA remains at a loss of $4.1 million, although this is an improvement from the previous year.
- The Immune Medicine business continues to operate at a loss, with adjusted EBITDA showing a 21% improvement but still negative.
- The company faces challenges in achieving operational efficiencies from EMR integrations, with potential savings not yet factored into the 2025 guidance.
- There is uncertainty regarding the timing and magnitude of sequential growth in test volumes, as several strategic initiatives are still in early stages.
Q & A Highlights
Q: Can you provide more details on the 30% volume growth and which indications are contributing to this growth?
A: We are seeing sequential growth across all indications, with particularly strong performance in lymphoma indications such as DLBCL and mantle cell lymphoma. The launch of the mantle cell indication in Q4 and the enhanced version of our assays in DLBCL have contributed significantly. The contribution from DLBCL and MCL has increased to 12% from 10% a year ago, aligning with our strategy to focus on Medicare-covered indications. - Susan Bobulsky, Chief Commercial Officer, MRD
Q: How is the EMR integration impacting your business, and can you quantify the uptake in larger accounts?
A: We have seen significant growth in accounts that have been live for at least a year, with six out of seven accounts exceeding 75% year-over-year growth. Among newer sites, including three of our largest accounts, we observed an average quarter-over-quarter growth of 27%. This integration is accelerating utilization, particularly in large accounts. - Susan Bobulsky, Chief Commercial Officer, MRD
Q: Can you discuss the impact of the $4.5 million milestone payment in Q1 and any changes to the funnel?
A: The milestone payment reflects more milestones becoming available and being realized earlier. This provides clarity and confidence in our 2025 outlook, with potential room for further upside. We are cautious due to FDA-related factors but are seeing positive trial readouts. - Kyle Piskel, Chief Financial Officer
Q: How are pricing and contracting discussions progressing with large health plans, especially regarding the Medicare rate?
A: We maintain significant discipline in our pricing strategy, ensuring contracted rates are at or very close to the Medicare rate. This approach is crucial for maintaining our pricing integrity. - Chad Robins, Chairman of the Board, Chief Executive Officer, Co-Founder
Q: What is the outlook for community settings, and is growth driven by new accounts or deeper penetration into existing ones?
A: Growth is driven by both new accounts and deeper penetration into existing ones. We have significant volume in some community accounts, with one now in our top 10. The NeoGenomics partnership and Flatiron integration are expected to further drive community growth. - Susan Bobulsky, Chief Commercial Officer, MRD
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
