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Adaptive Biotechnologies Corp (ADPT)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $47.5M (+4% YoY), driven by MRD revenue of $40.1M (+31% YoY), while Immune Medicine declined to $7.3M (-51% YoY) . Net loss per share improved to $(0.23) vs $(0.48) in Q4 2023, and sequencing gross margin reached 59% in Q4 .
  • clonoSEQ test volume set a record at 20,945 in Q4 (+34% YoY), with full-year tests at 76,105 (+35% YoY). Medicare’s CLFS Gapfill Determination increased to $2,007/test (+17%), and coverage expanded to Mantle Cell Lymphoma (MCL), strengthening reimbursement and adoption .
  • Management guided 2025 MRD revenue to $175–$185M, total OpEx (incl. COGS) to $340–$350M, and cash burn to $60–$70M; expects MRD milestones of $6–$7M and MRD adjusted EBITDA positive in 2H 2025, supported by NovaSeq X margin lift and ASP initiatives .
  • Strategic catalysts: ODAC vote endorsing MRD as a primary endpoint in myeloma, NeoGenomics partnership to expand community reach (minimal 2025 volume expected), and accelerated EMR integration (Epic/Flatiron) to standardize workflows and drive volumes .
  • Wall Street consensus estimates from S&P Global were not retrievable at this time; comparisons to estimates are therefore unavailable (S&P Global daily limit exceeded).

What Went Well and What Went Wrong

What Went Well

  • MRD momentum: MRD revenue rose 31% YoY to $40.1M in Q4, with clinical sequencing margin reaching 59% and record clonoSEQ volumes (20,945), reflecting operational leverage and demand expansion .
  • Reimbursement tailwinds: “Obtained updated Medicare Clinical Laboratory Fee Schedule (CLFS) Gapfill Determination for clonoSEQ of $2,007 per test, a 17% increase…”; plus expanded Medicare coverage for MCL and progress contracting commercial/Medicaid payers .
  • Strategic positioning: “The ODAC vote in favor of [using] MRD as a primary endpoint… represents a paradigm shift,” aiding pharma milestones and clinical adoption; NeoGenomics partnership to expand community presence (pilot in 2H 2025) .

What Went Wrong

  • Immune Medicine headwinds: Q4 Immune Medicine revenue fell 51% YoY to $7.3M, primarily from lower Genentech amortization and fewer pharma/academic services as focus shifts to drug discovery .
  • Profitability still out of reach company-wide: Q4 adjusted EBITDA loss was $16.4M (improved vs. $(24.7)M in Q4 2023), and net loss was $33.7M; despite efficiency gains, full-year adjusted EBITDA was $(80.4)M .
  • Conservative near-term pharma outlook: 2025 MRD guidance assumes cautious pharma services growth amid industry/regulatory uncertainties; milestones guided at $6–$7M with timing uncertainty .

Financial Results

Quarterly Financials vs. Prior Periods

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$43.190 $46.435 $47.459
Net Loss per Share (basic & diluted)$(0.31) $(0.22) $(0.23)
Sequencing Gross Margin %N/A56% 59%

Notes: Q2 YoY revenue −12%; Q3 YoY +22%; Q4 YoY +4% . Comparisons to consensus estimates unavailable due to S&P Global limit.

Segment Revenue Breakdown

Segment Revenue ($USD Millions)Q2 2024Q3 2024Q4 2024
MRD$35.284 $37.470 $40.149
Immune Medicine$7.906 $8.965 $7.310
Total$43.190 $46.435 $47.459

KPIs

KPIQ2 2024Q3 2024Q4 2024
clonoSEQ Tests Delivered (units)18,520 19,600 20,945
MRD % of Total Revenue82% 81% 85%
Cash, Cash Equivalents & Marketable Securities ($USD Millions)$291.9 (as of 6/30/24) $267.2 (as of 9/30/24) $256.0 (as of 12/31/24)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
MRD Revenue ($USD Millions)FY 2024$143–$145 Actual: $145.5 Achieved high end
Total Revenue ($USD Millions)FY 2024N/AActual: $179.0 Reported actual
Total Operating Expenses incl. COGS ($USD Millions)FY 2024$335–$340 (excl. one-time) Actual: $341.5 (incl. one-time) Above excl. base due to one-time
MRD Revenue ($USD Millions)FY 2025N/A$175–$185 New
Total Operating Expenses incl. COGS ($USD Millions)FY 2025N/A$340–$350 New
Total Company Cash Burn ($USD Millions)FY 2025N/A$60–$70 New
MRD Milestones ($USD Millions)FY 2025N/A$6–$7; spread across year New
Sequencing Margin Lift (NovaSeq X)Next 12 monthsN/A+5–8 ppts (12 months), ~10 ppts longer term New
MRD Adjusted EBITDA2H 2025N/AExpected positive New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
ASP and ReimbursementAnticipated ASP uplift from payer mix and CLFS; 2023 ASP ~$1,050; Medicare gapfill set at $2,007/test; MCL coverage added Targeting ~$1,300 ASP in FY 2025 via recontracting, RCM appeals, Medicaid traction Improving pricing trajectory
EMR IntegrationEpic integrations ramping; target ~20% 2024 volume; Flatiron kick-off 19 Epic accounts live incl. large centers; plan >50% integrated volume by YE 2025 Accelerating adoption/workflow
NeoGenomics PartnershipAnnounced in Jan 2025 press cycle (outside Q3) Minimal 2025 volume; pilot accounts in 2H; ramp in 2026–2027 Medium-term volume lever
MRD Regulatory (ODAC/NCCN)ODAC primary endpoint momentum; pharma trials moving to primary Continued pharma bookings; halo effect into clinic; NCCN DLBCL guidance supportive Strengthening clinical/regulatory tailwinds
Margin/COGS EfficiencySequencing margin improved; lab efficiencies; NovaSeq plan for 3Q25 Q4 sequencing margin 59%; NovaSeq X expected +5–8 ppts first year Sustained margin expansion
Immune Medicine R&DGenentech cell therapy; antibody programs; nominate lead autoimmune indication Digital in silico TCR model; lead autoimmune indication nominated; IM cash burn $25–$30M Focused, capital-disciplined R&D

Management Commentary

  • “2024 was a year of strong execution… Our MRD revenue grew by 42%… and we nominated a lead autoimmune indication within our Immune Medicine business.” — Chad Robins, CEO .
  • “We ended the year with a robust cash position of $256 million… We intend to drive top line growth in 2025… increasing ASP to an average of $1,300 per test… becoming adjusted EBITDA positive in the second half of the year.” — Chad Robins .
  • “Sequencing gross margin… was 59% for the fourth quarter… Lower overhead costs… and direct labor leverage… contributed to these improvements.” — Kyle Piskel, CFO .
  • “Guidance includes conservative MRD pharma services growth… MRD milestones of $6–$7 million… We expect full year operating expenses… $340–$350 million… cash burn… $60–$70 million.” — Kyle Piskel .

Q&A Highlights

  • ASP drivers to ~$1,300/test in 2025: full-year impact of Medicare gapfill; recontracting commercial payers; stronger RCM appeals; Medicaid traction, with managed care leveraging gapfill as reference .
  • Margin cadence: Q4 sequencing margin at 59%; NovaSeq X expected to add 5–8 ppts in first 12 months, with no material turnaround time impact due to batching capacity and current volumes .
  • NeoGenomics partnership: intentional slow ramp; minimal 2025 volume; material impact targeted for 2026–2027; attachment rates mid- to high-single digits over time .
  • Volume growth/seasonality: MRD revenue weighted ~40/60 H1/H2; linear volume progression assumed, with potential upside from Epic/Flatiron integration .
  • Milestones timing: $6–$7M spread evenly for practical modeling; pharma pipeline/backlog >$200M; ongoing conversions to MRD primary endpoints .

Estimates Context

  • We attempted to retrieve S&P Global consensus EPS and revenue estimates for Q4 2024 (and prior two quarters). The feed was unavailable due to a daily request limit exceeded, so consensus comparisons cannot be provided at this time.
  • Given the unavailability of S&P Global data, we cannot assess beats/misses versus Street for Q4 2024.

Key Takeaways for Investors

  • MRD is the growth engine: accelerating volumes (+34% YoY in Q4), improving margins (59% Q4 sequencing GM%), and expanding reimbursement (Medicare gapfill to $2,007/test, MCL coverage). Execution on ASP and EMR integration is central to 2025 upside .
  • Path to MRD profitability in 2H 2025 is credible: NovaSeq X, ASP uplift, and operating leverage should drive margin expansion; monitor cadence of ASP recontracting and volume mix (blood-based/community) .
  • Pharma catalysts supportive but prudently guided: $6–$7M milestones embedded with timing uncertainty; ODAC-driven trial design shifts and growing backlog underpin medium-term visibility .
  • Immune Medicine remains a drag near-term as revenue amortization declines; R&D is gated with targeted cash burn ($25–$30M), with long-term optionality via in silico TCR and lead autoimmune indication .
  • Balance sheet provides runway: $256.0M in cash and marketable securities at year-end supports execution against MRD profitability and IM milestones while managing cash burn to $60–$70M in 2025 .
  • Tactical focus: watch ASP progress, EMR integration penetration (>50% by YE 2025), and any earlier-than-expected NeoGenomics ramp; these are key narrative and stock reaction levers .
  • Estimates comparison: S&P Global consensus unavailable; reassess beat/miss dynamics upon data access to gauge near-term trading implications.