What happened
Shares of Adaptive Biotechnologies (ADPT 0.58%) rose nearly 32% last month, according to data from S&P Global Market Intelligence. Fresh off its initial public offering, the diagnostic company reported second-quarter and first-half 2019 operating results demonstrating solid year-over-year growth and a shrinking operating loss compared to the first quarter of the year.
During the most recent quarter, Adaptive Biotechnologies increased the number of insurance policies covering its diagnostic tests and opened a high-throughput lab to maximize its collaboration with Microsoft. The business exited June with $423 million in cash, which means it can weather operating losses and still invest in growth opportunities for the foreseeable future.

Image source: Getty Images.
So what
Adaptive Biotechnologies develops diagnostic tests that read the adaptive immune system -- the T cells and B cells that change over time -- to better understand human health. The idea is that the blood tests can be used to detect disease, inform clinical decisions, and even used in drug discovery efforts.
Building the infrastructure hasn't been easy: the company has a database of over 20 billion immune receptors and has tapped Microsoft's Azure machine learning platform to pore over the data for molecular insights. But it appears to be catching on.
The business reported year-over-year growth of 43% for sequencing revenue and 212% for development revenue in the second quarter of 2019, which means growth has accelerated since the first quarter of this year. Adaptive Biotechnologies reported an operating loss of $16 million on revenue of $22 million in Q2 2019, but that was also an improvement from Q1 2019.
Now what
While investors are excited about the company's growth potential, they apparently had second thoughts about its market cap approaching $7 billion. Shares of Adaptive Biotechnologies have tumbled in September and have now gained just 13% since the beginning of August. The market is still pricing in a significant amount of future growth at the current market cap of $5.4 billion, so investors might expect volatility to continue in the near term.