Investors have probably pretty much forgotten that Adaptive Biotechnologies (NASDAQ:ADPT) shares sank more than 40% earlier this year. That's because the stock made a remarkable rebound and was up nearly 19% year to date as of Tuesday.
But Adaptive's momentum could be derailed at least somewhat going forward. The biotech announced its first-quarter results after the market closed on Tuesday. Here are the highlights from Adaptive's Q1 update.
By the numbers
Adaptive Biotechnologies announced first-quarter revenue of $20.9 million, a 65% jump from the $12.7 million reported in the same quarter of the previous year. However, this result fell short of the average analysts' revenue estimate of $22.66 million.
The biotech reported a Q1 net loss of $31.4 million, or $0.25 per share, based on generally accepted accounting principles (GAAP). In the prior-year period, Adaptive posted a net loss of $18.4 million, or $1.45 per share. The consensus Wall Street estimate projected a net loss of $0.21 per share in the first quarter of 2020.
Adaptive ended the first quarter with cash, cash equivalents, and marketable securities of $655.8 million. The company's cash position stood at $576.9 million at the end of 2019.
Behind the numbers
Adaptive Biotechnologies' revenue growth in the first quarter stemmed from two sources. The company's sequencing revenue jumped 56% year over year to $9.5 million. Clinical tests for its clonoSEQ DNA assay for detecting and monitoring minimal residual disease (MRD) in bone marrow samples of patients with multiple myeloma and B-cell acute lymphoblastic leukemia increased by 75%.
The company's development revenue related to its immune medicine platform soared 74% year over year to $11.4 million. This revenue includes services provided to biopharmaceutical customers and revenue from collaboration agreements.
Adaptive's net loss widened compared to the prior-year period for a simple reason: The company's spending growth outpaced its revenue growth. Operating expenses in Q1 totaled $55.5 million, up 70% year over year. Adaptive's sales and market expenses and research and development expenses nearly doubled from the prior-year period.
The company's cash position improved thanks to the sale of 8 million shares in a public stock offering in January.
Because of the uncertainties created by the COVID-19 pandemic, Adaptive Biotechnologies withdrew its previous revenue guidance for full-year 2020. This wasn't a surprise, considering that many companies in the healthcare sector have made similar decisions in recent weeks.
However, Adaptive could also benefit from its COVID-19 efforts over the long run. The company announced a partnership with Amgen in April to develop a COVID-19 treatment. It also recently teamed up with Microsoft to map the immune responses of individuals who have either contracted COVID-19 or are likely to have done so.