Adaptive Biotechnologies Corporation

Ladies and gentlemen, thank you for standing by and welcome to the Adaptive Biotechnologies First Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Carrie Mendeville, Investor Relations. Please go ahead, ma'am.

Thank you. Earlier today, Adaptive Biotechnologies released financial results for the first quarter ended March 31, 2020. If you have not received this news release, or if you'd like to be added to the company's distribution list, please send an email to investors at adaptivebiotech.com. Like most of you, many of us are working from home, so please bear with us if we encounter any unforeseen audio issues with today's call. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking statements and in the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. Additional information regarding these risks and uncertainties appears in the section titled Forward Looking Statements in the Press Release Adaptive Issue today. For a more complete list and description, please see the Risk Factors section of the company's annual report on Form 10-K supplemented by the risk factors set forth in the company's 10-Q for the first quarter to be filed today. Adaptive disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise, except as required by law. In addition, non-GAAP financial measures will be discussed during this call. Please visit the aforementioned press release for reconciliation to the most directly comparable GAAP measure. This conference call contains time-sensitive information and is accurate only as of the live broadcast May 12, 2020. With that, I'd like to turn the call over to Chad Robins, Adaptive Co-founder and Chief Executive Officer. Chad?

Thanks, Carrie. Good afternoon, and thank you all for joining us on our first quarter 2020 earnings call. I hope that you and your loved ones are staying safe and healthy as we navigate through these challenging times. Given our current environment, I'll start off by reviewing our efforts and contributions towards the fight against COVID-19. Explain how these endeavors are enabled by our existing platform and review our long-term vision for the company. Next, Julie will give an update across our commercial business and clinical development pipeline, which will include detail on the impact of COVID-19 in the final weeks of Q1 and into April. Finally, Chad C. will provide a more detailed look at our financials, and then we'll open it up for questions. I want to start off by saying I'm truly honored to be part of the adaptive team. At Adaptive, we are focused on translating the genetics of the adaptive immune system into clinical products to detect and treat disease. We are committed to leveraging our immune medicine platform in any way that we can to support the efforts to combat the COVID-19 pandemic. Led by our COVID-19 Response Committee, our entire company has shown unwavering dedication and flexibility over the past few months. In early March, We move quickly to protect the health and safety of our employees and join the fight against COVID-19 all while ensuring that our labs remain open to service our patients and our partners. In addition, I've never felt more privileged to be part of the broader healthcare community and the biotech industry. It's been incredibly motivating to see so many entities and in some cases our competitors proactively collaborating to solve this global pandemic. It has always been our vision at Adaptive that the immune response should be broadly incorporated into the diagnosis and treatment of disease. The world is now watching this unfold in real time as information about patients' immune response to the coronavirus is published on an almost daily basis. However, there are still many outstanding questions with respect to the immune response to the virus. Why are some individuals virtually asymptomatic while others have severe complications? Beyond using age and known risk factors, can we determine ahead of time who may have a more severe immune reaction and require hospitalization versus being able to recover at home? How can we identify with more certainty whether an individual has or has had the disease, even if antibodies are not detectable? And are certain strains of the virus more virulent than others? Our immune medicine platform was built intentionally to answer questions like these in response to many diseases, including infectious diseases. Now, we are using our platform to help deliver diagnostic and therapeutic solutions for people suffering from COVID-19. Importantly, this is not a new effort for adaptive. As infectious and debilitating as COVID-19 is to society, the immune system seizes as it would any other disease, and our platform worked in exactly the same way. Specifically, we're applying our platform to assist in two ways to help solve this crisis. On the diagnostic side, we extended our partnership with Microsoft to decode the immune system's response to COVID-19 virus to potentially develop a test that will measure the presence of virus-specific T cells in the immune system. Much like we are doing in Lyme and other disease states, We are measuring the presence of T cells that identify disease early on and then clone themselves to combat infection. While there's been great progress made in a short amount of time with PCR tests that look at the presence of the virus itself and serology tests that look at a patient's antibody response, both have standardization and biological issues that make it challenging to understand how widespread the virus really is and who has truly developed immunity. To generate immune response data to address these issues, we are proud to have recently announced the launch of our Immune Race Study to enroll at least 1,000 patients in 24 metropolitan areas across the United States. We are collecting de-identified blood samples from individuals currently diagnosed with, recovered from, or exposed to COVID-19 using a LabCorp-enabled mobile phlebotomy service. Immune cell receptors from these blood samples will be sequenced and then mapped to antigens that have been confirmed by our platform to be specific to SARS-CoV-2. Leveraging Microsoft's machine learning capabilities in the Azure cloud platform, the accuracy of the immune response signature will be continuously improved and updated online in real time as more trials are sequenced from the study. The immune race study data will be combined with data from thousands of additional unique patient samples from many institutions around the world. The list of participating institutions is growing as we continue to work with other investigators in the U.S., Europe, Australia, Asia, and Africa to collect and sequence valuable patient cohorts. We expect to have preliminary data to share within a matter of weeks, and we will be making our findings publicly available to health officials, Academia, and Industry. That way, in addition to potentially advancing our own tests, we can also equip others with our data to include their immune response into their own efforts. On the therapeutic side, we have partnered with Amgen to use our immune medicine platform to identify and develop therapeutic antibodies from the blood of patients who are either actively fighting or have recently recovered from COVID-19. Like others, we think that neutralizing antibodies may be efficacious since this virus seems to mutate more slowly than other RNA viruses and mutated strains are genetically similar. There have been some early successes using convalescent plasma therapy to boost the ability of patients with severe cases of COVID-19 to fight off the infection. And this is great, but unfortunately this approach is hard to scale and standardize. In collaboration with Amgen, we're using our high throughput method of screening immune cells to find the best antibody or antibodies, ones which neutralize the virus. These could be used to treat patients fighting the disease and to potentially prevent disease in those with heightened exposure, such as healthcare workers. The key to neutralizing antibodies is their ability to fight infection alone or in small groups. meaning that they have to do the job of what normally takes hundreds of antibodies to do in a typical immune response. But finding the most efficacious neutralizing antibodies is challenging because the vast majority of antibodies don't neutralize the virus. We are approaching this search for neutralizing antibodies with Amgen in much the same way that we work with Genentech to identify T-cell receptors for use in cancer. The key is our scale and speed to assess hundreds of thousands of possible antibodies against a wider range of targets to select those that neutralize SARS-CoV-2. Growing up in Chicago and bringing and binging on the last dance, Harlan and I equate this to finding the Michael Jordan of antibodies. The search has to include the ability to scout every single high school basketball player in the entire country at the exact same time. Not just the players in one high school, one city, or even one state. Once we have narrowed down to a set of the most promising antibodies, Amgen will then leverage its world-class antibody engineering and drug development capabilities to develop and manufacture antibodies to bind and neutralize SARS-CoV-2. While it is still early days, we are already moving fast and see some exciting results, and they're confident that we can deliver potent antibodies to Amgen in the coming months. We have always said that our platform presents an open-ended opportunity across many disease states. Our ability to move quickly on these solutions for COVID-19 demonstrates the power and versatility of our immune medicine platform. Turning to the first quarter, we ended the quarter with just over $20.9 million in revenue, up 65% over the first quarter of 2019. While our business started off strong, we did start to see an impact from the spread of COVID-19 over the last few weeks of March. Julie will discuss this impact in greater detail during her review of the commercial business and Chad Cohen during his review of our financials. Due to the evolving and significant uncertainties related to the impact of COVID-19 pandemic, we are withdrawing our full year 2020 guidance. While our near-term revenue may be impacted due to the macro challenges in our health and economic environments, I am more confident than ever in our vision for adaptive and the importance of broadly incorporating immune response into the diagnosis and treatment of disease. We are well capitalized to continue to invest across our business to execute on our vision and move into this next phase of growth. With that, I'll hand over to Julie, who will walk you through more detail across each of our product areas, as well as provide more detail on the impact from COVID-19. Julie?