Adaptive Biotechnologies Corporation

Good day, and thank you for standing by. Welcome to the Adaptive Biotechnologies Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Karina Casadilla, Head of Investor Relations. Please go ahead.

Thank you, Jacinda, and good afternoon, everyone. I would like to welcome you to Adaptive Biotechnologies' third quarter 2025 earnings conference call. Earlier today, we issued a press release reporting adaptive financial results for the third quarter of 2025. The press release is available at www.adaptivebiotech.com. We are conducting a live webcast of this call and will be referencing to a slide presentation that has been posted to the investor section in our corporate website. During the call, management will make projections and other forward-looking statements within the meaning of federal security laws regarding future events and the future financial performance of the company. These statements reflect management's current perspective of the business as of today. Actual results may differ materially from today's forward-looking statements depending on a number of factors, which are served forth in our public filings with the SEC and listed also in this presentation. In addition, non-GAAP financial measures will be discussed during the call, and a reconciliation from non-GAAP to GAAP metrics can be found in our earnings release. Joining the call today are Chad Robbins, our CEO and co-founder, and Kyle Pisco, our Chief Financial Officer. Additional members from management will be available for Q&A. With that, I'll turn the call over to Chad. Chad?

Thanks, Karina. Good afternoon, and thank you for joining us on our third quarter earnings call. I'm pleased to share another quarter of strong execution and accelerating momentum across the business. We delivered meaningful wins, sustained growth, and further strengthened our financial position. Let's now turn to slide three for a summary of this quarter's highlights. The MRD business delivered major profitability milestones. This quarter, adjusted EBITDA was 7 million, reflecting strong sequential growth. Also this quarter, and ahead of plan, the MRD business became cash flow positive, a significant achievement that underscores the strength and scalability of our model. MRD revenue grew 52% year over year, driven by robust increases in clinical volume and ASP. This growth reflects expanding clinical utility and broader integration of MRD testing into patient care. Clinical validation continues to deepen. The NCCN guidelines were updated again this quarter, this time in CLL, incorporating MRD-guided treatment options, providing more specific direction on testing frequency and supporting ClonoSeq ID testing at diagnosis. Operationally, we're scaling efficiently. With ClonoSeq now running on the NovaSeq X+, we're realizing meaningful cost efficiencies and expanding gross margins. Total company sequencing gross margin improved 10 percentage points year over year to 66%. And our focus on operating discipline is paying off. operating expenses remained stable sequentially while cash burn continued to decline. Through the first nine months of the year, we reduced cash burn by 51% versus last year, ending the quarter with a strong cash position of $217 million. Given this performance, we are again updating our full-year guidance to reflect a higher MRD revenue range, lower operating expenses, and a reduced annual cash burn. Kyle's going to cover the details shortly in his prepared remarks. Let's now turn to slide five for a deeper look at the MRD business. Clonacy clinical revenue had impressive growth of 83% year-over-year and 18% quarter-over-quarter. We saw broad-based volume expansion across all reimbursed indications, delivering over 27,100 tests. up 38% versus prior year, and up 7% sequentially. By indication, multiple myeloma remains our largest contributor, accounting for 42% of U.S. colonoscopy volume, followed by ALL at 32%, CLL at 10%, DLBCL at 9%, and MCL at 5%. This volume growth continues to align with our strategic priorities. First, blood-based testing now represents 45% of volume, achieving our full-year goal ahead of plan. And in multiple myeloma, blood-based contribution reached 24% up from 21% last year. Second, community-based testing represents 31% of total clonacy volume, with increasing contribution from flat-iron integrated accounts. NHL testing expanded to 15% of total clonal seek volume led by DLBCL and MCL sequential growth. Fourth, ordering HCPs grew 38% year over year to more than 4,100 with sequential growth of 9% in academic centers and 12% in community practices. And finally, we tested over 19,400 unique patients in the quarter, a 41% increase year-over-year and 8% sequentially. In addition to volume growth, we saw continued improvement in ASP, with U.S. ClonoSeq ASP increasing to over $1,340 per test, reinforcing our confidence to achieve full-year average ASP of $1,300 or higher. During the quarter, we achieved several policy wins, including our first large commercial payer coverage in DLVCL and two major payers in CLL, bringing our total CLL covered lives to over $260 million. We continue to improve cash collections and expand our reimbursement footprint with new payer contracts. Overall, all ASP metrics and contracting initiatives are trending in the right direction, positioning us well to reach our long-term ASP target of $1,700 to $1,800 per test. Let's now turn to slide six to review progress on EMR integrations. Our EMR integration efforts continue to gain momentum across both academic and community settings. These integrations are a key driver of volume growth and support two other important strategic initiatives. The first is to build a scalable moat around ClonoSeq, protecting against new entrants and minimizing disruption from account turnover. And the second is to maximize ClonoSeq's usage across the care continuum by directly embedding into EMR-driven workflow, which translates into more tests per patient. Since last quarter, we've completed 11 integrations, seven academic and four community, with six of our top 10 accounts now integrated. Among accounts integrated with Flatiron last quarter, volume in these accounts grew 17% sequentially and now represent 24% of our community volume, up from 20% pre-launch. We're also leveraging integration to enable serial testing plans, with many ordering providers at flat-iron integrated accounts selecting recurring testing at three-, six-, or 12-month intervals. Importantly, nearly 40% of our commercial tests this quarter came from integrated accounts, which continues to outpace growth from non-integrated accounts. Looking ahead, we plan to further expand our EMR footprint and expect continued acceleration from integrated accounts with fewer ordering discrepancies and deeper account retention. Let's turn to MRD Pharma on slide seven. Our MRD Pharma business delivered a solid quarter with revenue up 11% year over year, including $6.5 million in milestone revenue. Multimyloma remains the largest contributor to our biopharma portfolio at over 60% of our active trials, followed by CLL at 17% and ALL at 9%. We ended the quarter with a backlog of more than 200 million, reflecting strong partner demand and sustained program activity. ClonoSeq is most well established as an endpoint in Multimyloma, where the ODAC and CHMP votes reinforce its role in assessing treatment response and supporting accelerated approvals, particularly in the frontline setting. The momentum is now extending to other lymphoid cancers and driving diversification across our portfolio. Endpoint qualification efforts are underway in CLL and DLBCL, which are already translating into results. 2025 CLL bookings are more than twice what they were last year. Currently, the FDA is accepting MRD as an endpoint on a case-by-case basis in other lymphoid cancers. Of our 19 ongoing primary endpoint studies, 12 are in multiple myeloma, six are in leukemia, and one is in MCL. While recent agency news views on surrogate endpoints have introduced some uncertainty, We remain confident MRD will gain broader acceptance as an endpoint for accelerated approval in other lymphoid cancers. As the first and only FDA-cleared MRD assay, Clonacic holds a distinct and durable position to capture this market. In summary, MRD is a strong growth engine with multiple levers to increase penetration. Now, let's turn to immune medicine on slide nine. Our immune medicine business is executing across our three strategic priorities. First, we continue to generate large-scale, high-quality proprietary data to develop a digital TCR antigen prediction model. We're making good progress by using our data to train and improve the accuracy of our models. As we deploy these models, we see promising results in multiple immunology applications. one of these applications included the ability to select the best tcrs to use in cancer cell therapy products in partnership with genentech earlier this quarter we announced the conclusion of our partnership with genentech following its internal portfolio prioritization as a result adaptive is released from exclusivity and any further obligations related to this partnership importantly The scientific and technical progress we've made along the way allowed us to significantly accelerate both our data generation and our AI ML modeling capabilities across multiple use cases. We are deploying our knowledge and infrastructure that we built towards multiple high-value partnership opportunities. Second, for our T cell depletion antibody program, we are on track to establish a preclinical data package in our lead autoimmune indication. This quarter, we selected our lead antibody candidate. This key milestone is based on robust potency and other functional characterization data that we generated this year. We've also started planning for CMC tox work, which represents a key step towards IND enabling studies for this lead T cell depleting antibody and autoimmunity. As we continue to execute on these two focused R&D priorities, we remain financially disciplined and are on track to achieve our 2025 cash burn target between $25 million and $30 million. Now, I'm going to pass it over to Kyle to walk through the financial results and updated full year guidance. Kyle?