Adaptive Biotechnologies at Morgan Stanley Conference: Strategic Growth Insights

On Wednesday, 10 September 2025, Adaptive Biotechnologies (NASDAQ:ADPT) presented at the Morgan Stanley 23rd Annual Global Healthcare Conference. The company highlighted its strategic achievements and future plans. Adaptive Biotechnologies has met its 2025 goals ahead of schedule, including EBITDA profitability and key technological implementations. The focus remains on expanding market penetration and improving financial performance. However, challenges like increasing competition and reliance on strategic partnerships were also discussed.

Key Takeaways

• Adaptive Biotechnologies achieved its 2025 goals early, including EBITDA profitability.
• The company is enhancing market penetration through EMR integration and blood-based testing.
• Aiming for cash flow break-even by the first half of 2026 with improved gross margins.
• Strategic partnerships and clinical data generation are pivotal for future growth.
• The leadership team’s experience is seen as a positive factor for future success.

Financial Results

• clonoSEQ ASP target for 2025 is $1,300, with current achievements over $1,290 in Q2.
• Re-contracting with payers and Medicaid penetration are expected to boost ASP growth.
• NovaSeq X rollout is projected to enhance gross margins by 5% to 8% over 12 months.
• The company has reduced its full-year cash burn guidance, aiming for break-even in early 2026.
• Revenue growth is driven by 25%+ top line growth through execution and volume increases.

Operational Updates

• MRD market penetration varies: Multiple Myeloma (12%), ALL (28%), MCL (7%), CLL (5%), DLBCL (3%).
• Community penetration is rapidly growing with 16% quarter-over-quarter volume growth.
• Blood-based testing accounts for 44% of MRD testing volume, up from 40% in Q2 2024.
• EMR integration shows significant growth, with Epic integration at 40 sites and 113 community accounts live via oncoEMR.
• NeoGenomics partnership is expected to contribute to incremental volume in 2026 and 2027.

Future Outlook

• Growth strategy includes EMR integration, blood-based testing, and strategic partnerships.
• Sales force restructuring aims to drive high-volume growth.
• Frequency of testing is increasing, with notable growth in Acute Lymphoblastic Leukemia.
• Biopharma business is active with 175 trials, including 65 in multiple myeloma.
• The company is exploring monetization opportunities for its immunology data set.

Q&A Highlights

• clonoSEQ sensitivity ranges from 10^-6 to 10^-7, with multi-parameter flow as a potential competitor in Europe.
• NCCN guideline updates could improve cash flow and pathology services.
• CMS reimbursement for surveillance in mantle cell lymphoma opens opportunities for other indications.
• Serial monitoring is gaining traction among community oncologists.

Adaptive Biotechnologies’ strategic initiatives and operational updates promise potential growth, with a focus on innovation and market expansion. For more detailed insights, refer to the full transcript below.

Full transcript - Morgan Stanley 23rd Annual Global Healthcare Conference:

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Hi, my name is Vicky Apostolakos, and I’m on the Life Science Tools and Diagnostic Team here at Morgan Stanley. For important disclosures, please see Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales rep. It’s my pleasure to host Adaptive Biotechnologies and speak on behalf of the company. We have Co-founder and CEO Chad Robins and CFO Kyle Piskel. Thank you for joining us today. To set the stage, can you talk about the goals you set for the company entering 2025 and the key accomplishments that you’re most proud of year to date?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: Sure. First, Vicky, thank you for having us again at the Morgan Stanley Conference. It’s a pleasure to be back. We set out this year with some ambitious goals of getting to EBITDA profitability, of implementing a Flatiron EMR integration. We’re super excited about that. The third on the cost side was getting NovaSeq X implemented and switched over from the NextSeqs. I’m happy to say we’re eight months into the year, and we’ve already accomplished all those goals ahead of schedule. If you ask me, I think what I’m most proud about is getting to EBITDA profitability, which is quite an achievement, especially in our industry, as you know. Really, really excited about that. The future looks bright.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Maybe to start with MRD, would you provide an update on market penetration for ALL, DLBCL, MCL, and CLL?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: Sure. In that order, I’ll just do it by, in multiple myeloma, it’s our largest indication. We’re 12% penetrated into the market. ALL, because MRD has been used historically, is our largest area of penetration, which is about 28% penetration. In MCL, we’re at about 7% penetrated. CLL is about 5%, and then DLBCL is about 3%.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Okay, great. With that background, all right, so 60% of hematologic malignancies are treated in the community setting, and penetration in that setting is clearly an important driver for continued disclosure. With ordering healthcare physicians now at 3,700, where does the community penetration stand today? What efforts do you have underway to increase this penetration? What does the slope of the curve look like over the next couple of years?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: Yeah, of those 3,700 healthcare providers, about 1,500 are in the community, but we’re still very kind of a low penetration in the community. Although I should point out it’s the fastest growing. We had 10% quarter-over-quarter volume growth last quarter, but 16% quarter-over-quarter growth in the community setting. We’re growing faster in the community than our overall, although all segments of the business continue to be growing as well. I will point out it is a multi-prong strategy for growing the community business. First, which I mentioned already, is EMR integration. The workflow is incredibly important to the community oncologists. You have to make it very easy to order the test. Being integrated as they pull up the Willie cart is incredibly important. The second initiative is blood-based testing. In the community setting, they’re not doing bone marrow for the most part.

Really increasing kind of blood-based testing is a huge initiative for us. The third, which is kind of an overlay on everything, is data generation. It’s not only data generation, but this goes to simplifying the message. Remember, as a community oncologist, they’re not steeped in kind of data and publishing. They want to know specifically at what point in the patient care continuum do I treat the patient, why and how? Taking increasing dosage, taking a patient off therapy based on data is incredibly important. The fourth initiative is a partnership with NeoGenomics. That’ll go—we’re piloting four accounts. Think about that as a 2026 and 2027 driver of kind of volumes. The testing is going well. We’re being very methodical about how we’re rolling that out. It’s really kind of all of these things together that are coming together.

I’ll point out one other kind of good tactical thing that we’re doing, which is about two years ago, we split the sales force into key account managers that focus on the academic medical center and then dedicated hematology specialists that focus on the community. On top of that, we’ve overlaid this national strategic account, this kind of small group that focuses on the large network practices. It’s kind of all of these things together that kind of make us confident in, you know, really high-volume growth kind of moving forward.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Great. One of the other drivers of volume will be increasing the frequency of testing. Average frequency of testing at the start of the year was about 2.5. Could you parse out the frequency in between different indications, multiple myeloma, ALL, etc.? What are the factors that drive differences in frequency of testing between these cancer types?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: Yeah, no, it’s a really good question. One that we’re focused on is we look at blood-based testing, and I’ll get to that in a minute. Just to answer the question first, right now in acute lymphoblastic leukemia, which is our area of most frequent testing, you’re three and a half to four tests per patient. In multiple myeloma, it’s more in the two to two and a half tests per year per patient. As you look to kind of chronic lymphocytic leukemia, which is more of an indolent disease, you’re looking at more of a kind of a one test per year per patient. In some of the newer disease states like mantle cell lymphoma and diffuse large B-cell lymphoma, it’s just early data, but it’s more kind of on the one test per year per patient.

In terms of kind of increasing frequency of the tests per year, a couple of things I’ll point out. One is the move to blood-based testing. As you get to a less invasive test where patients come in and you can take a blood draw and do the test, that’ll increase the number of tests per year. The second thing is, and this is not really well known yet, but I’m going to give some data. Into the Flatiron Health EMR, kind of oncoEMR integration, we built in as the default a serial testing option so that you can choose three, six, nine, twelve months, or every time a patient comes in, or you can default and opt out and say, I want to do it on an as medically necessary basis on my own choice.

What we’re seeing from the early returns is that 80% of the community oncologists are clicking on a serial testing option. Really excited about that and increasing the frequency of testing. I go back to data. We have got multiple data studies we can talk about, touch on now, but it’s really about showing the clinical utility of being able to test throughout different points in the patient care to say exactly how you would treat a patient. Those studies are really increasing the frequency of tests for patients.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Great. You touched on blood-based testing being an important driver of frequency of testing too. Now that blood-based testing is about 44% of your MRD testing volume, up from 40% in the second quarter of 2024, over what timeframe do you see this replacing most of your bone marrow biopsy within your clinical volume?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: Yeah, so it’s never going to get to 100% of your testing volume because for a couple of different reasons. One, in the academic medical centers, they do bone marrow, that’s part of kind of their standard of care. The second reason is, depending on the disease, for example, in multiple myeloma, the disease burden is greater in the bone marrow than it is in the blood. There’s always going to be kind of a room for marrow-based testing. If you look at it, really there’s no difference in the assay sensitivity or specificity in the blood versus the marrow. It’s just the disease concentration is actually higher in the marrow.

We’re working on different R&D initiatives, including applying our ctDNA assay in addition to our cellular assay to blood-based testing, in addition to looking at a couple of other things to kind of increase the NPV or the negative predictive value of the test in the blood. A lot of different work. Now, contrast that with DLBCL and CLL, which are only done in the blood. Overall, as you have an increase in those indications as a total of your total test mix, you’re going to get, along with more testing that’s done in the community setting in blood, you’re going to get a higher percentage of your tests that will be done overall in the blood, but you’re never going to get to kind of 100% because of the aforementioned reasons.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Great. You know, when I listen to conferences and KOL presentations, there appears to be a consensus that 10^-5 isn’t sensitive enough, given that it’s highly dependent on the quality of the biopsy. Acknowledging that clonoSEQ sensitivity can go as low as 10^-6 and maybe even to 10^-7 in some cases, what are other competitors, such as those in multi-parameter flow, that can go down to these levels? What does their adoption look like versus clonoSEQ?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: Yeah, just a little bit about the landscape to answer that question. You know, multi-parameter flow is potentially a competitor more in Europe than it is in the United States. In the United States, clonoSEQ has really taken on as the de facto standard for next-gen testing. One of the things to point out from a practical matter is you need 20 to 30 times the amount of material to get to 10^6 in flow. We really need only 2 mL of blood, 2 mL in the blood and 1 mL in marrow to be able to get to 10^6. We’re just not seeing that competition of multi-parameter flow in the United States. We haven’t really, we’re on kind of the early stages of kind of international anyways.

What you’ll see, I believe, when we go over there and do the head-to-heads, it’s just really not a, it’s not going to be a fair fight.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Got it. You also had several NCCN guideline updates here today, including strengthening recommendations for baseline clonoSEQ, clonotype ID, and diagnosis of multiple myeloma patients. Can you help us contextualize what the recommendation means for your multiple myeloma volumes? Perhaps more importantly, are there any read-throughs from this guideline update into other indications?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: Okay, so first of all, the guideline update was awesome, right? Like, it’s super exciting to see the recommendation to take an ID clonotype. This helps us for the long-term health of our business. We actually coined this term MRD-enable every patient. We did this a couple of years ago. This is ultimately, you know, what this guideline inclusion or recommendation does for us. It says, and make sure that you can do the MRD test. Practically, it’s a very low percentage of our patients, you know, only a couple % where we’re not able to retrieve the ID sample. What it does, if you look at, it’s sometimes a 30 to 60-day, we have a team that does pathology retrieval services. It’s really, it’s just a challenge going out and getting that sample to bring in.

What this does, and just from a business standpoint in terms of A, time to cash, right? You’re getting that, you’re getting two samples up front because you’re getting the ID and MRD sample potentially kind of right up front. Third, some of those kind of pathology retrieval services that are, you know, some of that overhead, you can really look at how to, you know, optimize that overhead. Net-net, in terms of the long-term health of the business, particularly in the community, particularly as you move to blood, it’s extremely important to ID every sample. In addition to the data that’s coming out and our messaging and the peer-to-peer education where your academic KOLs are going out to the community and saying, hey, make sure even if you refer into an academic medical center for a transplant, we need that ID sample.

These things kind of, again, I keep talking about this layering effect, but all these things are working in conjunction to ensure kind of this volume trajectory well into the future.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Right. You also announced CMS reimbursement for surveillance in mantle cell lymphoma, which increased clonoSEQ testing opportunity per patient. Although MCL is a relatively smaller indication, how does it open up the opportunity to establish reimbursement for surveillance in your other heme indications? Are there any particular heme malignancies where surveillance doesn’t make sense due to lack of availability of treatment options?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: I’ll say this. One is it absolutely opens up the opportunity, but in the nearer term, I think we’re going to have to go one by one because that’s how the reimbursement paradigm and the MOBIX program right now is structured, that you’re going to have to show data on an indication-by-indication basis. The next one up is probably CLL. It’s an indolent disease. There are patients that are off treatment. Basically, what you need is a disease setting where patients are off treatment and they can be surveilled to be able to catch the disease earlier from a molecular test like clonoSEQ before you can catch it on a scan, right? Then get a patient on the right treatment earlier to intervene on their disease course. Multiple myeloma, although our largest indication, it’ll probably go CLL, DLBCL, then multiple myeloma. Why is that?

It’s not that we’re not super focused on multiple myeloma, but there’s not a lot of off treatment because historically, that being said, one of the trials that we’re doing in terms of the MASTER study is showing that for two successive MRD negative tests, you can take a patient off of therapy. We’re then going to go design a trial with those patients that are off therapy to see if we can intervene and catch them earlier. You need to wait for that outcomes data, so it’ll be longer. One other point to make on this is, my goal, and again, I’m not promising anything, but my goal would be to say, hey, if we get a couple of these, can we then get to kind of a pan-disease recurrence monitoring kind of paradigm where you don’t have to go one by one?

I think we’ve had some really productive discussions with the MOBIX program, but I think it’s going to take some time to get there. That’s the long-term goal of what we’re trying to achieve.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Great. On EMR integration, as of last quarter, you had Epic integration at 40 sites. We’re live in 113 community accounts via oncoEMR. Looking at the remainder of the year, how should we think about the number of EMR integrated sites to be added before year end? Should we think of a similar number of sites added last quarter, i.e., 13 Epic sites to come online in 3Q and 4Q? Do you see it accelerating from here in the second half?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: I actually probably the opposite. I mean, we continue to have a huge focus on EMR integrations, both in the academic medical center setting and in the community setting. I think last quarter was a pretty big quarter because we had a significant backlog. That said, our pipeline is extremely robust. We’ve done several since then. We will continue to kind of focus on EMR integrations kind of moving forward. Notably, we had our first EMR integrations in a Cerner integrated account just over the past two weeks, a Cerner integrated account and an LK integrated account. Those are interesting to us. It’s not necessarily the number of accounts. It’s also the quality of account. I mean, we’re focused on our large accounts. What we’re excited about is four of our top 10 largest accounts have been EMR integrated thus far.

We’ve got some kind of more on the docket as well. Of those accounts and just a little bit of data, the three months post-integration had been seeing a 25% incremental growth from the three months prior to integration. Those are new integrations from our top accounts. Overall, now we have a cohort that’s kind of a year-long, a year since being integrated. Twelve months post-integration on all accounts, kind of large accounts, small accounts across the board, we’re seeing double the growth rate. We’re seeing an 84% growth rate versus a 46% growth rate on non-EMR integrated accounts on a year-over-year basis. If you look at, again, people asking me some of the things I’m excited about, that to me, in looking at those numbers, is pretty encouraging.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Are you seeing a difference between the volume uplift you see in the larger accounts versus the smaller accounts?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: I gave you some of those. I think some of the accounts on the larger accounts have been newer implementations. The only data that I wanted, I can share that’s really meaningful is that so far they’ve come out of the gate strong. In general, you would expect the overall nominal growth rate to be higher in the smaller accounts. I wouldn’t expect kind of an 86% growth rate year-over-year on something like an MD Anderson just because of EMR integration because some of those smaller accounts hadn’t been kind of power users of the test to date. That being said, I think both on large accounts and small accounts we’re encouraged by the growth that EMR integration is providing.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Right. That makes sense. You touched on this earlier, but has the new serial monitoring feature on the EMR helped to drive more consistent ordering patterns?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: All I can share so far is that 80% in the community oncology setting of clinicians are clicking on the serial monitoring order. That being said, it’s only been integrated for two months. We haven’t seen those tests yet arrive. Again, when you’re talking about, hey, we’re in 2025, we’re talking about 35% growth. Obviously, we’re not giving 2026 numbers yet. If you’re talking about, okay, how do you, the question is, how do you maintain, even off a larger base, really strong growth numbers? That’s one of the things that I think is quite encouraging.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Okay. You recently launched phase one of the Neo collaboration, a collaboration that should help you expand your presence in the community setting. Tell us the goals in the first phase of the collaboration and what experience you hope to gain ahead of the broader launch in early 2026.

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: Yeah, so it’s been relatively recent. We’re piloting with four different sites. I want to be cautious on this in the sense that we are going slowly. We’ve had a lab-to-lab partnership in the past. It’s hard to get these things right. The first phase, the goals of the first phase are to make sure that the pipes are connected, that the sample is going in the right place, and that the field force is educated with the right messaging. That is like simply, can we properly get samples from an order, from a compass test on the ID workup from Neo into the house, into an Adaptive Biotechnologies process and return a test result in the right format? If you look at a three-year partnership, what I would kind of caution is we have put in really no incremental volume in 2025.

It’s really year two and year three, which is 2026 and 2027, that we’re looking at kind of incremental volume from this partnership.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Great. I think one of the underappreciated aspects of Adaptive Biotechnologies is the recent progress you made in generating clinical utility data for clonoSEQ. Would you elaborate on how the clinical utility trials, such as MASTER and MIDUS trials, have helped to facilitate penetration of clonoSEQ in the market, as well as open up the opportunity to increase the number of tests per patient? What are some key trials that we should be watching for in the near term as well?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: Yeah, so, I’ll touch again, MASTER trial, it says that if you are two successive MRD negative tests, that you can take a patient off of maintenance therapy with no difference in overall survival, or progression-free survival. That’s been a very, very important test. Just practically, what that means is if a patient’s on a drug like Revlimid and they’re continually taking it, this drug has some pretty significant side effects. Patients really are looking for reasons, or they’re looking for evidence and a rationale for how they can go on a treatment holiday. That clinician has a tangible tool to say, hey, let’s try it because you’re MRD negative, go on a treatment holiday, and then we’ll continue to monitor that. Okay? That’s MASTER. In terms of MIDUS, MIDUS is a 796-patient trial that is looking at the impact of MRD status to transplant.

What essentially, I don’t want to go into detail, but what essentially it shows is if you’re MRD negative, that you’re not going to benefit from a transplant. That data is incredibly compelling because there’s been a debate about what are the true benefits of transplant. By the way, that is in the myeloma setting, but we also have really good data in the CLL setting as well, and mantle cell setting about transplant. This is really kind of across the board. It says, why go through the pretty invasive procedure of getting a transplant if there’s no disease burden from a one in a million, 10 to the sixth molecular level? You should maybe wait at least, at the very least, to get a transplant. That again goes to also the frequency of testing and to test to say, okay, are you still MRD negative?

Are you still MRD negative? You know, let’s not transplant the patient. We’ve got some really nice data coming up in ALL. We also have some good data coming up in blood-based testing in myeloma. The abstracts haven’t been announced yet for ASH, but ASH is really our big conference where we kind of do our data rollout. Keep your eyes peeled for that.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Great. You’ve also been seeing pretty significant momentum in your biopharma business as well. Given ODAC support to incorporate MRD as a primary endpoint for accelerated approval of new therapies in multiple myeloma and a favorable CHMP opinion, further solidifying that view, have most of the studies now converted MRD as a secondary endpoint into a primary endpoint?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: Okay, so first, yeah, super excited about the 12 to 0 vote on the ODAC decision last May. Then recently, about six weeks ago, the CHMP decision in Europe. This global kind of recognition of multiple myeloma as a primary endpoint bodes extremely well for the importance of the assay in global pharma trials. Let’s just set the stage for that, of which we have about 175 trials, 65 of which are in multiple myeloma. Of those 65, 12 of which are primary endpoints, three of which have converted from secondary to primary, and the rest of those, which is about 52, if I’m doing the math right, are secondary. We’re looking at some of them to convert from secondary to primary. As new multiple myeloma drugs roll on, we’re looking at incorporating them as primary endpoints.

The second point of that is because that impact into other indications on our pharma business has been real. It’s been tangible, meaning, at some point, we’re hoping for other disease states, such as CLL, that the clonoSEQ, I shouldn’t say clonoSEQ, because the FDA actually does it as NGS-based MRD testing, of which we’re the only approved one, will be the primary endpoint. We will be designated as a primary endpoint. We’re starting to really see that impact on pharma companies that are starting to do more trials, bank more samples, use clonoSEQ more. The final point I’ll make there is there’s an amazing halo effect that we’ve always talked about these businesses between the clinical business and the pharma business being synergistic.

This is one where I can just tell you it’s incredibly tangible because we had clinicians who we’d been trying to call on for many years that we couldn’t get into their offices. Now the phone’s ringing and saying, oh, I saw that you’re a primary endpoint, because remember, this is the first new primary endpoint in cancer in over 10 years. They said, you’re a primary endpoint. We’re ready to talk about MRD. That’s been another driver of volumes in the clinical setting.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Great. One of the things you’ve called out in the past is the idea of converting a contract based on regulatory milestones, one based on higher ASP per sample to improve predictability of your revenue stream. Have you been able to discuss that with your pharma customers as they incorporate MRD as an endpoint in their trials or tweak their trial design? If so, what is your sense for their willingness to do that?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: Yeah, yeah, it’s a good question. I mean, the answer is yes. We’ve started to have those conversations. We’ve been successful on a couple of cases. Remember, some of these are multi-year contracts with kind of master services agreements, and each trial’s scope of work under that. That master service agreement has to come up because the reality is that if you look at the purchasing department of pharma, they’re already pretty busy. If they don’t have to do something, they’re just probably not going to do something. When those contracts come up is when we’ve started to have those conversations. We’ve been successful a couple of times. The reality is pharma doesn’t love the reason pharma doesn’t love these milestones is they come to the FDA, get approval, and they’re like, okay, you owe us $5 million. They’re like, what? Who’s paying that?

They’re all looking at each other trying to figure out what budget it’s going to come out of, etc. They’d rather move it to, and obviously, I think we’d rather, I know you guys and the investors in the audience would much rather be a kind of more predictable recurring revenue stream. That being said, I want to caution that this is, well, two things. This isn’t going to flip overnight. It’s going to take some time to do so. The other thing I’ll say is, yeah, as unpredictable and challenging as milestones can be to guide to and to model, etc., they often come at a 100% margin. They’re not all bad.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Shifting to immune medicine, you recently announced a termination agreement with Genentech. While it’s not surprising given strategic shifts at many pharma companies with the evolving regulatory landscape, it does remove some upside opportunity that could have materialized in the event of a successful cell therapy approval. Can you comment on what you might be able to do now that you have the rights back for some of those assets, including the PCR antigen prediction model? Beyond the Genentech partnerships, how can you monetize the asset now that it’s returned to you?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: Yeah, so first of all, I’d say overall, I think this increases our upside and not removes it, particularly because I would doubt that I know that the analysts and most of our investors didn’t have this anywhere in their models anyway. What it does is it releases us from exclusivity. We have the technology back for cellular therapy in cancer. I would say the larger opportunity is beyond that. We’ve been building this digital TCR antigen map over the course of many different years that we’re looking to monetize in a variety of different areas. One is in different drug discovery opportunities and ultimately looking for our next S-curve in terms of T-cell-based diagnostics. We’ve built this muscle and kind of machinery around reimbursement, regulatory kind of salesforce expertise, EMR integrations. Ultimately, we’ve generated some amazing data. It’s really the next frontier of immunology data.

If you look at, again, kind of AlphaFold and the ability to essentially model kind of protein folding, the next big frontier is protein-protein interaction, which is the TCR antigen or peptide MHC kind of interaction with the T-cell receptor. We’ve been generating this data. Frankly, we generated it for personalized cell therapy as one of the applications for the Genentech deal. There are many different applications of this technology. I think the data underlying kind of what we’ve built is incredibly valuable. We’re just now looking at monetization opportunities and have some good discussions. This is one that I think is important that we ring-fence the burn around this opportunity and protect really the MRD profitability.

We’ve been very clear about characterizing this as a low-cost call option and one that we reiterate has really a high-value opportunity behind it that we’re just looking to figure out the best way to monetize.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: I do want to touch on financials.

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: Good. We want to bring power for reading. Let’s go.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: It’s fine. It’s fine. You’ve set a goal for clonoSEQ ASP to reach $1,300 in 2025, and you’ve already achieved well over $1,290 in Q2, which pretty much sets a clear path to that goal. Could you outline the drivers of upsides to ASP from here? What are the unknowns that keep you from getting too optimistic from raising that $1,300 ASP target for the year? Looking beyond 2025, what are the drivers of ASP growth from even there?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: Yeah, I think as it relates to the $1,300 target and the upside there, I think right now we want to be prudent with our expectations regarding that. We have a number of contracts that go effective into the second half of the year at a higher rate. We want to see evidence that those payers are paying at that rate. We’re enforcing those payments and starting to pull that through. I think that’s just the prudence and the guide. What gives us confidence in the exit value and ultimately getting to that $1,700+ ASP target over time is the ability that we’ve had to continually execute and re-contracting with existing payers up towards that gap fill rate of around $2,007 per test. We started the process. We’ve enabled a number of payers over the last six months. We have a number going live in the second half.

Continuing to stack onto that is Medicaid penetration and coverage in that area, which will continue to grow over the course of the next two to three years.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Great. You also began to roll out NovaSeq X, which should equate to a 5% to 8% improvement in gross margins. How should we be thinking about cadence of that improvement in the second half?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: Yeah, I think the best way to think about it in the second half is, you know, this quarter we’re going through the implementation. We’re only getting two months of benefit from it, and then in the fourth quarter, you’ll see the majority of that impact. Effectively, literal interpretation of that 5% to 8% point improvement over the next 12 months is probably the right way to model it.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Right. You continue to manage your expenses and even reduced your full-year total company cash burn guidance while still driving 25%+ top line growth. What are the most important growth drivers to execute successfully over the next couple of quarters in your view to achieve that cash flow break even in the first half of 2026?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: Yeah, I think taking a step back, a number of things we’ve put in place. Two to three years ago, we expanded the field team. About 24 months ago, we started the implementation around coordinating our laboratory operation logistics, including NovaSeq X implementation. We’ve got a number of those initiatives behind us. We’re gaining more leverage in the business in terms of volume. I think that’s the most important driver here. Just continued execution without having to kind of grow incrementally, which we have a number of the infrastructure in place. We need to make some targeted investments to continue to improve some efficiencies, but those aren’t going to be outsized investments. I think at the end of the day, volume growth is the most important leverage we’re going to gain in ASP initiatives in the coming 12 months.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Great. In the last minute here, just to wrap up, what are you most excited about heading into 2026?

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: I’m excited about a lot of things. First and foremost, I’m excited that the team is executing and firing on all cylinders. Particularly, I’m really encouraged by what we’re seeing in terms of the Flatiron oncoEMR integration. Again, the early returns that I’m seeing bode well for volume growth moving forward. I’m excited about the Neo partnership. I think that it’s going to be interesting to see how that rolls on. I continue to be excited about the kind of clinical utility data. If you think about it, and just to put this in perspective, you’ve got all these companies in minimal residual disease, solid tumor, that are now starting to talk about prognostic data. clonoSEQ’s been prognostic since 2011, 2012. What we’re really seeing is clinical utility data that’s demonstrating specifically how a doctor can treat a patient.

That uptake, particularly that uptake in the community, is what’s going to drive the future growth of the business. Finally, I touched on it before, but I think we’re building this incredibly powerful data set in immunology. We’re looking to exploit that and look for the next revenue monetization opportunities. I think, again, overall, we have, if you look at the average tenure of our executive team now, it’s like eight years in place. Everyone’s working extremely well together. I’m pretty, I would say, pretty, very excited about the business and our trajectory moving forward.

Vicky Apostolakos, Life Science Tools and Diagnostic Team, Morgan Stanley: Great. Thank you very much.

Chad Robins, Co-founder and CEO, Adaptive Biotechnologies: Thank you. Thank you, Yuko. Appreciate it.

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