Adaptive Biotechnologies inks deal with healthcare fund to beef up balance sheet

September 14, 2022:- According to an article by Charlotte Schubert in MSN, Adaptive Biotechnologies will boost $250 million in a deal announced Monday with healthcare investment company OrbiMed, which will acquire a cut of Adaptive’s revenue as part of the agreement.

OrbiMed will supply Adaptive with $125 million in non-dilutive financing, with the opportunity for the second tranche of $75 million. Adaptive can also control the third tranche of $50 million for potential merger and acquisition agreements.

OrbiMed will obtain 5% of the public biotech company’s GAAP revenues for the first $125 million, increasing to 8% for the second tranche and 10% for the third. In a report Monday announcing the deal, the organizations described it as a “royalty financing agreement.”

“We are keen to work with OrbiMed on this creative royalty structure to persist in unlocking the complete potential of our immune medicine platform,” stated Adaptive CEO and cofounder Chad Robins.

“The agreement will grow our cash runway while providing flexibility to invest in growth initiatives in both our MRD and immune medicine business locations,” added Robins, referring to the company’s products and services to notice MRD (minimal residual disease) in people with blood cancers.

Adaptive had $450 million in cash and marketable securities at the end of the second quarter of 2022. As per a recent financial report, revenue for the second quarter reached $43.7 million, a 13% growth from the second quarter of 2021.

Though its revenue is increasing, Adaptive tallied operating expenses of $96.2 million for the second quarter of 2022 and a net loss of $52.1 million, analogized to $49.3 million in the year-ago duration.

In May, the business restructured to focus on MRD and immune medicine, laying off about 100 employees, or 12% of its workforce.

More recently, Adaptive’s MRD product clonoSEQ received an expanded Medicare range for Diffuse Large B-Cell Lymphoma (DLBCL), a typical kind of lymphoma. ClonoSEQ test volume grew 53% versus the second quarter of 2021 and 17% over the first quarter of 2022, as per the financial report.

The company anticipates pulling in between $185 million to $195 million in revenue for 2022, with operating expenditures between $410 million and $415 million.

Robins founded the company, a spinout of Fred Hutchinson Cancer Center, in 2009 with his brother, Chief Scientific Officer Harlan Robins. They took the business public in 2019 and cut the ribbon on a recent 100,000-square-foot headquarters in Seattle last year.

“This investment remembers our confidence in Adaptive Biotechnologies and the possibility to accelerate its significant contributions to the field of immune medicine,” stated Matthew Rizzo, General Partner of OrbiMed, which was not a previous investor in the business.

“The business is well-positioned to deliver revenue growth while continuing to innovate and develop the applications of its platform in clinical diagnostics and drug finding,” stated Rizzo.