Adaptive Biotechnologies (ADPT) is trading another 5% higher today after doubling its valuation in its market debut yesterday.
The immuno-sequencing company sold 15 mln shares at $20/share in an IPO yesterday. The stock gapped up 95% and closed its first session higher by 101.5%. It is already the second-best performing IPO of the year, after Beyond Meat (BYND).
Traders have piled in to play the momentum in an already hot stock with a small float. Adaptive now has a market value of over $5 bln.
Enterprise software stocks remain a market darling, but the market also loves genetically targeted medicine stocks. Guardant Health (GH) uses genomics to help physicians and researchers more accurately treat cancer. That stock is up 343% since its IPO eight months ago, sporting a $7.2 bln market value.
More background on Adaptive Biotechnologies:
Adaptive says that it is advancing the field of immune-driven medicine by harnessing the inherent biology of the adaptive immune system to transform the diagnosis and treatment of disease. Its immune medicine platform applies its proprietary technologies to read the diverse genetic code of a patient's immune system and understand precisely how it detects and treats disease in that patient.
It then captures these insights in its dynamic clinical immunomics database, which is underpinned by computational biology and machine learning, and uses them to develop and commercialize clinical products and services that it is tailoring to each individual patient.
The cornerstone of ADPT's platform and core immunosequencing product, immunoSEQ, serves as its underlying research and development engine and generates revenue from academic and biopharmaceutical customers. The company's first clinical diagnostic product, clonoSEQ, is the first test authorized by the FDA for the detection and monitoring of minimal residual disease in patients with select blood cancers.
ADPT's therapeutic product candidates, being developed under its collaboration agreement with Roche's (RHHBY) Genentech, leverage its platform to identify specific immune cells to develop into cellular therapies in oncology. The company believes that this approach has the potential to be applicable to patients with a wide range of cancers.
ADPT's immunoSEQ research service and kit are used to answer research questions that inform current and future clinical trials ("translational research") and to discover new prognostic and diagnostic signals. Its technology has been used for research purposes by over 2,000 academic researchers and more than 125 biopharmaceutical companies and has been incorporated into over 480 clinical trials since the company's inception in 2009.
The company intends to initiate development of a next generation, sample-type agnostic research use-only kit, which it expects to enable global distribution of its research product.
ADPT's clonoSEQ diagnostic test detects and monitors the remaining number of cancer cells that are present in a patient's body during and after treatment, known as minimal residual disease. clonoSEQ was granted marketing authorization from the FDA under the de novo process in September 2018 for patients with multiple myeloma and B cell acute lymphoblastic leukemia to monitor their MRD from bone marrow samples.
In January 2019, clonoSEQ received Medicare coverage aligned with the FDA label and National Comprehensive Cancer Network guidelines for longitudinal monitoring in multiple myeloma and acute lymphoblastic leukemia, and subsequently clonoSEQ received coverage from three private payors representing ~68 million covered lives.
clonoSEQ is also available for use in other lymphoid cancers as a laboratory developed test. The company continues to invest in the commercial success of clonoSEQ by establishing a specialized sales organization and infrastructure in the United States and by exploring partnerships with diagnostic companies in other parts of the world.
For the three months ended March 31, 2019, revenue increased 31% to $12.7 mln. Sequencing revenue increased by $0.3 mln, or 5%. The increase in sequencing revenue was primarily attributable to an increase of $0.5 mln in secured payor coverage, including $0.4 mln relating to tests delivered in periods prior to the three months ended March 31, 2019.
Development revenue increased to $6.6 mln, representing an increase of $2.6 mln, or 67%. The increase was primarily attributable to $6.3 mln of revenue generated from the Genentech Agreement.
Research and Development costs increased by 41% to $12.5 mln. The company had an operating loss of ($20.0) mln compared to a loss of ($13.1) mln in the year ago quarter.
Clearly, investors are not worried about near-term financials. Investing in this company is more about the company's long-term potential to use genomics to transform how we treat disease.