Adaptive Biotechnologies (ADPT) Q1 2025: ClonoSeq Volume Climbs 36% as EMR Integrations Accelerate
Adaptive Biotechnologies delivered a quarter marked by robust ClonoSeq test growth and significant operating leverage, driven by disciplined execution in both clinical and pharma MRD segments. The company’s rapid EMR integration rollout and payer contracting are reshaping its revenue mix, while management’s confidence is reflected in a guidance raise and lower cash burn outlook. Eyes turn now to execution on further automation, payer adoption, and the NovaSeqX transition in the back half of 2025.
Summary
- ClonoSeq Expansion Surges: Test volumes hit record highs as EMR integration and blood-based indications drive adoption.
- Margin and Cost Discipline Materialize: Sequencing gross margin jumps and OpEx declines, signaling operational leverage.
- Guidance Raised on Execution: Upward revisions to MRD revenue, OpEx, and cash burn reflect sustained momentum and confidence.
Performance Analysis
Adaptive Biotechnologies’ Q1 2025 showcased a step-change in operational scale, with total revenue up 25% year-over-year, led by 34% growth in MRD (Minimal Residual Disease, a molecular test for cancer monitoring) revenue. MRD accounted for 83% of total revenue, highlighting the business’s strategic shift toward high-growth, high-margin clinical and pharma testing. ClonoSeq, the company’s flagship MRD assay, delivered 23,117 tests in the quarter—a 36% YoY increase—driven by blood-based testing adoption and rapid EMR (Electronic Medical Record) integration, which now covers five of the top ten accounts.
Sequencing gross margin expanded 17 percentage points to 62%, reflecting both scale efficiencies and improved pricing, while total operating expenses fell 9% as R&D and corporate costs were tightly controlled. MRD adjusted EBITDA loss narrowed sharply, and company-wide cash burn improved 38% YoY, supporting management’s claim of a “clear path to adjusted EBITDA positivity” in the second half. Immune medicine revenue declined as expected due to lower Genentech amortization, but pharma and academic services partially offset the drop.
- Volume Mix Shift: Blood-based MRD tests rose to 44% of US volume, up from 39% a year ago, with lymphoma indications (DLBCL, MCL) showing outsized growth.
- ASP Gains: Average selling price for ClonoSeq climbed 14% YoY, with major payer contracts renegotiated at or near Medicare rates.
- Pharma Pipeline Momentum: Over 60% of pharma studies are now in multiple myeloma, with regulatory milestones recognized and more trials using MRD as primary endpoints.
The combination of higher volume, mix shift, and pricing discipline is driving both revenue acceleration and margin expansion, positioning Adaptive for improved profitability as automation and new platform launches come online later this year.
Executive Commentary
"We are off to an excellent start this year, demonstrating strong execution across both top and bottom line results. In MRD, revenue increased 34% from a year ago. Significant growth was observed in clinical volumes, ASP, and pharma sequencing. This quarter, we also received our first Medicare recurrence monitoring coverage in MCL, a key part of our strategy to grow the lifetime value of each ClonoSeq Medicare patient."
Chad Robbins, Chief Operating Officer and Co-founder
"Sequencing gross margin, which excludes milestones and Genentech amortization, was 62% for the quarter. This represents a significant improvement of 17 percentage points versus prior year, as we leverage lower overhead costs and stable direct labor supporting increased volumes while improving pricing across both our clinical and pharma revenues."
Kyle Pisco, Chief Financial Officer
Strategic Positioning
1. MRD Leadership and EMR Integration
Adaptive is cementing its leadership in MRD testing by expanding ClonoSeq’s reach through EMR integration and payer contracting. EMR integration, which automates test ordering and reporting, is now live in 27 accounts (including five of the top ten), with at least five more set to launch imminently. Integrated accounts are showing volume growth outpacing non-integrated peers, with some doubling test volume YoY post-integration. This digital infrastructure is not only accelerating adoption but is poised to drive long-term operational efficiency and stickiness with providers.
2. Payer Contracting and ASP Discipline
Adaptive’s willingness to walk away from sub-Medicare rates is paying off, as six major payer agreements were closed or renegotiated at or near target price points. Management is confident in achieving a $1,300 average selling price for ClonoSeq in 2025, underpinning both revenue growth and gross margin expansion. Expansion of the reimbursement operations team and improved revenue cycle management further support this pricing discipline.
3. Pharma MRD Pipeline and Regulatory Tailwinds
The pharma MRD business is benefiting from a “halo effect” following last year’s ODAC recommendation, with over 60% of the portfolio now in multiple myeloma and an increasing share of studies using MRD as a primary endpoint. Regulatory milestones are being recognized earlier, and management suggests the funnel is growing, with opportunities for additional upside as more trials read out. Adaptive is also pushing for more recurring revenue models in pharma contracts to reduce milestone lumpiness and improve predictability.
4. Automation and Platform Transition
Sequencing automation and platform upgrades are a key lever for further margin expansion. The NovaSeqX platform is on track for a second-half launch, with expectations for a 5-8 percentage point gross margin improvement in the first year post-launch. Management reiterated the long-term target of 70%+ gross margin at scale, with current performance running ahead of plan due to volume and pricing tailwinds.
5. Immune Medicine Focus and Cost Gating
Immune medicine, while a smaller contributor, is tightly managed with a $25-30 million cash burn target, and R&D investments are gated to data milestones and external funding. The focus is on advancing digital TCR antigen prediction models and preclinical antibody programs, with pharma and academic revenue partially offsetting spend.
Key Considerations
This quarter highlights Adaptive’s ability to scale its core MRD business while maintaining strict cost control, positioning the company for potential near-term profitability and long-term leadership in molecular diagnostics.
Key Considerations:
- EMR Integration as a Volume Driver: Integrated accounts are posting outsized growth, with management targeting 50% of volume from EMR-enabled sites by year-end.
- Payer Contracting Underpins ASP Expansion: Six major contracts were closed or renegotiated at disciplined rates, supporting a 14% YoY ASP increase and further margin leverage.
- Pharma MRD Pipeline Diversification: Regulatory milestones and trial mix are trending toward larger, later-stage studies, increasing both visibility and potential upside.
- Sequencing Automation and Cost Leverage: Lab automation and NovaSeqX transition are expected to deliver incremental margin gains, with current sequencing gross margin already up 17 points YoY.
- Community Penetration and Account Expansion: Community accounts now include top-volume sites, and focused field teams are driving both breadth and depth of adoption.
Risks
Adaptive’s outlook is exposed to execution risk around EMR integration timelines, payer adoption, and the NovaSeqX platform transition, as well as potential regulatory volatility in pharma milestones. While management downplays tariff and NIH funding exposures, any delays in automation or payer pushback could impact both margin and volume growth. The business remains loss-making, and further outperformance is needed to deliver on adjusted EBITDA positivity targets.
Forward Outlook
For Q2 2025, Adaptive guided to:
- Sequential ClonoSeq test volume growth across all major indications
- Continued margin expansion as lab automation scales
For full-year 2025, management raised guidance:
- MRD revenue to $180-190 million (up from $175-185 million)
- Total operating spend lowered to $335-345 million
- Cash burn reduced to $50-60 million
Management cited strong Q1 volume momentum, earlier milestone recognition, and disciplined OpEx as drivers, with upside potential tied to further EMR integration and payer wins. Key watchpoints include the Flatiron OncoEMR launch, NovaSeqX deployment, and Neogenomics pilot ramp in H2.
Takeaways
Adaptive’s Q1 2025 results demonstrate a business inflecting toward scale and profitability, with disciplined execution across commercial, operational, and financial levers.
- Operational Leverage Surfaces: Gross margin and cash burn improvements reflect successful automation and pricing discipline, with further gains expected as new platforms launch.
- Commercial Model Validation: EMR integration and payer contracting are driving sustainable volume and ASP growth, validating Adaptive’s go-to-market strategy in MRD.
- Execution Remains the Watchpoint: Investors should monitor EMR rollout pace, payer adoption, and platform transition milestones as the company targets adjusted EBITDA positivity in H2 2025.
Conclusion
Adaptive Biotechnologies delivered a quarter of accelerating growth and margin expansion, underpinned by digital infrastructure and payer discipline. With raised guidance and clear execution milestones, the company is positioned for a pivotal year—though delivery on automation, EMR, and pharma pipeline will be critical to sustaining momentum.
Industry Read-Through
Adaptive’s Q1 underscores a sector-wide inflection toward automation, digital integration, and payer-driven pricing in molecular diagnostics. The rapid adoption of EMR integration as a volume and efficiency lever is a signal for other diagnostics providers to accelerate digital transformation. Pharma’s shift to MRD endpoints and milestone-based contracts points to greater regulatory alignment and trial complexity, benefitting those with scale and data-driven platforms. Margin gains from automation and platform transitions will increasingly separate leaders from laggards as reimbursement and cost pressures persist across the sector.