Adaptive Biotechnologies Reports Strong Preliminary 2025 Revenue Growth, Bolstering MRD Execution Narrative

What happened

Adaptive announced preliminary unaudited fourth-quarter and full-year 2025 results, with revenue reaching approximately $72 million and $277 million, representing 51% and 55% year-over-year growth, respectively. This surge aligns with the DeepValue report's BUY stance, driven by the company's leadership in hematologic MRD via clonoSEQ, which benefits from FDA authorizations and broad U.S. reimbursement. The growth likely reflects successful execution on management's targets for MRD profitability in 2025 and reduced cash burn guidance, as noted in the report. However, the report highlights persistent risks, including evolving LDT regulation, reimbursement shifts, and competition, which could temper long-term sustainability despite the positive momentum. Overall, these results reinforce the MRD strategy's traction but underscore the need for vigilance on key watch items like ASP trends and cash flow management.

Implication

Investors can interpret the strong preliminary 2025 revenue as evidence that Adaptive is effectively capturing share in the underpenetrated MRD market, leveraging its reimbursement moat and clinical integrations. This performance may accelerate the achievement of MRD profitability in 2025, potentially reducing cash burn and enhancing liquidity runway from the reported $222 million in cash as of Q2'25. However, the unaudited nature of the results and reliance on stable payer policies introduce volatility, requiring scrutiny beyond the optimistic portrayal in the announcement. The growth should be contextualized against the wind-down of the Genentech collaboration, which limits therapeutic upside but sharpens capital allocation on the core MRD business. Continued focus on clonoSEQ volumes, ASP expansion, and MRD-Pharma services momentum is critical to sustaining the investment thesis amid competitive and regulatory headwinds.

Thesis delta

The preliminary 2025 revenue growth exceeds historical rates and provides concrete evidence of execution on the MRD expansion narrative, strengthening confidence in near-term targets. This reinforces the BUY stance by demonstrating operational momentum, though the core thesis remains unchanged with risks around policy shifts and competition still in play. No fundamental shift is introduced, but the results enhance the likelihood of achieving MRD profitability and reduced cash burn as guided.