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Item 1. Business

2022-02-15 compared with 2021-02-24 · 307 added, 297 removed, 789 unchanged (43% of the section changed)

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We capture these insights in our dynamic clinical immunomics database, which is underpinned by computational biology and machine learning, and use these insights to develop and commercialize clinical products and services that we are tailoring to each individual patient.

We have three commercial products and services and a robust pipeline of clinical products and services that we are designing to diagnose, monitor and enable the treatment of diseases such as cancer, autoimmune conditions and infectious diseases.

Since our inception in 2009, we have characterized over 58 billion immune receptors, established partnerships and commercial relationships with 175 biopharmaceutical companies and launched three product lines.

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Our first clinical diagnostic product, clonoSEQ, is the first test authorized by the Food and Drug Administration (“FDA”) for the detection and monitoring of minimal residual disease (“MRD”) in patients with multiple myeloma (“MM”), B cell acute lymphoblastic leukemia (“ALL”) and chronic lymphocytic leukemia (“CLL”) and is also available as a CLIA-validated laboratory developed test (“LDT”) for patients with other lymphoid cancers.

Leveraging our collaboration with Microsoft Corporation (“Microsoft”), we are creating a map of the interaction between the immune system and disease (“TCR-Antigen Map”).

Leveraging our collaboration with Microsoft Corporation (“Microsoft”), we are creating a map of the interaction between the immune system and disease (our “TCR-Antigen Map”).

We are using this map to develop research solutions by disease called immunoSEQ T-MAP and a diagnostic product for many diseases from a single blood test called T-Detect.

T-Detect was formerly known as immunoSEQ Dx.

T-Detect COVID, for which we have applied for Emergency Use Authorization (“EUA”), confirms past SARS-CoV-2 infection, the virus that causes COVID-19, and is also the first indication for the T-Detect product line.

We are finalizing clinical validation of T-Detect for Lyme disease and continue to pursue signals for other disease states in parallel.

T-Detect COVID, the first indication for the T-Detect product line, received Emergency Use Authorization (“EUA”) for confirmation of recent or prior SARS-CoV-2 infection, the virus that causes COVID-19, in March 2021.

We confirmed signals in Crohn’s disease, celiac disease, and multiple sclerosis, identified new signals in ulcerative colitis, and rheumatoid arthritis, and are focusing on generating additional signals in autoimmune disease states.

In addition, we have completed our clinical validation of the immuneSense Lyme study, which represents another technical proof point in our ability to map T cells to disease specific antigens.

Our therapeutic product candidates, being developed under our collaboration agreement with Genentech, Inc.

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We believe this approach has the potential to be applicable to patients across a wide range of cancers.

We also extended our platform to identify highly potent neutralizing antibodies against SARS-CoV-2 and we believe this differentiated approach may be leveraged across multiple disease states.

In addition, we extended our platform to inform vaccine design and development through our licensing agreement with Vaccibody AS, now known as Nykode Therapeutics AS (“Nykode”).

We believe there is potential to apply our platform to vaccine development and design across multiple disease states.

Immune medicine is one of the largest global addressable markets in healthcare.

We estimate the potential market opportunity for our portfolio to be $54.7 billion, including $1.0 billion for research products, $22.3 billion for clinical diagnostics and $31.4 billion for cellular therapy in oncology.

We estimate the potential global market opportunity for our portfolio to be approximately $54 billion, including approximately $6 billion for products and services related to the detection of MRD and approximately $48 billion for diagnostic and drug discovery applications driven by mapping immune receptors to disease-specific antigens.

This currently includes T-Detect and cellular therapy in oncology and is expected to grow with additional opportunities stemming from our platform.

We use multiple sources and assumptions to estimate the total addressable market for immune medicine.

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Despite the novelty of this area, we believe we are uniquely positioned to develop and commercialize a pipeline of immune-driven diagnostic and therapeutic products across multiple disease states by leveraging the cumulative learning from our immune medicine platform.

Despite operating with challenges presented by the global COVID-19 pandemic, we were able to achieve and progress towards many key milestones in 2020 in each business area:

We extended our collaboration with Microsoft to decode the population-wide T-cell immune response to COVID-19.

We believe that quantifying virus-specific T cells may provide important research and diagnostic advantages because T cells appear earlier than antibodies and persist longer.

Together, we implemented the ImmuneCODE Program to quantitatively assess the T-cell immune response to the virus in over 5,000 individuals from around the world and we have made this data publicly available.

As a result of this work, we have broadened our product portfolio in our life sciences research and clinical diagnostic business areas.

In addition, we also leveraged these samples to contribute to our research and development efforts to identify potent neutralizing antibodies against the virus, which extended our drug discovery capabilities.

In clinical diagnostics, we now have two products on the market – clonoSEQ and T-Detect.

For clonoSEQ, we grew our test volume by 49% to 15,186 tests delivered.

We were able to achieve and progress towards many key milestones in 2021 in each business area:

In March 2021, T-Detect COVID was granted EUA by the Food and Drug Administration, becoming the first-in-class test to confirm recent or prior COVID-19 infection.

Data demonstrates that T-Detect COVID can detect prior infection nearly 12 months after diagnosis in some patients.

T-Detect COVID was ordered by over 30,000 consumers and providers on behalf of their patients.

In addition, we received a positive technical assessment from Palmetto GBA’s Molecular Diagnostics Program (“MolDX”), followed by a coverage decision from Noridian Mutual Insurance Company providing a path to reimbursement in 2022 for immunocompromised patients.

immunoSEQ T-MAP COVID, another byproduct of leveraging the TCR-Antigen Map collaboration, continues to be a source of valuable insight as we advance towards an understanding of the T cell response to SarS-CoV-2 at scale and with precision, including with respect to emerging variants of concern .

For new variants of concern, such as Delta or Omicron, we have demonstrated the ability to identify mutations and connect them to our large-scale antigen-specific datasets in order to measure T-cell response to vaccination and determine the role of cellular immunity.

The T-Detect product continued to make significant advances in the autoimmune space.

With respect to autoimmune diseases, we confirmed signals in Crohn’s disease and multiple sclerosis and identified new signals in ulcerative colitis and rheumatoid arthritis.

These clinical signals were identified in a series of well-characterized case-control sample sets from collaborating institutions, including over 5,000 samples in inflammatory bowel disease (“IBD”), and we plan to advance some of these signals to blinded clinical validation studies in the near future.

Our clinical diagnostics business continued to grow year over year.

For our clonoSEQ product, we grew our test volume by 48% to 22,516 tests delivered.

We increased the all-time number of unique patients tested by more than 46% to over 22,000 patients by the end of 2021.

We also achieved an expansion of our FDA label to include CLL from both bone marrow and blood and have filed to expand our existing label for ALL in bone marrow to include blood .

For T-Detect, we launched the first indication, T-Detect COVID, to confirm past SARS-CoV-2 infection.

Our data demonstrates that our T-cell based test outperforms antibody serology to confirm past infection.

We will be completing our ImmuneSENSE Lyme clinical validation study and are preparing for commercialization in 2021, and we announced another clinical signal for Crohn’s Disease.

In life sciences research, we launched the upgraded immunoSEQ RUO kit, which has been selected by 35 core labs and user groups at premier institutions and by two global clinical research organizations (“CROs”), Q2 Solutions LLC (“Q2 Solutions”) and Laboratory Corporation of America Holdings (“Labcorp”), to offer gold standard immunosequencing to their research clientele.

In the third quarter, leveraging our work with Microsoft, we launched a new product extension called immunoSEQ T-MAP COVID to accurately and reproducibly measure the T-cell immune response to vaccines and track the persistence of that response over time, and we are in late-stage discussions with several companies developing next-generation vaccines.

This is the first application of the immunoSEQ T-MAP product extension whereby we will be offering access to the mapped sequence data generated by our platform.

In the fourth quarter of 2020, we entered into our first multi-year immunoSEQ T-MAP cancer collaboration with AstraZeneca plc (“AZ”) to generate data from antigen-specific T-cell immune responses across AZ’s oncology drug portfolio.

T-MAP data may inform early disease intervention to help improve patient outcomes, with the potential for additional opportunities to develop companion diagnostic or novel therapeutics with AZ.

We also signed two additional collaborations with Genentech and GlaxoSmithKline plc to use the research application of our MRD product to support clinical development and potential regulatory approval or label extensions of novel blood cancer therapies.

In drug discovery, Genentech is planning to file an investigational new drug (“IND”) submission in the first half of 2021 for our first shared cellular therapy product and we are in late-stage characterization of our next cancer-specific immune receptor that could be selected by Genentech for the potential development of a second shared cellular therapy product.

We are scaling our research and development efforts and plan to generate proof of concept data for the personalized approach and are on track to open our dedicated prototype lab in South San Francisco in early 2021.

For our neutralizing antibody efforts, we identified several highly potent neutralizing antibodies against SARS-CoV-2 and are in active partnering discussions.

Key financial highlights for 2020 include full year revenue up 16% to $98.4 million, cash, cash equivalents and marketable securities of $806.8 million and clinical sequencing volumes up 50% to 15,216 tests, which now includes both clonoSEQ and T-Detect tests.

In addition, we expect to complete construction and move into our new corporate headquarters in Seattle, Washington in the second half of 2021.

This approximately 100,000 square foot facility is designed to enable us to quadruple our volume over time and allow for continued scaling and growth.

We have filed to expand our existing label for ALL in bone marrow to include blood, and we enhanced the clinical report for CLL patients to include immunoglobulin heavy chain – V (“IGHV”) mutation status, which has been well received by our clinical customers.

In drug discovery, we continue to make good progress with our shared and private product programs under our Genentech collaboration.

Regarding the shared product, we delivered to Genentech efficacy and safety data for our TCR candidate that targets a shared cancer neoantigen.

Following review of data generated by both us and Genentech using this TCR candidate, Genentech recently selected this TCR candidate to progress as a potential therapeutic product candidate.

Also, in 2022, we’re on track to deliver to Genentech up to two additional TCR data packages for consideration by Genentech.

Regarding our private program, we conducted initial proof of concept screens by successfully processing blood from approximately 60 cancer patients.

We continue to work closely with Genentech to establish the private product specifications and to build our private product data package.

The personalized data that we generate in 2022 with Genentech will help start to define steps toward early product development by Genentech.

We also extended our drug discovery efforts by establishing a new worldwide licensing agreement in July 2021 with Nykode, whereby virus-specific T cell epitopes identified by our platform will be used to inform the design and development of novel SARS-CoV-2 vaccine candidates.

The Nykode 2-arm Phase I/II trial started in the fourth quarter of 2021 and is currently enrolling individuals in Norway who are already vaccinated.

This T cell-based vaccine is intended to address SARS-CoV-2 variants of concern and may be used as a potential universal booster to available vaccines.

The Nykode collaboration represents a significant extension of the platform into vaccine design and development.

Key financial highlights for 2021 include full year revenue up 57% to $154.3 million, cash, cash equivalents and marketable securities of $570.2 million and clinical sequencing volume up 48% to 22,516 tests, excluding T-Detect COVID volume.

In addition, we moved into our new corporate headquarters in Seattle, Washington in September 2021, increased warehouse space in the Seattle area, and opened a new office in New York City in 2021.

These facilities are designed to allow for continued scaling and growth, as well as laboratory and operational optimization in the Seattle area.

Our Immune Medicine Platform

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TruAB is our high-throughput antibody discovery process that enables the selection of potent, naturally occurring, full length antibodies for therapeutic or prophylactic development.

The massive amount of data generated by our immune medicine platform is stored in our dynamic clinical immunomics database of over 58 billion immune receptors.

The massive amount of data generated by our immune medicine platform is stored in our dynamic clinical immunomics database.

We believe the application of machine learning, supported by our collaboration with Microsoft, has the potential to exponentially accelerate our ability to derive novel insights from this database and use them to inform our robust product development efforts.

The current coronavirus pandemic is highlighting the critical importance of understanding the immune response to disease broadly, making our technology more relevant than ever.

We are focused on translating the genetic language of the adaptive immune system into clinical products to diagnose and treat disease, and we are committed to leveraging our immune medicine platform to support the efforts to combat the COVID-19 pandemic.

By elucidating immune receptor data specific to SARS-CoV-2, we developed multiple products.

In our research business, for the first time, we offered a product that not only sequences, but also maps the immune response to the virus.

This product, called immunoSEQ T-MAP COVID, provides a better way for vaccine developers and researchers to include the T-cell response in their studies.

We are pleased to see top-tier vaccine developers recognizing the power of this product.

Leveraging the same data, we launched a clinical diagnostic called T-Detect COVID to confirm past infection.

In addition, we created an antibody discovery platform to find highly potent neutralizing antibodies against COVID-19 that is applicable not only to the current pandemic, but also in the unfortunate event of future pandemics and other diseases states.

In 2020, together with Microsoft, we created the ImmuneCODE program to map the T cell response to SARS-CoV-2 across the global population.

Our goal was to leverage the existing capabilities of our high throughput platform to generate an unprecedented amount of T cell data from over 9,000 samples to understand the adaptive immune response to COVID-19.

From these samples, we have mapped over 160,000 high-confidence TCRs to all parts of the virus which we have shown to be most immunogenic.

We have published several papers over the past year that demonstrate the correlation between the T cell response and real world efficacy of vaccination as the virus has mutated.

This mapping effort has enabled us to develop and commercialize multiple products that have supported the fight against COVID-19.

In our research business, we offered a product called immunoSEQ T-MAP COVID to provide a better way for vaccine developers and researchers to include the T-cell response in their studies.

We are pleased to see top-tier vaccine developers such as Johnson & Johnson, Moderna, and AstraZeneca continue to recognize the power of this product.

Leveraging the same data, we launched a clinical diagnostic called T-Detect COVID to confirm recent or prior infection.

T-Detect is the only T cell-based test for COVID authorized by the FDA pursuant to the EUA pathway.

Additionally, we signed a drug discovery agreement with NyKode of the design and development of a next-generation DNA-based T cell mediated vaccine for COVID and the first patient was dosed in December 2021.

Importantly, we believe we can leverage what we accomplished for COVID-19 using disease-specific immune receptor data across other disease states going forward.

In addition to the opportunities driven from understanding the T cell response to SARS-CoV-2, we also extended our platform to identify highly potent neutralizing antibodies against the virus.

We currently have a portfolio of highly potent neutralizing antibodies against SARS-CoV-2 and continue to explore potential partnerships.

We are exploring the potential of leveraging this differentiated antibody discovery capability across multiple disease states.

We believe COVID-19 brought the role of the immune system to the forefront of society and has created the opportunity for us to be positioned as the “go to” company to rapidly and reproducibly assess the T-cell response to any pathogen, including future pandemics.

Our Current Products and Pipeline

Our current portfolio includes commercial products and services in life sciences research and clinical diagnostics, and we are developing products and services in both clinical diagnostics and drug discovery.

Our commercial research products, immunoSEQ and immunoSEQ T-MAP, primarily serve as our underlying research and development engine to develop and validate our clinical pipeline.

Our current portfolio includes commercial products and services in clinical diagnostics and life sciences research, and we are developing products and services in both clinical diagnostics and drug discovery.

We plan to continue to invest in our immune medicine platform to develop additional clinical products, which we prioritize based on clinical actionability, unmet medical need and commercial viability.

Life Sciences Research

Our immunoSEQ research service and kits are used to answer translational research questions and discover new prognostic and diagnostic signals.

Our technology has been used for research purposes by over 2,400 academic researchers and 175 biopharmaceutical companies and incorporated into over 650 clinical trials since our inception in 2009.

We have completed development of a next generation, sample-type agnostic research use only (“RUO”) kit that has been selected by 35 academic core labs and user groups in the United States and we continue to expand these collaborations.

Additionally, we announced our first distribution agreement with two CROs, Q2 Solutions and Labcorp, and we are in discussions with several others.

By enabling academic core labs and CROs as centers of excellence with our gold standard immunoSEQ RUO kit, we expect to set the foundation for long term growth going forward.

Importantly, immunoSEQ is analytically validated so that all research data generated using immunoSEQ can be used for clinical validation of potential diagnostic applications.

We launched immunoSEQ T-MAP COVID in August 2020 for vaccine developers and researchers to accurately and reproducibly measure the T-cell immune response to vaccines and track the persistence of that response over time.

A key objective with T-MAP COVID is to answer many outstanding questions about durability of COVID-19 vaccines, especially in light of new variants of the virus.

Our T-MAP product offers significant advantages over other technologies to detect and monitor T cells at scale using a small amount of blood without the need for live cells that require special sample handling.

To date, we have sequenced a subset of patient samples (pre- and post-vaccination) from clinical trials sponsored by several top-tier vaccine developers, including AZ, University of Oxford, Bill and Melinda Gates Foundation and several prestigious academic labs who are studying the impact of COVID-19 vaccines on patients receiving other immune-mediated therapies.

Using our immunoSEQ T-MAP COVID product, we can identify and track expanded T cells induced by a vaccine, which can be distinguished from a natural infection, in order to monitor vaccine efficacy.

In vaccinated subjects who test positive for the virus utilizing the two-step multiplex polymerase chain reaction (“PCR”) amplification process, immunoSEQ T-MAP COVID can specifically track vaccine-induced T cells and correlate response with improved patient outcomes.

In addition, we are also in late-stage discussions with several companies developing next-generation vaccines.

In the fourth quarter of 2020 , we entered into our first multi-year immunoSEQ T-MAP c ancer collaboration with AZ to generate data from antigen-specific T-cell immune response s across AZ ’s oncology drug portfolio .

T-MAP data may inform early disease intervention to help improve patient outcomes , with the potential for additional partnership opportunities to develop companion diagnostics or novel therapeutics with AZ .

The partnership also allows for data sharing between us and AZ that benefit s our independent efforts.

We expect this will help expedite our ability to map the large antigenic space in cancer.

Clinical Diagnostics

Clinical Diagnostics – clonoSEQ and T-Detect

Our 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 MRD.

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In January 2019, clonoSEQ received Medicare coverage aligned with the FDA label and National Comprehensive Cancer Network (“NCCN”) guidelines for longitudinal monitoring in MM and ALL.

Throughout 2019 and 2020, we secured additional payor coverage for clonoSEQ aligned with our FDA label with Medicare, national private payors and large regional plans for a total of over 225 million covered lives for ALL and MM and over 110 million covered lives for CLL.

We secured additional payor coverage for clonoSEQ aligned with our FDA label with Medicare, national private payors and large regional plans for a total of over 240 million covered lives for ALL and MM and over 150 million covered lives for CLL.

In November 2021, MolDX published its LCD for MRD testing.

This LCD not only affirms the importance of MRD and clonoSEQ coverage in ALL, MM and CLL in bone marrow and blood, but also provides a clear and efficient pathway for seeking expanded clonoSEQ coverage through technical assessments in Non-Hodgkin’s Lymphoma (“NHL”).

clonoSEQ testing has been ordered by clinicians for over 22,000 unique patients and used by more than 60 biopharmaceutical companies in over 150 clinical trials.

We continue to deepen our commercial investments to expand clinical adoption of clonoSEQ and have increased the size of our specialized sales and customer support organization and supporting infrastructure in the United States, and we have successfully transferred the technology to seven labs in other parts of the world.

We also signed a co-promotion agreement with Labcorp to leverage their growing oncology salesforce to expand our commercial reach and further deepen our market penetration.

We continue to deepen our commercial investments to expand clinical adoption of clonoSEQ and have increased the strength of our specialized sales and customer support organization and supporting infrastructure in the United States, and we have successfully transferred the technology to seven labs in other parts of the world.

We believe clonoSEQ has broad applicability across all lymphoid malignancies.

We recently submitted a 510(k) premarket notification for ALL from blood samples in February 2021 and are actively advancing validation studies in certain non-Hodgkin’s lymphoma (“NHL”) sub-types.

We submitted a 510(k) premarket notification for ALL from blood samples in February 2021 and are actively advancing validation studies in certain NHL sub-types.

We are also awaiting results from a clinical study using clonoSEQ to assess MRD in blood for multiple myeloma.

Importantly, we have also implemented collaborations with Labcorp and Phlebotek Solutions Corporation (“Phlebotek”) to ease access to blood sample collection for patients.

We believe these solutions may facilitate more frequent monitoring and benefit patients longer term as they enable a convenient and safe alternative to inpatient visits.

Leveraging Microsoft’s machine learning capabilities to create the TCR-Antigen Map, we are developing a diagnostic product, T-Detect, that may enable early or accurate detection of many diseases from a single blood test.

In addition, we continue to develop product improvements for clonoSEQ .

In the third quarter of 2021, we launched an enhanced version of our clonoSEQ B-cell Clonality (ID) reports, which now include s IGHV mutation status for patients with CLL .

The presence of IGHV mutations have been proven prognostic of better outcomes in CLL patients .

We believe that this improvement strengthens the clonoSEQ product by aiding clinicians in evaluating prognosis, simplifying diagnosis, and improving overall patient management by providing additional clinically valuable CLL information, and preliminary feedback indicates these improvements have been well received .

With respect to T-Detect, we developed this diagnostic product by leveraging Microsoft’s machine learning capabilities to create the TCR-Antigen Map, which may enable early or accurate detection of many diseases from a single blood test.

Initially, we are validating detection of a set of discrete diseases for which there is a significant unmet medical need for better diagnostic testing and early intervention, and where antigen specificity is well-known.

These include infectious diseases, autoimmune disorders and certain prevalent cancer types.

In December 2020, we launched an early access program for T-Detect COVID as the first indication of T-Detect, which came a year earlier than originally planned.

The formal launch of T-Detect COVID, which includes a virtual provider to authorize the prescription, occurred in February 2021.

Leveraging the infrastructure built to support this initial indication, we are on track to launch T-Detect Lyme in our CLIA lab towards the end of 2021.

Additionally, we have early clinical signals in gastrointestinal disorders such as Celiac disease and Crohn’s disease, and we have built a robust research and development pipeline to rapidly identify signals across many disease states simultaneously.

We launched the first indication, T-Detect COVID, to confirm recent or prior SARS-CoV-2 infection, which represents a stepping-stone to the long-term vision of T-Detect where a single blood sample can provide information about what diseases a person’s immune system has seen or is currently fighting.

We launched T-Detect COVID in the fourth quarter of 2020 and the product received EUA in March 2021.

We are in the process of working with the FDA to extend the label to include a semi-quantitative measure to enable the test to monitor T cell response over time.

We are concurrently working with select biopharmaceutical collaborators to try to establish a correlate of protection.

Leveraging the infrastructure built to support this initial indication, we are on track to make T-Detect Lyme available in our CLIA lab during the 2022 Lyme season.

Additionally, we confirmed signals in Crohn’s disease, celiac disease, and multiple sclerosis, identified new signals in ulcerative colitis and rheumatoid arthritis, and are focusing on generating additional signals in autoimmune disease states.

Our immune medicine platform enables parallel development because it can work with retrospective sample sets and uses machine learning and computational statistics to continuously improve our detection and accuracy which is applied to all of the diagnostic algorithms.

For T-Detect, we launched the first indication, T-Detect COVID, to confirm past SARS-CoV-2 infection, which represents a stepping-stone to the long-term vision of T-Detect where a single blood sample can provide information about what diseases a person’s immune system has seen or is currently fighting.

In two real-world studies with convalescent patients, including our own IRB-sponsored study called ImmuneRACE, our T-cell based test shows higher sensitivity than multiple antibody serology tests to confirm past infection.

Additionally, data demonstrates that the T-cell response is more persistent than the antibody response to the virus, persisting to at least five months following initial infection and that the performance of T-Detect COVID is equivalent to or better than antibody testing at all timepoints evaluated.

The test was launched in December 2020, primarily targeting groups and individuals for whom knowledge of past COVID-19 infection or exposure is valuable, including self-pay consumers, employers and concierge medicine physician groups.

Our market research shows that there are many people who were unable to access testing in spring of 2020 or had unexpected results from antibody or PCR testing, and are still curious or skeptical about a previous infection.

For T-Detect COVID, our T-cell based test shows higher sensitivity than multiple antibody serology tests to confirm recent or prior infection.

Data demonstrates that T-Detect COVID can detect prior infection nearly 12 months after diagnosis in some patients.

Additionally, T-cell testing can be used to distinguish natural SARS-CoV-2 infection from COVID-19 vaccine response, an important advantage over antibody tests.

The sensitivity of T-Detect COVID is equivalent to or greater than serology testing in RT-PCR-confirmed SARS-CoV-2 cases, and the product has demonstrated a percent positive agreement (“PPA”) of 100% in individuals with RT-PCR–confirmed SARS-CoV-2.

With T-Detect COVID, we initially targeted groups and individuals for whom knowledge of past infection or exposure is valuable, including self-pay consumers, employers and concierge medicine physician groups.

Our market research showed that there are many people who were unable to access testing in spring of 2020 or had unexpected results from antibody or PCR testing, and are still curious or skeptical about a previous infection.

This is particularly true for individuals who were asymptomatic or had mild symptoms, in whom antibody testing may be less reliable.

Additionally, our research indicates high interest among consumers in understanding immunity to COVID-19.

Therefore, we are offering the ability to contribute to on-market research to quantitatively assess the duration of immunity as defined by the persistence of SARS-CoV-2 specific T cells.

T-Detect Lyme is the second indication planned for the T-Detect product line, with an anticipated market launch towards the end of 2021 as a CLIA-service offering , leveraging the infrastructure built for T-Detect COVID.

An interim analysis of the ImmuneSense Lyme study comparing our T-cell based diagnostic to current standard of care testing will support the CLIA launch.

We have enrolled 91% of the subjects needed for the interim analysis.

We intend to continue full enrollment of the 990 subject study, of which approximately 420 will have either a clinical diagnosis or clinical suspicion based on a physician's assessment of Lyme disease.

The remaining subjects will include negative controls from both endemic and non-endemic regions and potential cross-reactive diseases.

Additionally, our research indicates high interest among consumers in understanding immunity to COVID-19.We believe there is a significant need to for clinicians to manage patient care, including vaccine or booster regimens, by assessing the immune responses of immunocompromised patients.

We also believe we are uniquely suited to assess and provide insights to clinicians as to the immune responses of those patient whose immunocompromised status is the result of prior cancer infection, a market that is complementary to our oncology expertise.

We continue to offer the ability to contribute to on-market research to quantitatively assess the duration of immunity as defined by the persistence of SARS-CoV-2 specific T cells.

In addition, we have completed our clinical validation for our immuneSense Lyme study, which represents another technical proof point in our ability to map T cells to disease specific antigens We expect to leverage the infrastructure built for T-Detect COVID with an anticipated market availability during the 2022 Lyme season.

There are approximately 3.4 million Lyme diagnostic tests performed annually.

Initially, we are focused on generating data that supports market entry for early and more accurate diagnosis of Lyme disease for patients with non-descript symptoms that are suspected to be caused by Lyme.

This population is over 600,000 patients in the US each year.

In terms of other T-Detect indications in the pipeline, we recently confirmed our third clinical signal in Crohn’s disease.

Crohn’s is a gastrointestinal disorder that is often confused with other conditions with similar symptom presentation and there is a significant unmet need for a highly specific and sensitive non-invasive test.

Leveraging acceleration from our T-Detect COVID efforts, we are now able to assess an increasing number of diseases in parallel across the five stages of our research and development pipeline.

Initially, we are focused on market entry for early and more accurate diagnosis of Lyme disease for patients with non-descript symptoms that are suspected to be caused by Lyme.

This population is over 600,000 patients in the United States each year.

Learnings from T-Detect COVID and Lyme efforts have helped us accelerate our assessment of various diseases in parallel across the different stages of our research and development pipeline.

We begin the process with diseases that meet key market attractiveness criteria such as high unmet medical need, understanding of the antigenic space, and our access to samples with metadata.

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Once commercialized, again, we use the same blood sample and the same underlying chemistry for all diseases with a small incremental investment in software for each individual disease, enabling a long-term high margin profile.

Life Sciences Research

Our immunoSEQ research service and kits are used to answer translational research questions and discover new prognostic and diagnostic signals.

Our technology has been used for research purposes by over 2,400 academic researchers and 175 biopharmaceutical companies and incorporated into over 650 clinical trials since our inception in 2009.

Importantly, immunoSEQ is analytically validated so that all research data generated using immunoSEQ can be used for clinical validation of potential diagnostic applications.

immunoSEQ T-MAP COVID combines the sequencing and mapping capabilities of Adaptive’s immune medicine platform to show how T cells respond to different parts of the virus, including the various parts of the spike protein.

A key objective with T-MAP COVID is to answer many outstanding questions about durability of COVID-19 vaccines, especially in light of new variants of the virus.

To date, we have sequenced a subset of patient samples (pre- and post-vaccination) from clinical trials sponsored by several top-tier vaccine developers, including Moderna, Johnson & Johnson, AstraZeneca, University of Oxford, and the Bill and Melinda Gates Foundation among others.

Using our immunoSEQ T-MAP COVID product, we can identify and track expanded T cells induced by a vaccine, which can be distinguished from a natural infection, in order to monitor vaccine efficacy.

With some partners, we are working towards understanding how T cell activation may provide a correlate of protection.

This has become increasingly critical in the wake of variants since the antibody response is increasingly off-target and T cells are correlating more closely with real-world vaccine efficacy.

In an effort to understand immunity for immunocompromised patients, we have also collaborated with the Leukemia and Lymphoma Society and other prestigious academic labs in order to study the T cell response of this subset of patients who do not always have the ability to mount an antibody response to vaccination.

Drug Discovery

Our drug discovery efforts to date are focused on identifying therapeutic-grade TCRs and antibody-secreting BCRs to enable our partners to engineer, manufacture and commercialize therapeutic candidates.

Our TruTCR process characterizes TCRs against shared antigens for use in the development of therapeutics.

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The shared products will use “off-the-shelf” TCRs identified against cancer antigens shared among patients (“Shared Products”).

Genentech is planning its first IND submission for the first shared product targeting a selected shared cancer antigen in the first half of 2021.

We continue to screen and characterize TCRs against clinically relevant targets in solid tumors and we are in late-stage characterization of several promising TCRs that could be considered by Genentech for the development of a second Shared Product.

We completed an assessment of efficacy and safety data to enable a decision to select our lead TCR candidate.

Following review of this data by both us and Genentech, Genentech recently selected this TCR candidate to progress as a potential therapeutic product candidate.

Meanwhile, we continue to screen and characterize TCRs against clinically relevant targets in solid tumors.

We are on track to deliver to Genentech up to two additional TCR data packages for consideration by Genentech.

Personalized Product.

The personalized product will use patient-specific TCRs identified by real-time screening of TCRs against cancer antigens in each patient (“Personalized Product”).

In the second half of 2020, we started screening blood from cancer patients to identify TCRs specific to a patient’s tumor mutations and our goal is to generate proof of concept data by early 2021.

To support our near-term and long-term objectives for our private product, we plan to open our dedicated prototype lab in South San Francisco in 2021, which will have capacity to perform first-in-human clinical trials.

We believe this investment positions us to potentially pursue additional opportunities outside of this collaboration, including cellular therapy in other disease states and cancer vaccines.

In the second half of 2020, we started screening blood from cancer patients to identify TCRs specific to a patient’s tumor mutations.

W e conducted initial proof of concept screens by successfully processing blood from approximately 60 cancer patients, demonstrating that in certain of these patients we were able to identify naturally-occurring TCRs from the cancer patient’s own blood that are specific to that patient’s unique tumor mutations.

To support our near-term and long-term objectives for the Personalized Product, we opened our dedicated prototype lab in South San Francisco in 2021, which will have capacity to perform first-in-human clinical trials.

We believe the lab positions us to potentially pursue additional opportunities outside of this collaboration, including cellular therapy in other disease states and cancer vaccines.

The Nykode 2-arm Phase I/II trial is currently in progress with individuals in Norway who are already vaccinated.

This T cell-based vaccine is intended to address SARS-CoV-2 variants of concern and may be used as a potential universal booster to available vaccines.

The Nykode collaboration represents a significant extension of the platform into vaccine design and development.

The platform is being deployed to both design and develop the vaccine, potentially creating opportunity for a new commercial product.

Although this is the first licensing agreement we have entered into with vaccine design and development as the primary goal, we believe it may provide a useful proof of concept for extending the platform’s ability to design vaccines that may be applicable to other disease states as well.

Our TruAB process, similar to our TruTCR process, leverages our high-throughput capabilities to screen millions of BCRs to identify unique antibodies from the blood of COVID-19 patients.

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Our Clinical Portfolio and Pipeline

Our clonoSEQ pipeline

Our T-Detect pipeline

Our Drug Discovery Pipeline

Our Competitive Strengths

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Our clinical immunomics database provides a robust product development engine.

Using the adaptive immune system as our source-code, we are building a dynamic clinical immunomics database of over 58 billion immune receptors, now being annotated with antigens using machine learning, that drives our ability to rapidly discover and develop potential diagnostic and therapeutic applications.

Our aim is to translate the natural capabilities of the immune system into the clinic by capturing the millions of diverse unique receptors present in a patient’s blood.

Using the adaptive immune system as our product source-code, we are building a dynamic clinical immunomics database , now being annotated with antigens using machine learning, that drives our ability to rapidly discover and develop potential diagnostic and therapeutic applications.

Our aim is to translate the natural capabilities of the immune system into the clinic by capturing the millions of diverse unique receptors present in a patient’s blood , then leveraging the resultant data set into multiple products and services.

Clinical applicability spans diagnostic and therapeutic product potential.

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Each of our products also has broad applicability, enabling robust product lifecycle extensions.

Regulatory and reimbursement expertise will help inform future clinical product development.

Having successfully obtained FDA marketing authorization and coverage for clonoSEQ from Medicare and several national private payors, we believe we have developed valuable core capabilities that will facilitate future product development through to regulatory approval and reimbursement.

Expanding regulatory and reimbursement expertise will help inform future clinical product development.

Having successfully obtained EUA for T-Detect COVID, FDA marketing authorization and expanded coverage for multiple indications of clonoSEQ from Medicare and several national private payors, we believe we have developed valuable core capabilities that will facilitate future product development through to regulatory approval and reimbursement.

We believe this capability will inform future development of other clinical products, including early detection tests.

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We leverage the unique capability of our platform to translate the genetics of a patient’s immune system with the scale, precision and speed required to enable the development of personalized products, including clinical diagnostic tests for disease monitoring and early detection, as well as immune-based therapeutics.

Rapidly identify and advance new products, leveraging foundational technology.

Integrate proven chemistry into our clinical products in development, avoiding the need to re-engineer new products for every clinical application.

We do this by serially identifying new applications of T-Detect for early detection of disease using retrospective datasets without requiring live cells from large cohorts of patients, and by characterizing TCRs for therapeutic use.

As our platform expands into new indications across cancer, autoimmune conditions and infectious diseases, we believe we will benefit from economies of scale and drive margin improvement over time.

Entrench our products and services in clinical drug development with biopharmaceutical collaborators.

Position our platform as the gold standard for the validation of potential immune-driven clinical discoveries in late-stage clinical trials.

Since inception, our products and services have been used by 175 biopharmaceutical companies and incorporated into over 650 clinical trials, and clonoSEQ has proven to be the MRD test of choice for select registrational trials.

Since inception, our products and services have been used by 175 biopharmaceutical companies and incorporated into hundreds of clinical trials, and clonoSEQ has proven to be the MRD test of choice for select registrational trials.

To deepen our established position as a partner of choice, we provide end-to-end support, including hypothesis-driven trial design, extensive data analyses, parallel regulatory support, compliant data transfers and novel target screening.

These synergistic relationships advance the development and adoption of our own clinical products and also inform drug development for our partners.

These synergistic relationships advance the development and adoption of our own clinical products and inform drug development for our partners.

Rapidly identify and advance new products, leveraging foundational technology to generate revenue and address clinical diagnostic challenges in key disease states, such as autoimmune, cancer, and COVID-19.

We integrate proven chemistry into our clinical products in development, avoiding the need to re-engineer new products for every clinical application.

As our platform focuses on cancer, autoimmune disorders and infectious diseases, we believe we will benefit from economies of scale and drive margin improvement over time.

Drive the commercial adoption of distributed, reimbursed and regulated clinical products.

Expand distribution and drive usage of our products and services, including the possibility of developing clinical in vitro diagnostic (“IVD”) kits.

Leverage the commercial infrastructure built for clonoSEQ to submit clinical data for regulatory clearance of our products and services, expand current payor coverage and provide robust billing and patient access infrastructure for multiple clinical applications.

Expand distribution and drive usage of our products and services.

Leverage the commercial infrastructure built for clonoSEQ and T-Detect COVID to submit clinical data for regulatory clearance of our products and services, expand current payor coverage and provide robust billing and patient access infrastructure for multiple clinical applications.

Maintain an entrepreneurial, scientifically rigorous, data-driven and inclusive corporate culture.

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Our immune medicine platform combines a suite of proprietary chemistry, computational biology and machine learning to generate clinical immunomics data to decode the adaptive immune system and transform the diagnosis and treatment of disease.

The massive amount of data generated by our immune medicine platform is stored in our dynamic clinical immunomics database of over 58 billion immune receptors.

We believe the application of machine learning with Microsoft has the potential to exponentially accelerate the growth of novel insights from this database, which we expect will further inform our product development efforts, as demonstrated by the growing number of clinical signals we are generating.

The massive amount of data generated by our immune medicine platform is stored in our dynamic clinical immunomics database.

We have also confirmed signals in Crohn’s disease, celiac disease, and multiple sclerosis and identified new signals in ulcerative colitis and rheumatoid arthritis.

Sequence with immunoSEQ

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We evaluated these BCR sequences in silico and selected more than 3,300 likely attractive antibody candidates for downstream functional characterization, including affinity binding and live virus neutralization.

As of November 12, 2020, Amgen, Inc.

declined its option to negotiate an agreement to develop, manufacture and commercialize our neutralizing antibodies against the SARS-CoV-2 virus.

We are evaluating several options to further advance our lead candidate(s).

Beyond COVID-19, we believe these efforts represent a differentiated platform extension that will position us to pursue additional potential antibody discovery opportunities in a variety of disease states, including in autoimmunity where there is an unmet need.

Clinical Immunomics Database

We are developing a large, dynamic clinical immunomics database, which currently contains over 58 billion immune receptors.

We are developing a large, dynamic clinical immunomics database.

We use our proprietary software and core competency in computational biology to structure and store immune receptor data and to create tools for rapid analysis and easy visualization.

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Our Products and Services

Our commercial research product, immunoSEQ, primarily serves as our underlying research and development engine to develop and validate our clinical pipeline.

Our first commercial diagnostic product, clonoSEQ, is our FDA-cleared test to monitor MRD in patients with select blood cancers.

In the fourth quarter of 2020, we initiated the launch of our second commercial diagnostic product, T-Detect COVID, for the confirmation of past COVID-19 infection.

In 2020 we launched T-Detect COVID, for the confirmation of recent or prior COVID-19 infection.

Our commercial research and clinical products leverage the sequencing and mapping capabilities of our immune medicine platform and the revenue generated by these products largely contributes to sequencing revenues.

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Our drug discovery efforts to date are focused on identifying therapeutic-grade TCRs (TruTCR) and antibody-secreting BCRs (TruAB) to enable our partners to engineer, manufacture and commercialize therapeutic candidates.

With Genentech, we are advancing our pipeline of both shared and private TCR-mediated cellular therapies for cancer patients.

With Genentech, we are advancing our pipeline of both shared and personalized TCR-mediated cellular therapies for cancer patients.

We also extended our platform to identify highly potent neutralizing antibodies against SARS-CoV-2 and this differentiated approach can be leveraged across other disease states.

Our drug discovery pipeline leverages the sequencing, mapping, pairing and characterization components of our platform and generates most of our development revenue.

We further extended our platform in drug discovery by establishing a new worldwide licensing agreement with Nykode, whereby virus-specific T cell epitopes identified by our platform will be used to inform the design and development of novel SARS-CoV-2 vaccine candidates.

We plan to continue to invest in our platform to develop additional clinical applications, which we prioritize based on rigorous data requirements for clinically actionability, unmet medical need and commercial viability.

Life Sciences Research

immunoSEQ for Research Use Only

Our immunoSEQ technology, which we offer to customers as a service and a kit, is the core of our immune medicine platform.

immunoSEQ utilizes multiplex, bias-controlled PCR to accurately and quantitatively sequence millions of immune receptors at high-throughput directly from DNA.

We believe immunoSEQ is positioned to become the global standard for immunosequencing due to the quality and reliability of our data and the analytics and data visualization tools that are easily accessible to customers in the immunoSEQ Analyzer, whether sequenced as a service or a kit.

Since inception, immunoSEQ has been used for research purposes by over 2,400 academic researchers and 175 biopharmaceutical companies and incorporated into over 650 clinical trials to answer translational research questions relating to the adaptive immune system, monitor response to therapies and discover new prognostic and diagnostic signals.

These research questions are answered by using the data generated by immunoSEQ and uploaded to the immunoSEQ Analyzer to study different properties and dynamics of all of the sequences in an immune repertoire, such as frequency or abundance, and by tracking specific sequences over time in clinical trials.

Graphical representations of the Analyzer output are shown in the figure below:

immunoSEQ provides a growing revenue stream.

However, we also use immunoSEQ as the foundational technology for our clinical diagnostic and therapeutic products.

To fuel innovation, we also provide immunoSEQ to select research and development collaborators who gain access to immunoSEQ and significant computational and analytical support, co-share and co-publish the data with us, and contribute to the validation of potential clinical diagnostic discoveries.

For example, we work closely with our collaborators to conduct translational research to explore the use of immunosequencing to predict responders to novel immunotherapies such as checkpoint inhibitors.

Our immunoSEQ Analyzer is housed on a secure cloud-based database and is the visualization gateway to our clinical immunomics database that currently has billions of TCR and BCR sequences which are often annotated and accompanied by samples with associated metadata.

We offer computational services to assist our customers in realizing the power of their data and to compare their data to other publicly available datasets in our clinical immunomics database.

We contribute some of our own research and development sequences into the publicly available datasets and customers are offered the option to make their data public using one of our tools on our immunoSEQ Analyzer, called immuneACCESS, through which researchers can expedite and streamline the peer-review process by sharing their data with reviewers prior to manuscript submission.

The ongoing analysis of immune receptor data from an expanding database tagged with clinical metadata, when possible, has led to over 550 peer-reviewed publications referencing immunoSEQ and potential clinical signals to explore.

We recently launched an improved version of immunoSEQ to our research customers.

We incorporated chemistry improvements into a new RUO kit, which was completed in the fourth quarter of 2019 and launched in 2020.

We expect this service and kit offering to become the technology upon which we clinically validate the early detection diagnostics we are developing using our TCR-Antigen Map.

The kit improvements will further enhance the quantitation of the data and allow for any sample type to be used, including stored cancer tumor tissue sections, which is more readily available globally amongst researchers in the field of cancer immunotherapy.

The RUO kit has been selected by 35 academic core labs and user groups in the United States and we continue to expand these collaborations.

Additionally, we announced distribution agreements with two CROs, Q2 Solutions and Labcorp, and we are in discussions with several others.

By enabling academic core labs and CROs as centers of excellence with our gold standard immunoSEQ RUO kit, we expect to set the foundation for long term growth going forward.

immunoSEQ T-MAP

In 2020, we identified some key opportunities to expand our research product offering to include mapping data generating by our platform.

Sequences mapped to clinically relevant antigens has many benefits beyond just repertoire sequencing dynamics and we plan to offer immunoSEQ T-MAP across many disease states in the future.

We launched our first immunoSEQ T-MAP product extension in August 2020 for COVID-19 vaccine developers and researchers to accurately and reproducibly measure the T-cell immune response to vaccines and track the persistence of that response over time.

Our immunoSEQ T-MAP product offers significant advantages over other technologies to detect and monitor T cells at scale using a small amount of blood without the need for live cells that require special sample handling.

Using our immunoSEQ T-MAP COVID product, we can identify and track expanded T cells induced by a vaccine, which can be distinguished from a natural infection, in order to monitor vaccine efficacy.

In vaccinated subjects who test positive for the virus utilizing the two-step multiplex PCR amplification process, immunoSEQ T-MAP COVID can specifically track vaccine-induced T cells and correlate response with improved patient outcomes.

In addition, we are also in late-stage discussions with several companies developing next-generation vaccines.

In the fourth quarter of 2020, we entered into our first multi-year immunoSEQ T-MAP cancer collaboration with AZ to generate data from antigen-specific T-cell immune responses across AZ’s oncology drug portfolio.

T-MAP data may inform early disease intervention to help improve patient outcomes, with the potential for additional opportunities to develop companion diagnostics or novel therapeutics with AZ.

The partnership also allows for data sharing between us and AZ that benefits our independent efforts.

We expect this will help expedite our ability to map the large antigenic space in cancer.

Clinical Diagnostics

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NGS MRD testing has been added to these guidelines and we plan to seek expansion of the recommendations to include additional time points in each disease state and to incorporate clonoSEQ specific data.

To that end, in 2020, NCCN published favorable updates to their myeloma guidelines and pediatric ALL guidelines to include more specifics related to how and when to measure MRD, the importance of using a sensitive and validated test, and a reference to the necessity of collecting a baseline sample at diagnosis.

To that end, in 2021, NCCN updated the adult ALL guidelines to emphasize the importance of achieving MRD negativity and incorporate recommendations on MRD actionability post-induction.

MRD monitoring is becoming increasingly important in the hematologic oncology field because highly effective new therapies are extending survival.

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In the clinic, clonoSEQ testing has been ordered by clinicians at centers all around the country, including all 31 NCCN centers, for over 22,000 unique patients.

We believe increased adoption of clonoSEQ will now be possible due to the extensive coverage policies granted in 2019 and 2020 by Medicare to assess MRD at multiple time points throughout therapy in MM, ALL and CLL, and several national private payors and large regional payors, together representing over 225 million total covered lives in ALL and MM and over 110 million covered lives in CLL.

We believe increased adoption of clonoSEQ will now be possible due to the extensive coverage policies granted by Medicare to assess MRD at multiple time points throughout therapy in MM, ALL and CLL, and several national private payors and large regional payors, together representing over 240 million total covered lives in ALL and MM and over 150 million covered lives in CLL.

We are in active discussions with other large private national and regional payors.

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This prospective, multicenter, observational study will include approximately 500 adult patients with lymphoid malignancies in the United States.

Among biopharmaceutical companies, we believe clonoSEQ will remain the preferred commercial test for MRD monitoring in their registrational trials.

Among biopharmaceutical companies, we believe clonoSEQ remains the preferred commercial test for MRD monitoring in their registrational trials.

To that end, clonoSEQ is now being used by more than 60 biopharmaceutical companies in over 150 clinical trials.

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We believe clonoSEQ has broad applicability across all lymphoid malignancies.

Specifically, we recently submitted a 510(k) premarket notification for ALL from blood samples in February 2021 and are actively validating the test for patients with non-Hodgkin’s lymphoma (“NHL”) disease types.

Importantly, we have also implemented collaborations with Labcorp and Phlebotek to ease access to blood sample collection for patients.

We believe these solutions may facilitate more frequent monitoring and benefit patients longer term as they enable a convenient and safe alternative to inpatient visits.

Specifically, we submitted a 510(k) premarket notification for ALL from blood samples in February 2021 and are actively validating the test for patients with NHL disease types.

We have also added a new team of demand generation representatives who are hematology specialists and are working closely with our key account managers in accounts that are onboarded.

We are also building another team focused on Integrated Delivery Networks.

We have continued to expand our team of demand generation representatives who are hematology specialists and are focusing their efforts on expanding access to clonoSEQ in community oncology settings.

Outside of the United States, we have successfully transferred the technology to seven labs across France, Germany, Italy, UK, Spain, Australia and Japan which provide local testing options, primarily in support of collaborative group and investigator-sponsored studies.

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CLL Patients with lower levels of MRD in blood have a higher probability of EFS

Evolution of MRD into Clinical Decision Making Tool

While clinical utility has been a barrier to adoption in the past, this is changing quickly as we see multiple studies reading out that clearly demonstrate the value of MRD testing for patients.

For example, the MASTER trial presented at ASH 2021 and published in the Journal of Clinical Oncology (JCO) showed 98% of standard and high-risk patients who discontinued treatment after two negative clonoSEQ MRD tests did not progress after 12 months of treatment discontinuation.

This data supports the goal of adapting treatment regimens to give relief to patients from side effects and saving substantial costs for the health care system.

Martinez-Lopez published a retrospective cohort analysis of 400 newly diagnosed myeloma patients in which MRD was used interventionaly to escalate, change, or stop therapy for 67 of those patients.

Data showed that for MRD negative patients who stopped therapy, progression-free survival (PFS) was not negatively impacted.

Also, for MRD positive patients in whom therapy was changed or intensified, PFS was significantly better than in patients who remained on the same course of therapy.

This analysis supports the potential for use of MRD to modify treatment.

Strategy to Achieve Market Leadership

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To do so, we are executing upon the following strategic initiatives:

Invest in commercial initiatives to increase awareness and usage in the clinic.

We are expanding our sales organization to target key customer segments, including academic centers, integrated health networks and community clinicians, in a tiered manner based on patient volume.

Importantly, clonoSEQ is now being used clinically at all 31 NCCN institutions.

In 2021, we also drove significant uptake in Tier 2-3 community accounts.

We will continue to increase the strength of our specialized sales organization and supporting infrastructure, including building out our teams focused on community oncology centers and integrated delivery networks.

We are also focusing on deeper penetration of the patient opportunity within academic institutions currently using clonoSEQ.

We also continue to build advocacy on an educational basis through a variety of patient educational initiatives and peer to peer programming about the impact of MRD status on clinical decision-making.

Expand reimbursement with public and private payors.

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As of December 31, 2021, we secured Medicare and private payor coverage for clonoSEQ for over 240 million covered lives for MM and ALL and over 150 million covered lives for CLL.

We continue to seek broader coverage in line with our planned FDA label expansions and we continue to invest in health economic research and real-world evidence generation to demonstrate the actionability of MRD monitoring.

We launched a watch registry in 2020 as a prospective, multicenter, observational study of approximately 500 adult patients with lymphoid malignancies in the United States to support these efforts.

In November 2021, MolDX published its LCD for MRD testing.

Entrench clonoSEQ in biopharmaceutical clinical trials.

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We are already cleared in ALL and MM from bone marrow and CLL from bone marrow and blood.

At the same time, we are increasing marketing support for clonoSEQ usage as a CLIA-validated lab-developed testing service, where samples for any lymphoid cancer indication and a range of sample types (including blood) are acceptable, and payer coverage is already in place for blood-based testing in ALL and myeloma.

Going forward, we will continue to evaluate the optimal commercial path (FDA or CLIA) for each additional indication.

Going forward, we will continue to evaluate the optimal commercial path (FDA or CLIA) for each additional indication, with an increasing focus on NHL.

Validate clonoSEQ in blood to offer a minimally invasive alternative.

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Therefore, blood-based MRD testing may enable more frequent monitoring of patients over longer periods of time.

We have already received FDA clearance for clonoSEQ from blood samples for patients with CLL, we recently submitted for FDA clearance for ALL from blood samples, and we will continue to expand testing with blood to other indications over time.

Invest in commercial initiatives to increase awareness and usage.

We are expanding our sales organization to target key customer segments, including academic centers, integrated health networks and community clinicians, in a tiered manner based on patient volume.

In 2019 and 2020, we focused on Tier 1 and Tier 2 accounts, which we estimate to be the sites of care for approximately two-thirds of the patients that comprise the potential market.

With increasing adoption and our recent CLL label expansion, we are beginning to drive uptake in Tier 3 community accounts.

We will continue to increase the size of our specialized sales organization and supporting infrastructure, including building out our teams focused on community oncology centers and integrated delivery networks.

We also launched a variety of patient educational initiatives and peer to peer programming to spread awareness about the impact of MRD status to inform clinical decision-making.

Evaluate a decentralized testing solution.

We continue to explore options to service the MRD opportunity in institutions and markets where local testing is needed or required.

Expand internationally.

We have expanded our technology transfer program to select centers to conduct investigational studies that further demonstrate the value of clonoSEQ and are essential for reimbursement submissions.

We have already completed successful technology transfers in France, Germany, Italy, UK, Spain, Australia and Japan.

In 2019, we obtained a Conformité Européene (“CE”) mark for our clonoSEQ reagents, which is intended to support our reimbursement efforts in Europe.

We expect these market development activities to enhance our commercialization efforts and accelerate international market acceptance over the next three to five years.

We have already received FDA clearance for clonoSEQ from blood samples for patients with CLL, we submitted for FDA clearance for ALL from blood samples and are evaluating the path forward, and we will continue to expand testing with blood to other indications over time.

Invest in product and customer experience improvements.

For 2022, we are making significant investments to support our field force, including providing enhanced selling direction, data and training.

We are also making significant investments in improving our assay’s performance for evaluation of ctDNA in plasma, and, with respect to the process of ordering malignancies clonoSEQ testing and obtaining test results, aiming to continue to enhance our customer-facing software interface and user experience.

Early or Accurate Detection with T-Detect

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We see the evolution of T-Detect in three phases over time:

Launch T-Detect disease by disease with a more accurate test versus current standard of care.

Launch T-Detect disease by disease with a more accurate test versus the current standard of care.

Introduce T-Detect panel(s) for the differentiated diagnosis of disease when the symptoms are shared among several diseases.

Enable T-Detect for population immunomics, where anything we map, we will be able to diagnose from a single blood sample.

Proof of Concept

For proof of concept of the ability of our technology to detect infectious disease exposure in patients, our researchers profiled the T cell repertoire of more than 660 subjects with known cytomegalovirus (“CMV”) status and identified a set of TCRs across that population that are specific for CMV.

This set of CMV-specific TCRs was then tested as a method for CMV diagnosis in a new cohort of 120 people.

Using this TCR set, we were able to confirm CMV infection in up to 93% of blood samples evaluated.

These data represent a significant step forward for the potential use of TCR sequences to detect exposure to pathogens or other diseases with distinct T cell profiles.

By combining the power of our clinical immunomics database with a machine learning technique known as pseudo-labeling, we are rapidly scaling the identification and validation of antigen-specific TCRs for diagnostic applications.

For example, we have already iteratively scaled the identification of additional CMV-specific TCRs to improve the diagnostic accuracy in our proof of concept study to 98% with a minimal false positive rate.

We believe this approach has the potential to significantly reduce the time and number of individuals, and ultimately the cost, required to accurately validate our clinical diagnostics across different diseases.

First Commercial Indication:

T-Detect COVID

In response to the COVID-19 pandemic, we and Microsoft committed to decode the population-wide T cell immune response to COVID-19.

We believe that quantifying virus-specific T cells may provide important diagnostic advantages because T cells appear earlier than antibodies and persist longer.

Timing and Persistence of T-cell Response 1,2,3,4,5,6,7

Gallais et al., Peng et al., Snyder et al., Subbarao et al., Channappanavar et al., and Zuo et al.

Zuo J, Dowell A, Pearce H, Verma K, Long HM, Begum J, et al.

Robust SARS-CoV-2-specific T-cell immunity is maintained at 6 months following primary infection.

2020 Nov 2;2020.11.01.362319.

Gallais F, Velay A, Wendling M-J, Nazon C, Partisani M, Sibilia J, et al.

Intrafamilial exposure to SARS-CoV-2 induces cellular immune response without seroconversion.

2020 Jun 22;2020.06.21.20132449.

Peng Y, Mentzer AJ, Liu G, Yao X, Yin Z, Dong D, et al.

Broad and strong memory CD4+ and CD8+ T cells induced by SARS-CoV-2 in UK convalescent individuals following COVID-19.

2020;21(11):1336–45.

Snyder TM, Gittelman RM, Klinger M, May DH, Osborne EJ, Taniguchi R, et al.

Magnitude and dynamics of the T-cell response to SARS-CoV-2 infection at both individual and population levels.

2020.07.31.20165647.

Subbarao K, Mahanty S.

Respiratory virus infections:

Understanding COVID-19.

2020;52(6):905–9.

Channappanavar R, Zhao J, Perlman S.

T cell-mediated immune response to respiratory coronaviruses.

2014;59(1–3):118–28.

Together, we implemented the immuneCODE Program to quantitatively assess the T-cell immune response to the virus in over 5 ,000 individuals from around the world and we have made this data publicly available.

To date, we have mapped hundreds of thousands of TCRs to all of the immunogenic parts of the SARS-CoV-2 virus, inclusive of but not limited to the spike protein.

T-Detect COVID confirms past SARS-CoV-2 infection, which represents a stepping-stone to the long-term vision of T-Detect where a blood sample can provide information about what diseases a person’s immune system has seen or is currently fighting.

In two real-world studies with convalescent patients, including our own IRB-sponsored study called ImmuneRACE, our T-cell based test demonstrated higher sensitivity than multiple antibody serology tests to confirm past infection.

Additionally, data demonstrates that the T-cell response is more persistent than the antibody response to the virus, persisting to at least five months following initial infection, and performance of T-Detect COVID is equivalent to or better than antibody testing at all timepoints evaluated.

T-Detect COVID was launched in December 2020, primarily targeting groups and individuals for whom knowledge of past COVID-19 infection or exposure is valuable, including self-pay consumers, employers and concierge medicine physician groups.

This is particularly true for individuals who were asymptomatic or had mild symptoms, in whom antibody testing may be less reliable.

Additionally, our research indicates high interest among consumers in understanding immunity to COVID-19.

Therefore, we are offering the ability to contribute to on-market research to quantitatively assess the duration of immunity as defined by the persistence of SARS-CoV-2 specific T cells.

The commercial and operational infrastructure needed to deliver T-Detect COVID will be critical as we move T-Detect forward in additional indications.

These efforts will set the base of our near-term commercial focus in infectious diseases including COVID-19 and Lyme disease and a medium-term expansion into autoimmune disorders.

Clinical Validation in FDA EUA filing for Detection of Recent or Past SARS-CoV-2 Infection

In response to the COVID-19 pandemic, we collaborated with Microsoft to create the ImmuneCODE program to map the T cell response to SARS-CoV-2 across the global population.

From these samples, we have mapped over 160,000 high-confidence TCRs to all parts of the virus which we have shown to be most immunogenic.

T-Detect COVID received EUA for confirmation of recent or prior SARS-CoV-2 infection in March 2021.

This represents a stepping-stone to the long-term vision of T-Detect where a single blood sample can provide information about what diseases a person’s immune system has seen or is currently fighting.

Data demonstrates that the T-cell response is more persistent than the antibody response to the virus, persisting to at least twelve months following initial infection, and performance of T-Detect COVID is equivalent to or better than antibody testing at all timepoints evaluated.

Clinical Validation of Detection of Recent or Prior SARS-CoV-2 Infection

Our T-Detect COVID test is a novel T-cell based assay that has demonstrated high percent positive and percent negative agreement (PPA and NPA) to identify or exclude prior SARS-CoV-2 infection in PCR-confirmed SARS-CoV-2 cases and lack of cross-reactivity to several viral and/or respiratory pathogens.

PPA was demonstrated in two studies 1) a primary PPA study evaluating residual blood samples (N=205) from subjects diagnosed with SARS-CoV-2 infection based on the EUA Abbott RealTime SARS-CoV-2 RT-PCR test from a single US reference lab (Discovery Life Sciences, New York);

PPA was demonstrated in two studies:

1) a primary PPA study evaluating residual blood samples (N=205) from subjects diagnosed with SARS-CoV-2 infection based on the EUA Abbott RealTime SARS-CoV-2 RT-PCR test from a single U.S.

reference lab (Discovery Life Sciences, New York);

and 2) a secondary PPA study using both retrospectively and prospectively collected samples from multiple cohorts (N=77;

ImmuneRACE and ImmuneSense™ COVID-19) and identified as positive based on a variety of EUA testing methods performed by a number of different labs.

T-Detect COVID demonstrated high PPA particularly in the timeframe of ≥15 days since diagnosis (97.1%) as well as ≥15 days since symptom onset (94.5%) (Table 1).

T-Detect COVID demonstrated high PPA particularly in the timeframe of ≥15 days since diagnosis (97.1%) as well as ≥15 days since symptom onset (94.5%), as shown in Table 1.

Positive Percent Agreement (PPA) of T-Detect COVID Assay with SARS-CoV-2 RT-PCR according to days since symptom onset or days since diagnosis.

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1) a primary NPA including 124 retrospective frozen clinical remnant blood samples collected prior to December 2019 and thus presumed negative for SARS-CoV-2 infection;

and 2) a secondary NPA study using blood samples from subjects enrolled prospectively (ImmuneSense COVID-19) from Oct-Nov 2020 who presented with SARS-CoV-2 symptoms but tested negative for SARS-CoV-2 using RT-PCR EUA, BioFire RP V2.1, and EUA antibody tests.

T-Detect COVID demonstrated NPA of approximately 100% in individuals who had compatible symptoms of infection but were either presumed or confirmed negative for SARS-CoV-2 by PCR and antibody testing (Table 2).

and 2) a secondary NPA study using blood samples from subjects enrolled prospectively (ImmuneSense COVID-19) from October through November 2020 who presented with SARS-CoV-2 symptoms but tested negative for SARS-CoV-2 using RT-PCR EUA, BioFire RP V2.1, and EUA antibody tests.

Negative Percent Agreement (NPA) of T-Detect COVID Assay with pre-pandemic samples sourced retrospectively (DLS) and prospectively enrolled subjects (ImmuneSense COVID-19) negative for SARS-CoV-2 by EUA RT-PCR and antibody testing.

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98.7 (93.1 – 99.97)

Second Indication in Late-Stage Development:

Second Indication:

T-Detect Lyme

In the third quarter of 2019, we established proof of concept in acute Lyme disease from two independent, retrospective cohorts of over 200 patients.

In both of these studies, we compared to standard of care, two-tiered serology testing.

Results demonstrate a doubling of sensitivity of our test compared to standard two-tiered serology in acute patients.

We have also seen that our test can confirm an ongoing infection in patients who were treated with standard 2-3 weeks of doxycylcine but still have lingering symptoms.

We previously established proof of concept in acute Lyme disease from two independent, retrospective cohorts of over 200 patients with early Lyme disease.

The TCR repertoire sequencing demonstrated a near doubling in sensitivity for identifying disease compared to STTT (56% vs.

30%) in patients tested within 30 days of symptom onset (2/3 of patients were tested within 8 days of symptom onset), with the sensitivity over STTT being most significant in the four days following the onset of symptoms (44% vs 14%).

TCR repertoire sequencing was approximately 99% specific in an independent set of control samples that had all tested STTT-negative.

37% of early Lyme cases that initially tested STTT negative were identified.

Additionally, the relative abundance of T-cell signatures was found to correlate with disease severity markers, such as abnormal liver function tests, disseminated rashes, and several other Lyme disease-associated symptoms.

The signal in Lyme further demonstrates that machine learning can be leveraged to develop diagnostic signals, even without the large cohorts of prospective patient data often required for diagnostics development.

For T-Detect Lyme, we launched the ImmuneSENSE Lyme study with the goal to enroll 990 participants.

Even though Lyme visits and diagnoses were down in 2020 due to COVID-19, by the end of 2020, we enrolled 91% of the subjects needed for the interim analysis.

The remaining subjects will include negative controls from both endemic and non-endemic regions and potential cross-reactive diseases.

We expect to launch as a CLIA-service offering at the end of 2021, leveraging the infrastructure built for T-Detect COVID.

We completed the ImmuneSENSE Lyme study and expect to launch as a CLIA-service offering during the 2022 Lyme season, leveraging the infrastructure built for T-Detect COVID.

T-Detect Pipeline

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Broaden utility to a wide range of diseases without requiring large prospective trials.

Over the past year, we have optimized our five-stage research and development funnel and expanded our lab capacity to expedite our ability to move many diseases through the funnel in parallel.

We have optimized our research and development funnel and expanded our lab capacity to expedite our ability to move many diseases through the funnel in parallel.

We start by prioritizing diseases that meet key market attractiveness criteria such as high unmet medical need, understanding of the antigenic space, and our access to samples with metadata.

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Once we confirm a signal, we proceed with a full commercial validation and generation of a locked-down algorithm to take into clinical validation and regulatory submission.

We have about four to five diseases under study in each of the earlier stages of the research and development funnel and continue to invest heavily in the speed and robustness of this funnel with people and data analytic capabilities.

T-Detect R esearch and D evelopment Funnel

In the third quarter of 2020, we announced the confirmation of our third clinical signal in Crohn’s disease.

Data will be shared in a scientific forum next year.

Other indications such as celiac, ovarian cancer and other autoimmune disorders continue under development within our research and development funnel and we will update you on future progress as they advance.

There are many economic advantages of T-Detect both in the research and development stage and as a commercial product.

For the research and development pipeline, we use the same capex and workflow for signal generation across all diseases allowing us to study multiple disease in parallel.

In terms of other T-Detect indications in the pipeline, we continue to advance T-Detect in multiple autoimmune indications in parallel.

In 2021, we confirmed signals in Crohn’s disease and multiple sclerosis and identified new signals in ulcerative colitis and rheumatoid arthritis.

These clinical signals were identified in a series of well-characterized case-control sample sets from collaborating institutions, including over 5,000 samples in IBD, and we plan to advance some of these signals to blinded clinical validation studies in the near future.

For new indications, there are many economic advantages of T-Detect both in the research and development stage and as a commercial product.

For the research and development pipeline, we use the same capital expenditures and workflow for signal generation across all diseases allowing us to study multiple diseases in parallel.

Life Sciences Research

immunoSEQ for Research Use Only

Our immunoSEQ technology, which we offer to customers as a service and a kit, is the core of our immune medicine platform.

immunoSEQ utilizes multiplex, bias-controlled PCR to accurately and quantitatively sequence millions of immune receptors at high-throughput directly from DNA.

Graphical representations of the Analyzer output are shown in the figure below:

immunoSEQ provides a growing revenue stream.

However, we also use immunoSEQ as the foundational technology for our clinical diagnostic and therapeutic products.

We offer computational services to assist our customers in realizing the power of their data and to compare their data to other publicly available datasets in our clinical immunomics database.

The ongoing analysis of immune receptor data from an expanding database tagged with clinical metadata, when possible, has led to over 650 peer-reviewed publications referencing immunoSEQ and potential clinical signals to explore.

immunoSEQ T-MAP

In 2020, we identified some key opportunities to expand our research product offering to include mapping data generated by our platform.

Sequences mapped to clinically relevant antigens have many benefits beyond just repertoire sequencing dynamics and we plan to offer immunoSEQ T-MAP across many disease states in the future.

A key objective with T-MAP COVID is to answer many outstanding questions about durability of COVID-19 vaccines, especially in light of new variants of the virus.

Using our immunoSEQ T-MAP COVID product, we can identify and track expanded T cells induced by a vaccine, which can be distinguished from a natural infection, in order to monitor vaccine efficacy.

With some partners, we are working towards understanding how T cell activation may provide a correlate of protection.

This has become increasingly critical in the wake of variants since the antibody response is increasingly off-target and T cells are correlating more closely with real-world vaccine efficacy.

Drug Discovery

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The Shared Products will use “off-the-shelf” TCRs identified against cancer antigens shared among patients.

Genentech is planning its first IND submission for the first shared product targeting a selected shared cancer antigen in the first half of 2021.

We completed an assessment of efficacy and safety data to enable a decision to select our lead TCR candidate.

Following review of this data by both us and Genentech, Genentech recently selected this TCR candidate to progress as a potential therapeutic product candidate.

Meanwhile, we continue to screen and characterize TCRs against clinically relevant targets in solid tumors.

We are on track to deliver to Genentech up to two additional TCR data packages for consideration by Genentech.

Personalized Product.

The Personalized Product will use patient-specific TCRs identified by real-time screening of TCRs against cancer antigens in each patient.

In the second half of 2020, we started screening blood from cancer patients to identify TCRs specific to a patient’s tumor mutations and our goal is to generate proof of concept data in early 2021.

We believe this investment positions us to potentially pursue additional opportunities outside of this collaboration, including cellular therapy in other disease states and cancer vaccines.

In the second half of 2020, we started screening blood from cancer patients to identify TCRs specific to a patient’s tumor mutations.

We conducted initial proof of concept screens by successfully processing blood from approximately 60 cancer patients, demonstrating that in certain of these patients we were able to identify naturally-occurring TCRs from the cancer patient’s own blood that are specific to that patient’s unique tumor mutations.

We believe the lab positions us to potentially pursue additional opportunities outside of this collaboration, including cellular therapy in other disease states and cancer vaccines.

Under the terms of the agreement, we received a $300.0 million initial upfront payment in February 2019, and we may be eligible to receive approximately $1.8 billion in aggregate milestone payments upon achievement of specified development, regulatory and commercial milestones.

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We believe this investment would position us to potentially pursue additional opportunities outside of this collaboration, including developing and commercializing vaccines and cellular therapies in other disease states.

Vaccine Development with Nykode

The Nykode 2-arm Phase I/II trial is currently enrolling individuals in Norway who are already vaccinated.

This T cell-based vaccine is intended to address SARS-CoV-2 variants of concern and may be used as a potential universal booster to available vaccines.

The Nykode collaboration represents a significant extension of the platform into vaccine design and development.

The platform is being deployed to both design and develop the vaccine as opposed to an evaluative use of our data following infection, as well as in direct support of a new commercial product.

Although this is the first licensing agreement we have entered into with vaccine design and development as a primary goal, we believe it may provide a useful proof of concept for extending the platform’s ability to design vaccines for other disease states.

Developing neutralizing antibodies using TruAB

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We believe relations with our employees are good.

Our talented employees drive our mission and share core values that both stem from and define our culture, which plays an invaluable role in our execution at all levels in our organization.

Our core values are used in candidate screening and in employee evaluations to help reinforce their importance in our organization:

Our talented employees drive our mission and share core values that both stem from and define our culture.

This plays an invaluable role in our ability to execute at all levels in our organization.

Our core values are used in candidate screening, rewards and recognition criteria, and in employee evaluations to help reinforce their importance in our organization:

Make it happen.

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Fun makes everything better .

We believe our employees are highly engaged, and we were recognized consecutively in 2018, 2019 and 2020 by the Puget Sound Business Journal as one of Washington State’s Best Places to Work.

We believe our employees are highly engaged, and we were recognized consecutively from 2018 to 2021 by the Puget Sound Business Journal as one of Washington State’s Best Places to Work.

We were also nationally certified as a 2021 Great Place to Work.

Diversity and Inclusion

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In 2021, we expanded and implemented several diversity and inclusion initiatives.

We launched multiple employee resource groups, including Women@Adaptive, Adaptive PRIDE, Black Adapter Network and Working Life and Wellness.

We developed diversity sourcing programs and implemented hiring manager diversity training.

We also established an Equity Advisory Council of senior leaders focused on specific objectives looking at clinical studies, commercial engagement, recruiting, and retention through a diversity and inclusion lens.

We integrated hidden bias training into our Leader of People Program.

Most recently, we launched a STEM minority mentoring program with a local university.

We continued to provide quality DEI programming through Employee Resource Groups (“ERGs”) including Women@Adaptive, Adaptive PRIDE, Black Adapter Network and Working Life and Wellness, and in 2021 launched two new ERGs:

Asian Pacific@Adaptive and Sustainability@Adaptive.

We continued to explore diversity sourcing programs and partnerships, and we expanded our diversity training to a growing population of hiring managers.

We also integrated hidden bias training into our Leader of People Program.

Our Equity Advisory Council of senior leaders maintained a strategic focus on clinical studies, commercial engagement, recruiting, and retention through a diversity and inclusion lens.

In November 2021, we received a Corporate Equality Index (CEI) score of 95/100 from the Human Rights Commission.

Our score of 95 is an increase of 20 points from last year’s previous CEI score.

We successfully executed a second year of our STEM minority mentoring partnership with University of Washington.

During the grand opening of our new Seattle headquarters building, and with the help of Governor Jay Inslee, we also announced our partnership with SPIN Girls, a transformative local program that builds leadership and provides immersive STEM experiences, while pairing students with female-identifying mentors of color from across King County.

Compensation and Benefits

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Our compensation package includes market-competitive base pay, performance-based short-term incentives, health care, retirement benefits, paid time off and family leave.

In addition, we offer employees the benefit of equity ownership in the Company through stock option and restricted stock unit awards.

We also provide access to a variety of health and wellness resources.

In addition, we offer employees the benefit of equity ownership in the Company through restricted stock unit awards.

We also provide access to a variety of health and wellness resources, with special attention paid to mental health in 2021.

This year also saw the inaugural winners of our Adaptive Leadership Awards announced, recognizing and celebrating those who best embody our Adaptive Leadership Principles.

Employee Development & Training

We prioritize employee development and training and have established programs to support a culture of employee development.

Specifically, in 2020, we offered multiple learning solutions, including our Leader Orientation Program, our Leader of People Program, and our L-re:combinator Program.

Our Leader Orientation Program is an eight-week blended learning program that features self-paced online learning and live virtual training, designed to train new line to mid-level leaders about our culture, HR policies, communication, motivation, and more.

Our Leader of People Program is a three-part, 15-week program designed to train leaders on change management, interviewing and hiring the best, having difficult discussions and creating alignment.

Our L-re:combinator Program is a peer-to-peer learning group that provides mid-level managers with education, support, and collaboration opportunities.

In 2020, over 100 Adapters attended leadership development programs and consumed over 2,000 hours of training.

Specifically, in 2021, we offered multiple learning solutions, including our Leader Orientation Program, our Leader of People Program, and our L-re:combinator Fellowship Program.

We launched Leader of Leaders for employees at or above Director level.

We also completely reworked and relaunched our employee onboarding program, DayOne.

All of our leadership development programs are multi-week, blended learning courses that feature self-paced online learning and live virtual training.

DayOne focuses not just on HR and compliance orientation, but cultural onboarding with small group interactions among our Chief Executive Officer, cultural ambassadors and fellow new Adapters.

In 2021, over 130 Adapters attended leadership development programs and consumed approximately 2,400 hours of training.

Over 200 Adapters completed DayOne.

In our annual employee survey, Adaptive Listens, Adapters generally judged our managerial corps as one of Adaptive’s strengths, a sign that investing in their development is translating into real-world results.

COVID-19 Preparedness

In response to the emergence of the COVID-19 pandemic, management formed a cross-functional COVID-19 preparedness committee to regularly monitor the progress of the disease, stay apprised of expert external guidance, discuss and implement preparedness plans as needed and provide clear communication to all Adapters.

We implemented measures to reduce the risk of exposure of COVID-19 to the employees who continue to work on site, including the implementation of work-from-home policies for certain employees, as well as the implementation of shifts and zones to physically distance employees who remain on site and extra sanitation measures.

Since the emergence of COVID-19, our cross-functional COVID-19 preparedness committee has been meeting at least weekly to monitor the progress of the disease, stay apprised of expert external guidance, discuss and implement preparedness plans as needed, and provide clear communication to all Adapters.

For those employees working remotely, we provided additional equipment to support their ergonomic and technology needs.

Beginning in 2022, our offices and infrastructure are now set up to support and enable a hybrid workforce, with safety and other factors related to on site work continually evaluated by our Covid-19 preparedness committee.

Strategic Collaborations and Other Agreements

Genentech Agreement

In December 2018, we entered into the Genentech Agreement to develop, manufacture and commercialize novel neoantigen directed T cell therapies for the treatment of a broad range of cancers.

In December 2018, we entered into an agreement with Genentech (“Genentech Agreement”) to develop, manufacture and commercialize novel neoantigen directed T cell therapies for the treatment of a broad range of cancers.

Pursuant to the Genentech Agreement, we are responsible for the screening and identification of TCRs that can most effectively recognize and directly target specific neoantigens, while Genentech is responsible for clinical, regulatory and commercialization efforts.

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Genentech will also pay us tiered royalties at a rate ranging from the mid-single digits to the mid-teens on aggregate worldwide net sales of the Shared Products and the Personalized Product arising from the strategic collaboration, subject to certain reductions, with aggregate minimum floors.

For the year ended December 31, 2020 and 2019, the Genentech Agreement accounted for approximately 53.7 % and approximately 41.3% of our revenue , respectively .

For the year ended December 31, 2021 , 2020 and 2019 , the Genentech Agreement accounted for 40.2% , 53.7% and 41.3% of our revenue, respectively.

The Genentech Agreement will continue until the expiration of all royalty payments, but may be terminated by mutual agreement, upon an uncured material breach by either party, upon insolvency of either party, or by Genentech for convenience upon prior written notice.

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However, if one of our suppliers fails to perform adequately or fulfill our needs, we may be required to incur significant costs and devote significant efforts to find new suppliers and may face delays in processing samples or developing and commercializing our products and services.

Beginning in 2020, we have faced delays in the form of longer lead times for equipment that is subject to increased demand due to public health measures taken to combat the COVID-19 pandemic, such as freezers.

W e have occasionally faced delays in the form of longer lead times for equipment that is subject to increased demand due to public health measures taken to combat the COVID-19 pandemic.

In particular, we have purchased the Illumina NextSeq System, and Illumina also supplies us with reagents that have been designed for use solely with this sequencer.

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Our drug discovery efforts are focused on large biopharmaceutical companies.

We have entered into relationships with distributors to leverage an improved RUO immunoSEQ kit that can be used with various sample types, which we expect to enable global distribution of our research product.

We plan to utilize a third-party global distributor but may not be able to engage a distributor in a timely manner or on commercially reasonable terms.

Intellectual Property

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Through our Sequenta Acquisition, we also obtained an exclusive paid-up license, with rights to sublicense, to patents filed in the United States, Europe, Australia and China owned by iRepertoire, Inc.

The license is for worldwide use in diagnosis, prognosis, treatment and monitoring of any proliferative disorder for which rearranged nucleic acids capable of encoding an immune receptor, whether productive or unproductive, or functional or nonfunctional, of a cell, excluding tumor infiltrating lymphocytes, of the proliferative disorder can be used as markers for the disorder, including, but not limited to, lymphoid and myeloid proliferative disorders, such as ALL, CLL, acute myeloid leukemia, chronic myelogenous leukemia, Hodgkin’s and non-Hodgkin’s lymphomas, plasma cell neoplasms, such as MM, monoclonal gammopathy of undetermined significance, monoclonal B cell lymphocytosis and myelodysplastic syndromes.

The license is for worldwide use in diagnosis, prognosis, treatment and monitoring of any proliferative disorder for which rearranged nucleic acids capable of encoding an immune receptor, whether productive or unproductive, or functional or nonfunctional, of a cell, excluding tumor infiltrating lymphocytes, of the proliferative disorder can be used as markers for the disorder, including, but not limited to, lymphoid and myeloid proliferative disorders, such as ALL, CLL, acute myeloid leukemia, chronic myelogenous leukemia, Hodgkin’s and NHL, plasma cell neoplasms, such as MM, monoclonal gammopathy of undetermined significance, monoclonal B cell lymphocytosis and myelodysplastic syndromes.

In addition to the patent estate acquired from Sequenta, we also acquired ownership of immunosequencing-related patent portfolios from Imdaptive, Inc.

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RUO products belong to a separate regulatory classification under a long-standing FDA regulation.

From an FDA perspective, products that are intended for research use only and are labeled as RUO are not regulated by the FDA as in vitro diagnostic devices and are therefore not subject to the regulatory requirements discussed below for clinical diagnostic products.

From an FDA perspective, products that are intended for research use only and are labeled as RUO are exempt from most regulatory controls, and are therefore not subject to the regulatory requirements discussed below for clinical diagnostic products.

Thus, RUO products may be used or distributed for research use without first obtaining FDA clearance, authorization or approval.

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“For Research Use Only.

Not for Use in Diagnostic Procedures.” RUO products cannot make any claims related to safety, effectiveness or diagnostic utility, and they cannot be intended for human clinical diagnostic use.

Not for u se in d iagnostic p rocedures.” RUO products cannot make any claims related to safety, effectiveness or diagnostic utility, and they cannot be intended for human clinical diagnostic use.

Accordingly, a product labeled RUO but intended or promoted for clinical diagnostic use may be viewed by the FDA as adulterated and misbranded under the Federal Food, Drug, and Cosmetic Act (“FDCA”) and subject to FDA enforcement action.

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If the FDA disagrees with a company’s RUO status for its product, the company may be subject to FDA enforcement activities, including, without limitation, requiring the company to seek clearance, authorization or approval for the products.

If the FDA determines an RUO product is adulterated and misbranded, enforcement may also include a warning letter, seizure, an injunction and/or criminal fines for FDCA violations.

Clinical Diagnostics in the United States

Our first diagnostic product, clonoSEQ, was granted marketing authorization by the FDA for the detection and monitoring of MRD in bone marrow samples in patients with MM and ALL under the de novo process, which classified clonoSEQ and future DNA-based tests to measure MRD in hematological malignancies as Class II devices, as explained further below.

Our first diagnostic product, clonoSEQ, was granted marketing authorization by the FDA for the detection and monitoring of MRD in bone marrow samples in patients with MM and ALL under the de novo process in September 2018, which classified clonoSEQ and future DNA-based tests to measure MRD in hematological malignancies as Class II devices, as explained further below.

In August 2020, we received our third FDA clearance for clonoSEQ, following a 510(k) submission, for CLL in bone marrow as well as blood samples.

We submitted a 510(k) premarket notification for ALL from blood samples in February 2021 and are actively advancing validation studies in certain NHL sub-types.

In the United States, medical devices are subject to extensive regulation by the FDA under the FDCA and its implementing regulations, and other federal and state statutes and regulations.

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Position in the European Union

In the EU, IVDs can be placed on the market by obtaining a “CE mark,” which demonstrates conformity with the In vitro Diagnostic Medical Device Directive (“IVDD”).

In the EU, IVDs can be placed on the market by obtaining a “CE mark,” which demonstrates conformity via a self-certification with the In vitro Diagnostic Medical Device Directive (“IVDD”).

clonoSEQ obtained a CE mark in May 2019 for all B-cell malignancies with blood and bone marrow.

The requirements under the Directive include:

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On May 26, 2017, the EU released a new regulatory framework, the In vitro Diagnostic Medical Device Regulation (“IVDR”), which will replace the IVDD.

Our products in the EU will have to comply with the IVDR requirements after May 26, 2022, subject to the applicable transitional provisions before full compliance is required.

Our products in the EU will have to comply with the IVDR requirements by May 2026, subject to the applicable transitional provisions before full compliance is required.

The IVDR is considerably stricter in regulatory oversight than the IVDD and will require more IVD devices to be reviewed by a notified body before being placed on the market.

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Laboratories certified as “high complexity” under CLIA may develop, manufacture, validate and run LDTs.

clonoSEQ is available as an LDT for use in assessing MRD for other lymphoid malignancies, including CLL and NHL, at our Seattle, Washington laboratory.

clonoSEQ is available as an LDT for use in assessing MRD for other lymphoid malignancies, including NHL and use in other specimen types, at our Seattle, Washington laboratory.

In that respect, Congress introduced legislation to establish a framework for FDA to oversee marketing of in vitro clinical tests (“IVCTs”), such as test kits and LDTs (the Verifying Accurate Leading-edge IVCT Development Act, or “VALID Act”).

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It is not certain whether or in what form the VALID Act bill will pass Congress, but passage could increase the stringency of regulatory review required for our LDT products.

If the VALID Act does not pass, FDA may decide to exercise enforcement discretion for LDTs, especially if it perceives a LDT as posing a risk to patients.

If the VALID Act does not pass, the FDA may decide to exercise enforcement discretion for LDTs, especially if it perceives a LDT as posing a risk to patients.

Therefore, the regulatory path for marketing of LDTs is subject to uncertainty given the FDA’s latitude in interpreting and applying its laws and policies.

As of November 2020, the U.S.

Department of Health and Human Services instructed the FDA to review voluntary EUA submissions of LDTs for COVID-19 in order to extend certain statutory immunities to liability for those laboratories under the federal Public Readiness and Emergency Preparedness Act (“PREP Act”).

Failure to obtain an EUA for a COVID-19 LDT can impair such immunity and could make payor reimbursement for COVID-19 LDTs under the Family First Coronavirus Act unavailable.

We are seeking an EUA for our T-Detect COVID test and could be at risk of product liability or lack of payor reimbursement if the EUA is not granted.

In November 2020, the U.S.

Department of Health and Human Services advised that the FDA did not have authority to require LDTs related to COVID to obtain an EUA prior to marketing.

HHS also instructed the FDA to review voluntary EUA submissions of LDTs for COVID-19 in order to extend certain statutory immunities to liability for those laboratories under the federal Public Readiness and Emergency Preparedness Act (“PREP Act”).

In March 2021, the FDA issued an EUA for T-Detect COVID to confirm recent or prior SARS-CoV-2 infection.

In November 2021, HHS rescinded its previous statement that the FDA did not have authority over LDTs.

The FDA modified its policy and has required all COVID related LDTs on the market to submit an EUA request within 60 days of the policy, and has also made clear that no additional COVID related LDTs may come onto the market prior to issuance of an EUA.

Federal and State Privacy, Security and Breach Notification Laws

Many state and federal laws govern the processing of personally identifiable information or individually identifiable health information.

Many state and federal laws govern the processing of personal information or individually identifiable health information.

At the federal level, under the administrative simplification provisions of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), the U .S.

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Although we have and maintain a system for compliance with privacy laws and regulations, failure to comply with them could expose us to potential FTC enforcement action and fines.

In addition, certain state laws govern the privacy and security of health information, some of which are more stringent than HIPAA (including providing for patient enforcement of these state laws) and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

In addition, there are state breach notification laws in every state.

In addition, certain state laws govern the privacy and security of health information and personal information.

Some of the state laws governing health information privacy and security are more stringent than HIPAA (including providing for patient enforcement of these state laws) and often differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

There has also recently been an influx of state privacy and security laws that introduce similar compliance complexities, including the California Consumer Privacy Act (“CCPA”), the Colorado Privacy Act (“CPA”) and the Virginia Consumer Data Protection Act (“VCDPA”).

In addition, there are state breach notification laws in every state, as well as D.C., Guam and Puerto Rico.

Failure to comply with these laws, where applicable, can result in the imposition of significant civil or criminal penalties and private litigation.

General Data Protection Regulation in the EU

General Data Protection Regulation in the EU and Internationally

The General Data Protection Regulation (“GDPR”) is a legal framework that sets requirements for the collection and processing of personal information of individuals within the European Economic Area (“EEA”).

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The GDPR became enforceable on May 25, 2018.

The regulation applies to the human resources record of employees and even the Internet Protocol addresses of people using online services.

The regulation is a comprehensive privacy law, meaning that it applies to all types of personal information, including the human resources record of employees and even the Internet Protocol addresses of people using online services.

The GDPR builds upon data rights that the EU had previously advocated, such as the right of an individual to be forgotten and the right to data portability.

Many other countries and regions also have privacy and data protection laws, some of which are modeled after the European framework.

This includes countries within Europe that are not part of the EEA, such as the United Kingdom and Switzerland, and therefore operate under different privacy and data protection frameworks.

In addition to laws that directly impose privacy and data protection obligations on companies, there is also a growing interest in laws and regulations that govern data areas that are related to, but not completely related to data privacy.

One area of these laws relates to use and testing of genetic and genomic data.

In addition to the federal Genetic Information Nondiscrimination Act , there are a number of state laws that have recently passed (e.g., the California Genetic Information Privacy Act) and that continue to make appearances on states’ legislative schedules.

There have been similar draft bills at the state level that would regulate machine learning, artificial intelligence, the Internet of Things, and human specimen use.

There have been similar trends internationally, such as ongoing public consultations in the European Union on the Digital Governance Act and an Artificial Intelligence Regulation.

Federal, State and Foreign Fraud and Abuse Laws

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Further, the prohibitions cover the payment or offer of remuneration to induce a referral to, or in exchange for, an individual using the services of, such providers.

This new law creates additional risk that relationships with referral sources could be problematic.

This law creates additional risk that relationships with referral sources could be problematic.

For anti-corruption legislation, the U.S.

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In addition, the individual can be subject to an unlimited fine, if found to have committed an offense, as can commercial organizations that are found to have failed to prevent bribery.

Most recently, France has passed an anti-bribery and compliance law (“Sapin II”), and the new French anti-corruption agency (“AFA”) has been established.

In 2016 , France passed an anti-bribery and compliance law (“Sapin II”), and the French anti-corruption agency (“AFA”) was established.

The Sapin II law makes it compulsory for companies within the scope of the law to implement internal procedures to fight corruption.

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These documents are subject to investigation by the AFA and failure to comply with the requirements can lead to a fine of up to €1.0 million for a company and €200,000 for executives.

Currently, we are not subject to the jurisdictional requirements of the UK Bribery Act or Sapin II as we do not have offices in either country and do not employ a requisite amount of employees in these countries.

If we were to have future growth in the European market, these laws could potentially apply to us.

In 2021, Adaptive expanded its European presence and hired employees within the UK and as such, has a potential for the UK Bribery Act to apply as it can be triggered by any act committed within the UK.

Currently, we are not subject to the jurisdictional requirements of Sapin II as we do not have offices in France.

If we were to have future growth in the European market, this law could potentially become applicable to us.

Physician Referral Prohibitions

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On the other hand, some proposals could impose additional limitations on the prices we will be able to charge for our tests or on the coverage of or the amounts of reimbursement available for our tests from payors, including commercial payors and government payors.

The federal physician payment transparency requirements (“Physician Payments Sunshine Act”) and its implementing regulations, which requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the State Children’s Health Insurance Program, with certain exceptions, to annually report to HHS information related to certain payments or other transfers of value made or distributed to physicians, defined to include doctors, dentists, optometrists, podiatrists and chiropractors, and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

The SUPPORT Act, under a provision entitled “Fighting the Opioid Epidemic with Sunshine,” extends the Physician Payments Sunshine Act to payments and transfers of value to physician assistants, nurse practitioners and other mid-level healthcare providers, with reporting requirements going into effect in 2022 for payments and transfers of value made to these practitioners in 2021.

There are also state “sunshine” laws that require manufacturers to provide reports to state governments on pricing and marketing information.

The federal physician payment transparency requirements (“Physician Payments Sunshine Act”) and its implementing regulations, which requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the State Children’s Health Insurance Program, with certain exceptions, to annually report to HHS information related to certain payments or other transfers of value made or distributed to covered recipients, defined to include doctors, dentists, optometrists, podiatrists, chiropractors, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and anesthesiologist assistants, certified nurse-midwives, and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

There are also state transparency and gift ban laws that require manufacturers to provide reports to state governments on pricing and marketing information.

Several states have enacted legislation requiring medical device manufacturers to, among other things, establish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales and marketing activities, and such laws may also prohibit or limit certain other sales and marketing practices.

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In addition, we may not be free to determine the price charged for our products.

For instance, the No Surprises Act (“NSA”) was enacted on December 27, 2020 and took effect on January 1, 2022.

One of the goals of the NSA is to protect patients from “surprise” medical bills resulting from gaps in coverage for services provided by out-of-network providers, such as laboratories, related to patient visits at in-network facilities.

The NSA limits the amount out-of-network laboratories may charge a patient for laboratory services ordered during an in-network facility visit.

In addition, the NSA establishes an independent dispute resolution process for determining the amount of reimbursement for the laboratory service in the event that the laboratory and insurer cannot agree on a rate.

Certain countries, including a number of member states of the EU, set prices and make reimbursement decisions for diagnostics and pharmaceutical products.

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(“Sequenta”), a San Francisco, California-based company that was also developing an NGS test for MRD (“Sequenta Acquisition”).

Our principal executive offices are located at 1551 Eastlake Avenue East, Suite 200, Seattle, Washington 98102, and our telephone number is (206) 659-0067.

Our principal executive offices are located at 1165 Eastlake Avenue East, Seattle, Washington 98109, and our telephone number is (206) 659-0067.

Available Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business