Seattle-based biotech Adaptive Biotechnologies Corp. (Nasdaq: ADPT) is exploring options for its two businesses, minimal residual disease testing and immune medicine.
The company said in a news release earlier this month announcing its third quarter financial results it had a "strategic review underway with Goldman Sachs" to get the most value out of the two businesses.
Co-founder and CEO Chad Robins said on an analyst call Adaptive and Goldman are looking into "strategic alternatives" given the two businesses are at different stages with different needs.
"We are evaluating all options that are all on the table that we think can maximize value. Obviously, we can't comment on any (mergers and acquisitions) at this time," Robins said on the call. "We think we've got some very differentiated targets and are moving forward, and those could be stand-alone businesses and do very, very well as stand-alone publicly traded companies. But again, all options are on the table right now."
Minimal residual disease testing determines if a tiny number of cancer cells remain in the body after treatment, according to the National Cancer Institute. Adaptive's immune medicine pipeline, meanwhile, has targets aimed at oncology, autoimmune diseases and infectious diseases.
Robins said on the call the immune medicine business is functioning like a traditional early-stage biotech, focused more on data and testing than on revenue. He added that the immune medicine business had a breakthrough this quarter targeting multiple sclerosis. The minimal residual disease testing business, meanwhile, has reached the commercial stage, and Adaptive wants to increase its market share and become profitable with that business.
"It's a fact that we have two distinct businesses and they're at different stages of maturity. They have different value drivers, and they also have different investment requirements," Robins said.
Chad Robins and his brother Harlan Robins, Adaptive's chief scientific officer, co-founded the company in 2009. Adaptive went public in 2019. The company laid off about 100 workers in March 2022 as part of an organizational shake-up that led to the company focusing on its current two businesses. Adaptive had 790 full-time employees at the end of 2022.
In September of last year, Adaptive secured a royalty financing agreement with the health care investment firm OrbiMed that was worth up to $250 million. The company in April informed previous Chief Operating Officer Mark Adams he was being let go, as the company consolidated the president and COO duties into one role, filled by Julie Rubinstein.
Adaptive generated $37.9 million in revenue during the third quarter, down 21% year over year.
