The public market is bullish on Adaptive Biotechnologies.
The biotech company started trading on the Nasdaq exchange under the symbol ADPT at $38 per share Thursday morning, up 90 percent from the $20 per share price it set Wednesday evening after raising $300 million its IPO.
The initial price was already far higher than the $15 to $17 per share that it sought when first filing to go public last month. At its current share price, Adaptive is valued at more than $4 billion.
Adaptive co-founders Harlan and Chad Robins rang the opening bell at Nasdaq in New York City on Thursday morning, marking a major milestone in a journey that started when the brothers launched the company in 2009.
“[Adaptive] should have one of the best first-day closes for a biotech” this year, said Matthew Kennedy, senior IPO market strategist at Renaissance Capital, a manager of IPO-focused ETFs. Despite the flood of biotech IPOs in June, demand for companies in the sector has not been strong across the board. What set Adaptive apart was “innovative technologies in multi-billion-dollar markets” as well as a market-ready product, Kennedy said.
Seattle-based Adaptive didn’t quite claim the crown of biggest IPO of 2019 — that title went to BridgeBio Pharma, which also went public on Wednesday and raised nearly $350 million. Despite a frenzied month for biotech public offerings, the overall IPO market this year is down 28 percent compared to 2018 with 507 public offerings, according to a recent report from EY.
Adaptive was built on technology that Harlan Robins developed at the Fred Hutchinson Cancer Research Center. Chad Robins brought the business savvy, guiding the company’s decade-long journey from promising technology to massive partnerships with Genentech and Microsoft — raising $400 million from private investors along the way.
The plan is to use data derived from the genetic information of the human immune system in order to diagnose diseases and develop new drugs. Adaptive is doing that with its ImmunoSeq platform, which the company previously compared to a Hubble Telescope for the immune system.
“Our immune system has evolved over hundreds of millions of years in response to disease, and Adaptive has created technology that allows us to tap into this information,” Chad Robins told CNBC on Thursday.
In a partnership with Microsoft, Adaptive aims to use AI to diagnose multiple diseases from a single blood test. The companies announced that their AI engine was live and focused on diagnosing type 1 diabetes, celiac disease, ovarian cancer, pancreatic cancer and Lyme disease. Chad Robins told CNBC that he expects to have a product on the market to diagnose disease in 2021.
Adaptive has also signed a $300 million collaborative licensing agreement with Genentech to develop personalized cancer therapies. In addition to the up-front payment, Adaptive could receive up to $1.8 billion if certain milestones are met, as well as royalties on potential sales.
The company, which employs 350 people, reported a net loss of $46.4 million on revenues of $55.6 million last year. Adaptive reported having $440 million in cash and cash equivalents as of March 31. It estimates its total addressable market at $48.7 billion, with cell therapies for cancer treatment accounting for approximately two-thirds of that opportunity.
The company’s largest shareholders pre-IPO were Viking Global Entities with 36 percent, followed by Matrix Capital Management at 16.4 percent, according to filings. Chad Robins owned 6.3 percent of the company.
Adaptive is the first Seattle-area company to go public since tax automation software maker Avalara had its IPO in June 2018. Smartsheet, DocuSign, and nLight were the other Washington state companies that had an IPO last year. The last local biotech company in the region to go public was PhaseRX in May 2016; the company filed for bankruptcy less than two years later.