Cuộc họp công bố kết quả kinh doanh quý 3/2026 của Adaptive Biotechnologies (ADPT): Nâng định hướng MRD

Điểm nhấn chính

• Adaptive Biotechnologies đã công bố doanh thu quý 3/2026 đạt 83,9 triệu USD, tăng 39% so với cùng kỳ năm trước. Mảng MRD tạo ra 72,6 triệu USD, chiếm 86% tổng doanh thu.
• Doanh thu MRD cốt lõi tăng 44% so với cùng kỳ năm trước sau khi loại trừ khoản thanh toán cột mốc 6,5 triệu USD của năm trước. Khối lượng xét nghiệm lâm sàng tăng 46%, trong khi doanh thu giải trình tự cho khối dược phẩm của mảng MRD tăng 55%.
• Công ty đã có lãi sớm hơn dự kiến của ban lãnh đạo. EBITDA điều chỉnh đạt 14,3 triệu USD, thu nhập ròng theo GAAP đạt 2,8 triệu USD và dòng tiền tự do đạt 8 triệu USD.
• Gần 40.000 xét nghiệm clonoSEQ đã được thực hiện, tăng 10% so với quý trước. Xét nghiệm mẫu máu tăng 68% so với cùng kỳ năm trước, trong khi khối lượng xét nghiệm tại các cơ sở y tế cộng đồng tăng 14% so với quý trước.
• Ban lãnh đạo đã nâng dự báo doanh thu mảng MRD cả năm 2026 lên mức 276 triệu – 286 triệu USD từ mức 268 triệu – 278 triệu USD trước đó, phản ánh khối lượng xét nghiệm lâm sàng mạnh mẽ hơn và kết quả giải trình tự cho khối dược phẩm khả quan hơn.
• Giá trị đơn hàng tồn đọng (backlog) của mảng MRD từ khối dược phẩm đạt khoảng 270 triệu USD, tăng 34% so với cùng kỳ năm trước, nhờ việc gia tăng ứng dụng MRD trong phát triển thuốc điều trị đa u tủy xương.

Dữ liệu tài chính cốt lõi

Kết quả hoạt động và kinh doanh

Xét nghiệm lâm sàng clonoSEQ

Khối lượng xét nghiệm lâm sàng tăng 46% so với cùng kỳ năm trước và doanh thu xét nghiệm lâm sàng tăng 41%. Adaptive đã thực hiện gần 40.000 xét nghiệm clonoSEQ, nhiều hơn khoảng 3.500 xét nghiệm so với quý 2.

Khối lượng xét nghiệm DLBCL dẫn đầu đà tăng trưởng với mức tăng 20% so với quý trước. Đa u tủy xương, chiếm 45% khối lượng lâm sàng, tăng 11% so với quý trước. Ban lãnh đạo kỳ vọng DLBCL sẽ tiếp tục là động lực tăng trưởng chính, đồng thời nhấn mạnh rằng đa u tủy xương cũng sẽ tiếp tục đóng góp đáng kể.

Xét nghiệm mẫu máu chiếm 51% tổng khối lượng clonoSEQ sau khi tăng 68% so với cùng kỳ năm trước và 12% so với quý trước. Trong bệnh đa u tủy xương, xét nghiệm máu chiếm 31% số lượt xét nghiệm MRD.

Khối lượng xét nghiệm tại các cơ sở y tế cộng đồng tăng 14% so với quý trước và chiếm 37% tổng khối lượng, so với mức 31% của một năm trước đó. Khoảng 5.600 bác sĩ lâm sàng đã chỉ định clonoSEQ trong quý, tăng 37% so với cùng kỳ năm trước và tương đương khoảng 40% số nhà cung cấp dịch vụ ung bướu và huyết học tại Mỹ.

Gần một nửa số đơn đặt hàng hiện đến từ các tài khoản tích hợp EMR. Tại các tài khoản cơ sở y tế cộng đồng tích hợp Flatiron, 78% số yêu cầu theo dõi định kỳ đến hạn đã được hoàn thành.

Bồi hoàn bảo hiểm và ASP

Giá bán trung bình tại Mỹ đạt 1.380 USD, tăng 3% so với cùng kỳ năm trước và nhìn chung không thay đổi so với quý trước. Adaptive đã mở rộng phạm vi chi trả thương mại cho DLBCL và u lympho tế bào vỏ, đồng thời bổ sung chi trả của Medicaid tại Illinois và Ohio. Các bang nằm trong phạm vi chi trả hiện chiếm khoảng 62% khối lượng xét nghiệm của Medicaid, trong khi ASP của Medicaid tăng 26% so với cùng kỳ năm trước.

Medicare và Medicare Advantage chiếm khoảng 45% cơ cấu người chi trả, tăng từ mức 39% của năm trước. Mức chi trả theo đợt điều trị hiện tại của Medicare chỉ thanh toán tối đa bốn xét nghiệm trong suốt cuộc đời bệnh nhân. Việc theo dõi thường xuyên hơn đang khiến một số bệnh nhân vượt quá hạn mức đó, tạo áp lực lên ASP thực tế.

Adaptive đã nộp bản đánh giá kỹ thuật lên MolDX nhằm đề xuất bổ sung gói điều trị duy trì gồm năm xét nghiệm đa u tủy xương. Ban lãnh đạo mô tả các cuộc thảo luận mang tính tích cực nhưng cho biết chưa thể đảm bảo chắc chắn về thời điểm cũng như số lượng xét nghiệm cuối cùng được chi trả.

Mảng MRD cho khối dược phẩm

Doanh thu giải trình tự MRD cho khối dược phẩm tăng 55% so với cùng kỳ năm trước, không bao gồm các khoản thanh toán cột mốc. Adaptive đã bổ sung 27 nghiên cứu mới hoặc nghiên cứu sửa đổi, nâng danh mục lên 191 nghiên cứu đang triển khai trên toàn cầu.

Giá trị đơn hàng tồn đọng (backlog) đạt khoảng 270 triệu USD, tăng 34% so với cùng kỳ năm trước. Bệnh đa u tủy xương chiếm khoảng 60% các nghiên cứu đang hoạt động, 65% giá trị tồn đọng và 79% giá trị hợp đồng mới ký.

Công ty có 19 nghiên cứu về đa u tủy xương sử dụng MRD làm tiêu chí đánh giá chính, tăng từ mức 12 nghiên cứu của năm trước. clonoSEQ cũng đang được sử dụng trong 23 nghiên cứu can thiệp đối với bệnh đa u tủy xương, CLL và ALL.

Ban lãnh đạo cho rằng đà tăng trưởng này đến từ dự thảo hướng dẫn của FDA về việc sử dụng MRD làm tiêu chí đánh giá phê duyệt nhanh, định nghĩa mới về điều trị khỏi đa u tủy xương, và các thiết kế thử nghiệm kết hợp nhiều thời điểm xét nghiệm hơn.

Y học Miễn dịch

Doanh thu mảng Y học Miễn dịch đạt 11,3 triệu USD, chủ yếu phản ánh thỏa thuận phát hiện mục tiêu điều trị viêm khớp dạng thấp với Pfizer. Mảng này đã tạo ra EBITDA điều chỉnh là 3,2 triệu USD.

Adaptive tiếp tục làm việc với Morgan Stanley về việc tách mảng kinh doanh Y học Miễn dịch và vẫn đang bám sát tiến độ để công bố định hướng tiếp theo vào cuối năm 2026.

Kế hoạch định hướng của ban lãnh đạo

Ban lãnh đạo không đưa ra hướng dẫn dự báo cho năm 2027 nhưng cho biết kỳ vọng đà tăng trưởng mạnh mẽ sẽ tiếp tục, nhờ sự hỗ trợ từ dữ liệu lâm sàng, việc áp dụng các hướng dẫn điều trị, xét nghiệm mẫu máu, tích hợp EMR và mở rộng cơ sở y tế cộng đồng.

Rủi ro và các yếu tố cần theo dõi

• Tần suất xét nghiệm Medicare thường xuyên hơn đang tạo áp lực lên ASP trong ngắn hạn do mức chi trả theo đợt điều trị hiện tại chỉ thanh toán tối đa bốn xét nghiệm trong suốt cuộc đời bệnh nhân.
• Thời điểm phê duyệt của MolDX và số lượng xét nghiệm được đưa vào bất kỳ gói duy trì nào vẫn chưa chắc chắn.
• Adaptive đã phát hiện dữ liệu sai lệch liên quan đến mức giá sơ bộ của CMS đối với mã PLA của clonoSEQ. Công ty đang phối hợp với CMS để điều chỉnh dữ liệu này trước khi các mức giá chính thức được ban hành.
• Doanh thu từ khối dược phẩm có thể không đồng đều giữa các quý, và ban lãnh đạo chưa nắm rõ khả năng ghi nhận thêm doanh thu từ các cột mốc trong quý 4.
• Dù đạt lợi nhuận theo chuẩn GAAP trong quý 3, ban lãnh đạo không kỳ vọng thu nhập ròng theo GAAP hoặc EPS sẽ đạt mức dương trong quý 4 hoặc cả năm 2026.
• Cạnh tranh trong phân khúc DLBCL đã được thảo luận, dù ban lãnh đạo cho biết phạm vi chi trả bồi hoàn, kinh nghiệm lâm sàng và mối quan hệ khách hàng của clonoSEQ sẽ củng cố vị thế của công ty.

Điểm nhấn phiên hỏi đáp với chuyên gia phân tích

Ban lãnh đạo cho biết quy trình định giá PLA sơ bộ của CMS sẽ không ảnh hưởng đến khung bồi hoàn theo đợt điều trị của Medicare, vốn chiếm phần lớn doanh thu Medicare. Adaptive đang nỗ lực điều chỉnh dữ liệu được sử dụng cho mức giá PLA sơ bộ.

Đối với năm 2027 và giai đoạn tiếp theo, ban lãnh đạo xác định việc áp dụng các hướng dẫn điều trị và mở rộng bằng chứng lâm sàng là nền tảng cho tăng trưởng. Tối ưu hóa EMR, xét nghiệm định kỳ, xét nghiệm mẫu máu và thâm nhập các cơ sở y tế cộng đồng dự kiến sẽ tiếp tục là những đòn bẩy hoạt động chính.

Về phân bổ vốn, công ty có kế hoạch tái đầu tư lợi nhuận vào dữ liệu thực tế, tự động hóa quy trình bằng AI, quản lý chu kỳ doanh thu, trải nghiệm khách hàng và R&D. Ban lãnh đạo cũng đang đánh giá các ứng dụng mới của nền tảng giải trình tự miễn dịch ngoài lĩnh vực huyết học, dù chưa đưa ra các kế hoạch thương mại cụ thể.

Toàn văn biên bản cuộc gọi công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good day, and thank you for standing by. Welcome to the Adaptive Biotechnologies Third Quarter 2026 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Karina Calzadilla, Head of Investor Relations. Please go ahead.

Karina Calzadilla

Thank you, Daniel, and good afternoon, everyone. I would like to welcome you to Adaptive Biotechnologies Third Quarter 2026 Earnings Conference Call. Earlier today, we issued a press release reporting Adaptive financial results for the third quarter of '26. The press release is available at www.adaptivebiotech.com. We are conducting a live webcast of this call and will be referencing to a slide presentation that has been posted to the Investors section of our corporate website.

During the call, management will make projections and other forward-looking statements within the meaning of federal securities laws regarding future events and the future financial performance of the company. These statements reflect management's current perspective of the business as of today. Actual results may differ materially from today's forward-looking statements, depending on a number of factors, which are set forth in our public filings with the SEC and listed in this presentation. In addition, non-GAAP financial measures will be discussed during the call, and a reconciliation from non-GAAP to GAAP metrics can be found in our earnings release. Joining the call today are Chad Robins, our CEO, Co-Founder; and Kyle Piskel, our Chief Financial Officer. Additional members from management will be available for Q&A.

With that, I'll turn the call over to Chad. Chad?

Chad Robins

Thanks, Karina. Good afternoon, and thank you for joining us on our third quarter earnings call. Q3 was a breakthrough quarter for Adaptive. We achieved profitability at the total company level ahead of expectations, while continuing to deliver rapid MRD growth. MRD revenue, excluding milestones, increased 44% year-over-year, driven by clinical testing volume and pharma sequencing revenue. We achieved total company gross margin of 76%, generated $8 million in free cash flow and ended the quarter with approximately $386 million in total cash. These results demonstrate that we have been building toward a business that combines rapid growth with a strong financial profile. Achieving profitability reflects years of disciplined execution, thoughtful capital allocation and targeted investment in sustainable growth. The opportunity ahead continues to expand. Updated guidelines and a new definition of cure in multi myeloma strengthened the clinical foundation for clonoSEQ. With clinical volumes and pharma revenue exceeding our expectations, we are again raising our full year 2026 MRD revenue guidance.

On the immune medicine front, we are working closely with Morgan Stanley to advance the separation process and remain on track to announce the path forward by year-end. This quarter, the business also earned a milestone payment from Pfizer following the successful delivery of rheumatoid arthritis data under our agreement, an important accomplishment for the team.

Let's take a closer look at MRD clinical business on Slide 4. Clinical testing volume was a standout in Q3, growing 46% year-over-year and driving 41% growth in clinical revenue. We delivered nearly 40,000 clonoSEQ tests, up 10% sequentially or approximately 3,500 additional tests. Every reimbursed indication contributed to growth. DLBCL led with 20% sequential growth, while multiple myeloma contributing 45% of volume grew 11%. Our commercial team is executing across several fronts to drive and sustain this growth. Among those priorities are expanding blood-based testing, increasing community adoption and embedding clonoSEQ into clinical workflows. We advanced all 3 this quarter.

Blood-based testing grew 68% year-over-year and 12% sequentially, representing 51% of total clonoSEQ volume. In myeloma, blood-based tests now represent 31% of MRD testing, giving physicians a more accessible option for monitoring patients over time. Community volume grew 14% sequentially, outpacing academic centers. Community practices now account for 37% of total volume, up from 31% a year ago, extending clonoSEQ's reach to more patients. We are also making testing easier to order and repeat. Nearly half of our orders now come from EMR integrated accounts, where our team is focused on both adding integrations and increasing utilization.

In Flatiron integrated community accounts, 78% of serial monitoring orders due have now been fulfilled, demonstrating follow-through on planned patient monitoring. Our clinician base is expanding across both community and academic settings. Approximately 5,600 clinicians ordered clonoSEQ in Q3, up 37% year-over-year and representing about 40% of U.S. hematology/oncology providers. That reach underscores MRD's growing role in clinical care. As adoption expands and physicians monitor patients more frequently, we are advancing our reimbursement strategies to support that use.

Let's turn to Slide 5. U.S. ASP was $1,380 in Q3, up 3% year-over-year and relatively flat sequentially. We continue to expect approximately $1,400 average ASP for the full year and have clear catalysts to advance our longer-term goal of $1,700 to $1,800 per test. Let me start with this quarter's coverage gains. We expanded commercial coverage in DLBCL and MCL, 2 indications with substantial reimbursement opportunity. In DLBCL, we added Avalon and Concert. In MCL, we added Avalon, Blue Cross Blue Shield and United. We also expanded Medicaid coverage into Illinois and Ohio and have now established coverage in states representing approximately 62% of our Medicaid testing volume.

While Medicaid represents about 10% of our payer mix and remains our lowest paying segment, coverage gains are delivering results. Medicaid ASP increased 26% year-over-year. The largest opportunity ahead is Medicare and Medicare Advantage, which now represent approximately 45% of our payer mix, up from 39% a year ago. Here, increasing testing frequency is an important part of the ASP story. The current Medicare episode rate covers a bundle of up to 4 tests over a patient's lifetime. As physicians monitor more patients more frequently, a growing proportion is moving beyond those 4 tests, putting pressure on realized ASP. We saw this dynamic in Q3, particularly in multi myeloma, our largest indication.

That said, supporting this testing also enabled us to generate the evidence to pursue expanded coverage. We have now submitted our technical assessment to MolDX for an additional maintenance testing bundle in multi myeloma, and we are in active discussions. This is our priority catalyst with recent NCCN guideline updates further strengthening the clinical rationale for our submission. In addition for the maintenance bundle for myeloma, we are also pursuing recurrence monitoring coverage in several indications. Recurrence monitoring is already covered in MCL, and we expect to submit for CLL in the first half of next year, but we are also generating data now in multiple myeloma. Our conviction in the $1,700 to $1,800 ASP opportunity remains strong. Clinical use is expanding, and we have specific coverage initiatives underway to translate that use into broader reimbursement.

Now let's turn to Slide 6 and the advances in multi myeloma that support Pulse's strategy and clonoSEQ's longer-term potential. Two major developments this quarter strengthened the foundation for MRD testing in multi myeloma, our largest indication in both clinical testing and in pharma. First, the updated NCCN guidelines give MRD testing greater prominence and incorporate more specific direction. For the first time, the guidelines include a dedicated page on the principles of MRD testing. They recommend using an FDA-approved assay such as clonoSEQ, which is specifically named and identified 10 to the minus 6, which is 1 cancer cell in 1 million cells as the preferred sensitivity because of its higher prognostic value. clonoSEQ is, in fact, the only assay that can deliver 10 to the minus 6 sensitivity with the scale required for broad clinical use.

This is meaningful recognition of the rigor that clonoSEQ brings to MRD assessment. The guidelines also specify testing time points during maintenance and surveillance, reinforcing MRD's role beyond the initial treatment response. For community oncologists, in particular, clear direction on when and how to test can help translate clinical evidence into more consistent use. Importantly, the guidelines now address MRD-guided therapy, stating that MRD negativity can inform shared decisions on treatment intensity, while rising MRD may prompt increased vigilance and monitoring.

The second development is equally significant, a new definition of cure presented on behalf of the International Myeloma Working Group at the International Myeloma Society Annual Meeting. The definition describes 5 years off treatment with sustained MRD negativity demonstrated by at least 4 negative assessments with no positive MRD results. Testing must use next-generation sequencing or next-generation flow at a sensitivity of 10 to the minus 6. Again, clonoSEQ is the only assay that can deliver at this scale. The implication is powerful. Repeated, highly sensitive MRD assessment is central to determining which patients meet this definition. clonoSEQ is directly aligned with the cure definition requirements, further supporting our recurrence monitoring strategy. Together, these developments reinforce our MRD should be measured and why it should be followed over time. We are excited to see systematic MRD assessment becoming more central to how the field evaluates treatment success. The focus on deeper, sustained responses is also shaping drug development.

Let's turn to Slide 7 and our MRD pharma business. Our MRD Pharma business delivered one of its strongest quarters in several years, driven by accelerating adoption of MRD in drug development, particularly in multi myeloma. The underlying sequencing business generated 55% year-over-year revenue growth, excluding milestones, and we now expect pharma sequencing growth for the full year at approximately 25%. We added 27 new or amended studies during the quarter, bringing our portfolio to 191 active global studies. Backlog reached approximately $270 million, up 34% year-over-year, providing visibility into future revenue and underscoring continued demand from our biopharma partners.

Multi myeloma represent approximately 60% of active studies and 65% of backlog and accounted for 79% of new bookings this quarter. There are several key trends driving this outsized growth in multiple myeloma. First, FDA's January draft guidance around use of MRD as an accelerated endpoint was a clear signal of regulatory acceptance. We now have 19 multi myeloma studies using MRD as a primary endpoint, up from 12 a year ago. Additionally, the new definition of cure adds another dimension to that opportunity. We are already seeing multi myeloma trials incorporate more testing time points to enable assessment of a cure fraction, contributing to higher bookings per study.

Our partners are also evaluating how MRD can guide treatment itself. clonoSEQ is now used in 23 interventional studies, including multi myeloma, CLL and ALL, helping build the evidence for MRD-directed treatment decisions. For our pharma business, this creates opportunities through more studies using MRD as an endpoint, more assessments over time and an expanding role in guiding therapy. Across clinical and pharma, Q3 demonstrated the commercial strength of clonoSEQ. The advances in evidence, guidelines and trial design reinforce our conviction in the opportunity ahead.

I'll now turn it over to Kyle to review our financial results. Kyle?

Kyle Piskel

Thanks, Chad. I'll start on Slide 8 with our third quarter results. As a reminder, amortization of Genentech payments within Immune Medicine is excluded from all prior period comparisons. Total revenue was $83.9 million, up 39% year-over-year, driven by MRD growth and revenue from our Pfizer rheumatoid arthritis agreement in Immune Medicine. MRD represented 86% of total company revenue. MRD revenue was $72.6 million, up 28% year-over-year. Excluding $6.5 million of milestone revenue recognized in the third quarter of last year, core MRD revenue grew 44%. Clinical and Pharma represented 75% and 25% of MRD revenue, respectively. Immune Medicine revenue was $11.3 million, primarily reflecting the revenue from our target discovery agreement with Pfizer.

Turning to margins. Sequencing gross margin, which excludes MRD and Immune Medicine milestones, increased to 73% from 66% a year ago. MRD sequencing gross margin was 74%. The expansion reflects lab efficiencies following our NovaSeq X transition and operating leverage from higher testing volumes. Total operating expenses, including cost of revenue, were $84.4 million, up 1% year-over-year. Continued investment in our commercial infrastructure, including reimbursement and EMR integration initiatives was partially offset by lower R&D spend in Immune Medicine.

At the segment level, MRD adjusted EBITDA increased to $15.1 million compared to $7 million a year ago, reflecting the combination of strong revenue growth and continued operating leverage. Immune Medicine adjusted EBITDA for the quarter was $3.2 million. Total company adjusted EBITDA was positive at $14.3 million, a significant achievement reflecting growth and spending discipline. GAAP net income for the quarter was $2.8 million. While this is another significant accomplishment, we do not currently anticipate GAAP net income or positive EPS for Q4 or the full year.

Turning to Slide 9 on updated guidance. We're raising our full year MRD revenue guidance to a range of $276 million to $286 million, up from our prior range of $268 million to $278 million. This increase reflects stronger-than-expected clinical volume and pharma sequencing performance in the third quarter as well as higher year-over-year clinical volume growth expected now at approximately 42% versus our prior guidance of 38% to 40%. Our guidance continues to include $9 million of MRD milestone revenue, which was all recognized in the first quarter with no additional milestone revenue assumed for the remainder of the year.

At the midpoint, our updated guide represents 32% year-over-year MRD revenue growth or 41% excluding milestones. We now expect full year operating expenses of approximately $350 million at the lower end of our prior range of $350 million to $355 million and approximately 5% above last year. We are delivering higher growth while maintaining spending discipline.

With that, I'll turn the call back over to Chad.

Chad Robins

Thanks, Kyle. We entered Q4 with broad-based growth, profitability ahead of expectations and a higher full year revenue outlook. Our maintenance bundle submission is now with MolDX, and we are in active discussions on this potentially significant catalyst to expand reimbursement for ongoing testing. At the same time, advances in guidelines, the definition of cure and drug development are elevating the role of MRD and expanding clonoSEQ's long-term potential. Profitability represents an exciting inflection point for our business, enabling us to reinvest in deepening our competitive advantages and to capture the significant growth opportunities that lie ahead.

With that, operator, we'll open it up for questions.

Operator

[Operator Instructions] Our first question comes from Subbu Nambi with Guggenheim.

Phần hỏi đáp

Unknown Analyst

This is Thomas on for Subbu. In regard to the CMS rates drafted for 2027, can you just talk about exposure to clonoSEQ based on your current split of Medicare and non-Medicare volumes and how that might impact ASP in the near term? Or if you have any levers to help offset any pressures and remain on track with ASP targets?

Kyle Piskel

Yes. Let me address the CMS, the PLA code and the PAMA legislation. Maybe just as a reminder, at the beginning of the year, we determined we were not an applicable laboratory under the PAMA regulations. And as such, we did not submit any private payer data to CMS as part of this. When CMS published the preliminary rates, we identified that erroneous data was submitted on the clonoSEQ PLA. And the reason we know that is because we are the only laboratory that can perform the test. And a quick reminder of why we are not in applicable laboratory is because of the episodic billing structure with Medicare, the vast majority of our Medicare revenues comes from the bundled structure. And again, when we talk about the insulation related to the business, we don't believe the PLA rate setting process should have any pull-through into the episodic framework. And separately, with CMS, we are engaged in rectifying and correcting the erroneous data, which we do not believe and have made clear with CMS that they should not be relying on any erroneous data to set a price point for the clonoSEQ PLA code.

So we're anticipating getting that results prior to the finalized rates, which should go live sometime in November as we understand with CMS. And we remain confident in kind of the long-term pricing strategies that we have in play. And that's only further supported by the advances we're having with our contracted payers, the rates we have in place and our structure with MolDX.

Unknown Analyst

Great. And then this year, another great quarter. You've had a combination of a lot of key growth drivers working together. Just curious, as you think to next year in '27, what's going to be the biggest lever you have to reach that next phase of growth for clonoSEQ? Is it blood? Is it the EMR pull-through? Just how to think about the most crucial pieces to growth next year as people start to underwrite that growth?

Julie Rubinstein

Thanks for the question. Even though we're not providing guidance on 2027, I certainly don't see any reason not to believe that we'll continue to grow at a very high rate in 2027 and beyond. We have a high ceiling remaining. We intend to continue focusing on many of the same drivers that have gotten us to the place we are today. I think the foundations of that growth in 2027 will really be the data and the guidelines. The guidelines have been very favorable for MRD and for clonoSEQ specifically over the last 18 months, and there are many opportunities to pull through those updates in the clinic. And they also will be favorable for our pharma business as a side note because the definition of cure in multiple myeloma will help to drive increasing long-term testing time points so that pharma companies can assess their drug's efficacy in the context of cure. The data will continue to develop. We're very excited about the data you'll see at ASH in just 1.5 months. We can talk more about that later.

And beyond those 2 foundations, the real enablers of growth that we focus on are the same things that we've been talking about, EMR integration, blood-based testing, expansion in the community. These are synergistic with one another in many ways. We started working on EMR a few years ago, and we've integrated many of our key accounts, but it doesn't stop there because the big focus going forward is optimizing how integrations are being used, particularly to enable serial testing. And we've seen high rates of pull-through on serial testing with our Flatiron implementation in OncoEMR. We continue to see increases in blood. We're investing in product development in that regard to enhance the performance of the product in blood. And community is now contributing 37% to our volumes, and the guidelines will strengthen our ability to educate and promote the use of consistent testing across community practices. So we do continue to expect strong growth in 2027 and beyond, and it will be a combination of all those factors.

Operator

Our next question comes from Casey Woodring with JPM.

Casey Woodring

I guess the first one, it looks like the strongest clinical volume sequential growth was in DLBCL. There's been some competitive noise there. Just can you talk about what you're hearing from customers and your competitive moat in DLBCL going forward? And if you would expect that to continue to like be the strongest sequential kind of growth driver in volumes moving forward?

Julie Rubinstein

Yes. In our DLBCL sequential growth has continued to be very strong and fairly consistent quarter-over-quarter. And my expectation is that we will continue to deliver consistent double-digit growth rates on an ongoing basis. We do hear about competitors in the field, but we have a very strong position from which to continue to grow, and that includes the test itself and it's custom-built for blood cancers, including lymphomas, the reimbursement that is already established broadly for our test in lymphomas, the ability to continue to leverage our real-world experience and then now about 9,000 patients who have been tested with clonoSEQ for all these reasons as well as the fact that we have these established relationships with our key customers and continue to delight them, I'm very confident in our position in this field. And in the end, this is a very underpenetrated market. So the noise that is being created by additional companies talking about MRD and DLBCL is beneficial and disproportionately beneficial to us as the market leader. We are excited about the data that we will continue to advance in this space, and I think you'll see a good amount of that at ASH this year. And we believe that we are in a good position both in the short term, leveraging our moats, leveraging the sort of noise around MRD and also in the longer term where we believe the performance of our technology will really win the day.

Casey Woodring

Got it. That's helpful. And then I think you alluded to it in an earlier question, but 64% of your MRD pharma backlog increase was from multiple myeloma. Is that related to guideline updates or the new cure definition? Or just more generally speaking, kind of what's driving the momentum in multiple myeloma right now?

Julie Rubinstein

Yes, there are several reasons that we're seeing an improvement in our MRD -- in our myeloma pharma business. And I think one thing is that earlier this year, the accelerated endpoint that was adopted by ODAC back in 2024, the FDA actually issued draft guidance to really sort of cement the use of that endpoint. And I think a number of pharma companies saw that as an important signal to move forward with new primary endpoint studies, and we've seen quite a number of new primary endpoint studies in 2026.

The second is the definition of cure that was issued by the IMS just about a month ago. Many of our pharma clients have been anticipating that. It's been talked about among KOLs for a number of months. And so studies being designed today are incorporating more time points, as I alluded to earlier, to be able to make that cure claim for the therapeutics that are being evaluated in the study. And that's resulting in higher bookings, more time points. And then lastly, just the increase in regulated and interventional use. We now have 23 additional studies, including 8 multiple myeloma. The number of regulated studies is now the majority of our trials are regulated. And so we're seeing that overall MRD is just becoming a standard of how studies are being done in multiple myeloma, and that will continue, we believe, to contribute to strength for our pharma business going forward.

Operator

[Operator Instructions] Our next question comes from David Westenberg with Piper Sandler.

David Westenberg

I do wanted to jump on the DLBCL strength. It grew 20% sequentially in the quarter and remains a pretty underpenetrated opportunity. So what really were the biggest drivers of DLBCL up 20%? And then what -- how should we think about that as a contributor to growth over the next few years? Should we think about DLBCL as really being the predominant accretive to growth driver in '27 and '28?

Julie Rubinstein

Yes. I mean, David, thanks for the question. As you said, we've been really pleased with the DLBCL growth, which has continued to outpace all other indications. And the growth is broad-based. It's coming from both community and academic accounts. We've been particularly successful of late driving increased adoption in some of the largest community practice networks. Some of our largest DLBCL growth this past quarter came from one of the largest networks in the country. And all of this is a result of continued just focus on market development. We have to educate on the role of MRD, how it can augment and improve upon PET scans and other sort of more traditional ways of thinking about disease burden and how it can inform treatment. And there are now a number of studies in motion and a few that are even reading out at ASH showing different ways that MRD can be useful in informing treatment selection and escalating or deescalating therapy in DLBCL.

So we continue to expect it to be a top growth driver for the next few years, particularly given the investments we're making in data and the potential for pharma to expand its investment in MRD-guided therapy trials in the future.

Chad Robins

But David, even though multi myeloma has been a large grower, it's going to still be a major contributor to our growth, especially with updated guidelines and the new definition of cure. And just to kind of up level this a minute. I mean, it's hard to kind of understate how big a deal this is. We believe that this is the first definition of cure based on an NGS test. Basically, they're saying, if you're MRD-negative using clonoSEQ, for kind of 4 different tests, then you're cured of a disease. I was just an anecdote, we had investigators when they found this up crying in the hallway. They've been working on this for over a decade. So it's just -- this is -- myeloma is going to be -- continue to accelerate.

David Westenberg

Got you. And then I was kind of going to jump on -- I appreciate that I add some color. I want to jump on the $1,400 ASP target. I think you came in, I think you said $1,386. How much of this is blocking and tackling versus some of the new adds that you mentioned, new coverage adds that you mentioned. And we are in November of this time. So I mean, in order to get to that $1,400, do you need any kind of timing specific to get you there in terms of timing coverage? And I'll stop there.

Kyle Piskel

Yes. I appreciate the question, David. This is Kyle. Certainly, blocking and tackling plays into every quarter. I think blocking and tackling is a contributor even in the fourth quarter. Certainly, as we think about the guide and the year, one of the factors is frequency uptake as it relates to Medicare and the pressure we're seeing there, which ultimately is a good thing. So I think there are some timing dependencies that could move the needle in either direction. But foundationally, I think we're in a good place, and there are some timing considerations, but we'll see how those play out, but we're confident in kind of the long-term trajectory here and continue to be confident in getting to that $1,400 at some point.

Chad Robins

Yes. And David, maybe if I could just kind of add a little bit of color and context. Some of the -- a little bit of the ASP pressure that you're seeing is actually what is beneficial and what we're using to -- for our MolDX submission. And if you think about kind of our overall strategy, think about this in kind of -- there's 3 different kind of phases of a patient's treatment continuum. Kind of the first is active treatment phase, which we're already reimbursed by Medicare for 4 tests, okay? The second, and this is what we're -- we've already submitted and are in active, very positive discussions with MolDX on is what we're calling kind of the maintenance treatment phase. And we've submitted for an additional bundle of 5 tests. So this is the first time I've kind of said that, but that we've submitted for an additional 5 tests during the maintenance setting.

And then the third is the recurrence monitoring. And we also mentioned during this call in multi myeloma that the second half of this year, we believe we have data from the recurrence monitoring. So that really kind of hits all 3 phases of a treatment of a patient's kind of care continuum. And again, I think it's not a matter -- we believe it's not a matter of if, it's a matter of when. And we're, I would say, highly encouraged based on these discussions that we have -- that we'll have an upcoming catalyst when we get this maintenance bundle. We can't be -- I just want to be clear, though, we can't guarantee kind of the number of tests in the bundle. We can't guarantee timing. I can just guarantee that what I can tell you is the discussions have been very, very positive. It's recognized that this is necessary and it fits really perfectly with the new NCCN guidelines and the new definition of cure.

So all of these factors are converging to say that you need to both monitor a patient more frequently at all phases kind of during this care continuum. So that's kind of -- I just want to provide a perspective on how this is all working together and our broader-based reimbursement strategy so that we're not thinking that a short term -- we do believe we're going to be approximately at $1,400 this year. And timing-wise, we may see some very slight variation or fluctuation. But what we have seen is we have more confidence than ever kind of based on these discussions that we're having that our ASP targets of $1,700 to $1,800 that we will not only hit them, that we believe that we will hit them that we can potentially even accelerate that time frame in some cases.

Operator

Our next question comes from Dan Brennan with TD Cowen.

Daniel Brennan

Congrats on the quarter. Maybe just on the pharma side, really good pharma numbers again. Just can you just give us a flavor of what's happening on the pharma side of the business, like kind of what's baked in for the fourth quarter? And just kind of update us again on the milestone opportunity as we look ahead, maybe not this year, but just beyond just what type of milestones, say, next 12 months might be realistic?

Kyle Piskel

Yes, Dan, I appreciate the question. I mean we're really excited about the kind of bookings and backlog growth we're seeing in the pharma business as well as the print in the third quarter. As you know, quarter-to-quarter can be lumpy from a revenue perspective. But I think when we think about the longer-term opportunity and the growth we're seeing in that business, backlog at the end of Q3 was $270 million, up from $200 million a year ago, really setting us up for some strong growth. We're now looking at 25% year-over-year growth in the pharma business, excluding milestones. So it's setting us up for a good position heading into 2027.

With respect to milestones, we said we don't have any visibility into Q4 into any milestones. And again, we think about that when we get line of sight. We'll update our guidance with respect to that. We don't necessarily control that timing, but we still have a healthy backlog of milestone opportunities that could read out. It's just really difficult to model and predict the timing of that, but still expect to see some of those over the course of the next coming years as well. And we'll provide more color at the next earnings call around that.

Julie Rubinstein

Yes. And just to chime in a bit on the dynamics that are really sort of important. Again, I think reiterating the fact that the FDA draft guidelines or guidance that was issued earlier this year, the definition of cure, which is encouraging companies to do longer studies with more time points, the interventional nature of many of the study designs, all of these things combined with the fact that we have the only FDA-cleared assay and a strong reputation and relationship with these companies for delivering registrational grade data over many years, I think we continue to be in a really strong position to support the needs of the myeloma drug development programs for years to come.

Daniel Brennan

Great. And then the volumes, terrific volume again. You've been running in 30s and low 40s for a while now. Penetration still seems like it's not that high as the market. So -- and you have all these drivers kind of headed. Like how do we think about as we get to 4Q and then we lap into '27, most of us naturally have volumes coming down. You're not guiding for '27 right now, but it seems like there's still just so much momentum in the business. Any way to think about what volumes could be, say, over -- as we look out beyond '26 into '27, kind of what's the framework we could use?

Chad Robins

Obviously, Dan, we're not in a position yet to guide on '27. I can just tell you that there's a tremendous amount of internal excitement from our team and the conversations they're having with clinicians regarding the new definition of cure. The updated NCCN guidelines has given a great call point, particularly in the community where doctors are much more apt to follow guidelines. And we expect -- I'd just say we expect the momentum to continue. We see nothing that's slowing this down. On the contrary, I think there's been kind of 2 meaningful updates kind of overall in the industry, which kind of further support and gives us confidence in the growth trajectory ahead.

Operator

Our next question comes from Mark Massaro with U.S. Bancorp BTIG.

Mark Massaro

Some of us are hopping calls tonight, so pardon me if this has already been asked. But now that you've achieved company-wide profitability, should we think about any potential changes to capital deployment as we think about 2027? Also curious at a super high level, how you're thinking about the potential for exploring tuck-ins, assuming they made sense and we're disciplined. Just wanted to get a sense for how you're thinking about capital deployment now that you're a profitable company.

Chad Robins

Yes. I'll let Susan start on the areas we're investing in, in MRD, and I'll make some kind of broader comments as to kind of some things we're thinking about.

Susan Bobulsky

Yes. We've been growing at a high rate over several years, and we still have this big ceiling that we can continue to grow into. So as we become profitable, I think the best thing we can do is deploy those profits to continue to expand our moat and increase the trajectory of MRD adoption. So we've been very focused beginning this year on identifying strategic areas in which to invest. This year, our investment has been focused on capability building in a few key areas. Real-world data is one, AI and AI-driven business process automation, specifically, our revenue cycle management and developing the next-generation customer experience with a focus on facilitating serial testing. We made considerable strides in all 4 of these areas this year, and we intend to continue those investments in 2027.

I should also highlight that we have a robust R&D effort through which we're investing both in current product enhancement and an advancement of new products in order to extend our leadership in the spaces where we already play and also consider ways we can either leverage our channel or develop new applications of our proprietary platform.

Chad Robins

Yes. And again, one of the things to highlight, Susan mentioned kind of enhancing the performance of our existing clonoSEQ to deepen heme MRD and also kind of leveraging our heme channel to deliver kind of other things you could potentially do with that patient sample. But the third area, which we're actively in development on is new applications of our immuno sequencing platform to address kind of unmet medical needs kind of beyond hematology. There's some kind of really interesting potential applications of our platform that we're exploring. And again, not ready to talk about on this call, but I think what could be really interesting kind of large opportunities to kind of leverage our existing capabilities, both with our platform technology, but also with the infrastructure that we've built around how to deliver, how to get PET tests paid for, revenue cycle management and all the things that you need to do as a diagnostic company.

Mark Massaro

Okay. That's fantastic. And then I wanted to ask about the NCCN guideline recognition. What is your thinking in terms of -- you're already the dominant market leader. And so some of us are wondering how -- usually when you're #1, you can't do better than #1, but perhaps you could perhaps accelerate. But it's typically uncommon for market leaders that have been in the space for a while to accelerate. So I am curious what you think the benefits are from the NCCN recognition and clonoSEQ being called out in particular.

Susan Bobulsky

Yes. I mean we -- as was mentioned earlier, the opportunity is most substantial in community oncology where guidelines are particularly important. Clinicians are really looking for us to tell them how and when to test. And so we're very actively engaged in promoting the guidelines updates now and are seeing a great deal of engagement from clinicians. And one of the things that's important in the community to us is to find ways to help the practices align their practice with those guidelines to drive more consistent testing across all patients that they see. So that interacts with our EMR integration strategy and thinking about ways we can develop standardized testing pathways and protocols taking the accounts who are doing that successfully and bringing their stories to share across other accounts.

So that's the work that we're doing right now. I do think it's a potentially meaningful accelerator for the myeloma business. And importantly, also supports the maintenance bundle submission that's currently with MolDX and which will be an important future driver of ASP. So we have a number of opportunities folded in with these guidelines. It's also notable that the guidelines are really -- the guidelines combined with the cure definition are really underscoring the need for bone marrow testing. And I actually believe there's an opportunity to increase community testing to use bone marrow as a complement to blood in areas where they may not be doing so today. We are eager to work with them to help ensure that they can deliver the potential of a cure to as many patients as possible. And to do that, they need to incorporate clonoSEQ MRD testing in marrow as well as in blood.

Operator

I'm showing no further questions at this time. This concludes today's conference call. Thank you for participating. You may now disconnect.