On February 14, 2024 Charles River Laboratories International, Inc. (NYSE: CRL) reported its results for the fourth-quarter and full-year 2023 and provided guidance for 2024 (Press release, Charles River Laboratories, FEB 14, 2024, View Source [SID1234640085]). For the quarter, revenue was $1.01 billion, a decrease of 7.9% from $1.10 billion in the fourth quarter of 2022.

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The impact of foreign currency translation benefited reported revenue by 1.2%, and acquisitions contributed 0.7% to consolidated fourth-quarter revenue. The addition of a 53rd week at the end of 2022, which is periodically required to align to a December 31st calendar year end, reduced reported revenue growth by approximately 4.7%, and the divestiture of the Avian Vaccine business in December 2022 reduced reported revenue by 1.6%. Excluding the effect of these items, organic revenue decreased 3.5%. On a segment basis, revenue increased in the Manufacturing segment on an organic basis, but was offset by lower revenue in the Discovery and Safety Assessment (DSA) and the Research Models and Services (RMS) business segments.

In the fourth quarter of 2023, the GAAP operating margin decreased to 13.1% from 14.9% in the fourth quarter of 2022, and on a non-GAAP basis, the operating margin decreased to 19.1% from 20.4%. The GAAP and non-GAAP decreases were primarily driven by higher unallocated corporate costs.

On a GAAP basis, fourth-quarter net income attributable to common shareholders was $187.1 million, a decrease of 0.2% from $187.4 million for the same period in 2022. Fourth-quarter diluted earnings per share on a GAAP basis were $3.62, a decrease of 0.8% from $3.65 for the fourth quarter of 2022. Lower GAAP net income and earnings per share were driven primarily by lower revenue and operating income. GAAP earnings per share included gains on certain venture capital and other strategic investments of $2.04 per share in the fourth quarter of 2023, which included a gain on our original strategic investment in Noveprim Group. This compares to a loss of $0.13 per share on certain venture capital and other strategic investments for the same period in 2022. The GAAP gain related to the Noveprim investment in 2023 was more than offset by a prior-year gain on the sale of the Avian Vaccine business in the fourth quarter of 2022.

On a non-GAAP basis, net income was $127.2 million for the fourth quarter of 2023, a decrease of 16.8% from $152.9 million for the same period in 2022. Fourth-quarter diluted earnings per share on a non-GAAP basis were $2.46, a decrease of 17.4% from $2.98 per share for the fourth quarter of 2022. The non-GAAP net income and earnings per share decreases were driven primarily by lower revenue and operating income, including an increase in unallocated corporate expenses, as well as a higher tax rate.

James C. Foster, Chairman, President and Chief Executive Officer, said, "Our 2023 performance demonstrated the resilience and stability of our strategy and business model. Despite moderating demand trends in the broader life sciences sector, we were able to deliver solid revenue growth and non-GAAP earning per share that were in the upper half of our original guidance ranges. We are focused on innovation, enhancing our portfolio to support clients from target discovery to non-clinical development, and delivering flexible solutions to respond to a changing industry and client requirements. As a result, Charles River is positioned exceptionally well to meet the evolving needs of our clients."

"We believe the current market environment is transitory. We are anticipating that some level of constrained client spending will persist in 2024, but that demand will stabilize over the course of the year. We will continue to focus on opportunities to win additional market share, and on driving efficiencies to be an even more compelling partner for our clients. The long-term industry fundamentals for drug development remain firmly intact, which supports our goals to deliver sustained revenue growth and solid operating margin improvement in 2024 and in the future," Mr. Foster concluded.

Fourth-Quarter Segment Results

Research Models and Services (RMS)

Revenue for the RMS segment was $195.8 million in the fourth quarter of 2023, a decrease of 0.2% from $196.1 million in the fourth quarter of 2022. The Noveprim acquisition contributed 3.1% to fourth-quarter RMS reported revenue growth, and the impact of foreign currency translation benefited revenue by 0.8% in the quarter. The addition of the 53rd week in 2022 reduced RMS revenue growth by 3.7%. Organic revenue decreased by 0.4%, due primarily to lower small research model sales, particularly in North America and Europe, and lower revenue in the Cell Solutions business, partially offset by higher revenue for NHPs in China.

In the fourth quarter of 2023, the RMS segment’s GAAP operating margin of 18.9% was unchanged from the fourth quarter of 2022, and on a non-GAAP basis, the operating margin increased to 23.1% from 22.7%. The non-GAAP operating margin increase was driven primarily by product mix, specifically higher revenue for NHPs including in China and from Noveprim.

Discovery and Safety Assessment (DSA)

Revenue for the DSA segment was $625.8 million in the fourth quarter of 2023, a decrease of 9.5% from $691.7 million in the fourth quarter of 2022. The impact of foreign currency translation benefited revenue by 1.3%, and the SAMDI Tech acquisition contributed 0.3% to reported DSA revenue growth in the quarter. The addition of the 53rd week in 2022 reduced DSA revenue growth by 5.1%. Organic revenue decreased by 6.0%, driven by a meaningful revenue decline in the Discovery Services business, as well as lower Safety Assessment revenue, which was impacted by a difficult, prior-year growth comparison.

In the fourth quarter of 2023, the DSA segment’s GAAP operating margin decreased to 20.2% from 22.7% in the fourth quarter of 2022. The GAAP operating margin decrease was primarily due to asset impairment charges related to the divestiture of a small Safety Assessment operation in Canada and other restructuring costs. On a non-GAAP basis, the operating margin decreased to 26.0% from 26.3% in the fourth quarter of 2022. The non-GAAP operating margin decrease was primarily the result of the revenue decline in the Discovery Services business.

Manufacturing Solutions (Manufacturing)

Revenue for the Manufacturing segment was $191.9 million in the fourth quarter of 2023, a decrease of 9.5% from $212.1 million in the fourth quarter of 2022. The impact of the Avian Vaccine divestiture reduced revenue by 9.0%, and the addition of the 53rd week in 2022 reduced Manufacturing revenue growth by 4.4%. The impact of foreign currency translation benefited revenue by 1.6% in the quarter. Organic revenue growth of 2.3% reflected higher revenue in the CDMO business, which was largely offset by lower revenue in the Biologics Testing Solutions and Microbial Solutions businesses.

In the fourth quarter of 2023, the Manufacturing segment’s GAAP operating margin increased to 18.5% from 12.6% in the fourth quarter of 2022, and on a non-GAAP basis, the operating margin increased slightly to 25.4%, from 25.3% in the fourth quarter of 2022. The GAAP operating margin increase was driven primarily by higher acquisition-related adjustments in the CDMO business in the fourth quarter of 2022.

Full-Year Results

For 2023, revenue increased by 3.9% to $4.13 billion from $3.98 billion in 2022. Organic revenue growth was 6.5%.

The GAAP operating margin decreased to 14.9% in 2023 from 16.4% in 2022, and on a non-GAAP basis, the operating margin decreased to 20.3% from 21.0%.

On a GAAP basis, net income attributable to common shareholders was $474.6 million in 2023, a decrease of 2.4% from $486.2 million in 2022. Diluted earnings per share on a GAAP basis in 2023 were $9.22, a decrease of 2.7% from $9.48 in 2022.

On a non-GAAP basis, net income was $548.9 million in 2023, a decrease of 3.8% from $570.6 million in 2022. Diluted earnings per share on a non-GAAP basis in 2023 were $10.67, a decrease of 4.0% from $11.12 in 2022.

Research Models and Services (RMS)

For 2023, RMS revenue was $792.3 million, an increase of 7.2% from $739.2 million in 2022. Organic revenue growth increased 5.9%.

On a GAAP basis, the RMS segment operating margin decreased to 19.5% in 2023 from 21.7% in 2022. On a non-GAAP basis, the operating margin decreased to 23.0% in 2023 from 25.2% in 2022.

Discovery and Safety Assessment (DSA)

For 2023, DSA revenue was $2.62 billion, an increase of 6.9% from $2.45 billion in 2022. Organic revenue growth was 7.9%.

On a GAAP basis, the DSA segment operating margin increased to 23.2% in 2023 from 21.8% in 2022. On a non-GAAP basis, the operating margin increased to 27.5% in 2023 from 25.3% in 2022.

Manufacturing Solutions (Manufacturing)

For 2023, Manufacturing revenue was $721.4 million, a decrease of 8.6% from $789.6 million in 2022. Organic revenue growth was 2.0%.

On a GAAP basis, the Manufacturing segment operating margin decreased to 12.2% in 2023 from 21.2% in 2022. On a non-GAAP basis, the operating margin decreased to 21.8% in 2023 from 28.8% in 2022.

Acquisition of Noveprim Group

On November 30, 2023, Charles River Laboratories completed the acquisition of an additional 41% equity stake of Noveprim Group, a Mauritius-based provider of non-human primates (NHPs) for regulatory required biomedical, pharmaceutical, and toxicological research purposes, resulting in a 90% controlling interest. The Noveprim acquisition strengthens and diversifies the supply chain for the DSA segment. The purchase price for the additional 41% equity stake in November was $144.6 million, plus contingent payments of up to $55.0 million based on future performance and additional deferred payments of $12.0 million. In 2022, the Company had previously acquired a 49% equity stake for $90.0 million and additional future contingent payments of up to $5.0 million. Noveprim is reported as part of the RMS segment for NHPs sold to third-party clients and the DSA segment for NHPs vertically integrated into our Safety Assessment supply chain.

2024 Guidance

The Company is providing financial guidance for 2024. The 2024 revenue growth outlook reflects a continuation of the more cautious biopharmaceutical demand environment that the Company experienced throughout most of 2023. Earnings per share in 2024 are expected to benefit from higher revenue and modest operating margin improvement, as well as the acquisition of Noveprim, which is expected to contribute to the non-GAAP operating margin and at least $0.30 to non-GAAP earnings per share in 2024.

The Company’s 2024 guidance for revenue growth and earnings per share is as follows:

2024 GUIDANCE

Revenue growth, reported

1.0% – 4.0%

Impact of divestitures/(acquisitions), net

~(0.5)%

(Favorable)/unfavorable impact of foreign exchange

~(0.5)%

Revenue growth, organic (1)

0.0% – 3.0%

GAAP EPS estimate

$7.90 – $8.40

Acquisition-related amortization (2)

~$2.40

Acquisition and integration-related adjustments (3)

~$0.10

Costs associated with restructuring actions (4)

~$0.25

Other items (5)

~$0.25

Non-GAAP EPS estimate

$10.90 – $11.40

Footnotes to Guidance Table:

(1) Organic revenue growth is defined as reported revenue growth adjusted for completed acquisitions and divestitures, as well as foreign currency translation.

(2) These adjustments include amortization related to intangible assets, as well as the purchase accounting step-up on inventory and certain long-term biological assets.

(3) These adjustments are related to the evaluation and integration of acquisitions and divestitures, and primarily include transaction, advisory, certain third-party integration, and related costs.

(4) These adjustments primarily include site consolidation, severance, impairment, and other costs related to the Company’s restructuring actions.

(5) These items primarily relate to charges associated with U.S. and international tax legislation that necessitated changes to the Company’s international financing structure; and certain third-party legal costs related to investigations by the U.S. government into the NHP supply chain related to our Safety Assessment business.

Webcast

Charles River has scheduled a live webcast on Wednesday, February 14th, at 8:30 a.m. ET to discuss matters relating to this press release. To participate, please go to ir.criver.com and select the webcast link. You can also find the associated slide presentation and reconciliations of GAAP financial measures to non-GAAP financial measures on the website.

On February 14, 2024 Bristol Myers Squibb (NYSE: BMY) reported that the U.S. Food and Drug Administration (FDA) has accepted the supplemental New Drug Application (sNDA) for Augtyro (repotrectinib) for the treatment of adult and pediatric patients 12 years of age and older with solid tumors that have a neurotrophic tyrosine receptor kinase (NTRK) gene fusion, and are locally advanced or metastatic or where surgical resection is likely to result in severe morbidity (Press release, Bristol-Myers Squibb, FEB 14, 2024, View Source [SID1234640083]). The filing acceptance is based on results from the registrational Phase 1/2 TRIDENT-1 trial (adult patients with NTRK-positivesolid tumors) and CARE study (pediatric patients with NTRK-positivesolid tumors). The FDA granted the application Priority Review status and assigned a Prescription Drug User Fee Act (PDUFA) goal date of June 15, 2024.

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"While great advancements have been made over the last decade, patients with NTRK-positive locally advanced or metastatic solid tumors still experience significant unmet needs. New and effective treatment options that may improve durability of response and address resistance to existing tyrosine kinase inhibitors are critical to helping patients with these aggressive tumors," said Joseph Fiore, vice president, global program lead, Augtyro, Bristol Myers Squibb. "We look forward to working closely with the FDA on the review of our application for Augtyro for this tumor-agnostic indication and potentially offering patients with NTRK-positive disease a new, durable treatment option."

The filing was based on the results from the TRIDENT-1 and CARE trials. In the TRIDENT-1 study, Augtyro demonstrated clinically meaningful response rates in patients with NTRK-positive locally advanced or metastatic solid tumors. Durability of response was robust, including among patients whose tumors harbor common resistance mutations, and intracranial responses were observed. Augtyro showed a safety profile that was well tolerated and generally manageable. The study remains ongoing to assess long-term outcomes and additional endpoints. Results from TRIDENT-1 were supported by data from the CARE study, which evaluates Augtyro in pediatric and young adult patients with locally advanced or metastatic solid tumors harboring ALK, ROS1 or NTRK1-3 gene alterations. Additionally, in November 2023 the U.S. Food and Drug Administration approved Augtyro for the treatment of adult patients with locally advanced or metastatic ROS1-positive non-small cell lung cancer NSCLC.

Bristol Myers Squibb thanks the patients and investigators involved with the TRIDENT-1 and CARE clinical trials.

Turning Point Therapeutics is a wholly owned subsidiary of the Bristol-Myers Squibb Company. As of August 2022, Bristol Myers Squibb acquired the company, including its asset repotrectinib.

About TRIDENT-1

TRIDENT-1 is a global, multicenter, single-arm, open-label, multi-cohort Phase 1/2 clinical trial evaluating the safety, tolerability, pharmacokinetics and anti-tumor activity of Augtyro in patients with advanced solid tumors, including non-small cell lung cancer (NSCLC). Phase 1/2 includes patients with locally advanced or metastatic solid tumors harboring ROS1 or NTRK fusions. Additional analyses of the trial are still being conducted; asymptomatic central nervous system (CNS) metastases are allowed. The trial excludes patients with symptomatic brain metastases, among other exclusion criteria. Phase 1 of the trial included the dose escalation that determined the recommended Phase 2 dose.

Phase 2 of the trial has a primary endpoint of overall response rate (ORR). Key secondary endpoints include duration of response (DOR) according to Response Evaluation Criteria in Solid Tumors (RECIST v1.1) as assessed by Blinded Independent Central Review (BICR), progression-free survival (PFS), and intracranial response in six distinct expansion cohorts, including tyrosine kinase inhibitor (TKI)-naïve and TKI-pretreated patients with ROS1-positive locally advanced or metastatic NSCLC and NTRK-positive locally advanced or metastatic solid tumors.

About CARE

CARE is a Phase 1/2 open-label, safety, tolerability, pharmacokinetics and anti-tumor activity clinical trial evaluating Augtyro in pediatric and young adult patients with locally advanced or metastatic solid tumors harboring ALK, ROS1 or NTRK1-3 gene alterations.

Phase 1 of the study aims to evaluate the safety and tolerability at different dose levels. Phase 1 of the trial has primary endpoints of dose limiting toxicities (DLTs) and pediatric recommended Phase 2 dose (RP2D). Secondary endpoints include overall response rate (ORR), clinical benefit rate (CBR), time to response (TTR), duration of response (DOR) and intracranial ORR (IC-ORR). Phase 2 of the study will seek to demonstrate the efficacy and anti-tumor activity of Augtyro in pediatric and young adult patients. The primary endpoint of Phase 2 is ORR and secondary endpoints include CBR, TTR, DOR, IC-ORR, progression-free survival (PFS), central nervous system PFS (CNS-PFS) and overall survival (OS).

About NTRK-Positive Solid Tumors

Neurotrophic tropomyosin kinase receptors (NTRK) are a family of receptors involved in neural development. NTRK gene fusions can play a role in the development of cancer. They are rare in patients with solid tumors with less than 1% of patients testing positive, though may be more frequent in patients with secretory breast cancer, infantile fibrosarcoma, thyroid cancer, gastrointestinal stromal tumors, spitzoid tumors and infantile fibrosarcoma, among other cancers. Per international treatment guidelines, targeted agents are part of the treatment armamentarium for patients with a tumor harboring this gene alteration.

On February 14, 2024 Ashvattha Therapeutics ("Ashvattha"), a clinical-stage company advancing a new class of nanomedicine therapeutics that traverse tissue barriers to selectively target activated cells in regions of inflammation, reported that members of its senior management team will participate in two upcoming investor conferences (Press release, Ashvattha Therapeutics, FEB 14, 2024, View Source [SID1234640082]).

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Conference Details:

BIO CEO & Investor Conference

Format: Corporate Presentation
Date: Tuesday, February 27, 2024
Time: 11:45 – Noon ET
Location: The New York Marriott Marquis

Ashvattha’s Co-Founder and Chief Executive Officer, Jeffrey Cleland, Ph.D., and Chief Financial Officer, Paul Cayer, will be available for one-on-one meetings. If you are interested in a meeting, please reach out via the BIO One-on-One Partnering system.

Evercore ISI 2024 Emerging Biotech Conference

Format: Fireside Chat
Date: Thursday, February 29, 2024
Time: 11:20 – 11:50 am ET
Location: Virtual

Members of Ashvattha’s management team will provide an update on the company’s multiple Phase 2 clinical trials and upcoming data readouts.

On February 14, 2024 AIM ImmunoTech Inc. (NYSE American: AIM) ("AIM" or the "Company") reported the first subject has been dosed at Erasmus Medical Center ("Erasmus MC") in a Phase 1b/2 clinical trial combining AIM’s Ampligen (rintatolimod) with AstraZeneca’s anti-PD-L1 immune checkpoint inhibitor Imfinzi (durvalumab) for the treatment of late-stage pancreatic cancer (the "DURIPANC Study") (Press release, AIM ImmunoTech, FEB 14, 2024, View Source [SID1234640080]).

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The DURIPANC Study is an investigator-initiated, exploratory, open-label, single-center study with the full name "Combining anti-PD-L1 immune checkpoint inhibitor durvalumab with TLR-3 agonist rintatolimod in patients with metastatic pancreatic ductal adenocarcinoma for therapy efficacy." The primary objective of the Phase 1b portion is to determine the safety of combination therapy with Imfinzi and Ampligen. The primary objective of the Phase 2 portion is to determine the clinical benefit rate of the combination therapy.

Prof. Casper H.J. van Eijck, MD, PhD, Pancreato-biliary Surgeon at Erasmus MC, commented, "We are working in earnest toward meeting our expected completion of the Phase 1b portion of the study within six months. We continue to be excited about the promise of combining Ampligen with durvalumab and we believe this synergistic approach could make a positive impact on tumor regression and patient survival – potentially changing the treatment landscape for patients with metastatic pancreatic cancer."

The study is expected to enroll up to 18 subjects in its Phase 1b portion and up to 25 subjects in its Phase 2 portion. Subjects will start with Ampligen 200 mg via IV infusion twice per week for a total of 6 weeks (12 doses). Ampligen dose will be escalated to 400 mg according to a 3+3 DLT design. The first dose of Ampligen will be administered preferably 4-6 weeks after the last chemotherapy FOLFIRINOX dose. After two doses of Ampligen, the first dose of durvalumab 1500 mg via IV infusion will be introduced in week 2. Patients will continue to receive 1500 mg durvalumab via IV infusion every 4 weeks for up to a maximum of 48 weeks (up to 12 doses/cycles) with the last administration on week 48 or until confirmed disease progression according to Response Evaluation Criteria in solid Tumors (RECIST 1.1), unless there is unacceptable toxicity, withdrawal of consent, or another discontinuation criterion is met.

On February 14, 2024 Adaptive Biotechnologies Corporation ("Adaptive Biotechnologies") (Nasdaq: ADPT), a commercial stage biotechnology company that aims to translate the genetics of the adaptive immune system into clinical products to diagnose and treat disease, reported financial results for the fourth quarter and full year ended December 31, 2023 (Press release, Adaptive Biotechnologies, FEB 14, 2024, View Source [SID1234640079]).

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Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

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"2023 was a year of execution for MRD and strategic evolution for IM. The MRD business ended the year with 53% growth in clonoSEQ tests delivered and IM achieved key target and drug discovery milestones in cancer and autoimmune disorders," said Chad Robins, chief executive officer and co-founder of Adaptive Biotechnologies. "2024 is off to a strong start. As momentum continues to build in both MRD and IM, we look forward to maximizing the value of each of these distinct opportunities for our patients and shareholders."

Recent Highlights

•
Revenue for the fourth quarter and full year 2023 was $45.8 million and $170.3 million, respectively. The MRD business, which contributed over 60% of revenue, grew 9% and 18% over the corresponding periods. This growth was more than offset by an expected reduction in GNE amortization in the IM business.
•
clonoSEQ test volume increased 49% to 15,680 tests delivered in the fourth quarter of 2023, compared to the fourth quarter 2022 and ended the year with 56,496 tests delivered, up 53% versus 2022.
•
Signed partnership with Flatiron Health, a leading provider of EHR software and services for community oncology, to integrate the clonoSEQ Assay into Flatiron’s OncoEMR system.
•
IND secured for the first cell therapy product candidate; built regulated process workflow for the fully personalized cell therapy program.
•
Strategic review continues with the goal of maximizing the value of the MRD and Immune Medicine businesses.
Fourth Quarter 2023 Financial Results

Revenue was $45.8 million for the quarter ended December 31, 2023, representing a 17% decrease from the fourth quarter in the prior year. MRD revenue was $30.8 million for the quarter, representing a 9% increase from the fourth quarter in the prior year. Immune Medicine revenue was $15.0 million for the quarter, representing a 45% decrease from the fourth quarter in the prior year.

Operating expenses, which include a $25.4 million lease impairment charge, were $116.9 million for the fourth quarter of 2023, compared to $94.4 million in the fourth quarter of the prior year, representing an increase of 24%. Excluding the impact of the lease impairment charge, operating expenses for the fourth quarter of 2023 decreased 3% compared to the fourth quarter of the prior year. Interest and other income, net was $4.6 million for the fourth quarter of 2023, compared to $2.6 million in the fourth quarter of the prior year. Interest expense from our revenue interest purchase agreement was $3.0 million for the fourth quarter of 2023, compared to $3.6 million in the fourth quarter of the prior year.

Net loss was $69.5 million for the fourth quarter of 2023, compared to $40.2 million for the same period in 2022.

Adjusted EBITDA (non-GAAP) was a loss of $24.7 million for the fourth quarter of 2023, compared to a loss of $19.6 million for the fourth quarter of the prior year.

Full Year 2023 Financial Results

Revenue was $170.3 million for the year ended December 31, 2023, representing an 8% decrease from the prior year. MRD revenue was $102.7 million in 2023, representing an 18% increase from the prior year. Immune Medicine revenue was $67.5 million in 2023, representing a 31% decrease from 2022.

Operating expenses for 2023, which include a $25.4 million lease impairment charge, were $397.3 million, compared to $385.5 million for 2022, representing an increase of 3%. Excluding the impact of the lease impairment charge, operating expenses for 2023 decreased 4% compared to the prior year. Interest and other income, net was $15.5 million in 2023, compared to $4.1 million in 2022. Interest expense from our revenue interest purchase agreement was $13.8 million in 2023, compared to $4.2 million in 2022.

Net loss was $225.3 million in 2023, compared to $200.4 million in 2022.

Adjusted EBITDA (non-GAAP) was a loss of $116.4 million for 2023, compared to a loss of $121.6 million in the prior year.

Cash, cash equivalents and marketable securities was $346.4 million as of December 31, 2023.

2024 Financial Guidance

Adaptive Biotechnologies expects full year revenue for the MRD business to be between $130 million and $140 million. No revenue guidance is provided for the Immune Medicine business.

We expect full year operating expenses, including cost of revenue, to be between $360 million and $370 million.

Management will provide further details on the outlook during the conference call.

Webcast and Conference Call Information

Adaptive Biotechnologies will host a conference call to discuss its fourth quarter and full year 2023 financial results after market close on Wednesday, February 14, 2024 at 4:30 PM Eastern Time. The conference call can be accessed at View Source The webcast will be archived and available for replay at least 90 days after the event.