Adaptive Biotechnologies Corporation (ADPT) Q1 2022 Earnings Call Transcript

ADPT earnings call for the period ending March 31, 2022.

ADPT earnings call for the period ending March 31, 2022.

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Adaptive Biotechnologies Corporation (ADPT 3.35%)
Q1 2022 Earnings Call
May 04, 2022, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Adaptive Biotechnologies first quarter 2022 financial results conference call. [Operator instructions]. I would now like to hand the conference over to your speaker today, Karina Calzadilla, head of investor relations. Please go ahead, ma’am.

Karina CalzadillaHead of Investor Relations

Thank you, Alexandre, and good afternoon, everyone. I would like to welcome you to Adaptive Biotechnologies first quarter 2022 earnings conference call. Earlier today, we issued a press release reporting Adaptive financial results for the first quarter of 2022. 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 in 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.

Joining the call today are Chad Robins, our CEO and co-founder; and Kyle Piskel, our interim chief financial officer. In addition, Harlan Robins, Adaptive chief scientific officer and co-founder; Nitin Sood, head of our MRG business; and Sharon Benzeno, head of the immune medicine business, will be available for Q&A. With that, I’ll turn the call to Chad Robins. Chad?

Chad RobinsChief Executive Officer and Co-Founder

Thanks, Karina. Good afternoon, everybody, and thank you for joining us on our first quarter 2022 earnings call. As always, I want to thank all of our adaptive employees for their dedication and for their solid execution during a quarter in which we completed the reorganization of our business. This strategic restructuring focuses Adaptive in two business areas: MRD and immune medicine.


Along with our recent head count reduction, these changes will result in a more streamlined organization to fuel growth as we navigate this turbulent market. We continue to hire talent strategically in key growth areas, such as our clonoSEQ sales team and our cell therapy group in South San Francisco. We also look forward to formally welcoming our new CFO, Tycho Peterson, and leveraging his extensive expertise. Tycho will officially start on June 1, following completion of his leave.

We have prioritized product development efforts for each business area, and the teams are in place to execute toward our 2022 goals. Slide 3 shows the respective key drivers of our MRD and immune medicine businesses. The value of our MRD business is a combination of the clonoSEQ test offered to clinicians and the clonoSEQ MRD assay offered to pharma partners who integrate MRD status in their heme malignancy trials. Aligning these synergistic components of the MRD business under the same leadership at Adaptive will drive execution and enhance visibility.

The immune medicine business is comprised of pharma, clinical testing, and drug discovery, all of which are driven or informed by our T cell receptor antigen map. As with our MRD business, within immune medicine, there is synergistic value between the utility of the information for clinical diagnostics and to pharma partners in research and drug development. As shown on Slide 4, our first quarter results reflect a solid start to the year with revenue of $38.6 million. Both business areas delivered key achievements and are set up for significant growth in 2022 and beyond.

Within the MRD business, clonoSEQ test volume experienced strong growth of 45% versus prior year. The clonoSEQ sales team of 70 reps is now fully hired, trained and is being deployed to hit the field. Progress continues with payers, data generation and guideline expansion. For MRD pharma, we continue to grow our partnerships.


This quarter, we entered into an expanded MRD pan-portfolio partnership with a major pharma partner in multiple myeloma and CLL for the use of MRD as a clinical endpoint. The immune medicine business is also delivering on multiple fronts, generating a total of approximately $21 million this quarter. Revenues from pharma partners that use immunoSEQ and data generated from our TCR antigen map grew 100% versus prior year. We are well positioned for continued growth as we expand the use of immunoSEQ in multiple therapeutic areas and secure additional T-MAP deals beyond COVID.

For example, this quarter, we entered into a new collaboration with J&J to map T cell responses to RSV for its vaccine program. The clinical diagnostic pipeline with T-Detect is advancing in both infectious diseases and autoimmune disorders. And in drug discovery, we continue to make good progress with our shared and private product programs under our Genentech collaboration. Moving on to MRD business on Slide 5.

Tests delivered grew 12% to 7,698 tests versus prior quarter with double-digit growth observed in all three indications. Ordering HCPs and ordering accounts experienced significant growth of 53% and 36%, respectively, versus prior year. And unique patients tested also grew 59%. Growth in the community setting, although off a small base, was north of 60% during the quarter, demonstrating a strong start by our expanded sales force focused on increasing our reach beyond academic centers.

In addition, about 30% of all MRD tests were delivered in blood with multiple myeloma experiencing the highest uptake versus prior periods. As part of our strategy to cement our leadership in lymphoid malignancies, we plan to expand into non-Hodgkin’s lymphoma using ctDNA, which is the best measure of relapse risk. We have submitted our application for DLBCL coverage to MolDX this quarter. We continue to enhance the overall customer experience by investing in the integration of clonoSEQ into customer ordering systems.

This integration can positively impact both order volume and order pull-through. We’re off to a great start and on track to accelerate our growth trajectory for the remainder of the year. I want to share on Slide 6 new data about using clonoSEQ in pediatric ALL patients. In this published study, 143 pediatric ALL patients receiving CAR-T were tested for MRD at multiple time points using  flow and clonoSEQ.

Data show that clonoSEQ detected disease in blood that flow missed in marrow. Furthermore, in bone marrow, the performance of clonoSEQ was very strong closely detected MRD in 100% of patients prior to relapse with a median lead time of 168 days versus 52 days using flow, giving the clinician significant lead time to inform treatment decisions. I look forward to sharing additional data readouts this year, further demonstrating the increasing utility of clonoSEQ MRD testing. As mentioned before, our MRD pharma partnerships are a key component of our MRD business.

Slide 7 shows our pharma portfolio, which is comprised of partnerships with over 60 companies that integrate clonoSEQ in their clinical trials. As efficacy of blood cancer drugs continue to improve, pharma companies are looking for more sensitive ways to measure response. Of note, our clonoSEQ MRD assay was used as a clinical endpoint in support of regulatory approval of five drugs to date. Almost every major pharma company developing a blood cancer drug is using clonoSEQ in their trials as a clinical endpoint.

From these partnerships, we have a portfolio of more than $330 million in future eligible milestones based on additional drug approval from ongoing and future studies. We continue to grow and expand our pharma partnerships and look forward to seeing clonoSEQ data derived from these pharma trials to further drive clinical utility of the clonoSEQ test to clinicians. Now turning to our immune medicine business on Slide 8. The immune medicine business is comprised of three growth areas: pharma, clinical testing, and drug discovery.

Each of these areas has multiple shots on goal to create value in the short, medium, and long term. This value is predominantly driven by data that we generate through our TCR antigen map. The pharma research area, which includes over 100 companies using our immunoSEQ or T-MAP products is expected to continue to grow significantly in the short and medium term. The clinical diagnostic area, or T-Detect, is in early innings with his first indication launch last year, which also served to establish T-Detect as a new class of molecular T cell diagnostics.

We expect T-Detect to be a more meaningful contributor to revenue in the medium to long term as we generate and validate T cell signatures in multiple autoimmune disorders with high unmet need. In the drug discovery area, which is currently focused on our cell therapy collaboration with Genentech, is in early stages of development and is expected to be a significant growth contributor in the mid to long term. We aim to secure additional collaborations beyond cancer cell therapy that could further accelerate our growth. Let’s take a closer look on Slide 9 at the immune medicine business performance this quarter.

Pharma was the biggest contributor of revenue growth in the quarter and represented 30% of the immune medicine business. Our immunoSEQ T-MAP product is gaining traction with additional COVID studies and a new RSV program, which I mentioned. We expect to expand the use of existing and future T-MAPs in more disease areas as we continue to generate data from our TCR antigen map. As for T-Detect COVID, this quarter, orders decreased versus last quarter as we are seeing the virus move from a pandemic to an endemic state.

We continue to offer the test to consumers with modest promotional activities to maintain brand awareness. We are focusing on making T-Detect Lyme available via our CLIA lab during this lime season while we accelerate data generation and signal validation in select autoimmune disorders. Drug discovery revenue is attributed to the amortization of the Genentech upfront payment, which varies quarter over quarter. For our shared product this year, we’re on track to deliver up to two additional TCR packages.

We also continue to work closely with Genentech to establish the private product specifications and to build our private product data package. Zooming into T-Detect on Slide 10. T-Detect in infectious diseases has served as a proof of our T-Detect platform. Further investments in COVID and Lyme indications will be pursued opportunistically.

Specifically, in COVID, our efforts to establish the T cell response as a correlate of protection continue. We have been making progress at a policy level. A couple of weeks ago, Adaptive alongside a group of nearly 70 leading academics, industry leaders, and patient advocates, sent a letter to the FDA urging the incorporation of T cell response and COVID vaccine studies. This could further drive opportunities for T-Detect and for T-MAP COVID.

We also expect to make T-Detect Lyme available in the next quarter. Data from our immunoSEQ Lyme study shows T-Detect sensitivity of 54%, nearly double that of standard of care serology at 30% when we hold specificity at 99% for both. We anticipate this sensitivity to increase as we identify additional Lyme-specific TCRs from new data sets that we will use to update our diagnostic classifier. By making T-Detect available in our clear lab, we aim to implement the processes, which will be necessary for all future indications.

In parallel, the team is working on initiating a clinical validation study in IBD and continues to improve our signal in MS. Our objective is to launch at least one autoimmune indication test by the end of 2023. We’re excited about multiple opportunities stemming from our immune medicine business. I’ll now pass it over to Kyle Piskel for a financial update.

Kyle? 

Kyle PiskelInterim Chief Financial Officer

Thanks, Chad. Turning to our financial results on Slide 11. Total revenue in the first quarter was 38.6 million, representing a slight increase from 38.4 million in the same period last year. In prior periods, we’ve disaggregated revenue into sequencing and development categories, as you can see on the left side of the slide.

This quarter, our revenue reporting is now disaggregated to reflect the reorganization of our business around our MRD and immune medicine market opportunities. Immune medicine consists of revenue generated from immunoSEQ and immunoSEQ T-MAP to pharma and research customers, our T-Detect COVID test clinical customers and our collaboration agreements in drug discovery. MRD consists of revenue generated from clonoSEQ to clinical customers and our MRD services to pharma and research partners. We have included a revenue bridge for the last eight quarters in our earnings release and 10-Q to reflect the revised revenue disaggregation.

Our revenue mix for the first quarter consisted of 54% from immune medicine and 46% from MRD. Immune medicine revenue in the first quarter was 20.8 million, a 4% increase from the same period in 2021. Growth in immune medicine was primarily driven by a 3.4 million increase in revenue from our pharma and research partners partially offset by a 3.3 million reduction in the amortization of our Genentech upfront payment. As a reminder, these revenue amortization amounts may vary quarter over quarter.

MRD revenue was 17.8 million in the first quarter down 3% from the same period last year. This change was primarily due to recognizing 7 million in regulatory milestones in Q1 of 2021 versus 3 million this quarter. This reduction was partially offset by a 3.6 million increase in revenue from clonoSEQ clinical testing. clonoSEQ test funds also increased by 45% versus prior year.

Shifting now to our operating costs and guidance on Slide 12. Total operating expenses for the first quarter of 2022 were 101.7 million representing a 28% increase from 79.7 million in the same quarter last year. Cost of revenue was 13.2 million during the first quarter of 2022, compared to 10 million for the first quarter last year, representing a 32% increase. Higher cost of revenue was primarily driven by an increase in material costs due to revenue sample volume growth and an increase in labor overhead facility in.

Research and development expenses for the first quarter of ’22 were 37.8 million, compared to 33.8 million in the first quarter of 2021, representing a 12% increase. This increase is mainly attributable to increased personnel costs, including expenses related to our restructuring activities. Sales and marketing expenses for the first quarter of 2022 were 26.1 million, compared to 20.6 million in the first quarter of 2021, representing an increase of 27%. This growth was largely due to increased personnel costs primarily due to the expansion of our clonoSEQ field team and related customer operations teams as well as increased travel and customer event-related expenses.

Onetime charges from our restructuring efforts contributed to the growth in expenses. These increases were partially offset by a decrease in marketing expenses due to reduced corporate marketing efforts. General and administrative expenses for the first quarter of 2022 were 24.1 million, compared to 14.9 million in the first quarter of 2021, representing an increase of 62%. The increase was primarily driven by expanding our overall facility footprint and higher depreciation expenses.

Net loss for the first quarter of 2022 was 62.8 million, compared to the first quarter of 2021 net loss of 40.6 million. With respect to our full year guidance, we are reiterating our revenue range of 185 to 195 million, which already contemplated the MRD milestone we recognized this quarter. Both our MRD and immune medicine businesses are off to a great start, and we expect them to contribute to our full year revenue approximately 50-50 at the midpoint of the range. Although it is early in the year, we are confident on our ability to achieve our full year commercial and [Inaudible] goals.

Regarding our operating expenses, we are on track for operating expenses to grow at lower rates than revenue as a result of our restructuring activities and as we continue to prudently manage our investments and improve our operating efficiencies. We are being thoughtful about our cash and expect to deploy capital off our balance sheet to support those projects with the greatest potential while also reducing our burn rate. We look forward to providing you further updates next quarter. I’ll now turn the call back to Chad.

Chad RobinsChief Executive Officer and Co-Founder

Thanks, Kyle. As outlined on the call and listed on Slide 13, we executed on key strategic decisions around the restructuring of our business and are on track to achieve important milestones during the rest of the year in both MRD and immune medicine. Our capital position is strong, and we continue to manage our investments to fuel growth across the businesses. We’re looking forward to a great 2022.

So with that, I’d like to turn the call back over to the operator and open it up for questions.

Questions & Answers:

Operator

Thank you, sir. [Operator instructions]. And we have your first question from Brian Weinstein with William Blair. Your line is open.

Brian WeinsteinWilliam Blair — Analyst

Hey, guys. Good afternoon. Thanks for taking the question. I just want to go through the growth rates here a little bit because I know there are some moving parts here, it seems like, in the quarter because you posted basically flattish growth.

But Kyle or Chad, can one of you guys just go through some of the factors that kind of drove that flattish growth? I heard some Genentech stuff that was in there and some other things that might have sort of impacted that growth rate on a onetime basis. I just want to make sure that we understand what those things were.

Kyle PiskelInterim Chief Financial Officer

Sure. I’ll take that, Brian. I’d kind of first like to start with the two main components that drive a bit of quarter-to-quarter comparative challenges. The first being the MRD milestones — and just as a reminder, in Q1 of last year, we had approximately 7 million in milestones from our MRD business.

And this quarter, we have 3 million. So you’re seeing $4 million in compression there from a comp perspective. The second component is the Genentech amortization, and comparing that to last quarter last year, we had about 16 million versus this quarter where we’re up about 12 million. So those two things kind of really compress the growth.

And if you back those out, you’d see about 47% year-over-year growth. So that’s kind of driving some of that uptick issue. 

Brian WeinsteinWilliam Blair — Analyst

And when we think about the Genentech amortization, it’s always somewhat of a black box for us, I think. How should we be thinking about that going forward? I mean just so that we’re level set here so that we can sort of back that stuff out in — with a little bit more visibility. It’s always somewhat confusing for us.

Kyle PiskelInterim Chief Financial Officer

Yes, I’d say for the — it’s tied to our expense investment in the Genentech collaboration, I’d say. For the remainder of the full year, we’re still on track to be about the same total revenues last year, maybe a little bit of a bell curve this year through Q2 and Q3 and then come back down a little bit in Q4. But overall, I’d say it will be fairly consistent to last year.

Brian WeinsteinWilliam Blair — Analyst

Got it. And then, Chad, for you, obviously, the markets are very focused on pushes toward profitability, cash flow breakeven. I don’t think you guys have given kind of formal talks about that, but I’d love to kind of have some sort of path that you guys are thinking about toward profitability, the steps that you guys think that you’ll need to take. And any thoughts on timing there?

Chad RobinsChief Executive Officer and Co-Founder

Yes. So first, I’ll just acknowledge that the path to profitability and at least cash flow neutrality is incredibly important for us at Adaptive. And we — I think we got out ahead of it earlier, early this year and took proactive steps with doing the restructuring and the reduction in force. We continue to look at ways to manage expenses, and at the same time, look — we’re looking at opportunities to bring in, what I’ll call, nondilutive cash flow through different partnership and financing mechanisms.

Look, let’s face it. The cost of capital is high right now, and we’re kind of on a path to do what we can so that we don’t have to take in capital that will be dilutive to the company in this economic environment. That said, too, with Tycho coming on board, we were really sharpening that long-range plan and should have better visibility into that time horizon to get to kind of cash flow profitability and should be providing that for you within the back half of the year. 

Brian WeinsteinWilliam Blair — Analyst

OK. Thanks, guys.

Chad RobinsChief Executive Officer and Co-Founder

Sure. Thanks, Brian.

Operator

We have your next question from Salveen Richter with Goldman Sachs. Your line is open.

Elizabeth WebsterGoldman Sachs — Analyst

This is Elizabeth on for Salveen. Thanks for taking my question. Just on the Genentech, maybe if you could kind of walk us through what might be needed for the private product specification and what you kind of aim to deliver this year. And just maybe remind us what goes into those data packages.

Thank you.

Chad RobinsChief Executive Officer and Co-Founder

Sure, I’m going to have Sharon Benzeno, who’s head of our immune medicine business, take the call. Sharon?

Sharon BenzenoHead of the Immune Medicine Business

Yes. Thanks, Elizabeth. So as we’ve previously stated, and on the heels of our successful proof-of-concept screens using a blood from 60 cancer patients last year, that was the first path at designing certain specifications that we’re carrying through this year and expanding that in an additional set of 30 or more cancer patients as well. And so the goal there is, importantly, running the end-to-end workflow on our end in our dedicated San Francisco lab end-to-end.

And in parallel in conjunction with the pieces of the puzzle that Genentech is putting together, the process being in the product. So that’s where we’re aiming this year, building off of the success from last year. 

Elizabeth WebsterGoldman Sachs — Analyst

Got it. Thank you. That is helpful.

Operator

We have your next question from Mark Massaro with BTIG. Your line is open.

Mark MassaroBTIG — Analyst

Hey, guys. Thanks for the questions. If I can, I’ll ask two all at once. I guess first, nice growth from clonoSEQ this quarter.

Can you just comment on your visibility of what you’re seeing in the field? Are you guys fully open nearly to prepandemic levels? And maybe just comment about what kind of access you have, reps in the field versus virtual? And then the second question is, on Slide 17, you show you’ve got Crohn’s and MS and Celiac kind of in the lead for your autoimmune diseases. Should we think of those as like the lead candidates? I guess what my question really boils down to is to what extent are you committed to advancing and investing in RA? Obviously, Crohn’s and colitis are linked. So can you just help us think about the priorities of the autoimmune disease portfolio? 

Chad RobinsChief Executive Officer and Co-Founder

Sure. Mark, I’m going to have Nitin Sood, head of our MRD business, take the first question. And then with regard to prioritization, Harlan will take that. So, Nitin?

Nitin SoodHead of the MRG Business

Mark, yes, so we’re seeing an improvement in in-person meetings. It’s trending in a positive direction. But I would say today, still about 60% of our visits are virtual. But on a day-to-day basis, on a week-to-week basis, we see a positive trend, and I expect us to be sort of 50% very shortly in terms of in-person visits.

Mark MassaroBTIG — Analyst

OK. And then just on the priority of the autoimmune disease portfolio.

Harlan RobinsChief Scientific Officer and Co-Founder

Sure. Thanks. This is Harlan. So we’re focusing our resources where our signals are most advanced, and we have the highest quality samples for early diagnosis of disease.

And of course, having a high unmet need, we prioritized MS and Crohn’s higher than RA simply because we have — we’re a little bit further behind in collecting those RA samples, not for any other particular reason. And the key — the real key that we’re focusing on is our — as our differentiator is specificity here. So just as a reference, we’re aiming to really reduced the number of false positives so that we can hit an earlier diagnostic market. And so that’s really been the focus, and that’s where we’ve had the biggest increase in our signals as we go.

And we’re going to take the learnings from this and apply it into other diseases as we create panels and, in particular, for IBD, as we’re going to initiate a sample collection for a clinical validation study in the coming months.

Mark MassaroBTIG — Analyst

Great. Thank you.

Operator

We have your next question from Derik De Bruin with Bank of America.  Your line is open. Excuse me, Derick, your line is open. You may ask your question.

Chad RobinsChief Executive Officer and Co-Founder

Let’s go on to the next question.

Operator

We have your next question from Tejas Savant with Morgan Stanley. Your line is open.

Yuko OkuMorgan Stanley — Analyst

Hello. This is Yuko on the call for Tejas. Thank you for taking our questions. Would you elaborate on the plans to reduce the workforce? Are the reduction mostly in administrative, overhead, R&D, or commercial? What projects are you prioritizing? And should we anticipate any delays in key time lines as it relates to clonoSEQ inflection, expansion into DLBCL? Any color around that would be great.

Chad RobinsChief Executive Officer and Co-Founder

Yes, sure. Yuko, I’ll take that. So first, we — there was many areas affected across the business, but it wasn’t uniformly distributed. For example, there were very, very few cuts in the MRD business.

So to your questions about kind of DLBCL or any of the kind of project development pipeline, it’s all on track. An additional — in addition, the — kind of the cell therapy group in San Francisco had very little cuts. So there were cuts across kind of general and administration, project management and, frankly, some kind of duplicative or stacked hiring as well that we had an opportunity where we thought we could gain some efficiencies and leverage in the existing business. So we’re moving forward.

And as Harlan said, we’re being very, very clinical, if you will, to use a pun here, on how we’re prioritizing the T-Detect program. And we’re also being very opportunistic about continued investments for example, in COVID, given that’s taken more of an endemic state. And we’ve seen kind of the T-Detect orders kind of wane as COVID kind of becomes more normalized in the population. So hopefully, that’s helpful color to you in terms of kind of how we looked at the reduction in force and prioritization. 

Yuko OkuMorgan Stanley — Analyst

Got it. No, that’s super helpful. And then on the product development expansion efforts into NHL, could you walk us through the rationale for using cell-free DNA? Is there a specific advantage to using cell-free DNA in NHL versus some of the other indications? And could this be a strategy that you would like to deploy on a go-forward basis?

Nitin SoodHead of the MRG Business

Yes. So I’ll ask the question — answer that question. This is Nitin. Specifically for DLBCL, there have been studies that have been published that demonstrate that cell-free DNA is a better [Inaudible].

But for other diseases, namely CLL, ALL, and multiple myeloma, our cellular assay does really well. So on an ongoing basis, I don’t expect any changes on those three indications, but for non-Hodgkin’s lymphoma and more specifically for DLBCL, we’re going with the like we know has the best performance. And longer term, we’ll also look at potentially combining both the analytes, namely the cell free DNA analyze and the cellular assay. Obviously, we’re the one company that can do both.

So we’ll potentially look at combining both the analytes.

Yuko OkuMorgan Stanley — Analyst

Great. Thank you so much for that color.

Operator

We have your next question from Derik De Bruin with Bank of America. Your line is open.

Derik De BruinBank of America Merrill Lynch — Analyst

Sorry about that. My phone droid earlier. Can you give us some color on the ASPs for clonoSEQ? I mean you didn’t break out the clinical sequencing revenues like historically. So can you give us some idea on coverage on just the ASP and sort of data just to give us a little bit more clarity?

Nitin SoodHead of the MRG Business

Yes. So I think — this is Nitin again. We’ve seen steady ASP growth for clonoSEQ over the past couple of years, and we’re anticipating that the growth will continue in the mid-single-digit range over the next two to three years. We’re very close to about $1,000 in ASP today.

And our expectation is, in two to three years, we’re in the $1,200 to $1,300 range for ASP.

Derik De BruinBank of America Merrill Lynch — Analyst

Got it. And I know this was asked earlier, but I just want to go back and revisit it. I mean, do you expect — I mean, the cash burn was quite a bit higher in the first quarter. Do you expect that to ramp down throughout the rest of the year? Basically it’s a question on do you have enough cash this year.

Kyle PiskelInterim Chief Financial Officer

This is Kyle. Yes, so a couple of things in Q1. Obviously, you don’t have the full effect of our restructuring efforts and the cash burn because of the timing of when we initiated that was late March. The second thing as it relates to Q1, a bit of seasonality, we have our corporate bonus payouts in Q1.

So from a cash perspective, I’m generally thinking of the rest of the three quarters is between 50 and 60 million is cash burn.

Derik De BruinBank of America Merrill Lynch — Analyst

Great. Thank you. That’s helpful. And I guess any — and I’m sorry, and did you talk about when you expect to see the NHL assay to be commercialized? I know you’re in validation and clear validation now?

Chad RobinsChief Executive Officer and Co-Founder

Yes. With respect to NHL, we’re going to launch that later this year in our CLIA environment. We’ve submitted our tech assessment to MolDX and are waiting to hear back on reimbursement. But as with many of our diagnostics and our assays, we’ll launch ahead of reimbursement toward kind of the back half of the year.

I mean it’s currently available in our CLIA environment with a cellular assay. But we’ve got — as mentioned earlier, we’ve got product development efforts on — I’m going to convert that to incorporate ctDNA into the assay as well for — to enhance the product.

Derik De BruinBank of America Merrill Lynch — Analyst

Great. Thanks.

Nitin SoodHead of the MRG Business

Just one more item to that is before ahead of that launch, we’ll be doing what we call a clinical experience program with 30 physicians. So that’s already underway. And we’re pretty confident that, by October, November of this year, we’ll have a full commercial launch with [Inaudible] ctDNA assay by October of this year.

Derik De BruinBank of America Merrill Lynch — Analyst

Thanks.

Operator

[Operator signoff]

Duration: 37 minutes

Call participants:

Karina CalzadillaHead of Investor Relations

Chad RobinsChief Executive Officer and Co-Founder

Kyle PiskelInterim Chief Financial Officer

Brian WeinsteinWilliam Blair — Analyst

Elizabeth WebsterGoldman Sachs — Analyst

Sharon BenzenoHead of the Immune Medicine Business

Mark MassaroBTIG — Analyst

Nitin SoodHead of the MRG Business

Harlan RobinsChief Scientific Officer and Co-Founder

Yuko OkuMorgan Stanley — Analyst

Derik De BruinBank of America Merrill Lynch — Analyst

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