Good day, and thank you for standing by. Welcome to the Adaptive Biotechnologies Third Quarter 2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. 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.
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 2026. The press release is available at www.adaptivebiotech.com. We are conducting a live webcast of this call and will be referencing a slide presentation that has been posted to the Investor section on our corporate website. During the call, management will make projections and other forward-looking statements within the meaning of federal security laws regarding future events and the future financial performance of the company. These statements reflect management 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 and 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?
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 multiple myeloma strengthen 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, the clinical business, on slide four. 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 three 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 five. 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-$1,800 per test. Let me start with this quarter's coverage gains. We expanded commercial coverage in DLBCL and MCL, two indications with substantial reimbursement opportunity.
In DLBCL, we added Avalon and Concert. In MCL, we added Avalon, Blue Cross Blue Shield, and UnitedHealthcare. 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 four tests over a patient's lifetime. As physicians monitor more patients more frequently, a growing proportion is moving beyond those four tests, putting pressure on realized ASP.
We saw this dynamic in Q3, particularly in multiple 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 multiple 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-$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 six and the advances in multiple myeloma that support both this strategy and clonoSEQ's longer-term potential. Two major developments this quarter strengthen the foundation for MRD testing in multiple 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 six, which is one cancer cell in a million cells, as the preferred sensitivity because of its higher prognostic value. clonoSEQ is, in fact, the only assay that can deliver sensitivity of 10⁻⁶ 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 five years off treatment with sustained MRD negativity, demonstrated by at least four negative assessments with no positive MRD results. Testing must use next-generation sequencing or next-generation flow at a sensitivity of sensitivity of 10⁻⁶ .
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 how 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 seven 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 multiple 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. Multiple myeloma represents approximately 60% of active studies and 65% of backlog. It 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 multiple 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 multiple 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 multiple 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?
Thanks, Chad. I'll start on slide eight 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 nine on updated guidance.
We're raising our full-year MRD revenue guidance to a range of $276 million-$286 million, up from our prior range of $268 million-$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%-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-$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.
Thanks, Kyle. We enter 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.
As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Subbu Nambi with Guggenheim. Your line is open.
Hi, guys. This is Thomas on for Subbu. Thanks for taking our questions.
Sure
Regarding 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?
Yeah, 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. A quick reminder of why we are not an applicable laboratory is because of the episodic billing structure with Medicare. The vast majority of our Medicare revenues comes from the bundled structure. Again, when we talk about the insulation related to business, we don't believe the PLA rate-setting process should have any pull-through into the episodic framework.
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 resolved prior to the finalized rates, which should go live sometime in November, that's what we understand with CMS. We remain confident in 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.
Great. 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 2027, 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. Thank you so much.
Sure. 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 that 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.
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 a month and a half. We can talk more about that later. Beyond those two 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. We've seen high rates of pull-through on serial testing with our Flatiron implementation in oncology EMR. We continue to see increases in blood. We're investing in product development in that regard to enhance the performance of the products in blood. 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'll be a combination of all those factors.
Thank you. Our next question comes from Casey Woodring with JPM. Your line is open.
Great. Thank you for taking my questions. I guess the first one, it looks like the strongest clinical volume sequential growth was in DLBCL. There has been some competitive noise there. Can you talk about what you are hearing from customers and your competitive moat in DLBCL going forward, and if you would expect that to continue to be the strongest sequential kind of growth driver in volumes moving forward?
Yeah, 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 is 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 am very confident in our position in this field.
In the end, this is a very under-penetrated 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 will see a good amount of that at ASH this year. 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.
Got it. That's helpful. 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, what's driving the momentum in multiple myeloma right now?
Yeah, there are several reasons that we're seeing improvement in our myeloma pharma business. 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. 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, the definition of cure that was issued by the IMWG and 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, 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. Lastly, just the increase in regulated and interventional use. We now have 23 additional studies, including eight multiple myeloma. The number of regulated studies is now the majority of our trials are regulated, 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.
Great. Thank you so much.
Thanks, Casey.
Thank you. As a reminder, to ask a question, please press star one one on your telephone. Again, that is star one one to ask a question. Our next question comes from David Westenberg with Piper Sandler. Your line is open.
Hi. Thanks for taking the question. I too wanted to jump on the DLBCL strength. It grew 20% sequentially in the quarter and remains a pretty under-penetrated opportunity. What really were the biggest drivers of DLBCL up 20%, and then 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 2027 and 2028?
Yeah, 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. 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.
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 de-escalating therapy in DLBCL. We continue to expect it to be a top growth driver for the next few years, particularly given the investments we are making in data and the potential for pharma to expand its investment in MRD-guided therapy trials in the future.
But David, even though multiple myeloma has been a large grow, it is going to still be a major contributor to our growth, especially with updated guidelines and the new definition of cure. Just to kind of up-level this a minute, I mean, it is hard to kind of understand how big a deal this is. We believe that this is the first definition of cure based on an NGS test. Basically, they are saying if you are MRD negative using clonoSEQ for kind of four different tests, then you are cured of a disease. Just an anecdote, we had investigators when they found this out, crying in the hallway, who had been working on this for over a decade. Myeloma is going to continue to accelerate.
Got you. Then I just want to go ahead and jump on, I appreciate that addition of 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? 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? I will stop there. Thanks again.
Yeah, 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 remaining of the year, one of the factors is frequency uptake as it relates to Medicare and the pressure we are seeing there, which ultimately is a good thing. I think there are some timing dependencies that could move the needle in either direction, but foundationally, I think we are in a good place, and there are some timing considerations, but we will see how those play out, but we are confident in kind of the long-term trajectory here and continue to be confident in getting to that $1,400 at some point.
Yeah, David, maybe if I can just kind of add a little bit of color and context. A little bit of the ASP pressure that you are seeing is actually what is beneficial and what we are using for our MolDX submission. If you think about kind of our overall strategy, think about this in kind of, there is three different kind of phases of a patient's treatment continuum. The first is active treatment phase, which we are already reimbursed by Medicare for four tests, okay? The second, and this is what we have already submitted and are in active, very positive discussions with MolDX on, is what we are calling kind of the maintenance treatment phase. We have submitted for an additional bundle of five tests. This is the first time I have kind of said that, but that we have submitted for an additional five tests during the maintenance setting.
The third is the recurrence monitoring. We also mentioned during this call, in multiple myeloma, that the second half of this year, we believe we have data for the recurrence monitoring. So that really kind of hits all three phases of a treatment, of a patient's kind of care continuum. Again, I think it is not a matter We believe it is not a matter of if, it is a matter of when. We are, I would say, highly encouraged based on these discussions that we have, that we will have an upcoming catalyst when we get this maintenance bundle. I just want to be clear, though, we cannot guarantee kind of the number of tests in the bundle. We cannot guarantee timing. I can just guarantee that, what I can tell you is the discussions have been very, very positive.
It is 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 is kind of I just want to provide perspective on how this is all working together in our broader-based reimbursement strategy so that we are not thinking that a short-term We do believe we are going to be approximately at $1,400 this year.
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 are having, that our ASP targets of $1,700-$1,800, that we will not only hit them, that we believe that we will hit them, that we could potentially even accelerate that timeframe in some cases.
Thank you.
Thank you. Our next question comes from Dan Brennan with TD Cowen. Your line is open.
Great. Thank you. Thanks for the questions. Congrats on the quarter. Maybe just on the pharma side, really good pharma numbers again. 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 opportunities as we look ahead, maybe not this year, but just beyond, just what type of milestones, say, next 12 months might be realistic?
Yeah, 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 [inaudible] 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. We still expect to see some of those over the course of the next coming years as well. We'll provide more color at the next earnings call around that.
Yeah, 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 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.
Great. 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 of the market. You have all these drivers kind of ahead of you. How do we think about, as we get to 4Q and then we lap into 2027, most of us naturally have volumes coming down. You're not guiding for 2027 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, as we look out beyond 2026 into 2027, kind of what's a framework we could use?
Obviously, Dan, we're not in a position yet to guide on 2027. I can just tell you that there's a tremendous amount of internal excitement from our team in the conversations that 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. I 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 two meaningful updates overall in the industry, which kind of further support and gives us confidence in the growth trajectory ahead.
Awesome. Thanks, Chad.
Thank you.
Thank you. Our next question comes from Mark Massaro with US Bancorp BTIG. Your line is open.
Hey, guys. Thank you for taking the questions, and some of us are hopping calls tonight, so pardon me if this has already been asked. 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 were disciplined. Just wanted to get a sense for how you're thinking about capital deployment now that you're a profitable company.
Yeah. I'll have Susan start on the areas we're investing in MRD, then I'll make some broader comments as to some things we're thinking about.
Yeah, 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. As we become profitable, I think the best thing we can do is deploy those profits to continue to expand our moats and increase the trajectory of MRD adoption. 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 four 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 in 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.
Yeah. Again, one of the things to highlight, Susan mentioned enhancing the performance of our existing clonoSEQ to deepen heme MRD, and also leveraging our heme channel to deliver 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 immunosequencing platform to address unmet medical needs beyond hematology.
There is some kind of really interesting potential applications of our platform that we are exploring. Again, not ready to talk about on this call, but I think could be really interesting kind of large opportunities to leverage our existing capabilities, both with our platform technology, but also with the infrastructure that we have 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.
Okay. That is fantastic. Then wanted to ask about the NCCN guideline recognition. What is your thinking in terms of, you are already the dominant market leader, so some of us are wondering how, usually when you are number one, you cannot do better than number one, but perhaps you could perhaps accelerate. It is 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.
Yeah, I mean, 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. So we are very actively engaged in promoting the guidelines updates now and are seeing a great deal of engagement from clinicians. One of the things that is 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 is the work that we are doing right now.
I do think it is a potentially meaningful accelerator for the myeloma business. Importantly, also supports the maintenance bundle submission that is 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 is also notable that the guidelines combined with the cure definition are really underscoring the need for bone marrow testing, and I actually believe there is 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.
Awesome. Thanks so much for the time, guys.
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