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Revenue
 9 Months Ended
Sep. 30, 2025
Revenue from Contract with Customer [Abstract]  
Revenue

3. Revenue

We disaggregate our revenue from contracts with customers by business area and type of arrangement, as we believe this best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.

The following table presents our disaggregated revenue for the periods presented (in thousands):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

MRD revenue

 

 

 

 

 

 

 

 

 

 

 

 

Service revenue

 

$

50,288

 

 

$

32,470

 

 

$

133,947

 

 

$

92,880

 

Regulatory milestone revenue

 

 

6,500

 

 

 

5,000

 

 

 

16,500

 

 

 

12,500

 

Total MRD revenue

 

 

56,788

 

 

 

37,470

 

 

 

150,447

 

 

 

105,380

 

Immune Medicine revenue

 

 

 

 

 

 

 

 

 

 

 

 

Service revenue

 

 

3,443

 

 

 

5,453

 

 

 

13,566

 

 

 

16,160

 

Collaboration revenue(1)

 

 

33,742

 

 

 

3,512

 

 

 

41,282

 

 

 

9,958

 

Total Immune Medicine revenue

 

 

37,185

 

 

 

8,965

 

 

 

54,848

 

 

 

26,118

 

Total revenue

 

$

93,973

 

 

$

46,435

 

 

$

205,295

 

 

$

131,498

 

(1) On August 13, 2025, the Genentech Agreement was terminated, with termination effective February 9, 2026. See “Genentech Collaboration Agreement” below for more information regarding the resulting impact on revenue recognized during the three and nine months ended September 30, 2025.

During the three months ended September 30, 2025, we recognized $2.9 million in MRD service revenue related to Medicare reimbursements resulting from our determination that the likelihood of additional testing for specific patients was remote and cancelled customer contracts. During the three months ended September 30, 2024, we recognized $1.5 million in MRD service revenue related to Medicare reimbursements resulting from our determination that the likelihood of additional testing for specific patients was remote and $1.0 million in Immune Medicine service revenue related to cancelled customer contracts.

During the nine months ended September 30, 2025, we recognized $7.3 million in MRD service revenue related to Medicare reimbursements resulting from our determination that the likelihood of additional testing for specific patients was remote and cancelled customer contracts. During the nine months ended September 30, 2024, we recognized $4.3 million in MRD service revenue related to Medicare reimbursements resulting from our determination that the likelihood of additional testing for specific patients was remote and $1.1 million in Immune Medicine service revenue related to cancelled customer contracts.

As of September 30, 2025, we could receive up to an additional $384.0 million in milestone payments in future periods if certain regulatory approvals are obtained by our customers’ therapeutics in connection with MRD data generated from our MRD product.

Genentech Collaboration Agreement

In December 2018, we entered into the Genentech Agreement to leverage our capability to develop cellular therapies in oncology. Subsequent to receipt of regulatory approval in January 2019, we received a non-refundable, upfront payment of $300.0 million in February 2019. We also received a $10.0 million milestone payment in 2023. Prior to receiving the termination notice, we may have been eligible to receive an additional $1.8 billion over time, including payments of up to $65.0 million upon the achievement of specified regulatory milestones, up to $300.0 million upon the achievement of specified development milestones and up to $1,430.0 million upon the achievement of specified commercial milestones. In addition, we were also separately able to receive tiered royalties at a rate ranging from the mid-single digits to the mid-teens on aggregate worldwide net sales of products arising from the strategic collaboration, subject to certain reductions, with aggregate minimum floors.

Under the Genentech Agreement, we were pursuing two product development pathways for novel T cell therapeutic products in which Genentech intended to use T cell receptors (“TCRs”) screened by our immune medicine platform to engineer and manufacture cellular medicines:

•
Shared Products. If developed, the shared products will use “off-the-shelf” TCRs identified against cancer antigens shared among patients (“Shared Products”).
•
Personalized Product. If developed, the personalized product will use patient-specific TCRs identified by real-time screening of TCRs against cancer antigens in each patient (“Personalized Product”).

Under the terms of the Genentech Agreement, we granted Genentech exclusive worldwide licenses to develop and commercialize TCR-based cellular therapies in the field of oncology, including licenses to existing shared antigen data packages. Additionally, Genentech had the right to determine which product candidates to further develop for commercialization purposes. We determined that this arrangement met the criteria set forth in Accounting Standards Codification (“ASC”) Topic 808, Collaborative Arrangements (“ASC 808”), because both parties were active participants in the activity and were exposed to significant risks and rewards depending on the activity’s commercial failure or success. Because ASC 808 does not provide guidance on how to account for the activities under a collaborative arrangement, we applied the guidance in ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) to account for the activities related to the Genentech Agreement.

In applying ASC 606, we identified the following performance obligations at the inception of the agreement:

1.
License to utilize on an exclusive basis all TCR-specific platform intellectual property to develop and commercialize any licensed products in the field of oncology.
2.
License to utilize all data and information within each shared antigen data package and any other know-how disclosed by us to Genentech in oncology.
3.
License to utilize all private antigen TCR product data in connection with research and development activities in the field of use.
4.
License to existing shared antigen data packages.
5.
Research and development services for Shared Products development, including expansion of shared antigen data packages.
6.
Research and development services for private product development.
7.
Obligations to participate on various joint research, development and project committees.

 

We determined that none of the licenses, research and development services or obligations to participate on various committees were distinct within the context of the contract, given such rights and activities were highly interrelated and there was substantial additional research and development to further develop the licenses. We considered factors such as the stage of development of the respective existing antigen data packages, the subsequent development that would be required to both identify and submit a potential target for investigational new drug acceptance under both product pathways and the variability in research and development pathways given Genentech’s control of product commercialization. Specifically, under the Genentech Agreement, Genentech was not required to pursue development or commercialization activities pertaining to both product pathways and may have chosen to proceed with one or the other. Accordingly, we determined that all of the identified performance obligations were attributable to one general performance obligation, which was to further the development of our TCR-specific platform, including data packages, and continue to make our TCR identification process available to Genentech to pursue either product pathway.

Separately, we had a responsibility to Genentech to enter into a supply and manufacturing agreement for patient-specific TCRs as it pertained to any Personalized Product therapeutic. We determined this was an option right of Genentech should they pursue commercialization of a Personalized Product therapy. Because of the uncertainty resulting from the early stage of development, the novel approach of our collaboration with Genentech and our rights to future commercial milestones and royalty payments, we determined that this option right was not a material right that should be accounted for at inception. As such, we determined to account for the supply and manufacturing agreement when and if entered into between the parties.

We determined the initial transaction price shall be made up of only the $300.0 million upfront, non-refundable payment, as all the then-potential regulatory and development milestone payments were probable of significant revenue reversal given their achievement was highly dependent on factors outside our control. As a result, these payments were fully constrained and were not included in the initial transaction price. In May 2023, one of the regulatory milestones was achieved, resulting in a $10.0 million addition to the transaction price, $7.7 million of which was recognized as revenue in the three months ended June 30, 2023, with the remainder included in deferred revenue to be recognized as revenue over the remaining research and development period. We continued to exclude the commercial milestones and potential royalties from the transaction price, as those items related predominantly to the license rights granted to Genentech and would be assessed when and if such events occur.

As there were potential substantive developments necessary, which Genentech may have been able to direct, we determined that we would apply a proportional performance model to recognize revenue for our performance obligation. We measured proportional performance using an input method based on costs incurred relative to the total estimated costs of research and development efforts to pursue both the Shared Products and Personalized Product pathways.

On August 13, 2025, the Genentech Agreement was terminated, with termination effective February 9, 2026. There are no penalties nor future consideration due between either party. The termination of the Genentech Agreement was accounted for as a contract modification under ASC 606. As there were no changes to the transaction price and no future development efforts on our part in connection with the periods subsequent to September 30, 2025, we recognized the remaining related deferred revenue. We are no longer eligible to receive additional milestone payments or tiered royalties.

We recognized $33.7 million and $3.5 million in Immune Medicine collaboration revenue during the three months ended September 30, 2025 and 2024, respectively, and $41.3 million and $10.0 million in Immune Medicine collaboration revenue during the nine months ended September 30, 2025 and 2024, respectively, related to the Genentech Agreement. Costs related to the Genentech Agreement are included in research and development expenses.