- Encouraging initial launch of ZYNLONTA™
(loncastuximab tesirine-lpyl) driven by favorable product profile
to address high unmet medical need in relapsed / refractory DLBCL
market
- Company to host conference call today at 8:30
a.m. EDT
ADC Therapeutics SA (NYSE: ADCT), a commercial-stage
biotechnology company improving the lives of those affected by
cancer with its next-generation, targeted antibody drug conjugates
(ADCs) for patients with hematologic malignancies and solid tumors,
today reported financial results for the second quarter ended June
30, 2021 and provided business updates.
“We were thrilled to receive accelerated FDA approval for the
first indication for ZYNLONTA™ and are encouraged by the momentum
and positive feedback in the initial weeks following approval. We
remain highly focused on the successful execution of the launch and
positive about the longer-term potential of the product,” said
Chris Martin, Chief Executive Officer of ADC Therapeutics. “During
the second quarter, we were also pleased to present positive data
on ZYNLONTA and our exciting pipeline of advancing programs at key
medical meetings. Looking to the rest of the year, we have several
notable milestones on the horizon and look forward to keeping you
updated on our progress.”
Recent Highlights and
Developments
ZYNLONTA (loncastuximab tesirine-lpyl)
- Launch update:
- ZYNLONTA generated net sales of $3.8 million for the two-month
period following accelerated U.S. Food and Drug Administration
(FDA) approval on April 23, 2021, reflecting patient demand with no
material inventory build. Launch performance was driven by the
differentiated profile of ZYNLONTA in addressing an area of high
unmet medical need.
- The Company has engaged prioritized accounts, with patient
starts at a significant percentage of key accounts. A substantial
number of the National Comprehensive Cancer Network (NCCN) centers
have ordered and reordered ZYNLONTA. There has been positive
reception across the treatment site spectrum from academic- to
community-based centers reflecting the broad applicability of
ZYNLONTA in the 3L+ setting supported by the LOTIS-2 pivotal
data.
- ZYNLONTA was added to the NCCN Guidelines with a Category 2A
recommendation just two weeks after receiving accelerated FDA
approval. The NCCN guidelines listing is consistent with the broad
FDA-approved indication. As a result, payer access and medical
policy publication have accelerated.
- The Company is pleased with the positive launch momentum in a
continuing COVID environment. The sales and medical teams are
executing with a hybrid model, and there has been an increase in
face-to-face visits.
- Online publication of LOTIS-2 results in The Lancet
Oncology: Results of LOTIS-2, a Phase 2 clinical trial
evaluating the safety and efficacy of single-agent ZYNLONTA in
adult patients with relapsed or refractory diffuse large B-cell
lymphoma (DLBCL) following two or more systemic treatments, were
published in The Lancet Oncology. The trial included patients with
high-risk characteristics for poor prognosis, such as
double-/triple-hit, transformed, and primary refractory DLBCL.
- Phase 2 LOTIS-2 trial update at ASCO and ICML: Updated
clinical data from LOTIS-2, the pivotal Phase 2 trial of ZYNLONTA
in patients with relapsed or refractory DLBCL, were presented at
the American Society of Clinical Oncology (ASCO) Annual Meeting and
the International Conference on Malignant Lymphoma (ICML), both in
June 2021. As of the March 1, 2021 cutoff date, the overall
response rate (ORR) was 48.3% and the complete response rate (CRR)
was 24.8%. At this data cut, there was a median duration of
response of 13.4 months for the responders, with durable responses
in high-risk subgroups. No new safety concerns were identified
during the study.
- Other ZYNLONTA trials:
- The Phase 3 LOTIS-5 clinical trial is evaluating ZYNLONTA in
combination with rituximab in second-line patients with relapsed or
refractory DLBCL who are not eligible for autologous stem cell
transplant.
- The Phase 2 LOTIS-3 clinical trial of ZYNLONTA in combination
with ibrutinib for relapsed or refractory DLBCL patients continues
to enroll patients. Updated Phase 1 results presented at ICML
demonstrated ORR of 62.2%, CRR of 35.1% and a manageable toxicity
profile. Based on interim data from the Phase 2 trial, the Company
plans to amend the protocol to evaluate the administration of
ZYNLONTA with every cycle to potentially further enhance efficacy
and durability. Based on this additional data, the Company could
potentially pursue a Phase 3 study in second-line DLBCL, expanding
the addressable market and the number of patients who could benefit
from ZYNLONTA.
- The pivotal Phase 2 LOTIS-6 clinical trial in patients with
relapsed or refractory follicular lymphoma (FL) is open for
enrollment.
- The Company plans to initiate a clinical trial to evaluate
ZYNLONTA in combination with select therapies in B-cell non-Hodgkin
lymphoma (NHL).
- The Company plans to initiate a dose-finding study to evaluate
ZYNLONTA in combination with R-CHOP in frontline DLBCL.
Camidanlumab Tesirine (Cami)
- Pivotal Phase 2 trial in Hodgkin lymphoma (HL):
Encouraging interim results from the pivotal Phase 2 study in
patients with relapsed or refractory HL were presented at ICML. In
a heavily pre-treated patient population with a median of six prior
lines of systemic therapy, these results included an ORR of 66.3%
and CRR of 27.7%. Median duration of response has not been reached,
and no new safety signals were identified.
- Phase 1b trial in solid tumors: The Phase 1b clinical
trial, enrolling patients with selected advanced solid tumors, is
an open-label, dose-escalation and dose-expansion trial evaluating
the safety, tolerability, pharmacokinetics and antitumor activity
of Cami in combination with pembrolizumab, a checkpoint
inhibitor.
ADCT-901
- The FDA has cleared the Investigational New Drug (IND)
application for ADCT-901, targeting KAAG-1. The Company expects to
initiate the Phase 1 study in the second half of 2021.
Corporate Update
- Geographic Expansion: ADC Therapeutics is committed to
expanding its geographic footprint in order to provide ZYNLONTA and
other novel treatments to patients who can benefit from them.
- The Company expects to submit a regulatory filing in the second
half of 2021 to the European Medicines Agency (EMA) for ZYNLONTA
for the treatment of patients with relapsed or refractory
DLBCL.
- The Overland ADCT BioPharma joint venture in China is making
good progress toward initiating a pivotal bridging study and
seasoned executive Eric Koo was appointed CEO during the second
quarter.
Upcoming Expected
Milestones
ZYNLONTA
- Initiate a dose-finding study of ZYNLONTA in first-line DLBCL
with R-CHOP in the second half of 2021.
- Initiate a clinical study to evaluate ZYNLONTA in multiple
combinations in B-cell non-Hodgkin lymphoma in the second half of
2021.
- Complete safety lead-in of the Phase 3 LOTIS-5 confirmatory
study of ZYNLONTA in combination with rituximab in the second half
of 2021.
- Continue enrollment in the Phase 2 LOTIS-3 study of ZYNLONTA in
combination with ibrutinib in the second half of 2021.
Earlier-Stage Pipeline
- Initiate Phase 1 study of ADCT-901, targeting KAAG1, in the
second half of 2021.
- Initiate a Phase 1b combination study of ADCT-601 (mipasetamab
uzoptirine), targeting AXL, in multiple solid tumors in the first
half of 2022.
Second Quarter 2021 Financial
Results
Cash and Cash Equivalents
Cash and cash equivalents were $371.9 million as of June 30,
2021, compared to $439.2 million as of December 31, 2020. During
the second quarter of 2021, the Company drew down $50 million under
its Convertible Credit Facility with Deerfield, which was
contingent upon ZYNLONTA approval.
Research and Development (R&D) Expenses
R&D expenses were $39.5 million for the quarter ended June
30, 2021, compared to $26.0 million for the same quarter in 2020.
R&D expenses increased due to investments in programs
supporting the ZYNLONTA commercial launch and evaluating the
potential of ZYNLONTA in earlier lines of treatment and additional
histologies, and due to advancing the portfolio. As a result of
these initiatives, employee headcount and share-based compensation
expense increased.
Selling and Marketing (S&M) Expenses
During the second quarter of 2021, S&M expenses were $15.2
million, compared to $4.0 million for the same quarter in 2020. The
increase in S&M expenses was related to the launch of ZYNLONTA.
Prior to December 31, 2020, S&M expenses were reported within
General and Administrative (“G&A”) expenses within the
condensed consolidated interim statement of operations. The period
ended June 30, 2020 has been recast to conform to the current year
presentation.
G&A Expenses
G&A expenses were $19.4 million for the quarter ended June
30, 2021, compared to $15.0 million for the same quarter in 2020.
G&A expenses increased due to higher headcount to support the
commercial launch, increased share-based compensation expense and
higher costs of being a public company.
Net Loss and Adjusted Net Loss
Net loss was $72.6 million, or a net loss of $0.95 per basic and
diluted share, for the quarter ended June 30, 2021, compared to
$126.6 million, or a net loss of $2.01 per basic and diluted share,
for the same quarter in 2020. Net loss included share-based
compensation expense of $18.3 million for the quarter ended June
30, 2021, compared to $12.7 million for the same quarter in 2020.
In addition, net loss for the quarter ended June 30, 2021 includes
a $2.1 million non-cash gain related to the changes in fair value
of derivatives associated with the convertible loans under the
Convertible Credit Facility with Deerfield, compared to a $79.3M
charge for the same quarter in 2020. The decrease in fair value for
the quarter ended June 30, 2021 was driven by the decrease in the
Company’s share price from March 31, 2021. The increase in fair
value for the quarter ended June 30, 2020 was driven by the
increase in the Company’s share price from the April 2020 inception
of the derivative.
Adjusted net loss was $53.7 million, or an adjusted net loss of
$0.70 per basic and diluted share, for the quarter ended June 30,
2021, compared to $32.1 million, or an adjusted net loss of $0.51
per basic and diluted share, for the same quarter in 2020. The
increase in adjusted net loss was primarily driven by the expansion
of the organization, investment in the expanding clinical portfolio
and the preparation for the launch of ZYNLONTA.
Conference Call Details
ADC Therapeutics management will host a conference call and live
audio webcast to discuss second quarter 2021 financial results and
provide a company update today at 8:30 a.m. Eastern Time. To access
the live call, please dial 833-303-1198 (domestic) or +1
914-987-7415 (international) and provide confirmation number
6962756. A live webcast of the presentation will be available under
“Events and Presentations” in the Investors section of the ADC
Therapeutics website at ir.adctherapeutics.com. The archived
webcast will be available for 30 days following the call.
About ZYNLONTA (loncastuximab tesirine-lpyl)
ZYNLONTA is a CD19-directed antibody drug conjugate (ADC). Once
bound to a CD19-expressing cell, ZYNLONTA is internalized by the
cell, where enzymes release a pyrrolobenzodiazepine (PBD) payload.
The potent payload binds to DNA minor groove with little
distortion, remaining less visible to DNA repair mechanisms. This
ultimately results in cell cycle arrest and tumor cell death.
The U.S. Food and Drug Administration (FDA) has approved
ZYNLONTA (loncastuximab tesirine-lpyl) for the treatment of adult
patients with relapsed or refractory (r/r) large B-cell lymphoma
after two or more lines of systemic therapy, including diffuse
large B-cell lymphoma (DLBCL) not otherwise specified (NOS), DLBCL
arising from low-grade lymphoma and also high-grade B-cell
lymphoma. The trial included a broad spectrum of heavily
pre-treated patients (median three prior lines of therapy) with
difficult-to-treat disease, including patients who did not respond
to first-line therapy, patients refractory to all prior lines of
therapy, patients with double/ triple hit genetics and patients who
had stem cell transplant and CAR-T therapy prior to their treatment
with ZYNLONTA. This indication is approved by the FDA under
accelerated approval based on overall response rate and continued
approval for this indication may be contingent upon verification
and description of clinical benefit in a confirmatory trial.
ZYNLONTA is also being evaluated as a therapeutic option in
combination studies in other B-cell malignancies and earlier lines
of therapy.
About ADC Therapeutics
ADC Therapeutics (NYSE: ADCT) is a commercial-stage
biotechnology company improving the lives of those affected by
cancer with its next-generation, targeted antibody drug conjugates
(ADCs). The Company is advancing its proprietary PBD-based ADC
technology to transform the treatment paradigm for patients with
hematologic malignancies and solid tumors.
ADC Therapeutics’ CD19-directed ADC ZYNLONTA (loncastuximab
tesirine-lpyl) is approved by the FDA for the treatment of relapsed
or refractory diffuse large b-cell lymphoma after two or more lines
of systemic therapy. ZYNLONTA is also in development in combination
with other agents. Cami (camidanlumab tesirine) is being evaluated
in a late-stage clinical trial for relapsed or refractory Hodgkin
lymphoma and in a Phase 1b clinical trial for various advanced
solid tumors. In addition to ZYNLONTA and Cami, ADC Therapeutics
has multiple PBD-based ADCs in ongoing clinical and preclinical
development.
ADC Therapeutics is based in Lausanne (Biopôle), Switzerland and
has operations in London, the San Francisco Bay Area and New
Jersey. For more information, please visit
https://adctherapeutics.com/ and follow the Company on Twitter and
LinkedIn.
ZYNLONTA™ is a trademark of ADC Therapeutics SA.
Use of Non-IFRS Financial Measures
In addition to financial information prepared in accordance with
IFRS, this document also contains certain non-IFRS financial
measures based on management’s view of performance including:
- Adjusted net loss per share
Management uses such measures internally when monitoring and
evaluating our operational performance, generating future operating
plans and making strategic decisions regarding the allocation of
capital. We believe that these adjusted financial measures provide
useful information to investors and others in understanding and
evaluating our operating results in the same manner as our
management and facilitate operating performance comparability
across both past and future reporting periods. These non-IFRS
measures have limitations as financial measures and should be
considered in addition to, and not in isolation or as a substitute
for, the information prepared in accordance with IFRS. When
preparing these supplemental non-IFRS measures, management
typically excludes certain IFRS items that management does not
believe are indicative of our ongoing operating performance.
Furthermore, management does not consider these IFRS items to be
normal, recurring cash operating expenses; however, these items may
not meet the IFRS definition of unusual or non-recurring items.
Since non-IFRS financial measures do not have standardized
definitions and meanings, they may differ from the non-IFRS
financial measures used by other companies, which reduces their
usefulness as comparative financial measures. Because of these
limitations, you should consider these adjusted financial measures
alongside other IFRS financial measures.
The following items are excluded from adjusted net loss and
adjusted net loss per share:
Shared-Based Compensation Expense: We exclude share-based
compensation expense from our adjusted financial measures because
share-based compensation expense, which is non-cash, fluctuates
from period to period based on factors that are not within our
control, such as our stock price on the dates share-based grants
are issued. Share-based compensation expense has been, and will
continue to be for the foreseeable future, a recurring expense in
our business and an important part of our compensation
strategy.
Certain Other Items: We exclude certain other significant items
that may occur occasionally and are not normal, recurring operating
expenses, cash or non-cash, from our adjusted financial measures.
Such items are evaluated by management on an individual basis based
on both quantitative and qualitative aspects of their nature and
generally represent items that, either as a result of their nature
or significance, management would not anticipate occurring as part
of our normal business on a regular basis. While not all-inclusive,
examples of certain other significant items excluded from our
adjusted financial measures would be: changes in the fair value of
derivatives, the gain recognized in connection with the receipt of
the USD 50.0 million disbursement, establishment of the embedded
derivative and residual loan, elimination of the derivative
immediately prior to FDA approval of ZYNLONTA, the effective
interest expense associated with the Facility Agreement with
Deerfield, transaction costs associated with debt or equity
issuances that are expensed pursuant to IFRS, as well as the
non-cash gain related to the contribution of our intellectual
property for our equity interest in Overland ADCT BioPharma.
See the attached Reconciliation of IFRS Measures to Non-IFRS
Measures for explanations of the amounts excluded and included to
arrive at the non-IFRS financial measures for the three-month
periods ended June 30, 2021 and 2020.
Forward-Looking Statements
This press release contains statements that constitute
forward-looking statements. All statements other than statements of
historical facts contained in this press release, including
statements regarding our future results of operations and financial
position, business and commercialization strategy, products and
product candidates, research pipeline, ongoing and planned
preclinical studies and clinical trials, regulatory submissions and
approvals, planned commercialization activities, research and
development costs, timing and likelihood of success, as well as
plans and objectives of management for future operations, are
forward-looking statements. Forward-looking statements are based on
our management’s beliefs and assumptions and on information
currently available to our management. Such statements are subject
to risks and uncertainties, and actual results may differ
materially from those expressed or implied in the forward-looking
statements due to various factors, including those described in our
filings with the U.S. Securities and Exchange Commission. No
assurance can be given that such future results will be achieved.
Such forward-looking statements contained in this document speak
only as of the date of this press release. We expressly disclaim
any obligation or undertaking to update these forward-looking
statements contained in this press release to reflect any change in
our expectations or any change in events, conditions, or
circumstances on which such statements are based unless required to
do so by applicable law. No representations or warranties
(expressed or implied) are made about the accuracy of any such
forward-looking statements.
ADC Therapeutics SA
Condensed Consolidated Interim
Statement of Operations (Unaudited)
(in KUSD except for share and
per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020 (1)
2021
2020 (1)
Product revenues, net
3,760
-
3,760
-
Operating expense Cost of product sales
(121
)
-
(121
)
-
Research and development expenses
(39,533
)
(25,950
)
(78,705
)
(61,325
)
Selling and marketing expenses
(15,221
)
(4,004
)
(29,132
)
(6,632
)
General and administrative expenses
(19,367
)
(14,995
)
(36,949
)
(20,877
)
Total operating expense
(74,242
)
(44,949
)
(144,907
)
(88,834
)
Loss from operations
(70,482
)
(44,949
)
(141,147
)
(88,834
)
Other income (expense) Other income
199
130
393
278
Convertible loans, derivatives, change in fair value income
(expense)
2,053
(79,261
)
23,222
(79,261
)
Convertible loans, derivatives, transaction costs
(148
)
(1,571
)
(148
)
(1,571
)
Share of results with joint venture
(1,169
)
-
(1,696
)
-
Financial income
15
195
30
569
Financial expense
(2,555
)
(897
)
(4,555
)
(939
)
Exchange differences (loss) income
(242
)
(100
)
152
(71
)
Total other (expense) income
(1,847
)
(81,504
)
17,398
(80,995
)
Loss before taxes
(72,329
)
(126,453
)
(123,749
)
(169,829
)
Income tax expense
(240
)
(104
)
(347
)
(204
)
Net loss
(72,569
)
(126,557
)
(124,096
)
(170,033
)
Net loss attributable to: Owners of the parent
(72,569
)
(126,557
)
(124,096
)
(170,033
)
Net loss per share, basic and diluted
(0.95
)
(2.01
)
(1.62
)
(2.97
)
(1) Prior period has been recast to conform S&M expenses to the
current period presentation.
ADC Therapeutics SA
Condensed Consolidated Interim
Balance Sheet (Unaudited)
(in KUSD)
June 30, 2021
December 31, 2020
ASSETS Current assets Cash and cash equivalents
371,884
439,195
Accounts receivable, net
2,079
-
Inventory
7,718
-
Other current assets
12,751
11,255
Total current assets
394,432
450,450
Non-current assets Property, plant and equipment
3,261
1,629
Right-of-use assets
8,077
3,129
Intangible assets
12,010
10,179
Interest in joint venture
46,212
47,908
Other long-term assets
394
397
Total non-current assets
69,954
63,242
Total assets
464,386
513,692
LIABILITIES AND EQUITY Current liabilities
Accounts payable
14,631
5,279
Other current liabilities
29,450
30,375
Lease liabilities, short-term
988
1,002
Current income tax payable
237
149
Convertible loans, short-term
6,193
3,631
Total current liabilities
51,499
40,436
Non-current liabilities Convertible loans, long-term
84,648
34,775
Convertible loans, derivatives
49,619
73,208
Deferred gain of joint venture
23,539
23,539
Lease liabilities, long-term
7,612
2,465
Defined benefit pension liabilities
3,551
3,543
Other non-current liabilities
-
221
Total non-current liabilities
168,969
137,751
Total liabilities
220,468
178,187
Equity attributable to owners of the parent Share
capital
6,445
6,314
Share premium
981,290
981,056
Treasury shares
(134
)
(4
)
Other reserves
74,971
42,753
Cumulative translation adjustment
301
245
Accumulated losses
(818,955
)
(694,859
)
Total equity attributable to owners of the parent
243,918
335,505
Total liabilities and equity
464,386
513,692
ADC Therapeutics SA
Reconciliation of IFRS
Measures to Non-IFRS Measures (Unaudited)
(in KUSD except for share and
per share data)
Three Months Ended June
30,
Six Months Ended June
30,
in KUSD (except for share and per share data)
2021
2020
2021
2020
Net loss
(72,569
)
(126,557
)
(124,096
)
(170,033
)
Adjustments: Share-based compensation expense (i)
18,267
12,734
32,218
16,524
Convertible loans, derivatives, change in fair value (ii)
(2,053
)
79,261
(23,222
)
79,261
Convertible loans, first and second tranche, derivatives,
transaction costs (iii)
148
1,571
148
1,571
Effective interest expense (iv)
2,450
868
4,432
868
Adjusted net loss
(53,757
)
(32,123
)
(110,520
)
(71,809
)
Net loss per share, basic and diluted
(0.95
)
(2.01
)
(1.62
)
(2.97
)
Adjustment to net loss per share, basic and diluted
0.25
1.50
0.18
1.72
Adjusted net loss per share, basic and diluted
(0.70
)
(0.51
)
(1.44
)
(1.25
)
Weighted average shares outstanding, basic and diluted
76,728,714
62,863,866
76,725,210
57,225,939
(i)
Share-based compensation expense
represents the cost of equity awards issued to our directors,
management and employees. The fair value of awards is computed at
the time the award is granted and is recognized over the vesting
period of the award by a charge to the income statement and a
corresponding increase in other reserves within equity. These
accounting entries have no cash impact.
(ii)
Change in the fair value of the
convertible loan derivatives results from the valuation at the end
of each accounting period of the derivatives associated with the
convertible loans as well as the gain recognized in connection with
the receipt of the USD 50.0 million, establishment of the embedded
derivative and residual loan associated with the Deerfield facility
and elimination of the derivative immediately prior to FDA approval
of ZYNLONTA during the second quarter of 2021, as explained in note
13, “Convertible notes” to the unaudited condensed consolidated
interim financial statements. There are several inputs to these
valuations, but those most likely to provoke significant changes in
the valuations are changes in the value of the underlying
instrument (i.e., changes in the price of our common shares) and
changes in expected volatility in that price. These accounting
entries have no cash impact.
(iii)
The transaction costs allocated
to the convertible loan first and second tranche derivatives
represent actual costs. These are not expected to recur on an
ongoing basis.
(iv)
Effective interest expense
relates to the increase in the value of our convertible loans in
accordance with the effective interest method. As the initial value
of the loans are recorded net of the value of the embedded
derivatives, the increase in the loan value necessary to attain the
amounts necessary to fund the cash outflows of interest payments,
repayments of capital and exit fees are considerably higher than
the payments of interest at coupon rate and of the exit fee.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210803005236/en/
Investors Eugenia Litz ADC Therapeutics
Eugenia.Litz@adctherapeutics.com +44 7879 627205
Amanda Hamilton ADC Therapeutics
amanda.hamilton@adctherapeutics.com Tel.: +1 917-288-7023
USA Media Mary Ann Ondish ADC Therapeutics
maryann.ondish@adctherapeutics.com Tel.: +1 914-552-4625
EU Media Alexandre Müller Dynamics Group
amu@dynamicsgroup.ch Tel: +41 (0) 43 268 3231
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