ZYNLONTA® (loncastuximab tesirine-lpyl) net
sales of $17.3 million in the second quarter of 2022
Ex-U.S. ZYNLONTA license agreement with Sobi®
facilitates global patient access and extends cash runway into
early 2025
Company to host conference call today at 8:30
a.m. EDT
ADC Therapeutics SA (NYSE: ADCT) today reported financial
results for the second quarter ended June 30, 2022 and provided
business updates.
“The ZYNLONTA® launch is advancing steadily as we continue to
increase awareness and advocacy. There is significant opportunity
ahead and we have a focused plan in place to achieve continued
growth in the coming quarters,” commented Ameet Mallik, Chief
Executive Officer of ADC Therapeutics. “Our pipeline of hematology
and solid tumor programs is progressing well with impressive Cami
Phase 2 data in Hodgkin lymphoma presented at the EHA Congress in
June. Our recent license agreement with Sobi® in Europe gives us
worldwide access for ZYNLONTA. We have a strong cash runway
extending into early 2025 which makes us well-positioned to execute
on our key objectives.”
Recent Highlights and
Developments
Corporate Update
- Announced an exclusive license agreement with Swedish Orphan
Biovitrum AB (Sobi) for the development and commercialization of
ZYNLONTA for all hematologic and solid tumor indications outside of
the United States, greater China, Singapore and Japan.
- Appointed David Gilman as Chief Business & Strategy
Officer.
- Elected veteran oncology drug developer Jean-Pierre Bizzari,
MD, and CEO Ameet Mallik to the Company’s Board of Directors.
Hematology Franchise
ZYNLONTA (loncastuximab tesirine-lpyl)
- ZYNLONTA generated net sales of $17.3 million in the second
quarter of 2022.
- Initiated LOTIS-9, the Phase 2 clinical trial of ZYNLONTA in
combination with rituximab in unfit or frail first-line diffuse
large B-cell lymphoma (DLBCL) patients.
- Initiated LOTIS-7, the Phase 1b clinical trial of ZYNLONTA in
combination with other anti-cancer agents.
- Terminated LOTIS-6, the Phase 2 clinical trial of ZYNLONTA in
patients with relapsed or refractory follicular lymphoma.
- The Overland ADCT BioPharma joint venture enrolled the first
patient in China in the global LOTIS-5 confirmatory Phase 3
clinical trial of Lonca and rituximab in second-line or later
transplant ineligible DLBCL patients.
- Overland ADCT Biopharma completed enrollment of the
single-agent bridging study in third-line+ DLBCL, which forms the
basis for submission of a marketing application in China.
Cami (camidanlumab tesirine) in Hodgkin lymphoma
- Released results from the Phase 2 Hodgkin lymphoma (HL)
registrational trial at the European Hematology Association (EHA)
2022 Congress in June. These results showed an overall response
rate (ORR) of 70%, a complete response (CR) rate of 33% and a
median duration of response (DOR) of 13.7 months. Safety data
confirmed the manageable tolerability of Cami in these
patients.
Solid Tumor Franchise
ADCT-601 (targeting AXL)
- Initiated the Phase 1b combination trial in multiple solid
tumors.
Upcoming Expected
Milestones
Hematology Franchise
ZYNLONTA
- Present LOTIS-5 safety lead-in data at an upcoming medical
meeting in 2H 2022
- Receive a regulatory decision for third-line DLBCL from the
Committee for Medicinal Products for Human Use (CHMP), a committee
of the European Medicines Agency (EMA), by 1Q 2023
Cami
- Meet with the U.S. Food and Drug Administration (FDA) for HL
pre-Biologics License Application (BLA) meeting in September
2022
- Complete BLA submission for HL to the FDA in 2H 2023
Solid Tumor Franchise
Cami (targeting CD25)
- Preliminary results of safety and clinical activity are
anticipated in 2023 for the Phase 1b solid tumor trial of Cami in
combination with pembrolizumab
ADCT-901 (targeting KAAG1)
- Preliminary results of safety and tumor response for the Phase
1 dose escalation trial in multiple solid tumors are anticipated in
2023
Second Quarter Financial
Results
Cash and Cash Equivalents
Cash and cash equivalents were $376.8 million as of June 30,
2022, compared to $466.5 million as of December 31, 2021.
Product Revenue
Product revenue (net) was $17.3 million for the quarter,
compared to $3.8 million for the same quarter in 2021. Net revenues
are for U.S. sales of ZYNLONTA, which received accelerated approval
from the FDA on April 23, 2021.
Cost of product sales
Cost of product sales was $2.3 million for the quarter, compared
to $0.1 million for the same quarter in 2021, an increase of $2.1
million associated with $1.9 million of impairment charges
primarily related to the manufacturing of antibodies that was not
within the Company's specifications. The specification issues did
not, and are not expected to, impact the Company’s ability to
supply commercial product. In addition, cost of product sales
increased due to a full second quarter of sales activity in 2022 as
compared to the same period in 2021 due to the commencement of
ZYNLONTA sales in May 2021.
Research and Development (R&D) Expenses
R&D expenses were $48.5 million for the quarter ended June
30, 2022, compared to $39.5 million for the same quarter in 2021.
As a result of FDA approval of ZYNLONTA in April 2021, the Company
reversed $6.8 million of previously recorded impairment charges
during the three months ended June 30, 2021, relating to inventory
costs incurred for the manufacture of product prior to FDA
approval. In addition, R&D expenses increased due to clinical
activities to expand ZYNLONTA’s potential market opportunities in
earlier lines of therapy and advance the Company’s portfolio of
solid tumor programs.
Selling and Marketing (S&M) Expenses
S&M expenses were $17.7 million for the quarter ended June
30, 2022, as compared to $15.2 million for the same quarter in
2021. The increase in S&M expenses is related to the ongoing
launch of ZYNLONTA.
G&A Expenses
G&A expenses were $18.2 million for the quarter ended June
30, 2022, compared to $19.4 million for the same quarter in 2021.
G&A expenses decreased primarily due to lower share-based
compensation expense.
Net Loss and Adjusted Net Loss
Net loss was $64.4 million, or a net loss of $0.84 per basic and
diluted share, for the quarter ended June 30, 2022. This compares
to a net loss of $72.6 million, or a net loss of $0.95 per basic
and diluted share, for the same quarter in 2021. The decrease in
net loss for the quarter ended June 30, 2022, as compared to the
same period in 2021, was primarily due to higher product revenue,
partially offset by the increase in cost of product sales, R&D
and S&M expenses. In addition, net loss decreased for the
second quarter of 2022 as a result of income arising from changes
in the fair value of derivatives associated with our Deerfield
Facility Agreement, partially offset by higher interest expense
associated with the deferred obligation with Healthcare Royalty
Partners.
Adjusted net loss was $56.3 million, or an adjusted net loss of
$0.73 per basic and diluted share, for the quarter ended June 30,
2022. This compares to $53.7 million, or an adjusted net loss of
$0.70 per basic and diluted share, for the same quarter in
2021.
Conference Call Details
ADC Therapeutics management will host a conference call and live
audio webcast to discuss second quarter 2022 financial results and
provide a company update today at 8:30 a.m. Eastern Time. To access
the conference call, please register here. Registrants will receive
the dial-in number and unique PIN. It is recommended that you join
10 minutes before the event, though you may pre-register at any
time. A live webcast of the call will be available under “Events
and Presentations” in the Investors section of the ADC Therapeutics
website at www.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 pivotal Phase 2 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 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 registered 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
- 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 we believe do not represent the performance of our business,
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. 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 and the effective interest expense associated with the
Facility Agreement with Deerfield, transaction costs associated
with debt or equity issuances that are expenses pursuant to IFRS,
and the effective interest expense and a cumulative catch-up
adjustment associated with the deferred royalty obligation under
the royalty purchase agreement with HealthCare Royalty
Partners.
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.
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, market
opportunities, products and product candidates, research pipeline,
ongoing and planned preclinical studies and clinical trials,
regulatory submissions and approvals, projected revenues and
expenses and the timing of revenues and expenses, 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)
For the Three Months EndedJune 30, For the Six
Months EndedJune 30,
2022
2021
2022
2021
Product revenues, net
17,291
3,760
33,789
3,760
License revenue
-
-
30,000
-
Total revenue
17,291
3,760
63,789
3,760
Operating
expense Cost of
product sales
(2,266)
(121)
(2,795)
(121)
Research and development expenses
(48,537)
(39,533)
(97,489)
(78,705)
Selling and marketing expenses
(17,659)
(15,221)
(36,029)
(29,132)
General and administrative expenses
(18,240)
(19,367)
(37,251)
(36,949)
Total operating expense
(86,702)
(74,242)
(173,564)
(144,907)
Loss from operations
(69,411)
(70,482)
(109,775)
(141,147)
Other
income (expense)
Financial income
16
15
18,324
30
Financial expense
(8,801)
(2,555)
(18,018)
(4,555)
Non-operating income (expense)
12,875
693
26,317
21,923
Total other income (expense)
4,090
(1,847)
26,623
17,398
Loss before taxes
(65,321)
(72,329)
(83,152)
(123,749)
Income tax benefit (expense)
947
(240)
2,117
(347)
Net loss
(64,374)
(72,569)
(81,035)
(124,096)
Net loss
attributable to:
Owners of the parent
(64,374)
(72,569)
(81,035)
(124,096)
Net loss
per share, basic and diluted
(0.84)
(0.95)
(1.05)
(1.62)
ADC Therapeutics SA Condensed Consolidated Interim
Balance Sheet (Unaudited) (in KUSD)
June 30,2022 December 31,2021 ASSETS
Current assets
Cash and cash equivalents
376,778
466,544
Accounts receivable, net
20,863
30,218
Inventory
14,650
11,122
Other current assets
12,151
17,298
Total current assets
424,442
525,182
Non-current assets Property, plant and
equipment
3,596
4,066
Right-of-use assets
6,094
7,164
Intangible assets
14,575
13,582
Interest in joint venture
36,817
41,236
Deferred tax asset
34,040
26,049
Other long-term assets
899
693
Total non-current assets
96,021
92,790
Total
assets
520,463
617,972
LIABILITIES AND SHAREHOLDERS'
EQUITY Current liabilities
Accounts payable
13,019
12,080
Other current liabilities
52,384
50,497
Lease liabilities, short-term
909
1,029
Current income tax payable
799
3,754
Convertible loans, short-term
6,573
6,575
Total current liabilities
73,684
73,935
Non-current liabilities Convertible
loans, long-term
89,844
87,153
Convertible loans, derivatives
7,637
37,947
Deferred royalty obligation, long-term
204,423
218,664
Deferred gain of joint venture
23,539
23,539
Lease liabilities, long-term
5,990
6,994
Defined benefit pension liabilities
-
3,652
Total non-current liabilities
331,433
377,949
Total
liabilities
405,117
451,884
Equity attributable to owners of the
parent Share capital
6,445
6,445
Share premium
981,818
981,827
Treasury shares
(119)
(128)
Other reserves
133,480
102,646
Cumulative translation adjustments
(358)
183
Accumulated losses
(1,005,920)
(924,885)
Total equity attributable to owners of the parent
115,346
166,088
Total liabilities and equity
520,463
617,972
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)
2022
2021
2022
2021
Net loss
(64,374)
(72,569)
(81,035)
(124,096)
Adjustments: Share-based compensation expense
(i)
13,818
18,267
27,728
32,218
Convertible loans, derivatives, change in fair value income (ii)
(14,455)
(2,053)
(30,310)
(23,222)
Convertible loans, first and second tranche, derivatives,
transaction costs (iii)
-
148
-
148
Effective interest expense on convertible loans (iv)
3,126
2,450
6,148
4,432
Deferred royalty obligation interest expense (v)
5,545
-
11,687
-
Deferred royalty obligation cumulative catch-up adjustment income
(v)
-
-
(18,288)
-
Adjusted net loss
(56,340)
(53,757)
(84,070)
(110,520)
Net loss
per share, basic and diluted
(0.84)
(0.95)
(1.05)
(1.62)
Adjustment to net loss per share, basic and diluted
0.11
0.25
(0.04)
0.18
Adjusted net loss per share, basic and diluted
(0.73)
(0.70)
(1.09)
(1.44)
Weighted average shares outstanding, basic and diluted
76,911,713
76,728,714
76,866,968
76,725,210
(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, including any market and other
performance conditions, 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. See note
15, “Share-based compensation” to the unaudited condensed
consolidated interim financial statements. 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. See note 14, “Convertible loans” to the
unaudited condensed consolidated interim financial statements.
There are several inputs to these valuations, but those most likely
to result in significant changes to 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 derivative represent
actual costs. These are not expected to recur on an ongoing
basis.
(iv)
Effective interest expense on convertible
loans relates to the increase in the value of our convertible loans
in accordance with the effective interest method. See note 14,
“Convertible loans” to the unaudited condensed consolidated interim
financial statements.
(v)
Deferred royalty obligation interest
expense and cumulative catch-up adjustment relates to the accretion
expense on our deferred royalty obligation pursuant to the royalty
purchase agreement with HCR and changes in the expected payments to
HCR based on a periodic assessment of our underlying revenue
projections. See note 16, “Deferred royalty obligation” to the
unaudited condensed consolidated interim financial
statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220809005173/en/
Investors Eugenia Litz ADC Therapeutics
Eugenia.Litz@adctherapeutics.com +44 7879 627205 Amanda Hamilton
ADC Therapeutics amanda.hamilton@adctherapeutics.com +1
917-288-7023 Media Mary Ann Ondish ADC Therapeutics
maryann.ondish@adctherapeutics.com +1 914-552-4625
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