ZYNLONTA® (loncastuximab tesirine-lpyl) net
sales of $21.3 million in the third quarter of 2022 (+23% vs. 2Q
2022)
Cash runway expected into early 2025
Company to host conference call today at 8:30
a.m. EST
ADC Therapeutics SA (NYSE: ADCT) today reported financial
results for the third quarter ended September 30, 2022 and provided
business updates.
“In the third quarter, we made good progress executing our
strategy. We are pleased with the strong ZYNLONTA® performance as
the new initiatives we started in the second and third quarters of
the year begin to gain traction,” said Ameet Mallik, Chief
Executive Officer of ADC Therapeutics. “We are encouraged by the
initial results of LOTIS-5 in earlier lines of diffuse large B-cell
lymphoma with ZYNLONTA and rituximab. We continue to prioritize and
develop our pipeline and maintain our cash runway into early
2025.”
Recent Highlights and
Developments
ZYNLONTA (loncastuximab tesirine-lpyl)
- ZYNLONTA generated net sales of $21.3 million in the third
quarter of 2022, representing 23% growth over the second quarter of
2022. This was driven by a renewed focus on customer-facing
execution and the new initiatives put in place in the second and
third quarters of 2022 targeting physicians, community practices
and networks, and patients and caregivers.
- Initial safety run-in results of 20 patients from the LOTIS-5
Phase 3 trial of ZYNLONTA in combination with rituximab in relapsed
or refractory diffuse large B-cell lymphoma (DLBCL) were presented
at the Annual Meeting of the Society of Hematologic Oncology (SOHO
2022), demonstrating an overall response rate of 75%, a complete
response rate of 40% and no safety events materially different from
those observed in prior clinical trials.
- The Committee for Medicinal Products for Human Use (CHMP) of
the European Medicines Agency (EMA) adopted a positive opinion
recommending the marketing authorization of ZYNLONTA (loncastuximab
tesirine) for the treatment of relapsed or refractory DLBCL.
Cami (camidanlumab tesirine)
- The Cami pivotal Phase 2 data in relapsed or refractory Hodgkin
lymphoma (HL) were presented in an encore presentation at SOHO
2022, demonstrating an overall response rate of 70% and a complete
response rate of 33% with previously reported safety profile.
- The Company held a pre-Biologics License Application (BLA)
meeting in September 2022 and a Type C meeting with the U.S. Food
and Drug Administration (FDA) in late October. During the Type C
meeting, the FDA provided strong guidance that, for it to consider
an accelerated approval path, a randomized confirmatory Phase 3
study must be well underway and ideally fully enrolled at the time
of any BLA filing for Cami. As a result, the Company will not
submit the BLA for Cami next year, as it is estimated that it would
take at least two years to fully enroll a randomized confirmatory
Phase 3 study. The Company is engaged with the FDA in an ongoing
and constructive dialogue regarding their guidance and the
potential regulatory path forward. At this time, the Company is
pausing any material investments in the HL program and will
evaluate options for Cami in HL with a disciplined and strategic
approach to resource allocation.
- The Phase 1b study of Cami in combination with pembrolizumab in
solid tumors showed signals of immunomodulatory activity. However,
the signals were not compelling enough for the Company to move
forward on its own, so the current trial will not proceed. The
Company recognizes the considerable effort required to fully pursue
this opportunity may be better suited for a partner with
immuno-oncology development expertise.
Pipeline
- ADCT-602 (targeting CD22): Initial data showing
encouraging clinical activity from the Phase 1/2 study of ADCT-602
for patients with relapsed or refractory acute lymphoblastic
leukemia has been released in an American Society of Hematology
(ASH) abstract by The University of Texas MD Anderson Cancer
Center. Additional data will be disclosed in an oral presentation
at the 64th ASH Annual Meeting.
- ADCT-901 (targeting KAAG1): Dose escalation in the Phase
1 trial is proceeding. The Company expects to have an indication of
the safety and tolerability, as well as any early signals of
antitumor activity, in 2023.
- ADCT-601 (targeting AXL): The Phase 1b trial is ongoing.
The study includes a monotherapy arm including patients with AXL
gene amplification and a combination arm with gemcitabine in
patients with sarcoma.
Corporate Update
- The Company announced a $175 million senior secured term loan
from Owl Rock, a division of Blue Owl Capital, Inc., and Oaktree
Capital Management, L.P. and settlement of existing senior secured
convertible notes with Deerfield. The Company also entered into a
share purchase agreement with Owl Rock for an investment of $6.25
million.
- Kristen Harrington-Smith has been appointed the Company’s new
Chief Commercial Officer, effective November 17, 2022. Ms.
Harrington-Smith is a seasoned leader with over 20 years of
experience in the pharmaceutical industry. Most recently, she has
served as Chief Commercial Officer of Immunogen. She has also
served as Vice President and Head, US Hematology and Vice President
and Head, US CAR-T at Novartis Pharmaceuticals.
- Peter Graham was appointed the Company’s Chief Legal Officer,
effective November 1, 2022. Mr. Graham is a senior legal executive
with over 25 years of legal, transactional and executive management
experience in biotechnology, pharmaceutical and medical device
companies.
Upcoming Expected
Milestones
ZYNLONTA
- Receive a regulatory decision from the European Commission for
third-line DLBCL in 4Q 2022
Pipeline
ADCT-901 (targeting KAAG1)
- Preliminary results of safety and tumor response for the Phase
1 dose-escalation trial in multiple solid tumors in 2023
ADCT-602 (targeting CD-22)
- University of Texas MD Anderson Cancer Center to present oral
presentation of Phase 1/2 data at ASH Annual Meeting in 4Q
2022
ADCT-212 (targeting PSMA)
- Progress toward IND filing and initiation of Phase 1 trial in
2023
ADCT-701 (targeting DLK-1)
- Progress toward IND filing and initiation of Phase 1 trial in
2023
Third Quarter Financial
Results
Cash and Cash Equivalents
Cash and cash equivalents were $380.9 million as of September
30, 2022, compared to $376.8 million as of June 30, 2022. Based on
the Company’s business plan and expected milestones from Sobi and
Healthcare Royalty Partners, the cash runway extends into early
2025. Potential near-term milestone payments from those agreements
include a $50 million milestone from Sobi upon European regulatory
approval of ZYNLONTA in third-line DLBCL and a $75 million
milestone from our HealthCare Royalty Partners agreement for the
first EU commercial sale.
Product Revenue
Product revenue (net) was $21.3 million for the quarter,
compared to $13.1 million for the same quarter in 2021. Net
revenues are for U.S. sales of ZYNLONTA.
License Revenue
License revenue was $55.0 million for the current quarter.
During July 2022, the Company entered into an exclusive license
agreement with Sobi for the development and commercialization of
ZYNLONTA for all hematologic and solid tumor indications outside of
the U.S., greater China, Singapore and Japan. Under the terms of
the agreement, the Company received an upfront payment of $55.0
million.
Cost of Product Sales
Cost of product sales was $1.3 million for the quarter, compared
to $0.5 million for the same quarter in 2021, an increase of $0.8
million primarily related to impairment charges for product
intermediates not meeting the Company’s specifications. The
specification issues did not, and are not expected to, impact the
Company’s ability to supply commercial product.
Research and Development (R&D) Expenses
R&D expenses were $41.7 million for the quarter ended
September 30, 2022, compared to $36.8 million for the same quarter
in 2021. R&D expenses increased as a result of continued
investments in the pipeline.
Selling and Marketing (S&M) Expenses
S&M expenses were $16.8 million for the quarter ended
September 30, 2022, compared to $17.0 million for the same quarter
in 2021. The decrease in S&M expenses is related to lower
share-based compensation partly offset by higher expenses relating
to the ongoing commercial launch of ZYNLONTA.
G&A Expenses
G&A expenses were $19.6 million for the quarter ended
September 30, 2022, compared to $16.6 million for the same quarter
in 2021. G&A expenses increased primarily due to costs
associated with the recent CEO transition as well as higher
share-based compensation and professional expenses.
Net Loss and Adjusted Net Loss
Net loss was $50.6 million, or a net loss of $0.65 per basic and
diluted share, for the quarter ended September 30, 2022. This
compares to a net loss of $71.5 million, or a net loss of $0.93 per
basic and diluted share, for the same quarter in 2021.
Adjusted net income was $10.3 million, or an adjusted net income
of $0.13 per basic and diluted share, for the quarter ended
September 30, 2022. This compares to an adjusted net loss of $45.6
million, or an adjusted net loss of $0.59 per basic and diluted
share, for the same quarter in 2021.
The decrease in net loss and adjusted net loss for the quarter
ended September 30, 2022, as compared to the same period in 2021,
was primarily due to higher product and license revenue, partially
offset by the increase in cost of product sales, R&D and
G&A expenses.
In addition, net loss decreased for the third quarter of 2022 as
a result of income and lower charges arising from changes in the
fair value of our warrant obligations and derivatives,
respectively. These benefits were partially offset by the loss on
extinguishment of our convertible loans and derivatives and higher
interest and cumulative catch-up expense associated with the
deferred royalty obligation with HealthCare Royalty Partners.
Conference Call Details
ADC Therapeutics management will host a conference call and live
audio webcast to discuss third 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 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. In addition to ZYNLONTA, 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 and income
- Adjusted net loss and income 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 warrant obligations and the effective interest
expense associated with the Facility Agreement with Deerfield and
the senior secured term loan facility, loss on extinguishment,
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 per share
data)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2022
2021
2022
2021
Product revenues, net
21,321
13,147
55,110
16,907
License revenue
55,000
—
85,000
—
Total revenue
76,321
13,147
140,110
16,907
Operating expense
Cost of product sales
(1,295)
(502)
(4,090)
(623)
Research and development expenses
(41,676)
(36,805)
(139,165)
(115,510)
Selling and marketing expenses
(16,847)
(17,045)
(52,876)
(46,177)
General and administrative expenses
(19,617)
(16,587)
(56,868)
(53,536)
Total operating expense
(79,435)
(70,939)
(252,999)
(215,846)
Loss from operations
(3,114)
(57,792)
(112,889)
(198,939)
Other income (expense)
Financial income
273
16
18,597
46
Financial expense
(11,356)
(4,265)
(29,374)
(8,820)
Non-operating (expense) income
(37,122)
(9,363)
(10,805)
12,560
Total other (expense) income
(48,205)
(13,612)
(21,582)
3,786
Loss before taxes
(51,319)
(71,404)
(134,471)
(195,153)
Income tax benefit (expense)
711
(145)
2,828
(492)
Net loss
(50,608)
(71,549)
(131,643)
(195,645)
Net loss attributable to:
Owners of the parent
(50,608)
(71,549)
(131,643)
(195,645)
Net loss per share, basic and diluted
(0.65)
(0.93)
(1.70)
(2.55)
ADC Therapeutics SA
Condensed Consolidated Interim
Balance Sheet (Unaudited)
(in KUSD)
September 30,
2022
December 31,
2021
ASSETS
Current assets
Cash and cash equivalents
380,860
466,544
Accounts receivable, net
23,251
30,218
Inventory
15,745
11,122
Other current assets
18,243
17,298
Total current assets
438,099
525,182
Non-current assets
Property, plant and equipment
3,169
4,066
Right-of-use assets
6,708
7,164
Intangible assets
14,598
13,582
Interest in joint venture
34,687
41,236
Deferred tax asset
33,599
26,049
Other long-term assets
899
693
Total non-current assets
93,660
92,790
Total assets
531,759
617,972
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities
Accounts payable
11,611
12,080
Other current liabilities
62,658
50,497
Lease liabilities, short-term
835
1,029
Current income tax payable
—
3,754
Senior secured term loans, short-term
12,469
—
Convertible loans, short-term
—
6,575
Total current liabilities
87,573
73,935
Non-current liabilities
Senior secured term loans, long- term
96,731
—
Convertible loans, long-term
—
87,153
Convertible loans, derivatives
—
37,947
Warrant obligations
4,293
—
Deferred royalty obligation, long-term
208,218
218,664
Deferred gain of joint venture
23,539
23,539
Lease liabilities, long-term
6,622
6,994
Defined benefit pension liabilities
—
3,652
Total non-current liabilities
339,403
377,949
Total liabilities
426,976
451,884
Equity attributable to owners of the
parent
Share capital
6,699
6,445
Share premium
1,007,510
981,827
Treasury shares
(101)
(128)
Other reserves
148,045
102,646
Cumulative translation adjustments
(842)
183
Accumulated losses
(1,056,528)
(924,885)
Total equity attributable to owners of
the parent
104,783
166,088
Total liabilities and equity
531,759
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 September
30,
Nine Months Ended September
30,
in KUSD (except for share and per share
data)
2022
2021
2022
2021
Net loss
(50,608)
(71,549)
(131,643)
(195,645)
Adjustments:
Share-based compensation expense (i)
14,565
14,798
42,293
47,016
Convertible loans, derivatives, change in
fair value expense (income) (ii)
4,660
6,943
(25,650)
(16,279)
Convertible loans, second tranche,
derivatives, transaction costs (iii)
—
—
—
148
Loss on extinguishment (iv)
42,114
—
42,114
—
Senior secured term loans, warrants,
change in fair value income (ii)
(2,543)
—
(2,543)
—
Effective interest expense on convertible
loans (v)
1,536
2,961
7,684
7,393
Deerfield warrants obligation, change in
fair value income (ii)
(9,418)
—
(9,418)
—
Senior secured term loan facility,
warrants, transaction costs (iii)
245
—
245
—
Effective interest expense on senior
secured term loan facility (v)
1,933
—
1,933
—
Deferred royalty obligation interest
expense (vi)
5,669
1,246
17,356
1,246
Deferred royalty obligation cumulative
catch-up adjustment expense (income) (vi)
2,175
—
(16,113)
—
Adjusted net income (loss)
10,328
(45,601)
(73,742)
(156,121)
Net loss per share, basic and diluted
(0.65)
(0.93)
(1.70)
(2.55)
Adjustment to net loss per share, basic
and diluted
0.78
0.34
0.75
0.52
Adjusted net income (loss) per share,
basic and diluted
0.13
(0.59)
(0.95)
(2.03)
Weighted average shares outstanding, basic
and diluted
78,372,680
76,739,770
77,374,388
76,730,117
(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
18, “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, senior secured term loan facility
warrants and the Deerfield warrant obligation results from the
valuation at the end of each accounting period. See note 14,
“Senior secured term loan facility and warrants”, note 15
“Convertible Loans” and note 16, “Deerfield warrants” 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 second tranche derivative as well as the senior
secured term loan facility warrant obligation represent actual
costs. We do not believe that these costs reflect the performance
of our ongoing business.
(iv)
As a result of the exchange agreement
entered into on August 15, 2022, the Company recognized a loss on
extinguishment which primarily consists of the difference between
the aggregate principal amount and carrying amount of the
convertible loans and exit fee as well as the unpaid interest
payments through the maturity date. See note 15, “Convertible
loans” to the unaudited condensed consolidated interim financial
statements.
(v)
Effective interest expense on convertible
loans and senior secured term loans relates to the increase in the
value of our loans in accordance with the effective interest
method. See note 14, “Senior secured term loan facility and
warrants” and note 15, “Convertible loans” to the unaudited
condensed consolidated interim financial statements.
(vi)
Deferred royalty obligation interest
expense relates to the accretion expense on our deferred royalty
obligation pursuant to the royalty purchase agreement with HCR and
cumulative catch-up adjustment expense relates to changes in the
expected payments to HCR based on a periodic assessment of our
underlying revenue projections. See note 19, “Deferred royalty
obligation” to the unaudited condensed consolidated interim
financial statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221108005150/en/
Investors Eugenia Litz ADC Therapeutics
Eugenia.Litz@adctherapeutics.com +44 7879 627205 Amanda Loshbaugh
ADC Therapeutics amanda.loshbaugh@adctherapeutics.com +1
917-288-7023 Media Mary Ann Ondish ADC Therapeutics
maryann.ondish@adctherapeutics.com +1 914-552-4625
ADC Therapeutics (NYSE:ADCT)
Historical Stock Chart
From Mar 2024 to Apr 2024
ADC Therapeutics (NYSE:ADCT)
Historical Stock Chart
From Apr 2023 to Apr 2024