ADC Therapeutics Reports First Quarter 2022 Financial Results and Provides Business Updates
ADC Therapeutics reported first-quarter 2022 financial results with net sales of ZYNLONTA at $16.5 million, influenced by inventory build and fewer new patient starts due to the Omicron surge. The company transitioned CEO responsibilities from Chris Martin to Ameet Mallik. Cash and cash equivalents stood at $430.9 million. R&D expenses increased to $49.0 million, while net loss narrowed to $16.7 million from $51.5 million YoY. Key clinical trials and market expansions are underway, with updates anticipated in the coming months.
- Net sales of ZYNLONTA increased to $16.5 million from zero YoY.
- Cash and cash equivalents were $430.9 million, offering financial stability.
- Net loss decreased significantly from $51.5 million in Q1 2021 to $16.7 million in Q1 2022.
- Fewer new patient starts in the DLBCL market negatively impacted sales.
- R&D expenses rose to $49.0 million, indicating high investment costs.
Co-Founder
ZYNLONTA® (loncastuximab tesirine-lpyl) net sales of
Company to host conference call today at
LAUSANNE,
“ZYNLONTA continues to extend its reach in the DLBCL market with its differentiated product profile and broad applicability across the 3L+ patient population. We are pleased by the team’s progress since launch in bringing ZYNLONTA to patients. Sales in the first quarter were unfavorably impacted by the customer inventory build at the end of last year and fewer new patient starts in the DLBCL market in the first quarter, which was exacerbated by the Omicron surge,” said
Recent Highlights and Developments
Corporate Update
-
Today,
Chris Martin has transitioned the role of Chief Executive Officer toAmeet Mallik .Dr. Martin will serve as a non-executive member of the Board of Directors and Chair of theScience and Technology Committee . He will also serve as an advisor to the Company for the next three months to ensure a smooth transition.
Hematology Franchise
ZYNLONTA (loncastuximab tesirine-lpyl)
-
ZYNLONTA generated net sales of
$16.5 million - ZYNLONTA awareness and familiarity continues to increase and ZYNLONTA share of voice is performing well in the relapsed/refractory DLBCL market. Market share in the 3L+ setting is also increasing.
-
In terms of account penetration,
96% of priority accounts have ordered ZYNLONTA since launch and94% of National Comprehensive Cancer Network centers have ordered ZYNLONTA since launch. -
The permanent J-code for ZYNLONTA (J9359) was issued by the
U.S. Centers for Medicare & Medicaid Services and took effectApril 1, 2022 . -
The Phase
3 LOTIS-5 trial in combination with rituximab in second-line transplant-ineligible DLBCL patients continues to enroll the randomized portion of the trial. -
The Overland ADCT BioPharma joint venture continues to make progress in
China and enrollment continues in the local pivotal Phase 2 trial of ZYNLONTA in relapsed or refractory (r/r) DLBCL. -
The Company is actively engaged with its partner
Mitsubishi Tanabe Pharma Corporation (MTPC) inJapan to develop ZYNLONTA in DLBCL.
Cami (camidanlumab tesirine) in Hodgkin lymphoma (HL)
- The 12-month patient follow-up in this pivotal Phase 2 trial has been completed. The Company has submitted the data to an upcoming oncology conference.
Solid Tumor Franchise
Cami (targeting CD25)
- The Company is concurrently advancing the dose escalation and a dose expansion cohort of the Phase 1b trial of Cami in combination with pembrolizumab. The Company has initiated a limited expansion at 60 µg/kg based on investigator observation of stable disease or tumor response, and the dose escalation continues at 100 µg/kg.
Upcoming Expected Milestones
Hematology Franchise
ZYNLONTA
-
Continue to enroll the randomized portion of the
LOTIS-5 confirmatory trial in combination with rituximab in second-line transplant-ineligible DLBCL patients -
Initiate the
LOTIS-7 trial in multiple combinations in non-Hodgkin lymphoma in 1H 2022 -
Initiate the
LOTIS-9 trial in combination with rituximab in first-line unfit/frail DLBCL patients in 2H 2022
Cami
- Report topline results for the pivotal Phase 2 trial in HL in 1H 2022
- Meet with FDA for pre-BLA meeting in 2H 2022
ADCT-602 (targeting CD22)
- Continue to enroll the Phase 1 trial in acute lymphoblastic leukemia (ALL)
Solid Tumor Franchise
Cami (targeting CD25)
- Continue to advance the Phase 1b solid tumor trial of Cami in combination with pembrolizumab, with safety and efficacy data anticipated in 2023
ADCT-901 (targeting KAAG1)
- Continue to enroll the Phase 1 trial in multiple solid tumors, with safety and efficacy data anticipated in 2023
ADCT-601 (targeting AXL)
- Initiate the Phase 1b combination trial in multiple solid tumors in 1H 2022
ADCT-701 (targeting DLK1)
-
Continue to work with the
National Cancer Institute to complete preclinical studies to support an IND filing
ADCT-212 (targeting PSMA)
- Continue completion of preclinical studies to support an IND filing
First Quarter Financial Results
Product Revenue
Product revenue (net) was
Cash and Cash Equivalents
Cash and cash equivalents were
Research and Development (R&D) Expenses
R&D expenses were
Selling and Marketing (S&M) Expenses
S&M expenses were
G&A Expenses
G&A expenses were
Net Loss and Adjusted Net Loss
Net loss was
Adjusted net loss was
The decrease in net loss and adjusted net loss for the quarter ended
Conference Call Details
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
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’ 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,
ZYNLONTA® is a registered trademark of
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 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 and the effective interest expense associated with the Facility Agreement with
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
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
Condensed Consolidated Interim Statement of Operations (Unaudited) (in KUSD except for share and per share data) |
||||||
For the Three Months Ended
|
||||||
2022 |
2021 |
|||||
| Product revenues, net | 16,498 |
|
- |
|
||
| License revenue | 30,000 |
|
- |
|
||
| Total revenue | 46,498 |
|
- |
|
||
| Operating expense | ||||||
| Cost of product sales | (529 |
) |
- |
|
||
| Research and development expenses | (48,952 |
) |
(39,172 |
) |
||
| Selling and marketing expenses | (18,370 |
) |
(13,911 |
) |
||
| General and administrative expenses | (19,011 |
) |
(17,582 |
) |
||
| Total operating expense | (86,862 |
) |
(70,665 |
) |
||
| Loss from operations | (40,364 |
) |
(70,665 |
) |
||
| Other income (expense) | ||||||
| Financial income | 18,308 |
|
15 |
|
||
| Financial expense | (9,217 |
) |
(2,000 |
) |
||
| Non-operating income | 13,442 |
|
21,230 |
|
||
| Total other income | 22,533 |
|
19,245 |
|
||
| Loss before taxes | (17,831 |
) |
(51,420 |
) |
||
| Income tax benefit (expense) | 1,170 |
|
(107 |
) |
||
| Net loss | (16,661 |
) |
(51,527 |
) |
||
| Net loss attributable to: | ||||||
| Owners of the parent | (16,661 |
) |
(51,527 |
) |
||
| Net loss per share, basic and diluted | (0.22 |
) |
(0.67 |
) |
||
Condensed Consolidated Interim Balance Sheet (Unaudited) (in KUSD) |
||||||
|
|
|||||
| ASSETS | ||||||
| Current assets | ||||||
| Cash and cash equivalents | 430,874 |
|
466,544 |
|
||
| Accounts receivable, net | 26,752 |
|
30,218 |
|
||
| Inventory | 11,838 |
|
11,122 |
|
||
| Other current assets | 18,246 |
|
17,298 |
|
||
| Total current assets | 487,710 |
|
525,182 |
|
||
| Non-current assets | ||||||
| Property, plant and equipment | 3,938 |
|
4,066 |
|
||
| Right-of-use assets | 6,726 |
|
7,164 |
|
||
| Intangible assets | 13,851 |
|
13,582 |
|
||
| Interest in joint venture | 38,734 |
|
41,236 |
|
||
| Deferred tax asset | 29,905 |
|
26,049 |
|
||
| Other long-term assets | 1,022 |
|
693 |
|
||
| Total non-current assets | 94,176 |
|
92,790 |
|
||
| Total assets | 581,886 |
|
617,972 |
|
||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities | ||||||
| Accounts payable | 16,453 |
|
12,080 |
|
||
| Other current liabilities | 40,411 |
|
50,497 |
|
||
| Lease liabilities, short-term | 981 |
|
1,029 |
|
||
| Current income tax payable | 6,380 |
|
3,754 |
|
||
| Convertible loans, short-term | 6,549 |
|
6,575 |
|
||
| Total current liabilities | 70,774 |
|
73,935 |
|
||
| Non-current liabilities | ||||||
| Convertible loans, long-term | 88,415 |
|
87,153 |
|
||
| Convertible loans, derivatives | 22,092 |
|
37,947 |
|
||
| Deferred royalty obligation, long-term | 204,104 |
|
218,664 |
|
||
| Deferred gain of joint venture | 23,539 |
|
23,539 |
|
||
| Lease liabilities, long-term | 6,614 |
|
6,994 |
|
||
| Defined benefit pension liabilities | 3,681 |
|
3,652 |
|
||
| Total non-current liabilities | 348,445 |
|
377,949 |
|
||
| Total liabilities | 419,219 |
|
451,884 |
|
||
| Equity attributable to owners of the parent | ||||||
| Share capital | 6,445 |
|
6,445 |
|
||
| Share premium | 981,818 |
|
981,827 |
|
||
(119 |
) |
(128 |
) |
|||
| Other reserves | 116,044 |
|
102,646 |
|
||
| Cumulative translation adjustments | 25 |
|
183 |
|
||
| Accumulated losses | (941,546 |
) |
(924,885 |
) |
||
| Total equity attributable to owners of the parent | 162,667 |
|
166,088 |
|
||
| Total liabilities and equity | 581,886 |
|
617,972 |
|
||
Reconciliation of IFRS Measures to Non-IFRS Measures (Unaudited) (in KUSD except for share and per share data) |
||||||
Three Months Ended
|
||||||
| in KUSD (except for share and per share data) | 2022 |
2021 |
||||
| Net loss | (16,661 |
) |
(51,527 |
) |
||
| Adjustments: | ||||||
| Share-based compensation expense (i) | 13,910 |
|
13,951 |
|
||
| Convertible loans, derivatives, change in fair value income (ii) | (15,855 |
) |
(21,169 |
) |
||
| Effective interest expense on convertible loans (iii) | 3,022 |
|
1,982 |
|
||
| Deferred royalty obligation interest expense (iv) | 6,142 |
|
- |
|
||
| Deferred royalty obligation cumulative catch-up adjustment income (iv) | (18,288 |
) |
- |
|
||
| Adjusted net loss | (27,730 |
) |
(56,763 |
) |
||
| Net loss per share, basic and diluted | (0.22 |
) |
(0.67 |
) |
||
| Adjustment to net loss per share, basic and diluted | (0.14 |
) |
(0.07 |
) |
||
| Adjusted net loss per share, basic and diluted | (0.36 |
) |
(0.74 |
) |
||
| Weighted average shares outstanding, basic and diluted | 76,821,726 |
|
76,721,667 |
|
||
(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. 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) |
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. |
|
|
||
(iv) |
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/20220509005297/en/
Investors
Eugenia.Litz@adctherapeutics.com
+44 7879 627205
amanda.hamilton@adctherapeutics.com
+1 917-288-7023
maryann.ondish@adctherapeutics.com
+1 914-552-4625
amu@dynamicsgroup.ch
+41 (0) 43 268 3231
Source:
FAQ
What were ADC Therapeutics' Q1 2022 revenue figures for ZYNLONTA?
Who is the new CEO of ADC Therapeutics?
What was the net loss for ADC Therapeutics in Q1 2022?
How did ADC Therapeutics' cash position change in Q1 2022?
What challenges did ADC Therapeutics face in the DLBCL market in Q1 2022?
