ADC Therapeutics Reports Third Quarter 2021 Financial Results and Provides Business Updates
ADC Therapeutics reported third quarter 2021 net sales of $13.1 million for ZYNLONTA, marking its first full quarter of sales. The company secured a financing agreement with HealthCare Royalty for up to $325 million, bolstering its liquidity, which totaled $530.2 million in cash and cash equivalents. Significant R&D expenses of $36.8 million were reported as the company invests in expanding its clinical pipeline. Despite increasing sales and a comprehensive patient support program, net loss rose to $71.5 million, attributed to higher operational costs and share-based compensation expenses.
- ZYNLONTA's net sales reached $13.1 million in Q3 2021, showing strong market uptake.
- Financing agreement provides up to $325 million, enhancing financial stability.
- Cash and cash equivalents increased to $530.2 million, improving liquidity.
- Broad payer access achieved for ZYNLONTA, with no encountered barriers.
- Net loss rose significantly to $71.5 million, compared to $20.3 million in Q3 2020.
- R&D expenses increased to $36.8 million, reflecting heavy investment without immediate returns.
- Selling and marketing expenses surged to $17.0 million, indicating high costs associated with ZYNLONTA's launch.
ZYNLONTA® (loncastuximab tesirine-lpyl) third quarter 2021 net sales of
Financing agreement with HealthCare Royalty for up to
Company to host conference call today at
LAUSANNE,
“We are pleased with the momentum of the ZYNLONTA® launch to date and the positive reception from the physician community. Top priorities for the company remain driving the continued growth of ZYNLONTA and developing the longer-term potential of ZYNLONTA for patients,” said
Recent Highlights and Developments
ZYNLONTA
-
ZYNLONTA generated net sales of
$13.1 million -
Academic centers represented over
50% of total volume with an approximately 50/50 split between academic and community accounts in the third quarter. - The Company continued to initiate new accounts and increase volume from existing and prioritized accounts, including National Comprehensive Cancer Network (NCCN) centers.
- Brand aided and unaided awareness, perception and intent to prescribe continued to increase through the quarter.
- Broad payer access has been achieved, with no barriers encountered to date. A comprehensive patient support program, Advancing Patient Support, is available to patients.
- The Company continued to operate efficiently in the dynamic COVID environment. The sales and medical teams are executing with a hybrid model conducting both virtual and face-to-face interactions according to customer preferences and local conditions.
Clinical-Stage Pipeline
- ADCT-901: Dosed the first patient in the Phase 1 study for ADCT-901, targeting KAAG-1, a novel antigen expressed in various cancers, in patients with advanced solid tumors. KAAG-1 is expressed intracellularly in healthy tissues, but over-expression occurs on the membrane of certain advanced solid tumors such as ovarian cancer and breast cancer, including triple negative breast cancer.
-
ADCT-701: Entered into a collaboration with the
National Cancer Institute (NCI) at theNational Institutes of Health for the continued development of ADCT-701, targeting DLK-1, in neuroendocrine malignancies. DLK-1 is expressed during embryonic development, but expression is very restricted in healthy adult tissues. Over-expression occurs on the membrane of certain advanced solid tumors found in adrenocortical carcinoma, pheochromocytoma, paraganglioma, neuroblastoma and small cell lung cancer.
Corporate Update
-
Geographic Expansion:
ADC Therapeutics is committed to expanding its geographic footprint to provide ZYNLONTA and other novel treatments to patients who can benefit from them globally.-
The Marketing Authorization Application (MAA) for ZYNLONTA was validated by the
European Medicines Agency (EMA) for treatment in patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) in October. - Orphan Drug Designation was granted in the EU to ZYNLONTA for the treatment of DLBCL.
-
Overland ADCT BioPharma dosed the first patient in the pivotal Phase 2 clinical trial of ZYNLONTA in patients with relapsed or refractory DLBCL in
China , which is intended to support the anticipated registration of ZYNLONTA inChina .
-
The Marketing Authorization Application (MAA) for ZYNLONTA was validated by the
Upcoming Expected Milestones
ZYNLONTA
- Initiate the dose-finding study of ZYNLONTA in first-line DLBCL with R-CHOP in the fourth quarter of 2021.
- Initiate the clinical study to evaluate ZYNLONTA in multiple combinations in B-cell non-Hodgkin lymphoma in the fourth quarter of 2021.
-
Complete enrollment of safety lead-in of the Phase
3 LOTIS-5 confirmatory study of ZYNLONTA in combination with rituximab in the fourth quarter of 2021. -
Continue enrollment in the Phase
2 LOTIS-3 study of ZYNLONTA in combination with ibrutinib in the fourth quarter of 2021.
Cami
- Complete 12-month follow up of Phase 2 trial in relapsed or refractory Hodgkin lymphoma in the first quarter of 2022.
- Report preliminary results for the Phase 2 trial in Hodgkin lymphoma in the first half of 2022.
- Complete dose finding for Phase 1b solid tumor trial in combination with pembrolizumab.
Clinical-Stage Pipeline
- Initiate a Phase 1b combination study of ADCT-601 (mipasetamab uzoptirine), in tumors known to express AXL, in the first half of 2022.
Third Quarter 2021 Financial Results
Cash and Cash Equivalents
Cash and cash equivalents were
Product Revenue
Product revenue (net) was
Research and Development (R&D) Expenses
R&D expenses were
Selling and Marketing (S&M) Expenses
During the third quarter of 2021, S&M expenses were
G&A Expenses
G&A expenses were
Net Loss and Adjusted Net Loss
Net loss was
Adjusted net loss was
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 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,
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, the gain recognized in connection with the receipt of the
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- and nine-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, 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
Condensed Consolidated Interim Statement of Operations (Unaudited) (in KUSD except for share and per share data) |
|||||||||||
For the Three Months Ended
|
For the Nine Months Ended
|
||||||||||
2021 |
2020 (1) |
2021 |
2020 (1) |
||||||||
| Product revenues, net | 13,147 |
|
- |
|
16,907 |
|
- |
|
|||
| Operating expense | |||||||||||
| Cost of product sales | (502 |
) |
- |
|
(623 |
) |
- |
|
|||
| Research and development expenses | (36,805 |
) |
(32,155 |
) |
(115,510 |
) |
(93,480 |
) |
|||
| Selling and marketing expenses | (17,045 |
) |
(6,116 |
) |
(46,177 |
) |
(12,748 |
) |
|||
| General and administrative expenses | (16,587 |
) |
(14,157 |
) |
(53,536 |
) |
(35,034 |
) |
|||
| Total operating expense | (70,939 |
) |
(52,428 |
) |
(215,846 |
) |
(141,262 |
) |
|||
| Loss from operations | (57,792 |
) |
(52,428 |
) |
(198,939 |
) |
(141,262 |
) |
|||
| Other income (expense) | |||||||||||
| Other (expense) income | (203 |
) |
145 |
|
190 |
|
423 |
|
|||
| Convertible loans, derivatives, change in fair value (expense) income | (6,943 |
) |
33,868 |
|
16,279 |
|
(45,393 |
) |
|||
| Convertible loans, derivatives, transaction costs | - |
|
- |
|
(148 |
) |
(1,571 |
) |
|||
| Share of results with joint venture | (2,210 |
) |
- |
|
(3,906 |
) |
- |
|
|||
| Financial income | 16 |
|
163 |
|
46 |
|
732 |
|
|||
| Financial expense | (4,265 |
) |
(1,940 |
) |
(8,820 |
) |
(2,879 |
) |
|||
| Exchange differences (loss) income | (7 |
) |
(139 |
) |
145 |
|
(210 |
) |
|||
| Total other (expense) income | (13,612 |
) |
32,097 |
|
3,786 |
|
(48,898 |
) |
|||
| Loss before taxes | (71,404 |
) |
(20,331 |
) |
(195,153 |
) |
(190,160 |
) |
|||
| Income tax (expense) benefit | (145 |
) |
3 |
|
(492 |
) |
(201 |
) |
|||
| Net loss | (71,549 |
) |
(20,328 |
) |
(195,645 |
) |
(190,361 |
) |
|||
| Net loss attributable to: | |||||||||||
| Owners of the parent | (71,549 |
) |
(20,328 |
) |
(195,645 |
) |
(190,361 |
) |
|||
| Net loss per share, basic and diluted | (0.93 |
) |
(0.29 |
) |
(2.55 |
) |
(3.09 |
) |
|||
(1) Prior period has been recast to conform S&M expenses to the current period presentation. |
|||||||||||
Condensed Consolidated Interim Balance Sheet (Unaudited) (in KUSD) |
|||||
2021 |
2020 |
||||
| ASSETS | |||||
| Current assets | |||||
| Cash and cash equivalents | 530,194 |
|
439,195 |
|
|
| Accounts receivable, net | 15,896 |
|
- |
|
|
| Inventory | 8,008 |
|
- |
|
|
| Other current assets | 14,310 |
|
11,255 |
|
|
| Total current assets | 568,408 |
|
450,450 |
|
|
| Non-current assets | |||||
| Property, plant and equipment | 4,022 |
|
1,629 |
|
|
| Right-of-use assets | 7,540 |
|
3,129 |
|
|
| Intangible assets | 13,316 |
|
10,179 |
|
|
| Interest in joint venture | 44,002 |
|
47,908 |
|
|
| Other long-term assets | 691 |
|
397 |
|
|
| Total non-current assets | 69,571 |
|
63,242 |
|
|
| Total assets | 637,979 |
|
513,692 |
|
|
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
| Current liabilities | |||||
| Accounts payable | 12,028 |
|
5,279 |
|
|
| Other current liabilities | 39,685 |
|
30,375 |
|
|
| Lease liabilities, short-term | 1,012 |
|
1,002 |
|
|
| Current income tax payable | - |
|
149 |
|
|
| Convertible loans, short-term | 6,575 |
|
3,631 |
|
|
| Total current liabilities | 59,300 |
|
40,436 |
|
|
| Non-current liabilities | |||||
| Convertible loans, long-term | 85,877 |
|
34,775 |
|
|
| Convertible loans, derivatives | 56,562 |
|
73,208 |
|
|
| Deferred royalty obligation, long-term | 214,629 |
|
- |
|
|
| Deferred gain of joint venture | 23,539 |
|
23,539 |
|
|
| Lease liabilities, long-term | 7,183 |
|
2,465 |
|
|
| Defined benefit pension liabilities | 3,581 |
|
3,543 |
|
|
| Other non-current liabilities | - |
|
221 |
|
|
| Total non-current liabilities | 391,371 |
|
137,751 |
|
|
| Total liabilities | 450,671 |
|
178,187 |
|
|
| Equity attributable to owners of the parent | |||||
| Share capital | 6,445 |
|
6,314 |
|
|
| Share premium | 981,570 |
|
981,056 |
|
|
(133 |
) |
(4 |
) |
||
| Other reserves | 89,769 |
|
42,753 |
|
|
| Cumulative translation adjustment | 161 |
|
245 |
|
|
| Accumulated losses | (890,504 |
) |
(694,859 |
) |
|
| Total equity attributable to owners of the parent | 187,308 |
|
335,505 |
|
|
| Total liabilities and equity | 637,979 |
|
513,692 |
|
|
Reconciliation of IFRS Measures to Non-IFRS Measures (Unaudited) (in KUSD except for share and per share data) |
|||||||||||
Three Months Ended
|
|
Nine Months Ended
|
|||||||||
| in KUSD (except for share and per share data) | 2021 |
|
2020 |
|
2021 |
|
2020 |
||||
| Net loss | (71,549 |
) |
(20,328 |
) |
(195,645 |
) |
(190,361 |
) |
|||
| Adjustments: | |||||||||||
| Share-based compensation expense (i) | 14,798 |
|
10,988 |
|
47,016 |
|
27,512 |
|
|||
| Convertible loans, derivatives, change in fair value (ii) | 6,943 |
|
(33,868 |
) |
(16,279 |
) |
45,393 |
|
|||
| Convertible loans, first and second tranche, derivatives, transaction costs (iii) | - |
|
- |
|
148 |
|
1,571 |
|
|||
| Effective interest expense (iv) | 4,207 |
|
1,913 |
|
8,639 |
|
2,781 |
|
|||
| Adjusted net loss | (45,601 |
) |
(41,295 |
) |
(156,121 |
) |
(113,104 |
) |
|||
| Net loss per share, basic and diluted | (0.93 |
) |
(0.29 |
) |
(2.55 |
) |
(3.09 |
) |
|||
| Adjustment to net loss per share, basic and diluted | 0.34 |
|
(0.29 |
) |
0.52 |
|
1.25 |
|
|||
| Adjusted net loss per share, basic and diluted | (0.59 |
) |
(0.58 |
) |
(2.03 |
) |
(1.84 |
) |
|||
| Weighted average shares outstanding, basic and diluted | 76,739,770 |
|
70,914,300 |
|
76,730,117 |
|
61,613,177 |
|
|||
(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 |
|
|
(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 and deferred royalty obligation pursuant to the royalty purchase agreement with HCR in accordance with the effective interest method. See note 13, “Convertible loans” and note 15, “Deferred royalty obligation” to the unaudited condensed consolidated interim financial statements. |
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Investors
Eugenia.Litz@adctherapeutics.com
+44 7879 627205
amanda.hamilton@adctherapeutics.com
Tel.: +1 917-288-7023
maryann.ondish@adctherapeutics.com
Tel.: +1 914-552-4625
EU Media
amu@dynamicsgroup.ch
Tel: +41 (0) 43 268 3231
Source:
FAQ
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