ADC Therapeutics Reports Third Quarter 2022 Financial Results and Provides Business Updates
ADC Therapeutics reported strong financial results for Q3 2022, with net sales of $21.3 million for ZYNLONTA, reflecting a 23% increase from Q2 2022. The company has a cash runway extending into early 2025, supported by a $175 million loan and a $55 million upfront payment from a licensing agreement. The LOTIS-5 trial showed favorable initial results, enhancing the outlook for ZYNLONTA. However, the company is pausing significant investments in the Cami program, awaiting further FDA guidance.
- ZYNLONTA net sales increased by 23% sequentially to $21.3 million.
- Cash and cash equivalents rose to $380.9 million, ensuring a runway into early 2025.
- Positive results from LOTIS-5 trial showing a 75% overall response rate.
- Cami program's BLA submission is delayed due to FDA requirements; expected enrollment for Phase 3 study may take two years.
- Increased R&D expenses to $41.7 million, impacting overall profitability.
ZYNLONTA® (loncastuximab tesirine-lpyl) net sales of
Cash runway expected into early 2025
Company to host conference call today at
LAUSANNE,
“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
Recent Highlights and Developments
ZYNLONTA (loncastuximab tesirine-lpyl)
-
ZYNLONTA generated net sales of
in the third quarter of 2022, representing$21.3 million 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 theSociety of Hematologic Oncology (SOHO 2022), demonstrating an overall response rate of75% , a complete response rate of40% and no safety events materially different from those observed in prior clinical trials. -
The Committee for Medicinal Products for Human Use (CHMP) of theEuropean 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 of33% with previously reported safety profile. -
The Company held a pre-Biologics License Application (BLA) meeting in
September 2022 and a Type C meeting with theU.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 byThe 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
senior secured term loan from$175 million Owl Rock , a division of Blue Owl Capital, Inc., andOaktree Capital Management, L.P. and settlement of existing senior secured convertible notes withDeerfield . The Company also entered into a share purchase agreement withOwl Rock for an investment of .$6.25 million -
Kristen Harrington-Smith has been appointed the Company’s new Chief Commercial Officer, effectiveNovember 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 atNovartis Pharmaceuticals . -
Peter Graham was appointed the Company’s Chief Legal Officer, effectiveNovember 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
Product Revenue
Product revenue (net) was
License Revenue
License revenue was
Cost of Product Sales
Cost of product sales was
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 income was
The decrease in net loss and adjusted net loss for the quarter ended
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
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. In addition to ZYNLONTA,
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 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
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
Condensed Consolidated Interim Statement of Operations (Unaudited) (in KUSD except for per share data) |
||||||||
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||
|
|
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) |
Condensed Consolidated Interim Balance Sheet (Unaudited) (in KUSD) |
||||
|
|
|
|
|
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 |
|
|
(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 |
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) |
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 |
|
(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 |
|
|
|
|
(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. |
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|
|
|
(iv) |
As a result of the exchange agreement entered into on |
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|
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(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. |
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|
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(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. |
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Investors
Eugenia.Litz@adctherapeutics.com
+44 7879 627205
amanda.loshbaugh@adctherapeutics.com
+1 917-288-7023
Media
maryann.ondish@adctherapeutics.com
+1 914-552-4625
Source:
FAQ
What were ADC Therapeutics' Q3 2022 net sales for ZYNLONTA?
What is the cash position of ADC Therapeutics as of September 30, 2022?
What are the initial results of the LOTIS-5 trial reported by ADC Therapeutics?
What challenges are faced by the Cami program at ADC Therapeutics?