On August 6, 2024 ADC Therapeutics SA (NYSE: ADCT), a commercial-stage global leader and pioneer in the field of antibody drug conjugates (ADCs), reported financial results for the second quarter ended June 30, 2024, and provided operational updates (Press release, ADC Therapeutics, AUG 6, 2024, View Source [SID1234645403]).

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"We continue to make progress on multiple fronts, including reaching a key milestone as ZYNLONTA achieves commercial profitability in the first half of the year. We are excited about the potential to further our growth as we move toward expanding into the second line setting of DLBCL and indolent lymphomas," said Ameet Mallik, Chief Executive Officer of ADC Therapeutics. "Additionally, we have now passed futility analysis with LOTIS-5 and expect to complete enrollment this year, while also planning to deliver updates on the LOTIS-7 trial and on ADCT-601 targeting AXL. With our expected cash runway extended into mid-2026, we are well positioned to execute our strategy and advance multiple value-generating catalysts before year-end."

Second Quarter 2024 Operational Updates & Recent Highlights

•ZYNLONTA: Reached commercial profitability in the first half of 2024, generating net product sales of $17.0 million in the second quarter of 2024, a 5% decrease as compared to revenue of $17.8 million in the first quarter of 2024. Demand was impacted in part by variability in ordering patterns in the second quarter.

•LOTIS-7: During the second quarter, the Company announced the completion of dose escalation in LOTIS-7, a Phase 1b open-label clinical trial evaluating ZYNLONTA in combination with bispecific antibodies glofitamab or mosunetuzumab in heavily pre-treated patients with relapsed/refractory B-cell non-Hodgkin lymphoma (r/r B-NHL). Enrollment in the Part 2 dose expansion is progressing and completion is expected by year-end. An update on safety and efficacy in evaluable patients is expected by year-end, with data on all patients anticipated in the first half of 2025.

•LOTIS-5: The Phase 3 confirmatory trial for ZYNLONTA in combination with rituximab in patients with 2L+ diffuse large B-cell lymphoma (DLBCL). An Independent Data Monitoring Committee (IDMC) conducted a prespecified interim analysis of unblinded data and has recommended that the trial continue as planned without modifications. Enrollment is nearing completion in the randomized portion of the trial with full enrollment expected before year-end 2024.

•Investigator-initiated trial in marginal zone lymphoma (MZL): Partial data from an investigator-initiated Phase 2 clinical trial evaluating ZYNLONTA for the treatment of relapsed/refractory (r/r) MZL were presented on May 6, 2024 at the Lymphoma Research Foundation’s 2024 Marginal Zone Lymphoma Scientific Workshop by the trial’s lead investigator. Initial data from the first 15 evaluable patients showed 13 achieved a complete response and 1 achieved a partial response. The multi-center study is designed to enroll 50 patients. Additional data publications and presentations at medical congresses are expected in 2024 or 2025.

•Investigator-initiated trial in follicular lymphoma (FL): The investigator-initiated Phase 2 clinical trial evaluating ZYNLONTA in combination with rituximab in patients with relapsed/refractory follicular lymphoma is currently being conducted at the Sylvester Comprehensive Cancer Center at the University of Miami Miller School of Medicine. Additional updates are expected at medical congresses in 2024 or 2025.

•ADCT-601 (targeting AXL): The Phase 1b trial in ADCT-601 targeting AXL continues enrolling patients in both the sarcoma and pancreatic cancer arms, optimizing dose and schedule. We plan to share an initial update from the Phase 1 trial in patients in the second half of 2024.

•Early-stage pipeline: Progress continues in the IND-enabling studies for the Company’s PSMA, NaPi2b and Claudin-6 targeting ADCs. ASCT2 targeting ADC is in drug candidate selection stage and is still on track to complete this year. The Company has selected one target to move forward toward IND which we expect to disclose in 2025.
Second Quarter and First Half 2024 Financial Results

•Cash and cash equivalents: As of June 30, 2024, cash and cash equivalents were $300.1 million, compared to $278.6 million as of December 31, 2023. In May 2024 the Company completed an underwritten offering resulting in net proceeds of approximately $97.4 million, extending the expected cash runway into mid-2026.

•Product Revenues: Net product revenues were $17.0 million for the second quarter ended June 30, 2024 and $34.9 million for the first six months of 2024 as compared to $19.2 million and $38.2 million for the same periods in 2023. The quarter-over-quarter decrease is primarily due to lower sales volume, partially offset by a higher price. The year-to-date decrease is primarily due to lower sales volumes, as well as higher gross-to-net deductions primarily due to the discarded drug rebate accrual partially offset by a higher price.

•Research and Development (R&D) Expense: R&D expense was $24.3 million and $50.0 million for the three and six months ended June 30, 2024, respectively. This compares to R&D expense of $31.3 million and $69.7 million for the same periods in 2023. The decrease is due primarily to implementation of productivity initiatives and focused investment in prioritized development programs.

•Selling and Marketing (S&M) Expense: S&M expense was $10.7 million and $22.1 million for the three and six months ended June 30, 2024, respectively. This compares to S&M expense of $14.5 million and $29.8 million for the same periods in 2023. The decrease in S&M expense was primarily due to lower marketing and advertising costs and personnel related expenses.

•General & Administrative (G&A) Expense: G&A expense was $10.2 million and $22.3 million for the three and six months ended June 30, 2024, respectively. This compares to G&A expense of $12.0 million and $27.5 million for the same periods in 2023. The quarter-over-quarter decrease in G&A expense was primarily related to lower legal and audit fees, insurance and IT expenses while the year-to-date decrease was primarily related to lower insurance and IT expenses, partially offset by higher legal and audit fees.

•Net Loss: Net loss for the quarter ended June 30, 2024 was $36.5 million, or a net loss of $0.38 per basic and diluted share, as compared to net loss of $48.9 million, or a net loss of $0.60 per basic and diluted share for the same period in 2023. Net loss for the six months ended June 30, 2024 was $83.2 million, or a net loss of $0.93 per basic and diluted share, as compared to net loss of $108.3 million, or a net loss of $1.33 per basic and diluted share for the six months ended June 30, 2023. The decrease is primarily due to lower operating expenses.

•Adjusted Net Loss: Adjusted net loss, which is a non-GAAP financial measure, was $24.4 million, or an adjusted net loss of $0.25 per basic and diluted share for the quarter ended June 30, 2024 as compared to adjusted net loss of $32.1 million, or $0.39 per basic and diluted share, for the same period in 2023. Adjusted net loss for the six months ended June 30, 2024 was $55.5 million, or an adjusted net loss of $0.62 per basic and diluted share, as compared to net loss of $73.9 million, or an adjusted net loss of $0.91 per basic and diluted share for the six months ended June 30, 2023. The decrease in adjusted net loss is primarily attributable to lower operating expenses.

Conference Call Details

ADC Therapeutics management will host a conference call and live audio webcast to discuss second quarter 2024 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 & 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

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) and the European Medicines Agency (EMA) have 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 and in the European Union under conditional 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. Please see full prescribing information including important safety information about ZYNLONTA at www.ZYNLONTA.com.

ZYNLONTA is also being evaluated as a therapeutic option in combination studies in other B-cell malignancies and earlier lines of therapy.