On August 18, 2020 ADC Therapeutics SA (NYSE: ADCT), a late clinical-stage oncology-focused biotechnology company pioneering the development and commercialization of highly potent and targeted antibody drug conjugates (ADCs) for patients with hematological malignancies and solid tumors, reported financial results for the second quarter ended June 30, 2020 and provided recent business highlights (Press release, ADC Therapeutics, AUG 18, 2020, View Source [SID1234563786]).

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"ADC Therapeutics progressed rapidly this past quarter, and we are continuing to evolve towards becoming a commercial-stage company, as we prepare to submit a Biologics License Application to the U.S. Food and Drug Administration for Lonca, our lead product candidate, for the treatment of relapsed or refractory diffuse large B-cell lymphoma, later this year and have already submitted the Chemistry, Manufacturing and Controls (CMC) modules to the FDA. To that end, we’re focused on executing a successful launch and growing our talented and experienced commercial, market access, and medical affairs teams. We also presented data at the European Hematology Association (EHA) (Free EHA Whitepaper) Congress in June that demonstrated the potential of Lonca to be a key part of the treatment paradigm for patients with non-Hodgkin lymphoma, both as a single-agent and in combination with other therapies, deepening our conviction in the potential promise of this program and the hope it may bring to patients and their families," said Chris Martin, Chief Executive Officer of ADC Therapeutics. "We also completed an upsized IPO and expanded our leadership team. With these new resources and expertise in place, we are well-positioned for our next stage of growth."

Dr. Martin continued, "With regard to Cami, our second lead product candidate, we are pleased to have patient enrollment open in our ongoing pivotal Phase 2 trial in relapsed or refractory Hodgkin lymphoma and remain on track to announce interim results in the first half of 2021. We look forward to providing further updates across our pipeline as our programs continue to progress."

Recent Business and Clinical Highlights

Announced first patient dosed in Phase 2 portion of LOTIS 3 clinical trial of Lonca in combination with ibrutinib: In July 2020, the Company announced that the first patient was dosed in the Phase 2 portion of LOTIS 3, a 161-patient Phase 1/2 clinical trial of loncastuximab tesirine (Lonca, formerly ADCT-402) in combination with ibrutinub, which is being evaluated in patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) or mantle cell lymphoma (MCL). The clinical trial is intended to support the submission of a supplemental Biologics License Application (sBLA) to the U.S. Food and Drug Administration (FDA).
Announced FDA lifted partial clinical hold on pivotal Phase 2 trial of Cami for relapsed or refractory Hodgkin lymphoma: In July 2020, the Company announced that the FDA had lifted the partial clinical hold on its pivotal Phase 2 clinical trial of camidanlumab tesirine (Cami, formerly ADCT-301) in patients with relapsed or refractory Hodgkin lymphoma (HL). The Company continued to treat those patients who could benefit from ongoing treatment during the partial clinical hold, and the clinical trial is now open for enrollment. Interim results from the clinical trial are expected in the first half of 2021, subject to any impact by COVID-19. The clinical trial is intended to support the submission of a BLA to the FDA.
Presented positive data from LOTIS 2 and LOTIS 3 trials of Lonca at the virtual 25th Annual Congress of the European Hematology Association (EHA) (Free EHA Whitepaper) (EHA25): In June 2020, the Company presented interim data from two clinical trials of Lonca in an oral presentation and e-poster session at EHA (Free EHA Whitepaper)25. Data from the pivotal Phase 2 single-agent LOTIS 2 trial showed Lonca demonstrated an overall response rate (ORR) of 48.3% and complete response rate (CRR) of 24.1% in a broad relapsed or refractory DLBCL patient population, while upholding a manageable safety profile. The most common grade ≥3 treatment-emergent adverse events in ≥10% of patients were: neutropenia (25.5%) with low incidence of febrile neutropenia (3.4%), thrombocytopenia (17.9%), GGT increased (16.6%) and anaemia (10.3%). The Company is on track to submit a BLA to the FDA later this year based on these data. Interim data from the Phase 1 portion of the Phase 1/2 LOTIS 3 trial of Lonca in combination with ibrutinib showed an encouraging ORR of 75% and CRR of 58.3% at the Lonca dose of 60 μg/kg, which is the selected dose for the Phase 2 portion of the trial, in combination with ibrutinib (560 mg/day), in patients with relapsed or refractory DLBCL or MCL. The combination has had a manageable toxicity profile, with the most common grade ≥3 treatment-emergent adverse events in ≥10% of patients being thrombocytopenia (20%) and anaemia (12%). These interim data highlight the potential of Lonca in earlier lines of therapy and in combination.
Completed upsized initial public offering (IPO) and received first tranche of $115 Convertible Credit Facility with Deerfield: In May 2020, the Company completed its upsized IPO of 14,082,475 common shares at a public offering price of $19.00 per share, which included the full exercise of the underwriters’ option to purchase 1,836,844 additional common shares. The total gross proceeds from the offering, before deducting underwriting discounts and commissions and offering expenses, were approximately $267.6 million. In tandem with the closing of the IPO, the Company also received an initial $65.0 million disbursement of senior secured convertible term loans under its previously announced Convertible Credit Facility with Deerfield Partners, L.P. and certain of its affiliates. Under the Convertible Credit Facility, the Company will receive an additional $50.0 million disbursement upon receipt of U.S. regulatory approval for Lonca.
Appointed Jenn Creel as Chief Financial Officer and Victor Sandor, M.D., to its Board of Directors: In April 2020, the Company appointed Jenn Creel as Chief Financial Officer and Victor Sandor, M.D., to its Board of Directors. Ms. Creel joined ADC Therapeutics from Celgene Corporation, where she served as franchise chief financial officer and corporate vice president of global finance and business planning prior to its acquisition by Bristol Myers Squibb. Dr. Sandor most recently served as Chief Medical Officer of Array BioPharma, which was acquired by Pfizer, where he supported the approval of Braftovi (encorafenib) and Mektovi (binimetinib) for the treatment of melanoma. Prior to his role at Array BioPharma, Dr. Sandor was Senior Vice President for Global Clinical Development at Incyte Corporation and held positions of increasing responsibility in oncology product development at AstraZeneca.
Anticipated Upcoming Milestones

File a BLA with the FDA for Lonca for the treatment of relapsed or refractory DLBCL in the second half of 2020.
Present data from the Phase 1b trial of Cami in selected advanced solid tumors at a scientific meeting in the second half of 2020.
Initiate a pivotal Phase 2 trial of Lonca in follicular lymphoma (FL) in the first half of 2021.
Report interim results from the pivotal Phase 2 trial of Cami in HL in the first half of 2021.
Continue to accelerate the Company’s pipeline of ADC product candidates for the treatment of hematological cancers and solid tumors, including presenting Phase 1 data for ADCT-602 in acute lymphoblastic leukemia and ADCT-601 in solid tumors. Continue to advance our earlier-stage programs, ADCT-901 and ADCT-701, with IND-enabling studies.
Second Quarter 2020 Financial Results

Cash and Cash Equivalents

Cash and cash equivalents were $348.6 million as of June 30, 2020 compared to $115.6 million as of December 31, 2019.

Research and Development (R&D) Expenses

R&D expenses were $26.0 million for the quarter ended June 30, 2020, compared to $21.8 million for the same quarter in 2019. The increase was primarily due to an increased number of research and development employees and increased share-based compensation expense.

General and Administrative (G&A) Expenses

G&A expenses were $19.0 million for the quarter ended June 30, 2020, compared to $4.1 million for the same quarter in 2019. The increase was primarily due to increased share-based compensation expense, an increased number of commercial employees, and increased costs due to new commercial activities and the completion of our initial public offering.

Net Loss and Adjusted Net Loss

Net loss was $126.6 million, or a net loss of $2.01 per basic and diluted share, for the quarter ended June 30, 2020, compared to $23.3 million, or a net loss of $0.49 per basic and diluted share, for the same quarter in 2019. The net loss for the quarter ended June 30, 2020 includes a $79.3 million non-cash charge related to the changes in fair value of derivatives associated with the convertible loans under the Convertible Credit Facility with Deerfield. The significant increase in fair value was driven by the increase in the Company’s share price during the quarter. In addition, net loss included share-based compensation expense of $12.7 million for the quarter ended June 30, 2020, compared to $0.1 million for the same quarter in 2019.

Adjusted net loss was $32.1 million, or an adjusted net loss of $0.51 per basic and diluted share, for the quarter ended June 30, 2020, compared to $23.3 million, or an adjusted net loss of $0.49 per basic and diluted share, for the same quarter in 2019.

Conference Call Details

To access the call, please dial 646-787-0157 (domestic) or +41 22 5017540 (international) and enter pin code: 773478. A live webcast of the presentation will be available on the Investors section of the ADC Therapeutics website at www.adctherapeutics.com. The archived webcast will be available after the completion of the event and for 30 days following the call.