Financial Data and Key Metrics Changes - In Q3 2024, net product revenues increased to $18 million, bringing year-to-date ZYNLONTA revenues to $52.9 million, compared to $14.3 million and $52.4 million for the same periods in 2023 [7][22] - The net loss for Q3 2024 was $44 million, or $0.42 per share, compared to a net loss of $46.7 million, or $0.57 per share for the same period in 2023 [26] - On a non-GAAP basis, adjusted net loss was $29.4 million, or $0.28 per share, compared to an adjusted net loss of $32.4 million, or $0.39 per share for the same period in 2023 [27] Business Line Data and Key Metrics Changes - The growth in ZYNLONTA revenues was primarily driven by volume increases and a net price increase [22] - Non-GAAP operating expenses decreased by 12% year-over-year for the first nine months of 2024, while Q3 operating expenses increased by 5% due to investments in clinical trials [23][24] Market Data and Key Metrics Changes - The market for DLBCL treatments has evolved to include cellular therapies, bispecifics, ADCs, and monoclonal antibodies, with a shift towards combinations that offer rapid, deep, and durable responses [14] - ZYNLONTA is positioned well for use in combination therapies in second-line plus DLBCL due to its efficacy, safety, and accessibility [13] Company Strategy and Development Direction - The company aims to expand the use of ZYNLONTA beyond its current indication by supporting commercialization efforts in the U.S. and exploring partnerships for international markets [28] - In solid tumors, the focus will be on pursuing multiple ADC candidates in parallel, leveraging a novel exatecan-based research platform [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in ZYNLONTA's profile and its potential to expand into earlier lines of therapy in DLBCL and indolent lymphomas [7][31] - The company anticipates key milestones, including the completion of enrollment in LOTIS-5 and initial data from LOTIS-7, which are expected to drive value creation [31] Other Important Information - The company ended Q3 2024 with $274.3 million in cash and cash equivalents, expected to fund operations into mid-2026 [22] - The decision to discontinue the Phase Ib ADCT-601 program was based on an unfavorable benefit-risk profile during the dose optimization phase [11] Q&A Session Summary Question: Comment on the commercialization of ZYNLONTA in its approved indication - Management noted increased competition from bispecifics but indicated stable demand for ZYNLONTA, maintaining a 50-50 mix between community and academic settings [34][36] Question: What are the expectations for LOTIS-7 data? - Management aims for overall response rates and CR/PR rates in the range of 50% to 60%, while also monitoring the rates and severity of CRS [38][39] Question: Insights on the AXL601 solid tumor opportunity - The decision to halt the AXL601 program was due to an inability to sustain desired efficacy with a favorable tolerability profile [42][44] Question: Timeline for the next solid tumor IND filing - The timeline for an IND filing is approximately 18 months from drug candidate selection, with updates expected in 2025 [46][47] Question: Expectations for LOTIS-7 synergy and community center involvement - Management expects additive or synergistic efficacy from the combination of ZYNLONTA and glofitamab, with trials conducted in both academic and community centers [50][52] Question: Data requirements for indolent lymphoma updates at ASH - Management indicated that updated data will be presented at ASH, with a focus on patient sample sizes that have historically been sufficient for inclusion in guidelines [56][58]

Revenue Growth - Product revenues, net, increased to $18.0 million for the three months ended September 30, 2024, compared to $14.3 million for the same period in 2023, representing a 26.3% increase [118]. - License revenues and royalties rose to $448 thousand for the three months ended September 30, 2024, up from $226 thousand in the same period of 2023, marking a 98.2% increase [120]. - Total revenue, net, reached $18.5 million for the three months ended September 30, 2024, compared to $14.5 million for the same period in 2023, reflecting a 27.4% increase [116]. - Total revenue increased by $1.2 million or 2.2%, from $52.8 million in the nine months ended September 30, 2023 to $53.9 million in the same period of 2024 [146]. - Product revenues, net, increased by $0.5 million or 0.9%, from $52.4 million in the nine months ended September 30, 2023 to $52.9 million in the same period of 2024, primarily due to higher pricing [147]. - License revenues and royalties surged by $0.7 million or 194.3%, from $0.4 million in the nine months ended September 30, 2023 to $1.0 million in the same period of 2024 [149]. Expenses and Losses - Research and development expenses totaled $32.5 million for the three months ended September 30, 2024, an increase of $5.4 million or 20.0% from $27.1 million in the same period of 2023 [124]. - Cost of product sales increased to $0.9 million for the three months ended September 30, 2024, compared to $0.2 million in the same period of 2023, a significant increase of 309.1% [122]. - The net loss for the three months ended September 30, 2024, was $43.9 million, a decrease of $2.8 million or 5.9% from a net loss of $46.7 million in the same period of 2023 [116]. - Loss from operations was $35.6 million for the three months ended September 30, 2024, slightly improved from a loss of $36.1 million in the same period of 2023, a change of 1.6% [116]. - Research and development expenses for ZYNLONTA were $18.2 million for the three months ended September 30, 2024, compared to $17.1 million in the same period of 2023, an increase of $1.1 million [125]. - Selling and marketing expenses decreased by $3.1 million or 22.3%, from $13.7 million in Q3 2023 to $10.7 million in Q3 2024, primarily due to reduced marketing initiatives in the U.S. [132]. - General and administrative expenses increased by $0.4 million or 3.9%, from $9.6 million in Q3 2023 to $10.0 million in Q3 2024, driven by higher employee expenses and recruitment costs [136]. - Interest expense increased by $0.3 million or 2.3%, from $12.8 million in Q3 2023 to $13.1 million in Q3 2024, mainly due to higher accretion of deferred royalty obligations [139]. - The net loss decreased by $27.9 million or 18.0%, from $155.0 million in the nine months ended September 30, 2023 to $127.1 million in the same period of 2024 [146]. - The loss from operations improved by $27.8 million or 22.1%, from $126.0 million in the nine months ended September 30, 2023 to $98.2 million in the same period of 2024 [146]. - Selling and marketing expenses decreased to $32.8 million for the nine months ended September 30, 2024, from $43.5 million in 2023, a reduction of $10.8 million or 24.7% [162]. - Interest expense increased to $38.3 million for the nine months ended September 30, 2024, from $33.4 million in 2023, an increase of $4.9 million or 14.6% [168]. - General and administrative expenses were $32.3 million for the nine months ended September 30, 2024, down from $37.1 million in 2023, a decrease of $4.9 million or 13.1% [165]. Cash Flow and Financing - As of September 30, 2024, the company had cash and cash equivalents of $274.3 million, sufficient to fund operations for at least the next twelve months [176]. - For the nine months ended September 30, 2024, net cash used in operating activities was $102.0 million, an increase of $14.9 million compared to $87.1 million for the same period in 2023 [181]. - The company completed an underwritten offering in May 2024, resulting in net proceeds of approximately $97.4 million [179]. - Net cash provided by financing activities was $98.2 million for the nine months ended September 30, 2024, primarily from the 2024 Equity Offering [183]. - Cash used in investing activities decreased to $0.8 million for the nine months ended September 30, 2024, from $2.9 million in the same period in 2023, reflecting timing of property and equipment purchases [183]. - The net change in cash and cash equivalents for the nine months ended September 30, 2024, was a decrease of $4.6 million, an improvement compared to a decrease of $16.1 million in the same period in 2023 [180]. Strategic Focus - The company is focusing on growing ZYNLONTA in the 3L+ DLBCL setting and advancing its pipeline and ADC platform [179]. - The company is continuously exploring strategic collaborations and licensing opportunities for clinical development and commercialization of ZYNLONTA [177]. - The company has filed a prospectus for an at-the-market offering program with an aggregate offering price of $100 million, although no shares were sold under the program for the three months ended September 30, 2024 [179].

Group 1 - ADC Therapeutics reported a quarterly loss of $0.42 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.36, representing an earnings surprise of -16.67% [1] - The company posted revenues of $18.46 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 1.56%, and showing an increase from $14.49 million year-over-year [2] - The stock has increased approximately 92.8% since the beginning of the year, outperforming the S&P 500's gain of 24.3% [3] Group 2 - The earnings outlook for ADC Therapeutics is mixed, with the current consensus EPS estimate for the coming quarter at -$0.35 on revenues of $19.76 million, and -$1.72 on revenues of $74 million for the current fiscal year [7] - The Medical - Biomedical and Genetics industry, to which ADC Therapeutics belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8]

Financial Performance - ZYNLONTA generated net product revenues of $18.0 million for Q3 2024, up from $14.3 million in Q3 2023, and $52.9 million for the first nine months of 2024, compared to $52.4 million for the same period in 2023[9] - Product revenues for the three months ended September 30, 2024, were $18,016 thousand, a 26% increase from $14,267 thousand for the same period in 2023[31] - Total revenue for the nine months ended September 30, 2024, was $53,927 thousand, compared to $52,768 thousand for the same period in 2023, reflecting a 2.2% increase[31] - ADC Therapeutics reported a significant increase in revenue, reaching $150 million for the fiscal year, representing a 25% year-over-year growth[39] - ADC Therapeutics provided an optimistic outlook, projecting revenue growth of 20% for the next fiscal year[39] Expenses - Research and Development (R&D) expenses were $32.5 million for Q3 2024, compared to $27.1 million in Q3 2023, while year-to-date R&D expenses decreased to $82.5 million from $96.8 million in 2023[10] - Selling and Marketing (S&M) expenses decreased to $10.7 million for Q3 2024 from $13.7 million in Q3 2023, and year-to-date S&M expenses were $32.8 million compared to $43.5 million in 2023[11] - General & Administrative (G&A) expenses increased to $10.0 million for Q3 2024 from $9.6 million in Q3 2023, while year-to-date G&A expenses decreased to $32.3 million from $37.1 million in 2023[12] - The company reported a total operating expense of $54,028 thousand for the three months ended September 30, 2024, which is a 7% increase from $50,642 thousand in the same period of 2023[34] Net Loss - Net loss for Q3 2024 was $44.0 million, or $0.42 per share, an improvement from a net loss of $46.7 million, or $0.57 per share in Q3 2023[13] - Adjusted net loss for Q3 2024 was $29.4 million, or $0.28 per share, compared to an adjusted net loss of $32.4 million, or $0.39 per share in Q3 2023[14] - The net loss for the three months ended September 30, 2024, was $43,969 thousand, compared to a net loss of $46,726 thousand for the same period in 2023, showing a 5.9% improvement[35] - Adjusted net loss for the three months ended September 30, 2024, was $29,382 thousand, compared to $32,405 thousand for the same period in 2023, indicating a 9.3% improvement[35] Cash Position - Cash and cash equivalents as of September 30, 2024, were $274.3 million, slightly down from $278.6 million as of December 31, 2023, with a cash runway extended into mid-2026[15] - Cash and cash equivalents as of September 30, 2024, were $274,272 thousand, slightly down from $278,598 thousand as of December 31, 2023[33] - The company anticipates a cash runway extending into mid-2026, contingent on revenue growth and expense management[30] Research and Development - Full enrollment in the LOTIS-5 trial is expected by year-end 2024, with a data update anticipated in late 2025[2] - Interim data update for LOTIS-7 is expected in December 2024, with additional data anticipated in the first half of 2025[3] - Research and development expenses for the three months ended September 30, 2024, were $32,502 thousand, up from $27,080 thousand in the same period of 2023, representing a 20% increase[31] Strategic Initiatives - The company is discontinuing the ADCT-601 program and prioritizing the exatecan-based platform for solid tumors moving forward[6] - ADC Therapeutics is exploring potential acquisition opportunities to enhance its product portfolio and market presence[39] - The company is actively investing in new product development, with a budget allocation of $50 million for R&D in the upcoming year[39] - Market expansion efforts are underway, targeting an increase in market share by 15% in key regions[39] - The company reported a successful launch of a new technology that is expected to improve operational efficiency by 10%[39] - Customer satisfaction metrics improved, with a reported 90% satisfaction rate among users[39] - ADC Therapeutics plans to implement new strategies to enhance digital marketing efforts, aiming for a 25% increase in online engagement[39] - The company is committed to maintaining a strong balance sheet, with cash reserves of $200 million to support future initiatives[39] Share Information - The weighted average shares outstanding for the three months ended September 30, 2024, were 104,824,877, compared to 82,256,847 for the same period in 2023[35] Liabilities - The company's total liabilities increased to $521,025 thousand as of September 30, 2024, compared to $503,031 thousand as of December 31, 2023[33]

Company Performance - ADC Therapeutics SA (ADCT) has shown a year-to-date performance increase of approximately 69.9%, significantly outperforming the average gain of 3.1% in the Medical sector [4] - The Zacks Consensus Estimate for ADCT's full-year earnings has risen by 9.4% over the past three months, indicating a positive trend in analyst sentiment [3] Industry Comparison - ADC Therapeutics SA is part of the Medical - Biomedical and Genetics industry, which consists of 504 companies and currently ranks 83 in the Zacks Industry Rank. The average performance of this industry has seen a decline of 2.7% this year, highlighting ADCT's superior performance [5] - In contrast, Agios Pharmaceuticals, another stock in the Medical sector, has returned 99.5% year-to-date and belongs to the Medical - Products industry, which has gained 13.7% this year and ranks 68 [4][6] Zacks Rank - ADC Therapeutics SA holds a Zacks Rank of 2 (Buy), suggesting it is positioned to outperform the broader market in the near term [3]

2Q 2024 Earnings Call THERAPEUTICS Innovating Science. Inspiring Hope. August 6, 2024 Agenda | --- | --- | --- | --- | |-------|-------|--------------------------------------|------------------| | 01 | | Ameet Mallik Chief Executive Officer | Business Update | | 02 | | Pepe Carmona Chief Financial Officer | Financial Update | | 03 | Q&A | | | 2 Forward-Looking Statements This presentation and any accompanying oral presentation have been prepared by ADC Therapeutics SA ("ADC Therapeutics", "we" or "us") for ...

Financial Data and Key Metrics Changes - For Q2 2024, ADC Therapeutics reported revenues of $17 million, a decrease from $17.8 million in Q1 2024 and $19.2 million in Q2 2023, with year-to-date revenues of $34.9 million compared to $38.2 million in the same period last year [7][18][19] - The net loss for Q2 2024 was $36.5 million or $0.38 per share, while the adjusted net loss was $24.4 million or $0.25 per share, reflecting a decrease in both reported and adjusted net loss compared to Q2 2023 due to lower operating expenses [20][21] Business Line Data and Key Metrics Changes - ZYNLONTA remains the primary focus, with net product revenues of $17 million for Q2 2024, down from $19.2 million in Q2 2023, attributed to lower sales volume and higher gross-to-net deductions [18][19] - The company achieved commercial profitability in 2024, with a disciplined capital allocation strategy leading to a 23% reduction in operating expenses year-over-year on a non-GAAP basis [11][19] Market Data and Key Metrics Changes - The competitive landscape for ZYNLONTA in the third-line plus DLBCL market remains challenging, with increased competition from bispecific therapies, yet the company has maintained its position as a treatment option [8][9] - The company is expanding its market presence by pursuing opportunities in earlier lines of DLBCL therapy and indolent lymphomas, which could significantly increase the commercial opportunity [11][14] Company Strategy and Development Direction - The company's strategy focuses on hematology and solid tumor pipelines, with ZYNLONTA as a key asset and ADCT-601 targeting AXL as the most advanced solid tumor asset [6][7] - ADC Therapeutics aims to expand ZYNLONTA's usage into second-line plus DLBCL and indolent lymphomas, with potential peak sales exceeding $500 million [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in ZYNLONTA's role in the current treatment landscape, highlighting its clinical profile and the potential for further market penetration despite increasing competition [8][9] - The company anticipates significant milestones in the second half of 2024, including completion of enrollment in key trials and initial data from ongoing studies [21] Other Important Information - The company reported cash and cash equivalents of approximately $300 million as of June 30, 2024, providing a strong balance sheet to support its strategic initiatives [18] - ADC Therapeutics is exploring partnerships for its solid tumor programs and has selected one preclinical ADC candidate to advance towards IND, expected to be disclosed in 2025 [10][17] Q&A Session Summary Question: Regarding LOTIS-5 interim look, were there any other statistical considerations? - The independent data monitoring committee recommended continuing the trial without modifications after reviewing unblinded efficacy and safety data [24] Question: Can you provide more details on upcoming milestones? - Most data will be disclosed through corporate announcements, particularly for LOTIS-7 and AXL trials, with full data expected in the first half of next year [26] Question: Can you elaborate on the variability in ZYNLONTA orders? - Variability is attributed to the nature of orders from institutions and community physicians, with some months seeing significantly higher orders than others [29] Question: How do you expect Roche's STARGLO data to affect market dynamics? - The STARGLO data validates the efficacy of combinations with bispecifics, providing confidence in LOTIS-5 and LOTIS-7 trials [34][35] Question: Is there a possibility to include interim data into guidelines before full results? - It is possible, but would require presentation at a major medical congress and publication in a key journal [39]

Product Development and Pipeline - ADC Therapeutics aims to expand its ADC portfolio focusing on hematology and solid tumors, leveraging a validated technology platform and strategic partnerships [115]. - ZYNLONTA, the flagship product, received accelerated FDA approval for relapsed or refractory DLBCL, with ongoing international expansion efforts and clinical trials [116]. - In the LOTIS-7 trial, ZYNLONTA combined with bispecific antibodies showed promising anti-tumor activity with no dose-limiting toxicities observed in the dose escalation phase [119]. - Initial data from a Phase 2 trial of ZYNLONTA in relapsed/refractory MZL indicated a 86.7% complete response rate among evaluable patients, highlighting its potential in a high unmet need area [126]. - The solid tumor pipeline includes ADCs targeting NaPi2b and Claudin-6, currently in IND-enabling studies, with PSMA and ASCT2 candidates in drug selection stage expected to complete this year [129]. - The company is developing optimized ADCs targeting Claudin-6 and NaPi2b, with potential high impact in platinum-resistant ovarian cancer and non-small cell lung cancer [132]. - The company hosted a Research Investor Event to discuss its novel exatecan-based ADC platform, emphasizing its differentiated profile and therapeutic index [131]. Clinical Trials and Results - The LOTIS-7 trial is a global multicenter study evaluating ZYNLONTA in combination with bispecific antibodies, with ongoing enrollment in the dose expansion phase [122]. - As of April 2024, the LOTIS-7 trial reported that 88.8% of patients experienced Grade 3/4 adverse events, with manageable safety profiles observed [125]. - The company plans to pursue regulatory pathways for ZYNLONTA in MZL as trial results continue to be positive, aiming to address the high unmet medical need in this patient population [128]. Financial Performance - Product revenues, net, decreased to $17.0 million for the three months ended June 30, 2024, down $2.2 million or 11.3% from $19.2 million in the same period of 2023 [140]. - Total revenue, net, was $17.4 million for the three months ended June 30, 2024, a decrease of $1.9 million or 9.7% from $19.3 million in the same period of 2023 [138]. - License revenues and royalties increased significantly to $380 thousand for the three months ended June 30, 2024, compared to $86 thousand in the same period of 2023, representing a 341.9% increase [143]. - Net loss for the three months ended June 30, 2024, was $36.5 million, a decrease of $12.4 million or 25.3% from a net loss of $48.9 million in the same period of 2023 [138]. - Net loss per share, basic and diluted, improved to $(0.38) for the three months ended June 30, 2024, compared to $(0.60) in the same period of 2023, reflecting a 36.7% improvement [138]. - Total revenue decreased to $35.5 million for the six months ended June 30, 2024, down from $38.3 million in 2023, a decline of $2.8 million or 7.3% [172]. - Net loss for the six months ended June 30, 2024, was $83.2 million, compared to a net loss of $108.3 million in 2023, a reduction of $25.1 million or 23.2% [172]. - Product revenues, net, decreased to $34.9 million for the six months ended June 30, 2024, down from $38.2 million for the same period in 2023, representing an 8.6% decline [173]. Expenses and Cost Management - Research and development expenses decreased to $24.3 million for the three months ended June 30, 2024, down $7.0 million or 22.5% from $31.3 million in the same period of 2023 [148]. - Research and development expenses totaled $50.0 million for the six months ended June 30, 2024, a decrease of 28.2% from $69.7 million for the same period in 2023 [179]. - Selling and marketing expenses decreased to $10.7 million for the three months ended June 30, 2024, down from $14.5 million in 2023, a reduction of $3.8 million or 26.0% [161]. - General and administrative expenses were $10.2 million for the three months ended June 30, 2024, compared to $12.0 million in 2023, a decrease of $1.8 million or 14.7% [164]. - Research and development expenses for ZYNLONTA were $12.2 million for the three months ended June 30, 2024, down $4.4 million from $16.5 million in the same period of 2023 [149]. - Research and development expenses for ZYNLONTA were $27.1 million for the six months ended June 30, 2024, down from $35.8 million for the same period in 2023, a decrease of 24.0% [180]. - Selling and marketing expenses were $22.1 million for the six months ended June 30, 2024, down 25.9% from $29.8 million for the same period in 2023 [189]. - General and administrative expenses decreased to $22.3 million for the six months ended June 30, 2024, from $27.5 million for the same period in 2023, a reduction of 19.0% [192]. Cash Flow and Financing - The company completed an equity offering in May 2024, raising approximately $105.0 million in gross proceeds, with net proceeds of approximately $97.4 million after transaction costs [134]. - The company recorded a net cash used in operating activities of $76.9 million for the six months ended June 30, 2024, compared to $50.4 million for the same period in 2023, an increase of $26.6 million [206]. - Net cash provided by financing activities was $99.1 million for the six months ended June 30, 2024, primarily from the completion of the 2024 Equity Offering [208]. - The company had cash and cash equivalents of $300.1 million as of June 30, 2024, sufficient to fund operations for at least the next twelve months [201]. - The company recorded an income tax expense of $(0.4) million for the six months ended June 30, 2024, compared to a benefit of $4.0 million for the same period in 2023 [199]. - The company had an accumulated deficit of $1,418.6 million as of June 30, 2024, with operations historically funded through equity offerings and debt financings [202]. Interest Income and Expense - Interest income increased to $3.3 million for the three months ended June 30, 2024, up from $2.4 million in the same period of 2023, an increase of $0.9 million [165]. - Interest expense rose to $12.7 million for the three months ended June 30, 2024, compared to $10.3 million in 2023, an increase of $2.4 million or 23.0% [165]. - Interest income increased to $6.2 million for the six months ended June 30, 2024, up 36.4% from $4.5 million for the same period in 2023 [193]. - Interest expense rose to $25.2 million for the six months ended June 30, 2024, an increase of 22.2% from $20.6 million for the same period in 2023 [194].

Company Performance - ADC Therapeutics reported a quarterly loss of $0.38 per share, better than the Zacks Consensus Estimate of a loss of $0.44, and an improvement from a loss of $0.58 per share a year ago [1] - The company posted revenues of $17.41 million for the quarter, missing the Zacks Consensus Estimate by 8.63%, and down from $19.28 million year-over-year [1] - Over the last four quarters, ADC Therapeutics has surpassed consensus EPS estimates two times and topped revenue estimates just once [1] Stock Movement and Outlook - ADC Therapeutics shares have increased by approximately 72.9% since the beginning of the year, significantly outperforming the S&P 500's gain of 8.7% [2] - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and future earnings expectations [2][3] Earnings Estimates and Industry Context - The current consensus EPS estimate for the upcoming quarter is -$0.41 on revenues of $20.06 million, and for the current fiscal year, it is -$1.87 on revenues of $78.17 million [4] - The Zacks Industry Rank for Medical - Biomedical and Genetics is in the top 37% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [5] - VistaGen Therapeutics, another company in the same industry, is expected to report a quarterly loss of $0.41 per share, reflecting a year-over-year change of +56.4%, with revenues expected to be $0.3 million, up 66.7% from the previous year [5]

[Executive Summary](index=1&type=section&id=Executive%20Summary) ADC Therapeutics reported its Q2 2024 results, highlighting that its key product, ZYNLONTA®, achieved commercial profitability in the first half of the year - **ZYNLONTA®** achieved commercial profitability in the first half of 2024[2](index=2&type=chunk)[3](index=3&type=chunk) - The company's cash runway has been extended into mid-2026 following a recent underwritten offering[2](index=2&type=chunk)[6](index=6&type=chunk) - Key clinical trial updates are expected by year-end 2024 for LOTIS-7 and in H1 2025 for mature data. Full enrollment for the LOTIS-5 trial is expected before year-end 2024[1](index=1&type=chunk) [Operational Updates and Pipeline Highlights](index=1&type=section&id=Operational%20Updates%20and%20Pipeline%20Highlights) The company reported ZYNLONTA® net sales of $17.0 million for Q2 2024, with demand affected by ordering variability, while key clinical programs are advancing [ZYNLONTA® Commercial Performance](index=1&type=section&id=ZYNLONTA%C2%AE%20Commercial%20Performance) ZYNLONTA® generated net product sales of $17.0 million in Q2 2024, representing a 5% decrease from the previous quarter, partly due to ordering variability ZYNLONTA® Net Sales | Metric | Q2 2024 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $17.0M | $17.8M | -5% | - Demand was impacted in part by variability in ordering patterns during the second quarter[3](index=3&type=chunk) [ZYNLONTA® Clinical Development](index=1&type=section&id=ZYNLONTA%C2%AE%20Clinical%20Development) Progress continues across ZYNLONTA's clinical development programs, with LOTIS-7 and LOTIS-5 trials on track for enrollment completion by year-end 2024 - LOTIS-7 (Phase 1b): Enrollment in the dose expansion part is progressing and expected to complete by year-end, with a safety and efficacy update anticipated by year-end 2024[3](index=3&type=chunk) - LOTIS-5 (Phase 3): An independent committee recommended the trial continue as planned. Full enrollment is expected before year-end 2024[4](index=4&type=chunk) - Investigator-initiated trial in MZL: Initial data from 15 evaluable patients showed **13 complete responses** and **1 partial response**[5](index=5&type=chunk) [Early-Stage Pipeline Development](index=3&type=section&id=Early-Stage%20Pipeline%20Development) The company's early-stage pipeline is advancing, with ADCT-601 Phase 1b trial enrolling patients and IND-enabling studies progressing for new ADC targets - ADCT-601 (targeting AXL): The Phase 1b trial continues enrollment, with an initial update from the trial expected in H2 2024[5](index=5&type=chunk) - Progress continues in IND-enabling studies for ADCs targeting PSMA, NaPi2b, and Claudin-6. The company expects to disclose one target to move toward IND in 2025[6](index=6&type=chunk) [Second Quarter and First Half 2024 Financial Results](index=3&type=section&id=Second%20Quarter%20and%20First%20Half%202024%20Financial%20Results) For Q2 2024, ADC Therapeutics reported total revenues of $17.4 million and a net loss of $36.5 million, an improvement from Q2 2023, with cash strengthened to $300.1 million [Financial Position](index=3&type=section&id=Financial%20Position) As of June 30, 2024, the company's cash and cash equivalents stood at $300.1 million, an increase from $278.6 million at the end of 2023, bolstered by a recent offering Cash and Cash Equivalents | Date | Amount (in millions) | | :--- | :--- | | June 30, 2024 | $300.1 | | Dec 31, 2023 | $278.6 | - A May 2024 underwritten offering resulted in net proceeds of approximately **$97.4 million**, extending the cash runway into mid-2026[6](index=6&type=chunk) [Statement of Operations Analysis](index=3&type=section&id=Statement%20of%20Operations%20Analysis) In Q2 2024, net product revenues decreased to $17.0 million, but operating expenses were significantly reduced, leading to an improved net loss of $36.5 million Q2 2024 vs. Q2 2023 Financial Performance (in millions) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Product Revenues, Net | $17.0 | $19.2 | | R&D Expense | $24.3 | $31.3 | | S&M Expense | $10.7 | $14.5 | | G&A Expense | $10.2 | $12.0 | | Net Loss | ($36.5) | ($48.9) | | Net Loss Per Share | ($0.38) | ($0.60) | - The decrease in operating expenses was driven by productivity initiatives, focused investment in prioritized programs, and lower marketing and personnel costs[7](index=7&type=chunk)[8](index=8&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) On a non-GAAP basis, the adjusted net loss for Q2 2024 was $24.4 million, a favorable comparison to $32.1 million in Q2 2023, primarily due to lower operating expenses Q2 Adjusted Financials (Non-GAAP) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Adjusted Net Loss | ($24.4M) | ($32.1M) | | Adjusted Net Loss per Share | ($0.25) | ($0.39) | [Appendices](index=4&type=section&id=Appendices) This section includes supplementary information such as investor call details, company and product background, non-GAAP measure explanations, forward-looking statements, and detailed unaudited financial tables [Condensed Consolidated Statements of Operation](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operation) This unaudited statement details the company's revenues and expenses for the three and six months ended June 30, 2024, and 2023, showing a Q2 2024 net loss of $36.5 million Key Financial Data (Three Months Ended June 30, in thousands) | Description | 2024 | 2023 | | :--- | :--- | :--- | | Total revenue, net | $17,410 | $19,283 | | Total operating expense | ($46,451) | ($58,932) | | Loss from operations | ($29,041) | ($39,649) | | Net loss | ($36,544) | ($48,922) | [Condensed Consolidated Balance Sheet](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) This unaudited statement presents the company's financial position as of June 30, 2024, compared to December 31, 2023, showing total assets of $371.8 million Key Balance Sheet Data (in thousands) | Description | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $300,119 | $278,598 | | Total assets | $371,779 | $354,782 | | Total liabilities | $503,449 | $503,031 | | Total shareholders' equity (deficit) | ($131,670) | ($148,249) | [Reconciliation of GAAP to Non-GAAP Measures](index=11&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section provides a detailed reconciliation of GAAP financial figures to non-GAAP adjusted figures, bridging the GAAP net loss of $36.5 million to an adjusted net loss of $24.4 million for Q2 2024 - The reconciliation bridges GAAP net loss to adjusted net loss by excluding non-cash items like share-based compensation and changes in fair value of warrants, as well as certain interest expenses[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) [About ZYNLONTA®](index=4&type=section&id=About%20ZYNLONTA%C2%AE) ZYNLONTA® is a CD19-directed antibody-drug conjugate (ADC) approved for adult patients with relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy - ZYNLONTA is a CD19-directed ADC designed to be internalized by CD19-expressing cells, where it releases a PBD payload to cause cell cycle arrest and death[12](index=12&type=chunk) - It is approved for r/r large B-cell lymphoma after two or more lines of systemic therapy under accelerated/conditional approval pathways[13](index=13&type=chunk) [About ADC Therapeutics](index=5&type=section&id=About%20ADC%20Therapeutics) ADC Therapeutics is a commercial-stage global company pioneering antibody-drug conjugates (ADCs) to treat hematologic malignancies and solid tumors, with its lead product ZYNLONTA® approved for diffuse large B-cell lymphoma - The company is a commercial-stage leader in the field of antibody-drug conjugates (ADCs)[15](index=15&type=chunk) - It is based in Lausanne, Switzerland, with operations in London and New Jersey[16](index=16&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This section serves as a legal disclaimer, cautioning that the press release contains forward-looking statements subject to significant risks and uncertainties, where actual results could differ materially from expectations - The document contains forward-looking statements that are not guarantees of future performance and are subject to risks and uncertainties[21](index=21&type=chunk) - Key risks include the ability to grow ZYNLONTA revenue, timing and results of clinical trials (LOTIS 5, LOTIS 7, ADCT 601), regulatory outcomes, and restrictions from indebtedness[21](index=21&type=chunk)