ADC Therapeutics(ADCT) - 2024 Q2 - Earnings Call Transcript

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]