ADC Therapeutics Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 8, 2023

There are 11 speakers on the call.

Operator

Hello, and welcome to the ADC Therapeutics Second Quarter 2023 Financial Results Conference Call. My name is Corey, and I will be your operator for today's call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. Please be advised that today's conference call is being recorded.

Operator

I would now like to turn the call over to Eugenia Litz, Vice President of Investor Relations and Corporate Communications. You may begin.

Speaker 1

Thank you, operator. This morning, we issued a press release announcing our Q2 2023 financial results and business update. This release is available on the ADCT website at ir. Adctherapeutics.com under the Press Releases section. On today's call, Amit Malik, Chief Executive Officer Kristen Harrington Smith, Chief Commercial Officer Mohammad Zaki, Chief Medical Officer and Pepe Carmona, Chief Financial Officer, will discuss recent business highlights And review our Q2 2023 financial results before opening the call for questions.

Speaker 1

Before we begin, I would like to remind listeners That some of the statements made during this conference call will contain forward looking statements within the meaning of the Safe Harbor provisions of the U. S. Private Securities Litigation Reform Act of 1995. Examples of forward looking statements Include those related to our future financial and operating results, the impact of our updated strategic plan forward, Including our commercial field strategy, portfolio prioritization and capital allocation and restructuring plan, Our ability to achieve our guidance for 2023 Zolanta revenue and operating expenses as well as our future cash requirement projections, Future revenue growth, market acceptance, competition and volume growth for our products, product launches and market share for our products, Either alone or through our foreign partners, timing and results of ongoing and future development programs In clinical trials for our products, either alone or in combination with our partner products, FDA informed regulatory authorities' And potential regulatory approval for our products, either alone or in combination with our strategic partners' products, Future strategic partnerships and business development efforts, our ability to repay our outstanding debt obligations And future access to capital. These forward looking statements are subject to certain risks and uncertainties, And actual results could differ materially.

Speaker 1

They are identified and described in today's press release And the accompanying slide presentation on Slide 2 and in the company's filings with the SEC on Form 20F And as updated in ADCT's recent periodic filings on Form 6 ks. ADCT is providing this information As of the date of today's conference call, it does not undertake any obligation to update any forward looking statements contained in this conference call As a result of new information, future events or circumstances after the date hereof, except as required by law or otherwise. The company cautions investors not to place undue reliance on these forward looking statements. Today's presentation also includes Non IFRS financial measures. 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.

Speaker 1

You should refer to the information contained in the company's 2nd quarter earnings release for definitional information It is now my pleasure to pass the call over to our CEO, Amit Malik. Amit?

Speaker 2

Thanks, Eugene, and thank you all for joining us. It's my pleasure to provide an update on our progress during the Q2. Starting with XINLATA, we delivered net sales of 19 $2,000,000 up 11% year over year. The growth was slightly offset by higher gross to net including the new Medicare Discarded Drug Policy And GPO contracting. Compared with the prior quarter, dollar sales were up slightly and volume grew by just over 3%.

Speaker 2

Importantly, during Q2, we implemented our new commercial go to market model to better align with local healthcare ecosystems and the evolving treatment dynamics. We completed the staffing of the organization by the end of June, and we expect to see a progressive benefit from these changes In the coming months and to exit 2023 with a healthy run rate. As for geographic expansion, Our partner Sobe completed the 1st European commercial sales in Malta with the launch in Germany. This sale triggered a $75,000,000 milestone payment under our purchase and sale financing agreement with Healthcare Royalty Partners. In China, NMPA accepted the BLA submission for ZELONTA and granted priority review.

Speaker 2

Finally, in Japan, our partner Mitsubishi Tanabe initiated the Phase III Bridging Study. Turning to our clinical development program for ZENLANTA, we proactively took the tough decision to discontinue the Phase 2 LOTUS-nine clinical trial As we did not see a clear regulatory path forward, this is an example of our data driven approach to clinical development decisions And our disciplined capital allocation strategy. We are nevertheless disappointed that we are unable to offer these patients a potential new option. Separately, our ongoing Phase 3 LOTUS-five confirmatory trial of ZEMANTA and rituximab in second line second line plus And our Phase 2 LOTUS-seven clinical trial of XERMATA in combination with bispecifics continue to progress as planned. As a reminder, both of these trials include very different patient populations from LOTUS-nine.

Speaker 2

Turning to the remainder of our pipeline, We enhanced investments in our focused portfolio during the quarter, taking the opportunity to accelerate and expand our prioritized development programs. As a result, we look forward to several potential value creating data readouts in the next 12 months. In particular, we expect to share initial Phase 1 data from ADCT-six zero one targeting ACTL And from ADCT-nine zero one targeting CAG-one. We also expect to share additional Phase 1 data from ADCT-six zero two targeting CD22. To summarize the quarter, overall, I am pleased with how we executed on the new corporate and capital allocation We announced 3 months ago.

Speaker 2

Our new commercial model is now ramping up. Our pipeline has potential meaningful catalysts over the next 12 months And our expected cash runway continues to provide us with the ability to execute on our business plan. I remain confident that we are on a path To unlock the tremendous value that my executive team and I see in the coming months years. With that, I'd like to turn the call over to Kristin for a commercial update. Kristen?

Speaker 3

Thanks, Amit. It is my pleasure to share an update on ZENLANTA. As you already heard, 2nd quarter net sales of ZEMLANTA grew 11% year over year and were slightly up sequentially despite gross to net headwinds. Keep in mind 2 important factors. 1st, we had significant disruption in the field during the quarter as we implemented our new go to market model, which staff by the end of June.

Speaker 3

And second, the competitive landscape continued to evolve during the quarter with the entry of 2 bispecifics. As Amit stated, we have been working hard to implement our new commercial model, acknowledging this is no small undertaking and recognizing there would be fairly significant disruption Along the way, restructuring the field force was critical in this increasingly competitive environment. This was done with a long term view in mind, both To optimize uptake in the 3rd line, 3rd line plus setting and to put in place the foundation for future growth in potential earlier lines of therapy. I am confident that we now have the right structure and tools in place to drive the NOLANZA forward. With approximately Half of the field force newly hired or in new roles, we came together at the beginning of July for our national sales meeting to align as a team.

Speaker 3

And I am proud to say that our newly deployed field force left this meeting energized, engaged and ready to compete now and in the future. As the team ramps up under the new model, we expect to see a progressive improvement in ZENLANTA demand during the second half of the year. We will continue to focus on top accounts in each geography, while driving influence and pull through to the community, where awareness still lags that of other novel agents and there remains significant untapped potential. As a reminder, we have realigned to smaller local teams based around 2 key roles. 1, an account manager with experience in navigating complex institutions and 2, hematology specialists focused on the community centers.

Speaker 3

As the landscape evolves, we continue to believe that XINLANTA has a clear long term role to play in the treatment of 3rdline, 3rdline plus DLBCL, which I remind you is a highly fragmented market with no standard of care. Community physicians have been slow to adopt newer therapies and continue to use older rituximab based regimens. With respect to the recent launch of bispecifics, there is clearly some excitement about use in monotherapy, particularly in the academic setting. HCPs are working to determine the appropriate patients for these products given their efficacy, but also their unique safety profile With potential CRS and ICAMS and the recommendation for inpatient administration. The team is focused on ensuring thought leader advocacy And reinforcing the unique clinical attributes of XINLANTA to help drive long term growth.

Speaker 3

We believe XINLANTA is ideally suited across Different treatment settings, particularly the community given its durable efficacy, short time to response, Manageable safety profile with no CRS and simple dosing without REMS or inpatient stay recommendations. In fact, recent data from EHA And ICML reinforce the durable efficacy of ZENLANTA in a heavily pretreated patient population. Specifically, We reported at the 2 year follow-up, the median duration of response was not yet reached for patients who achieved a complete response. As we deliver improved execution with our new commercial model, we believe we are poised for growth and our longer term opportunity remains unchanged. We expect Xelanta to exit 2023 with a strong run rate, setting us up for success in the years ahead.

Speaker 3

With that, I'll turn the call over to Mohamad.

Speaker 4

Thank you, Kristin. It is my pleasure to share an update on the pipeline. Over the last quarter, through the prioritization of our R and D pipeline, we have been able to focus our efforts and resources on our more advanced programs, which we believe have the highest potential to drive value. 1st, As Amit mentioned, we made the decision to discontinue the LUTUS-nine study. While this is a disappointing to all of us at the company and in the treatment community, I strongly believe it was the right thing It is important to note that the treatment emerging adverse events seen in LUTUS-nine Have not been seen in other studies with the launch of the date, including monotherapy trials, LUTUS-one and 2.

Speaker 4

In addition, the LUTUS-five IDMC reviewed unblinded data and noted at regularly scheduled meeting in late July that the study should proceed as planned. We also recognize That the LUTUS-nine and LUTUS-five trials target very different patient populations. We continue to expect completion of enrollment in LUTAS-five next year. As a reminder, this trial examines The combination of ZENLONTA and rituximab in second line plus DLBCL patients not eligible for transplant And has produced early encouraging data. The safety lead in data was released at SOHO 2022, And we expect to provide an update at a medical meeting in the second half of the year.

Speaker 4

Moving to LUTUS-seven, this is our study to explore novel combinations of XERLONTA with Roche's Biospecifics, glufizumab and mocintuzumab in relapsed or refractory non Hodgkin lymphoma. Here we see the potential for significant patient benefit and if successful, we believe LUTA-seven In terms of hypothesis, we know that malignant T cells demonstrate broad and consistent expression of Bosec20, which is targeted by the 2 Roche bispecifics and CEZYNT, which is targeted by ZELONTA. Consequently, we believe that combining XERLONTA with either one of the bispecific antibodies Have the potential to have additive or even synergistic efficacy as well as manageable toxicity Inpatient with relapsed or refractory non Hodgkin lymphoma. Our excitement at this novel approach It's also reflected in the physician community, which has shown a high level of interest to explore these combinations. We continue to expect to share early data from LUTAS7 next year.

Speaker 4

I would also like to note that beyond our own clinical studies, we are encouraged to see substantial interest in the investigator community To explore ZENLONTA in novel combinations and across multiple types of B cell malignancies. Turning to the rest of the pipeline beyond ZENONTA. Starting with ADCT-six zero one targeting XL. XL is a validated target that has been shown to be well suited for an ADC approach. We have successfully amended the Phase 1 study of ADCT-six zero one to focus on monotherapy treatment for patients with sarcoma and patients with non small cell lung cancers.

Speaker 4

Patients are currently being treated in the Phase 1 study and the maximum tolerated dose has not yet been reached. In parallel, we are working towards Finalization of an IHCSA for a possible biomarker approach. As we Have previously indicated initial data from this Phase 1 trial expected in the first half of twenty twenty four. Turning to ADCT-nine zero one targeting KAG-one, this is in novel first in class agent that targets various solid tumors. The protocol amendment to explore different dosing schedules has been finalized and submitted to regulatory authorities.

Speaker 4

Once approved, we plan to advance to the next dosing level. As with 601, we are completing validation of the IHCSA, And we expect to share initial data in the first half of twenty twenty four. Finally, I would like to discuss the ADCT602, a Phase 1 study, which targets CD22 in patients With relapsed or refractory acute lymphoblastic leukemia. As a reminder, we are conducting this program In collaboration with MD Anderson Cancer Center, the trial is ongoing and new clinical trial sites Have been selected to help accelerate enrollment. Encouraging initial data was presented at ASH in December 2022, which showed MRD negative complete responses in highly refractory patient population.

Speaker 4

As we have previously highlighted, we expect additional data from the Phase 1 study of 602 to be shared in the first half of 2024. I look forward to providing further updates on the progress of our pipeline over the coming months. With that, I will turn the call over to Pepe to give a financial update.

Speaker 5

Thank you, Mohammed. Before I review the financials for the Q2, I want to provide an update on our efforts to increase operating efficiencies. Over the past few months, we have reduced external expenditures on vendor procurement and consultancy and we have prioritized our pipeline. We also reduced the workforce across the company by approximately 17%, while maintaining a relatively stable headcount in We expect these organizational efficiencies will help ensure That our operating expenses remain below 2022 levels, both this year and next, Despite the enhanced investment in our focused portfolio that Mohamad described, going forward, Our decisions on the development of our pipeline will be data driven and we will continue to be disciplined with our capital allocation. We believe these initiatives will ensure that we maintain a cash runway to mid-twenty 25.

Speaker 5

Turning now to the financials for the quarter, starting with our balance sheet. As of June 30, We had cash and cash equivalents of $347,500,000 representing a $37,000,000 increase from our position at the end of the Q1. The increase reflects the receipt of a $75,000,000 milestone payment from Healthcare Royalty Partners on the first commercial sales of ZYNOLTA in Europe by our partner, Sobe. Moving to the P and L, as you already heard, ZYNOLTA net sales were $19,200,000 in the 2nd quarter, Up 11% versus Q2 2022 and slightly ahead of the prior quarter. Moving down the P and L.

Speaker 5

Our combined operating expenses on a non IFRS basis, which excludes stock based compensation, We're down 20% compared to the same period in 2022. This mainly reflected the operating efficiencies I referred to earlier, together with a reduced R and D expenditure due to the discontinuation of a number of clinical studies in the prior year, as well as fluctuations in our share price. Commercial expenses for ZYNOLONTA were broadly maintained year over year. As a reminder, You can find the reconciliation of IFRS measures to a non IFRS measure in the accompanying financial tables of the press release issued earlier today and in the appendix of this presentation. Moving to the bottom of the P and L.

Speaker 5

On an IFRS basis, we reported a net loss of $47,100,000 for the 2nd quarter I would like to share some potential value driving milestones, which we expect over the next 12 months. Starting with ZINLONTA, we expect double digit growth this year and to achieve commercial brand profitability. This means that by the end of 2023, ZYNOLTA will start to pay in part for the development of new indications and the pipeline. We expect to share updated data from the safety leading portion of the confirmatory Phase 3 LOTUS-five Study in the second line setting at a medical meeting later this year. In 2024, We expect to complete the enrollment of LOTUS-five and we also expect to share some initial results from our LOTUS-seven study.

Speaker 5

In terms of the pipeline, in the first half of twenty twenty four, we expect to share initial data from ADCT 601 and ADCT-nine zero one, an additional data from the Phase 1 study for ADCT-six zero two. So we anticipate a number of important milestones both for ZYNOLONTA and our pipeline. With that, I will turn the call back To Amit for closing remarks. Amit?

Speaker 2

Thank you, Kristin, Mohammed and Pepe. To conclude, we are confident we have a clear roadmap As well as the capabilities to execute on our strategy to help drive future value creation for all our stakeholders.

Speaker 5

We are

Speaker 2

excited about the future and look forward to keeping you updated on our progress. Now the team will be available for questions. Operator?

Operator

Thank you. We will now conduct the question and answer session. Our first question comes from the line of Kelly Hsieh of Jefferies. Your line is open.

Speaker 1

Thank you for taking my questions. The first one is on commercial side. As your EU partner launching Xelanta, do you think Factors in lung test penetration in the long term to exceed what is in the U. S?

Speaker 2

Thank you, Kelly. I appreciate the question. We do expect there to be some more limited penetration of CAR T as we've seen to date in Europe Then in the U. S. And I would expect the same to be the case for bispecifics.

Speaker 2

Also when you look at it from a pure volume standpoint, the market actually in Europe is slightly bigger. So Overall, the volume opportunity we believe in the long term for Zalanta is even more significant in Europe. Of course, there's pricing differentiation And pricing will obviously be market by market based and will be lower than the U. S. In general in Europe.

Speaker 2

We expect The launch to be sort of progressive in Europe because as you heard in the Q2, so we launched in Germany is We're launching a number of other countries, particularly in Northern Europe. Reimbursement, of course, is a country by country occurs on a country by country basis. And so that will Over time and over the course of the next year progressively, Sylvia will launch in more countries over the course of Europe.

Speaker 1

Thank you. And also for the second half of the year, do you expect the growth to net level to stay stable or continue to increase?

Speaker 5

Gross There's going to be always fluctuations depending on the mix of business and how prior accruals behave Versus estimate, but in general, we see a stable gross to net over

Speaker 2

the year.

Speaker 1

Great. And then lastly, on the pipeline for 601 and the 901, you just announced the data will be In first half for next year, and should we expect the data at the medical meeting also press release? And also for PAS 1, Could you remind us what triggered protocol amendment? And could you also elaborate on how this will impact the clinical outcome? Thank you.

Operator

So the first

Speaker 5

question regarding when do we announce, we haven't made the decision. It depends On how the evolving data set get prepared and the timing of that. And so we will update the market as we go forward. We'll be obviously transparent and share all the data we have at the time of disclosure.

Speaker 6

And then Mohammad, do you want to take

Speaker 2

the second question on CAGRAN on the reasons for the protocol amendment?

Speaker 4

Yes. There's 3 main reasons for the protocol amendment. First, to proactively satisfy the requirements of Project Optimize with the relation to the FDA, also to improve patient experience and increase The Phase 1 study protocol amendment Fluorodiprant dosing schedule has been actually finalized and submitted to the FDA and will be submitted shortly to regulatory So, Ferdersen Europe, once approved by the IRBs, the company plans to advance to the next dose level. I will also add that immunohistochemistry assay is under Pfizer validation and could possibly be used for patient selection If we see the need for that.

Speaker 1

Thank you very much.

Operator

Thank you. One moment for our next question. Our next question comes from the line of Gregory Renza of RBC Capital Markets. Your line is open.

Speaker 6

Hi. Thank you so much for taking our question. This is Soapova for Gregory. I'm most curious about The commercial strategy with regard to the dynamics with bispecific, do you anticipate having more of a head on competition with bispecific Do you see that in fragments of the market that's up for grab and less competitive? I have a follow-up.

Speaker 3

Okay. Thank you for the question. Yes, so we saw both bispecifics launch in mid to late Q2 And I've seen negligible impact for us in the Q2. Since then, we have heard of some excitement from the physician community, But we really believe that bispecifics will be limited to the academic centers consistent with our long held view Based on the safety profile and the recommendation for inpatient administration, for us, The key opportunity for ZYNLANSO or the untapped potential is really driving growth in the community. In the long term, of course, We're excited about the opportunity to possibly combine ZENLANTA with the bispecifics due to They're distinct mechanisms of action as well as non overlapping toxicity profile.

Speaker 6

Got it. Thank you. And then my second question, I'm just curious if you can comment on what's the percentage of Patients who receive Xelanta have been previously treated with CD19 CAR T. I'm just curious because If there is any preference for a different target post CD19 or not basically? Thank you.

Speaker 3

Sure. So I don't have the exact percentage. I can say that in the academic centers, when we ask physicians Their ideal patient type for ZYNLANTA, for the majority it is the post CAR T patients because they do see the efficacy and It's an option for those patients. So I don't think they're concerned about CD19 to CD19. We haven't heard that yet.

Speaker 2

Yes. No, I agree. I mean, I think if you look, it's very different dynamics playing out in the academic and community setting. Obviously, in the community setting, most of our third line, third line plus uses It's not post CAR T because CAR T is much more limited in that setting. So it's after a number of other different therapies.

Speaker 2

In the academic setting, the majority of our use is post CAR T, Just given the penetration of CAR T that's increased in the second line setting.

Speaker 6

Got it. Thank you so much.

Operator

Thank you. One moment for our next question. Next question comes from Tazeen Ahmad At BofA, your line is open.

Speaker 2

Hi, this is Jeremiah Lorenzo on for Tazeen. Thank you for taking our question and congrats on the quarter. Just a quick question from us on your new go to market strategy. Can you highlight any specific targets for the team in the 1st 6 to 12 months?

Speaker 3

Sure. Thanks for the question. So, really the team, I would say, the teams are now in place. There was significant disruption in Q2. And in our case, 50% of our customer facing field force was either entirely new or in new roles.

Speaker 3

So half effectively half of our team is not in front of customers. But now that the team is in place and ramping up, I can say that we have confidence that with the changes that we've made, that we'll continue to build on And drive continued adoption there. So more to come.

Speaker 2

And then your question around metrics, We'll of course show the relevant metrics just to show progress about growth, for example, in the community versus academic as we've done in the past. Again, we believe that the big opportunities to continue to grow in

Speaker 5

the community.

Speaker 2

The biggest competitor in the community is actually R based odor, R based chemo regimens. And inertia in terms of behavior change is one of the things we have to overcome. But we believe with the new model, we can steadily make progress against that goal.

Speaker 6

Great. Thanks.

Operator

Thank you. One moment for our next question. Our next question comes from the line of Naureen Quibria from Capital One Securities. Your line is open.

Speaker 7

Hi, good morning. Thanks for taking my questions. So I just have a curious about LOTUS-nine as you sort of Wind down that study, is there anything that can be drawn from that that you would be able to share down the line? And since There were those respiratory related events in the older fell population. Do you think the label, current label would be impacted by that?

Speaker 4

Sorry, go ahead.

Speaker 2

Maybe, Mohamad, I'll just start and then I'm going to hand it to you, Mohamad. Yes. We don't believe there's any impact on our current label or on any other trials.

Speaker 4

And Mohamad will go through

Speaker 2

a little bit more specifics, but just when you look at the population, Both in terms of age and underlying comorbidities and the individual investigator assessments The deaths have happened, which all except one exception, whether it's a potential, relation to the treatment, they were all deemed as Likely unrelated. So we don't believe this has to do with the regimen most likely. And we don't plan on providing any more updates because we made the choice To stop the study, but we don't believe there'll be any spillover, any impact on the rest of ZERMATA. But Mohammad, you can go through more detail.

Speaker 4

Yes. Thanks, Doreen, and that's an excellent question. First, I want to make sure it is clear that we do not I think there's a likely relationship between the fatal events and the treatment of Zolanta plus rutuximab. For many reasons, I want to remind you that the patient on LUTUS-nine, by definition, were frail or unfit, many of which are 80 years of age or above with an active and significant underlying comorbidities When enrolled in the study, of course, as a consequence, it is highly unlikely they would have qualified for enrollment And really very different population than where our label is. Also important to highlight that 2 weeks ago in a planned DMC meeting for LUTAS-five, There was no notable safety signals observed, and the recommendation was to proceed with the study as planned with no changes.

Speaker 4

As Amit mentioned, we do not believe there is any read through to LUTUS-five or LUTUS-seven or the label at this time.

Speaker 7

Terrific. Thanks. Very helpful. And so obviously everybody has been mentioning the Launch of the Kinley and Columbia. So with regard to LOTUS-five, since there are so many DLBCL studies, I'm just wondering and they're also pursuing expansion strategies.

Speaker 7

Has that impacted enrollment for LOTUS-five And are you employing any strategies to sort of ensure continued recruitment for this study?

Speaker 4

As a matter of fact, we have not seen any impact on enrollment of LUTUS-five or LUTUS-seven. These are the mainly, again, for the fact that the population being studied is very different, and investigators understand very well The difference between the population study in LUTUS-nine and LUTUS-five. So we did not see an impact in enrollment And we continue to believe that we will complete enrollment of LUTAS-five in 2024.

Speaker 2

And I don't think, Noreen, With regards to the bispecifics, these studies have been going on for a while, right. So these I don't think much has changed. If anything, to be honest, we've Actually seeing, since Mohammed joined and he implemented a number of changes to give him credit on the clinical operation side, we've seen an acceleration overall in the recruitment of LOTUS So we're well on track to complete the study next year as we've said.

Speaker 7

Great. Okay. One more also for Mohammed. In the press release, you mentioned that you're going with the Axle Product candidate 601, you're moving forward in non small cell lung cancer and sarcoma. I believe we knew about sarcoma before.

Speaker 7

Can you talk about the rationale for the selecting these 2?

Speaker 4

It's really based on It's really based on preclinical models and testing of the target expression on those models showing a higher The highest expression in sarcoma and non small cell lung cancer with other 2 more tires, but those are the highest 2 that we based our selection on. Also, if you No, about the Bio Atlas work, they also studied and showed efficacy on both tumor types. So it kind of validated The XL as a target, and we believe those are the 2 first to study. And if that Looks positive we will be exploring definitely other tumor lives.

Speaker 7

Great. Thank you. That's all for me.

Operator

Thank you. One moment for our next question. Our next question

Speaker 8

This is Nick on for Boris. Just two for me. The first one, you mentioned that you anticipate a stable gross to net throughout the rest of 2023. So I was just wondering is that you plan for that to continue throughout 2024 as well or is that going to increase, decrease? And then on the clinical side for LOTUS-seven, do Do you plan to continue forward with multiple different combinations?

Speaker 8

So I know that you're running LOTTA7 with Xelanta Plus, a few different types of combinations. If positive, would you pick

Speaker 5

On the gross to net side, we don't expect At this moment, any change in gross to net from this year to next year. So basically, from last year to this year, we had an increase, As we explained before, and then it should stay stable going forward.

Speaker 2

Yes. And then Amit, do you want to

Speaker 6

take these questions?

Speaker 4

With the regarding with the 7, which bispecific to move forward for, it's really will be a data driven decision, Seeing how the 2 combinations look like or differ, if any. And in terms of, of course, that any possible, although we There is no overlap in toxicity, but we'll see how the safety profile looks like between the two agents. And in addition, the efficacy, The clinical pharmacology, the durability of responses observed, and based on that, we'll Either making a selection of 1 or maybe in different tumor types, it could be DLBCL and follicular. So there could be different ways of exploring the 2. But we remain agnostic to any bispecific meaning that we would believe that ZENONTA is an agent's choice to be combined with almost any bispecific currently being in development.

Speaker 8

Thank you very much. That's very helpful.

Operator

Thank you. One moment for our next question. Our next question comes from Jeffrey Hung of Morgan Stanley. Your line is open.

Speaker 9

Hi, this is Michael Reade on for Jeff Hung. Thank you for taking our questions. On the first one, so with the new field model, to what extent does covering topic accounts exclude the academic and community centers? And how could they be targeted to raise awareness and drives the launch

Speaker 2

Well, the Yes. So you're saying with the new model, how are we targeting the big academic and community accounts? Is that your question?

Speaker 9

Yes, that's correct.

Speaker 2

Yes, okay. So maybe you could just kind of model in the 2 different roles. Sure.

Speaker 3

So we have 2 roles in the new model. One that is focused on the top tier accounts, and we staffed it with folks who have Extensive experience navigating complex institutions. The other role is really to focus primarily on the community. So you have Clear lines of accountability, but they're organized into smaller local teams to really take advantage of Strong knowledge of the local dynamics, referral patterns and so on. I want to make sure that answered your question.

Speaker 2

Just the big, big, our managers are focused on large academic institutions, but also large community accounts, whether it's Texas Oncology, Tennessee Oncology, Florida Cancer, New York Blood and Cancer, all these big institutions, the account managers focused on the big account, whether it be academic or community. And then that Specialist, the sales specialist focuses on the satellite centers of those big accounts and other community centers, knowing that the dynamics, particularly in DLBCL,

Speaker 9

Thank you. That's really helpful. Thanks. And then maybe as a follow-up for 601901, Do you have any added color on the biomarker approach? What sort of IHC data would you want to see to have confidence in its ability to guide development?

Speaker 9

And how soon could we see that implemented? Thanks so much.

Speaker 4

At this stage, we are as I mentioned earlier, we are developing the immunoskemency assay. We have an assay that we'll be testing first retrospectively in samples in the Phase 1 study. And if we see a need And a clear differentiation in terms of level of expression of the target that correlates with response, We will be possibly pre selecting patients. However, it is a little bit early to tell right now if that Would be needed or not, but that's the overall thinking of what could be the possibility of using an Uniscamb CSA.

Speaker 2

Thank you. That's very helpful.

Operator

Thank you. One moment for our next question. Our next question comes from the line of Brian Chiang at JPMorgan. Your line is open.

Speaker 10

Hi, team. Thanks for taking my question this morning. Maybe on sales, just wondering what you're seeing from your sales force since the frontline For Polar Plus Archip back in April, any potential impact there or read through that we should factor in for the sales trajectory of Solanta For the rest of

Speaker 4

the year.

Speaker 3

Sure. So, we have seen uptake of Polivi And what we do here, whether it's from primary market research or just in speaking with customers, is that folks are Eager to use it in the frontline setting for appropriate patients. And what we also know is that the majority will not restate with polavie Once they've used it in the frontline setting and we see this as potentially opening up an opportunity for Xelanta later lines and third line, third line plus.

Speaker 10

Okay. And then on the European launch, can you elaborate on how the country by country launch will progress for the rest of the year. Thank you.

Speaker 2

Yes, sure. I mean, as you know, I mean reimbursement is a country by country So Germany is obviously the 1st country typically pricing is better there. Sobeys also launching in Northern European markets. Of course, in certain markets like Italy or Spain, where you have regional reimbursement, it just takes longer. And so they're well underway with a lot of the market access procedures in those countries Across Europe, they're also as you know have rights even beyond Europe to most international territories outside of Greater China and Japan.

Speaker 2

So they're also actively Preparing for launches in those territories as well. So we see really strong progress from our partner Sobeys and we think that they're executing the launch well right now.

Speaker 10

Great. Thank you.

Operator

Thank you. I would now like to turn the conference back over to Amit Malik for closing remarks.

Speaker 4

Well, I just want

Speaker 2

to thank all of you for joining our call today. I appreciate your interest in the company, and thanks for your continued support. We look forward to keeping you updated on

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Earnings Conference Call
ADC Therapeutics Q2 2023
00:00 / 00:00