ADC Therapeutics Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 6, 2024

Key Takeaways

  • Achieved commercial profitability with ZYNOLTA, making the business self-funding from product revenues.
  • Q2 net product revenues were $17.0 million, down from $19.2 million in Q2 2023, reflecting quarter-to-quarter variability and a competitive landscape.
  • LOTUS-5 Phase 3 trial of ZENLANTA plus rituximab passed interim futility analysis, with full enrollment expected by end-2024 and data readout by end-2025.
  • 23% reduction in non-GAAP operating expenses year-over-year and $105 million in financing extend the cash runway into mid-2026.
  • ADCT-601 solid tumor Phase 1 program is enrolling sarcoma and pancreatic cancer patients and screening NSCLC, with an initial data update planned for H2 2024.
AI Generated. May Contain Errors.
Earnings Conference Call
ADC Therapeutics Q2 2024
00:00 / 00:00

Transcript Sections

Skip to Participants
Operator

Welcome to the ADC Therapeutics Second Quarter 2024 Financial Results Conference Call. My name is Deedee, 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. During the question-and-answer session, if you have a question, please press star then one one on your touchtone phone. I will now turn the call over to Marcy Graham, Investor Relations Officer for ADCT. Marcy, you may begin.

Marcy Graham
Marcy Graham
Investor Relations Officer at ADC Therapeutics

Thank you, operator. This morning, we issued a press release announcing our second quarter 2024 financial results and business update. This release and the slides we will use in today's presentation are available on the Investors section of the ADC Therapeutics website. I'm joined on today's call by our Chief Executive Officer, Ameet Mallik, and our CFO, Pepe Carmona, who will discuss recent business highlights and review our second quarter 2024 financial results. We will then open the call for questions. 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. These forward-looking statements are subject to certain known and unknown risks and uncertainties, and actual results, performance, and achievements could differ materially.

Marcy Graham
Marcy Graham
Investor Relations Officer at ADC Therapeutics

They are identified and described in the accompanying presentation on slide three and in the company's filings with the SEC, including Form 10-K, 10-Q, and 8-K. ADC Therapeutics is providing this information as of today's date and 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, except as required by law. The company cautions investors not to place undue reliance on these forward-looking statements. Today's presentation also includes non-GAAP financial reporting. These non-GAAP measures should be considered in addition to and not in isolation or in substitute for, the information prepared in accordance with GAAP. You should refer to the company's second quarter earnings release for information and reconciliation of historical non-GAAP measures to the comparable GAAP financial measures. I'll now turn the call over to our CEO, Ameet Mallik. Ameet?

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

Thanks, Marcy, and thank you all for joining us. Today, I'd like to start by reminding everyone about our strategy to unlock the tremendous value we see in the company. Our first pillar and primary focus is hematology. Within this, we have a de-risked asset in ZYNLONTA, the key product in our prioritized portfolio. We continue to lay the foundation through our commercialization efforts in our existing third line plus DLBCL indication, while we pursue the substantially larger potential opportunities in earlier lines of DLBCL therapy and indolent lymphomas. The second pillar of our strategy is grounded in our emerging solid tumor pipeline. ADCT-601 targeting AXL is our most advanced asset. Beyond this, we are advancing a broad portfolio of differentiated ADCs against solid tumor targets of interest, driven by our novel exatecan-based platform.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

In the second quarter of 2024, we continued our focus on execution, advancing programs on several fronts in our ZYNLONTA expansion plan while working to deliver on our commercial strategy. In the first half of 2024, we achieved commercial profitability with revenues of $34.9 million year-to-date. Our second quarter revenues of $17 million compared to revenues of $17.8 million in the first quarter of 2024 and $19.2 million during the same period in 2023. Even in a highly competitive market, we have been able to secure our place as a treatment option for third-line-plus patients with DLBCL. We've observed quarter-to-quarter variability over time, and we've seen continued competition in the third-line-plus space with bispecifics. That said, the commercial business is now self-funding and is expected to be so going forward.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

We are confident in the role ZYNLONTA plays today in the third-line-plus DLBCL setting, given its clinical profile as a monotherapy with rapid and durable, complete responses, manageable safety, and ease of administration. Within our current indication, we see the potential to further strengthen our presence in the market, even as the environment grows increasingly competitive. We are excited about the potential to grow ZYNLONTA beyond our current indication into earlier lines of DLBCL and in the lymphomas, significantly expanding the commercial opportunity. We are progressing in our second-line-plus expansion efforts. Last week, LOTIS-5, our phase III confirmatory study of ZYNLONTA in combination with rituximab, passed futility and enrollment is nearing completion, with full enrollment expected by the end of 2024 and with data likely by the end of 2025.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

In our LOTIS-7 trial, enrollment remains on track in the Part II dose expansion of the ZYNLONTA plus glofitamab combination arm in second-line-plus DLBCL, and complete enrollment is expected by year-end. An update on safety and efficacy in evaluable patients is expected by the end of 2024, with data on all patients anticipated in the first half of 2025. We are also progressing our solid tumor programs. ADCT-601, our novel AXL-targeting ADC, continues to enroll sarcoma and pancreatic cancer patients as we optimize the dose and scheduling and have begun screening non-small cell lung cancer patients. We plan to share an initial update from the phase I trial in the second half of 2024.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

And since sharing a comprehensive update in April on our novel exatecan-based solid tumor platform, including early data on our four lead preclinical ADC candidates, we have selected one candidate to move forward, which we expect to disclose in 2025 and continue to explore potential partnership opportunities. Throughout the quarter, we maintained our disciplined capital allocation strategy and decreased operating expenses in the second quarter by 23% year-over-year on a non-GAAP basis. This, in addition to our recent financing of $105 million, enabled us to extend our expected cash runway into mid-2026, providing the company with a stronger balance sheet to execute against our strategy. As we have now reached commercial profitability for ZYNLONTA in 2024, I'd like to go deeper on the substantially larger potential opportunity for ZYNLONTA in earlier lines of DLBCL therapy and indolent lymphomas.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

Our LOTIS-5 and LOTIS-7 trials are focused on expanding usage of ZYNLONTA into second-line plus DLBCL. Assuming positive results based on these two studies, we are confident in our strategy to become the combination agent of choice in this setting, with the potential to reach more than $500 million in peak sales. Our LOTIS-5 trial continues to advance, and we are pleased to announce a positive outcome on the interim futility analysis. The independent data monitoring committee has reviewed the unblinded efficacy and safety data and recommended to continue the trial without modifications. As we have now passed futility, we remain on track to complete enrollment by the end of this year, with the potential for a headline readout by the end of 2025.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

If positive, we believe this trial will lead to full approval for ZYNLONTA, potentially as early as the end of 2026, and expand our indication into second-line plus DLBCL in combination with rituximab, a treatment frequently used in the community setting. This could triple the potential revenue opportunity by doubling the potential patient population and increasing the treatment duration by roughly 50% compared to the current ZYNLONTA label. In our LOTIS-7 trial, combining ZYNLONTA with bispecifics, we continue to be encouraged by the initial safety and tolerability profile, as well as the antitumor activity observed at the initial investigator assessment among the majority of patients in part one of the dose escalation. Enrollment is ongoing in part two dose expansion with ZYNLONTA plus glofitamab in second-line plus DLBCL, and we expect to complete enrollment and plan to share additional efficacy and safety data before year-end.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

We are excited by the opportunity to demonstrate that this ZYNLONTA combination can improve efficacy versus either agent and reduce the potential need for hospitalization associated with bispecifics, thereby expanding accessibility in the community setting. Beyond DLBCL, we also see the potential to expand into the second-line setting of indolent lymphomas based on initial data from investigator-initiated trials at the University of Miami, exploring ZYNLONTA monotherapy in marginal zone lymphoma and ZYNLONTA plus rituximab in follicular lymphoma. Early data from these studies demonstrate the potential for rapid, deep and durable efficacy with a fixed duration of therapy and a manageable side effect profile. Based on the high CR rates seen thus far in these studies, we believe there is the potential to provide marginal zone and follicular lymphoma patients years of remission.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

As there remains significant unmet need across these indolent lymphomas, with sufficient data, we plan to discuss the path forward with regulatory authorities, as well as seek inclusion in compendia. We anticipate more will be shared on these two trials at future medical meetings. Within solid tumors, we continue to investigate ADCT-601 targeting AXL in a phase I study. While others have explored AXL as a therapeutic target, we have a potentially differentiated profile with 601 due to its innovative design, incorporating a PBD toxin, as well as our patient selection approach with our validated biomarker assay. AXL is expressed in multiple tumor types, and it has been shown that the high expression of AXL is correlated to lower overall survival across many cancer types, including sarcoma, pancreatic cancer, and non-small cell lung cancer.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

In this trial, we continue to enroll sarcoma and pancreatic cancer patients as we optimize the dose and schedule, and have begun screening in non-small cell lung cancer patients. With respect to our preclinical pipeline, our focus is on advancing differentiated ADC candidates against prostate, non-small cell lung, colorectal, endometrial, and ovarian cancers. For each tumor type, the combination of incidence and five-year survival offers large potential opportunities and indicates that better treatment options are needed. Furthermore, in each case, chemotherapy remains a key part of the treatment armamentarium.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

From our four lead ADC candidates, NaPi2b, Claudin-6, PSMA, and ASCT2, we have now selected one to move forward to IND, which we expect to disclose in 2025. In terms of stage, our NaPi2b, Claudin-6, and PSMA ADCs are in IND-enabling studies, and our ASCT2 ADC is in the drug candidate selection stage, which we expect to complete this year. We continue to seek research collaborations to advance a broad portfolio, as we believe each offers the potential to improve the standard of care for cancer patients, and each utilizes our novel exatecan-based platform. Preclinical work suggests that our four lead candidates each have a high therapeutic index, reflecting the proprietary design of the ADC.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

Given the unmet medical need, coupled with the market opportunity, a successful outcome for our early research programs has the potential to transform the lives of patients and create significant value in the future. With that, I would like to turn the call over to Pepe.

Pepe Carmona
Pepe Carmona
CFO at ADC Therapeutics

Thank you, Ameet. I will now take you through a brief summary of our second quarter results. Starting with our balance sheet, as of June 30th, we had cash or cash equivalents of approximately $300 million. Moving to the P&L, as you already heard, ZYNLONTA net product revenues were $17 million for the second quarter 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.

Pepe Carmona
Pepe Carmona
CFO at ADC Therapeutics

Our total operating expenses on a non-GAAP basis, which excludes stock-based compensation, were down 23% compared to the second quarter of last year. This mainly reflected our focus on driving operating efficiencies, together with reduced R&D expenditures due to focused investment on our clinical studies and efficiencies in selling and marketing expenses. For the remainder of 2024, we will continue to take a very disciplined approach to our capital allocation. You can find the reconciliation of GAAP measures to non-GAAP measures 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&L, on a GAAP basis, we reported a net loss of $36.5 million for the quarter, or 38 cents per basic and diluted share.

Pepe Carmona
Pepe Carmona
CFO at ADC Therapeutics

On a non-GAAP basis, adjusted net loss was $24.4 million or an adjusted net loss of $0.25 per basic and diluted share. The decrease in both reported and adjusted net loss compared with the second quarter of 2023 was primarily due to lower operating expenses. With our strong balance sheet, we believe we are well-financed to continue to pursue our corporate strategy. As a reminder, hematology continues to be the primary focus of our capital allocation, and within this, our key objective is to create value by expanding the use of ZYNLONTA beyond our current indication. We expect to achieve this by fully supporting our commercialization efforts in the U.S. directly and through our partnership ex-U.S., and by investing behind potential expansion into early lines of DLBCL and indolent lymphomas.

Pepe Carmona
Pepe Carmona
CFO at ADC Therapeutics

In solid tumors, our aim is to pursue multiple ADC candidates in parallel and increase our shots on goal, mainly through our novel exatecan-based research platform. In addition to the candidate we are taking forward to IND, we will determine on a case-by-case basis whether we wish to progress additional candidates internally or seek to partner in order to share the development and financial risk. Finally, I would like to highlight that we have multiple potential value-driving milestones, which we expect in the second half of this year. These catalysts include expected completion of enrollment in LOTIS-5, initial efficacy and safety data from LOTIS-7, part II expansion, and an initial read of ADCT-601 in AXL in both sarcoma and pancreatic cancer.

Pepe Carmona
Pepe Carmona
CFO at ADC Therapeutics

In the first half of 2025, we expect mature data for our LOTIS-7 and AXL trials, and anticipate indolent lymphoma data will be shared at medical meetings in 2024 or 2025. With that, I will turn the call back to Ameet.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

Thanks, Pepe. As we've illustrated today, we made significant progress in the second quarter and are excited about what's ahead in the second half of 2024. We have achieved commercial profitability with ZYNLONTA by driving operating efficiencies while maintaining our customer-facing coverage and medical support. We continue to be on track for each of our planned key research and development milestones, and we maintained our disciplined approach to capital allocation. Looking ahead, with a strong balance sheet to execute our strategy, I am confident that ADC Therapeutics is well-positioned to drive value creation for all our stakeholders. With that, operator, could you please begin the Q&A session?

Operator

Thank you. We will now begin the question-and-answer session. If you have a question, please press star, then one, one on your touch tone phone. If you wish to be removed from the queue, please press star one, one again. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers.... Once again, if you have a question, please press star then one one on your touchtone phone. One moment. Eric Schmidt from Cantor Fitzgerald is online with a question.

Eric Schmidt
Eric Schmidt
Biotechnology Analyst at Cantor Fitzgerald

Well, thank you for taking my question, and congrats on the progress. Maybe first for Ameet on the LOTIS-5 interim look. Was there any other statistical consideration given other than a potential futility analysis? Could there have been, say, a trial besides the same or any other outcome other than halting the study?

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

Yeah, thanks, Eric. That was a great question. So, the independent data monitoring committee reviewed the unblinded efficacy and safety data and recommended to continue the trial without any modifications. So in terms of what they looked at, this was an interim analysis for futility with pre-specified efficacy boundaries based on PFS, which, as you know, is the primary efficacy endpoint, and that passed per IDMC review. The IDMC obviously also was looking at unblinded safety data and directly noted that the treatment emergent AEs were as expected in this very, as you can imagine, vulnerable and pre-treated population. So their recommendation was to continue the study without any modifications, and certainly for us, just increases our confidence around the study.

Eric Schmidt
Eric Schmidt
Biotechnology Analyst at Cantor Fitzgerald

You haven't disclosed what those PFS boundaries are, I assume?

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

Yeah, we haven't disclosed.

Eric Schmidt
Eric Schmidt
Biotechnology Analyst at Cantor Fitzgerald

Okay. And then, in terms of some of the upcoming milestones for the second half of the year, you've got several lined up. Can you be a little bit more specific about what forum they might take place, which might be at medical meetings, which might be in corporate events or press releases?

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

Yeah. So most of them will be at the end of the year. Well, it'll be a combination, but I would say specifically, if you look at LOTIS-7, which is probably one of the big ones, this would be likely through a corporate disclosure, simply because, as we've disclosed in the past, we want to enroll 40 patients in our trial by the end of the year. The data we're gonna have available and we'll make available are for any patients that have cleared at least 12-week scans, so that any responses have been confirmed. So basically, once you get to late August, it kind of gets to the cutoff of what's going to be shown. We want to make sure that we can show as much data as possible.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

We expect to have the full data from that trial in the first half of next year. Similarly, with AXL, where we're currently doing dosing a number of patients in pancreatic cancer, as well as in sarcoma, and have just begun screening patients in non-small cell lung cancer. We want to make sure that we can share the data that we have. And so, as you can imagine, cutoffs for congresses like ASH and others happen already, or have already happened actually in August. So that'll be, again, a company disclosure. So those are probably two of the biggest disclosures. What I would say is in terms of indolent lymphomas, whether it's this year or next year, the next set of updates will be at medical meetings.

Eric Schmidt
Eric Schmidt
Biotechnology Analyst at Cantor Fitzgerald

Great. Thank you very much.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

Yeah, thank you.

Operator

Thank you. Kelly Shi from Jefferies is online with a question.

Kelly Shi
Kelly Shi
SVP and Senior Equity Analyst in Biotechnology at Jefferies

Thank you for taking my question, and congrats on the progress. Maybe in terms of the variability in ordering pattern for the launch, you commented in press release. Could you provide more color on this front? Is this a variability in terms of, like, the academic and community split in prescription? And also maybe comments on, on distribution, inventory channel, and also gross-to-net. Thank you.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

Okay. So I'll comment on the order, you know, the variability that we see in by quarter, and then I'll turn to Pepe to talk about gross-to-net in the quarter and how that's evolved. So if you look at, you know, quarter by quarter variability, a lot I would say is just month by month. So I'll just give you some examples. We may have a large academic institution, I'll give you a real example, that ordered, for example, in January, but they order significant amount of quantity because if you can imagine, we're a relatively rare disease and the number of cycles on average is about four. So you don't need a lot of vials per patient.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

So you know, they may order for five, 10 patients, and for the next five to 10 patients, and then not need to order for three or four months. And so that happens a lot also at some smaller accounts, where you just see order patterns. So we see certain months which are much higher and certain months which are much lower, and depending on how the quarters get cut off, that can affect performance. And we've seen this in the past, too, since the launch, where you see some up and down fluctuation. What I would say is that, you know, despite an increasingly competitive environment, we're still seeing a strong place for ZYNLONTA in the academic settings. We're seeing a lot of use, either where bispecific can't be used or post bispecifics.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

And I think, I think really, especially in the academic setting, there's a clear understanding of how and when to use ZYNLONTA. You see much more stability in that setting. In the community, there's variability because you've seen some adoption of bispecifics in very large community accounts, but of course, the majority of accounts are not, have not yet adopted bispecifics. And the variability comes with just, you know, when they see patients or not see patients. An average community physician may only see a patient every couple of months. So in any quarter, if you look at accounts, depending on what patients that show up and if they're suitable for ZYNLONTA, you can get more or less. That's why we do see typically month-to-month and even quarter-to-quarter variability.

Pepe Carmona
Pepe Carmona
CFO at ADC Therapeutics

On the gross to net side, Kelly, we saw a favorable prior period adjustment this quarter. I would expect that to be just a one-off. In general, if you look at the year to date or even the Q1, so that's what you should expect as we go for the balance of the year.

Kelly Shi
Kelly Shi
SVP and Senior Equity Analyst in Biotechnology at Jefferies

Thank you very much. And also, I have a follow-up regarding the solid tumor program 601, targeting AXL. So what is the relative proportion of sarcoma versus pancreatic cancer patients will be enrolled and to be shown like data by the end of the year? And also, like, any particular subtypes you're gonna focus for sarcoma enrollment? Thank you.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

Yeah. So for sarcoma, we're focused on soft tissue sarcoma. And in terms of enrollment, actually both are enrolling at a pretty good pace, to be honest. I mean, as you know, there's, you know, very high AXL expression, so we don't even need to select patients for sarcoma. So although it's rare, that not needing to select, obviously, and, you know, helps to drive up the numbers. And given the early signals that we saw, there's a lot of awareness within the community. When you get to that late line setting, there's not a lot of options for these patients. So we've seen continued, you know, good enrollment. And similarly with pancreatic, again, these tend to be very late line patients, right? That have already failed, you know, multiple prior therapies. And, you know, the prognosis for these patients isn't great.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

So there, we're doing an enriched strategy. We're looking at, you know, different levels of expression to understand where the cutoffs can be. And again, we'll have a number of patients. Now, I can't tell you exactly what the proportion will be of those who have expression of AXL versus those that don't. That's the work that's ongoing, but I think we'll have a meaningful number in both of those tumors. In non-small cell lung cancer, given that we've just started screening and the proportion of AXL expression is lower, I don't expect to be able to share an update on non-small cell lung cancer. As we've said previously, we expect that to come more in the first half of next year.

Kelly Shi
Kelly Shi
SVP and Senior Equity Analyst in Biotechnology at Jefferies

Okay, terrific. Thank you very much.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

Yeah, thank you.

Operator

Thank you. Michael Schmidt from Guggenheim is online with a question.

Michael Schmidt
Michael Schmidt
Senior Biotech Analyst and Senior Managing Director in Equity Research at Guggenheim

Yeah, hey, good morning. Thanks for taking my questions. So, Roche recently reported positive data from their STARGLO study evaluating their CD20 bispecific antibody in second-line DLBCL. How do you expect that to affect market dynamics in that setting and perhaps the opportunity for ZYNLONTA? Obviously, you're evaluating both LOTIS-5 and LOTIS-7 studies in that same setting.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

Yeah, look, I think the STARGLO data was impressive from an efficacy standpoint. I think it validated that combinations of toxins with bispecifics is a really good approach. You know, so maybe just to talk about the implications of what STARGLO is gonna mean for both LOTIS-5 and for LOTIS-7. On the LOTIS-5 front, I think as you're aware, the primary endpoint is median PFS, and in our trial, we're doing ZYNLONTA plus rituximab versus R-GemOx. And, you know, there hasn't been a lot of modern data, especially large scale clinical data with R-GemOx in recent years, especially in the current treatment landscape. So seeing the data where -- and if you look at the STARGLO data, the R-GemOx arm had roughly 3.6 months of PFS. I think that provides us a clear opportunity to do better.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

I mean, so it gave us even more confidence, I would say, in LOTIS-5, because the study is powered with even a two-month difference to be a positive study. Obviously, we wanna—we would hope to do much better than that because we wanna make sure it's clinically relevant as well. But to us, that kind of clearly showed that we believe ZYNLONTA can be better than GemOx. If, you know, rituximab is obviously constant across both arms in LOTIS-5, but we believe ZYNLONTA has the opportunity to prove to be better than GemOx.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

But also, to do this where we don't have any—we've not seen any new safety signals, as we've reported before, but there's also no CRS, no ICANS, and this makes it a very accessible option in the community, either in the second line setting or even in the academic setting for those who progress in the third line plus setting. So I think it's gonna be a great combination. There's still a lot of R-based chemo use that exists within the community, and so ZYNLONTA plus rituximab has the opportunity to provide better efficacy with a better tolerability profile than what exists today. Now, if you look at LOTIS-7, as you know, STARGLO obviously showed over 13 months of PFS with glofitamab plus GemOx. So the efficacy bar, and with about a 58% CR rate. So the efficacy bar, I think, is high.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

I think it's pretty clear that we're gonna need to be comparable or better from an efficacy standpoint. That's what matters most when you talk about more potent therapies like bispecific combinations. And so I think it clearly set a bar around that. But we believe that ZYNLONTA and glofitamab, as we've seen in early data, and we hope to show, you know, with the expansion data, can have a synergistic or even additive effect. And, you know, when you look at the fact that ZYNLONTA plus rituximab in our early safety running data showed already 50% CR rates, we're, you know, we're hopeful, obviously, we believe glofitamab is significantly more potent than rituximab, and combining glofitamab plus ZYNLONTA has the opportunity to do even better. I mean, we're hopeful that we can approach the 60% range.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

And I think if you get to that level of efficacy, that's very, very meaningful. But in addition to that, we're hoping that we can continue to show what we saw in the dose escalation, which is reduce rates and grades of CRS, which can hopefully enable a broader accessibility in the community, especially to a nonsystemic chemo-free combination for patients, and I think that's the opportunity we have in our dosing regimen. You know, when you look at not only some of the toxicities with the bispecific, which we hope to reduce in the way we're dosing, ZYNLONTA, but also GemOx, where you see cumulative, irreversible adverse events, including neurotoxicity and neuropathy. Yeah, I think there's an opportunity to improve on both efficacy and safety profile with ZYNLONTA.

Michael Schmidt
Michael Schmidt
Senior Biotech Analyst and Senior Managing Director in Equity Research at Guggenheim

Great. Thanks, Mallik. And then just regarding the marginal zone lymphoma and the follicular lymphoma interim data that you had presented, obviously looks super impressive. Just wondering if there may be an opportunity to include that into guidelines prior to you know publishing the full results sometime next year. Is that a possibility, or would you need to wait for completion of those two studies? Thanks so much.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

Yeah, I think it's possible before the full completion, but I think what it's gonna require is, you know, a presentation at a major medical congress and a concomitant publication. I think whenever you wanna submit to guidelines, you do need a publication in a, in a key medical journal. And of course, it's gonna be data driven and, you know, driven also by the investigators of the study. But we've seen, you know, for example, in marginal zone, the latest, the last BTK inhibitor, which was added to the guidelines in a preferred position, had 36 patients. So it is possible that the data looks good and the data gets published before the full completion, in that case, it's a study of 50 patients, but I can't commit yet.

Ameet Mallik
Ameet Mallik
CEO at ADC Therapeutics

I think it's gonna be very data driven and driven by not only the efficacy that we see, but the durability of that efficacy. And then when there's a sufficient number of patients that it can get published in a major journal. But yeah, obviously, given the unmet need in these areas, we're working closely with the investigators to make sure that once there is a meaningful amount of data, it can be published. Then, of course, then we would plan to talk to both regulators and go to, you know, seek compendia inclusion.

Michael Schmidt
Michael Schmidt
Senior Biotech Analyst and Senior Managing Director in Equity Research at Guggenheim

Yeah, makes sense. Thank you.

Operator

Thank you. Brian Cheng from J.P. Morgan is online with a question.

Brian Cheng
Brian Cheng
Executive Director and Senior Biotech Analyst at JPMorgan

Hey, guys. Thanks for taking our questions this morning. Maybe just going back to ZYNLONTA sales, it seems that, you know, some of the variability can be explained by inventory build at some of the institutions. Can you comment on the growth in your prescriber base, whether there is any growth in your prescriber base in academics versus community? What are you seeing currently in Asia's markets? And how confident are you that, you know, you will be able to see continued growth for the rest of the year? Thanks.

Executives
    • Ameet Mallik
      Ameet Mallik
      CEO
    • Marcy Graham
      Marcy Graham
      Investor Relations Officer
    • Pepe Carmona
      Pepe Carmona
      CFO
Analysts
    • Brian Cheng
      Executive Director and Senior Biotech Analyst at JPMorgan
    • Eric Schmidt
      Biotechnology Analyst at Cantor Fitzgerald
    • Kelly Shi
      SVP and Senior Equity Analyst in Biotechnology at Jefferies
    • Michael Schmidt
      Senior Biotech Analyst and Senior Managing Director in Equity Research at Guggenheim
Powered by Quartr