ADC Therapeutics Q1 2025 Earnings Call Transcript

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May 14, 2025

There are 11 speakers on the call.

Operator

morning, ladies and gentlemen, and welcome to ADC Therapeutics First Quarter twenty twenty five Earnings Call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. I would now like to turn the conference call over to Marci Graham, Investor Relations and Corporate Affairs Officer. Please go ahead.

Speaker 1

Thank you, operator. Today we issued a press release announcing our first quarter twenty twenty five 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 Amit Malik, who will discuss our operational performance and recent business highlights our Chief Medical Officer Mohammad Zaki, who will discuss our clinical programs and updates followed by our Chief Financial Officer, Pepe Carmona, who will review our first quarter twenty twenty five financial results. We will then open 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. These forward looking statements are subject to certain known and unknown risks and uncertainties, and actual results, performance, and achievement could differ materially. They are identified and described in the accompanying slide presentation and in the company's filings with the SEC, including Form 10 ks, 10 Q and eight ks.

Speaker 1

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 as a substitute for the information prepared in accordance with GAAP. You should refer to the company's first quarter earnings release for information and reconciliation of historical non GAAP measures to the comparable GAAP financial measures.

Speaker 1

I will now turn the call over to our CEO, Amit Malik. Amit?

Speaker 2

Thanks Marci and hello everyone. Thank you for joining us on today's call. The first quarter of twenty twenty five represented a solid period of continued performance for our company. Throughout the quarter we continued to focus on execution and delivering on our commercial strategy, maintaining our place as a treatment option for third line plus DLBCL patients. Total first quarter revenues were $23,000,000 which included net product revenues of $17,400,000 This is in line with the first quarter sales in 2024 and compares favorably to $16,400,000 in the fourth quarter of twenty twenty four.

Speaker 2

We had an additional $5,600,000 in milestone and royalty payments included in total revenue for the quarter. Additionally as just announced this morning we are pleased to have data from LOTUS-seven accepted for presentation at EHA, the European Hematology Association Congress and at ICML, the International Conference on Malignant Lymphoma, both in June. We are encouraged by the promising LOTUS-seven abstract data demonstrating the potential for Zemlanta plus glufitamab to be a best in class combination in a highly competitive market. For reference we have seen complete response rates in other bispecific combination trials in the range of forty seven percent to sixty two percent. Abstract data as of January 2025 shows ZENLANTA plus glafitamab demonstrated an overall response rate of ninety five point five percent and a complete response rate of ninety point nine percent in the twenty two efficacy evaluable patients with further updated data to be presented at the meeting next month.

Speaker 2

We have recent enrollment of forty patients in our LOTUS-seven dose expansion arm and expect to share an additional update on LOTUS-seven in the second half of twenty twenty five. We are encouraged by the results we've reported so far and are assessing options for expanding enrollment to 100 patients at the recommended dose level, which will support regulatory discussions and is in line with recent examples of bispecific combination therapies added to compendia. Once sufficient data with longer follow-up is available, we plan to discuss the path forward for ZYNLASA and glafitamab with regulatory authorities and to pursue a compendia strategy. LOTUS-five remains on track to reach the pre specified number of progression free survival events by the end of twenty twenty five. After the pre specified number of PFS events is reached and data are available, we expect to provide top line data on this Phase III confirmatory trial evaluating CINLANTA in combination with rituximab in patients with second line plus DLBCL.

Speaker 2

Lastly, updated data from the Phase II IIT in marginal zone lymphoma being led by the Sylvester Comprehensive Cancer Center at University of Miami will also be presented at ICML. Moving beyond ZIMMANTA, the trial sponsored by the University of Texas MD Cancer Center evaluating ADCT-six zero two which targets CD22 in patients with relapsed or refractory B cell acute lymphoblastic leukemia is being discontinued based on available clinical data. I would like to thank the physicians and patients who participated in this trial. We were pleased to have data from preclinical studies of our exatecan based ADCs targeting Claudine six, PSMA, and ASCT II featured at the American Association for Cancer Research Annual Meeting last month. Here the most advanced targets are PSMA and QUADM-six and we continue to seek potential research collaborations to further advance our programs.

Speaker 2

I'm excited about the multiple upcoming catalysts ahead within our cash runway, which is expected to fund operations into the second half of twenty twenty six. As a single agent therapy and third line plus DLBCL, Zenlata has a profile of rapid, deep and durable efficacy as well as manageable safety with simple and convenient administration. Beyond our current indication we believe in the potential to reach significantly more patients while growing the commercial opportunity by expanding use into earlier lines of therapy in DLBCL and into indolent lymphomas. The data we've seen across these settings so far has been consistently encouraging with the potential to be highly differentiating. We know physicians make treatment choices based on efficacy, safety and accessibility in the context of individual patient needs.

Speaker 2

We believe efficacy is the primary driver of decision making for treatments that are accessible and suitable for a given DLBCL patient. ZYNLATA plus rituximab in LOTUS-five and ZYNLATA plus glufetumab in LOTUS-seven offer distinct approaches to addressing unmet needs in patients with DLBCL. In LOTUS five we believe the combination of ZINLANTA plus rituximab may offer a competitive second line plus efficacy with a favorable safety and convenient dosing schedule for patients who cannot access or not suitable for or progress on a CAR T or bispecific based therapy. The LOTUS-seven based upon the recent data we shared, we believe ZENLANTA plus glufetamab has the potential to be the preferred bispecific combination in second line plus DLBCL with highly competitive efficacy and a manageable safety profile. With sufficient data from these trials we plan to pursue regulatory and compendia strategies.

Speaker 2

Now I will turn the call over to our Chief Medical Officer, Mohammad Zaki, to provide an overview of the LOTUS-seven abstract data accepted for presentation at and ICML Mohammad?

Speaker 3

Thank you, Amit. We are excited today to report updated results from the LUTA-seven study, evaluating a fixed duration combination of ZYNLAZA and glufetumab in patients with relapsedrefractory DLBCL. The primary endpoint is safety and tolerability with secondary endpoint of efficacy, PK, and immunogenicity. As we discussed, dose escalation was completed last year with early signs of antitumor activity and no DLTs were observed. We are well into dose expansion, having enrolled forty patients with this combination at either the one hundred and twenty or 150 of zenotymptote combined with the approved dose of glufetamab.

Speaker 3

As we turn to the data, we are surely encouraged by the results thus far for this study. As summarized here, the baseline characteristics of the patients enrolled, including being refracted to prior therapy, as well as number and types of prior therapy are similar to those we have seen in other bispecific combination trials. Turning to safety, no new safety signals were observed, and the combination was well tolerated. Toxicity is observed during the study were manageable and were consistent with the known safety profile of each of the two agents. Only low grade adverse events of CRS and were observed.

Speaker 3

Turning to the efficacy results, a ninety five point five percent overall response rate was seen in the twenty two patients who were evaluable for efficacy, with twenty patients or ninety point nine percent achieving a complete response based on NOGANO criteria. All but one of those patients remain in complete response as of the data cutoff. We believe the LUDA-seven results so far are exceptional compared to current and emerging therapies in the second line DLBCL. The impressive efficacy and manageable safety profile seen to date in this trial with the combination of Zenlanta and glufetamab, two potent anti cancer agents with unique mechanism of action, is encouraging. The data reinforce our belief in the potential for the regimen to change the treatment paradigm for patients with aggressive lymphoma.

Speaker 3

Though we are limited in what we can speak to until the embargo lifts, we look forward to providing a more comprehensive look at results from our LUTA-seven trial in June when updated data are shared during a presentation at EHA and a subsequent oral presentation at ICML. We expect to host a corporate webcast to further discuss the data shared at that time. Now, I will turn the call over to Pepe Carbao, our CFO, who will discuss financial results for the first quarter. Pepe?

Speaker 4

Thank you, Mohamed. On the financial front, zimlotha net product revenues in the first quarter of twenty twenty five were $17,400,000 as compared to $17,800,000 in the same quarter of 2024. Total revenues for the first quarter was $23,000,000 which includes the recognition of $5,000,000 in licensing revenue related to a milestone due upon ZYNLONTA's approval by Health Canada. The payment of the milestone was received in the second quarter and not yet reflected in our cash and cash equivalents balance at 03/31/2025. Total operating expenses for the quarter were $49,100,000 on a non GAAP basis, representing a 5% net decrease over prior year, driven primarily by a reduction in SG and A.

Speaker 4

On a GAAP basis, we reported a net loss of $38,600,000 for the first quarter of twenty twenty five or March per basic and diluted share as compared to a net loss of $46,600,000 or $0.56 per basic and diluted share for the same period in 2024. The decrease in net loss for the quarter is primarily attributable to higher license revenues and royalties as well as lower expenses. You can find the reconciliation of GAAP to non GAAP measures in the companion financial tables of the press release issued earlier today and in the appendix of this presentation. As of 03/31/2025, cash and cash equivalents were $194,700,000 compared to $250,900,000 at 12/31/2024. This change was primarily driven by our net loss from operations for the quarter and was impacted by the timing of cash receipts and payments, including payment of the annual discounted drug rebate, annual bonuses and phasing of milestones and other partner reimbursements received in second quarter of twenty twenty five.

Speaker 4

As we have highlighted today, we made significant progress in the first quarter. In 2025, we have several potentially de risking in long term data catalyst, which we believe will unlock significant growth opportunities. In this quarter alone, we have key value driving milestones at upcoming medical meetings. This includes providing an update on LODUP seven at the upcoming EHA conference with an ENCORE oral presentation at ICML. We expect to host a corporate webcast to further discuss the data shared at that time.

Speaker 4

We also expect to have updated data from the MZL Phase II investigator initiated trial to be shared by Doctor. Losos from University of Miami at ICML. As we move forward, we also expect to present data on the 40 patients enrolled for our LODOS-seven trial in the second half of this year. Beyond this, we'll provide top line results from LODOS-five once the -five number of PFS events is reached and data are available. We continue to progress our preclinical assets as shared at AACR and are engaged in discussions with potential partners.

Speaker 4

With an expected cash runway into the second half of twenty twenty six, I'm confident that ADC Therapeutics is well positioned to deliver on our catalysts and drive value creation for all our stakeholders. I will now turn the call back over to Amit.

Speaker 2

Thank you, Pepe. I am pleased with how we are executing against our strategy and continue to be encouraged by the consistently promising ZENLANTA data we are generating across our ongoing trials. We believe our revenue growth opportunity comes with expanded use of ZYNLATA through regulatory approvals as well as inclusion in guidelines and we are confident in the multiple pathways we have to achieve our peak revenue goal. We can now open the line for questions. Operator?

Operator

Thank you. Ladies and gentlemen we will now begin the question and answer session. Your first question is from Kelly Hsu from Jefferies.

Speaker 5

Good morning. Thanks for taking my questions. This is Jose for Kelly. Could you please provide some color on the follow-up time for the patients from the update today and also for the 18 patients who achieved a complete response last year? Any color on CR conversion times or durability will be great.

Speaker 5

Thank you.

Speaker 6

Okay, thanks for the question. So you're asking about the follow-up time that of the data that we showed in December, as well as what the follow-up time is now with this latest update and any color on the convergence. I'll turn that over to Mohamed to answer those questions.

Speaker 7

Thank you.

Speaker 3

Yeah, the patients that we're following up right now is according to the criteria, we actually have been assessments for patients based on six and twelve weeks on a month. We keep looking into more assessment to be able to talk more into the durability of responses as we go forward. However, the high number of CR that we're seeing right now is very encouraging. It's actually considered a very strong biomarker for durability. So, it's really too early to speak about durability or the degree of follow-up at this stage.

Speaker 6

Yeah, but if you recall in the swimmer's plot that we showed in December, the longest patient was nearly a year, so close to a year, and obviously this analysis is a couple months later. So you can just sort of interpolate that, but more data on the follow-up and support will be coming at the presentation at EHA.

Speaker 8

Thank you. Appreciate it.

Speaker 5

And a follow-up if I may. So on the competitive strategy, you mentioned that you plan to engage with regulatory authorities. Is it when you have data from 40 patients that are already enrolled or would you wait for 100 patients?

Speaker 6

Yeah, we believe if you look at all the recent specific combination examples, many were added to guidelines earlier this year as a preferred regimen. We believe we're going need a publication including the approximately 100 patients with about a year of follow-up just based on all the other recent examples, and we're currently assessing how to best move that forward.

Speaker 8

Very helpful. Thank you.

Speaker 6

Thank you.

Operator

Thank you. Your next question is from Eric Schmidt from Cantor. Your line is now open.

Speaker 9

Thanks for taking my questions and congrats on a really nice update in terms of how these results are trending. Maybe just first, how many more patients should we expect to see at the conference itself, EHA?

Speaker 6

Yeah, we haven't disclosed how many more, but I would say we've already indicated in this release that we have enrolled the 40 patients that we had discussed that we wanted to enroll already, so there'll obviously be more patients than the 22. We can't disclose the exact number because all the, you know, anything beyond what's in the abstract is a bar code, so we don't want to risk that.

Speaker 9

I think in the past you've said maybe ten to fifteen additional patients by the time of the EHA update relative to the December update last year. Is that still kind of ballpark y?

Speaker 6

I think ballpark y versus the December update, yeah. Okay. And how are you

Speaker 9

thinking about the overall profile of the combination today? I mean, again, relative to the last update, you've got potentially

Speaker 6

one

Speaker 9

of the highest ever response rates and complete response rates we've seen including in CAR T. Is it time to start thinking about this maybe as a more efficacious but equally safe combination? Is anything out there? Or do you still think that safety might turn out to be trending somewhat better than other combinations as well?

Speaker 6

Yeah, so it's a great question. Mean, obviously, from an efficacy standpoint, we think the data is very, very encouraging right now. If you look at all the other bispecific combination trial data that's been out there, and everything from phase one data to phase three data, the CR rates have been anywhere from forty seven percent to sixty two percent, the best ever reported. And as you're aware, CAR Ts are in the kind of mid 60s to low 70s range in terms of CR rate. So anything over seventy percent we think would be extremely differentiating from an efficacy standpoint.

Speaker 6

I think from a safety standpoint, as you can see in this data, we continue to see only low grade CRS and ICANS, a manageable safety profile overall, low discontinuation we've disclosed in the past with this regimen. And I think more importantly than even those things is it's also the novel mechanism. If you look at a lot of the other bispecific combinations, they're either combining with chemo, which has some irreversible toxicities of neuropathy, or combining with polatuzumab, which has really become a mainstay frontline. And some physicians are reluctant to retreat with polatuzumab in subsequent lines. And so the fact that we're a unique agent combining with a highly potent bispecific lipofitamab, I think makes us a great combination partner.

Speaker 9

Great. Thank you very much.

Speaker 6

Thank you.

Operator

Thank you. Your next question is from Michael Schmidt from Guggenheim Securities. Your line is now open.

Speaker 10

Hey, good morning, guys. This is for Michael. Congrats on the data, Eehan. Thanks for taking our questions. So, in regards to LOTUS-five, I guess with the guidance of reaching PFS events by the end of twenty twenty five, do you still expect that top line data to be a twin time event, or is that going to be pushed to, like, an early twenty twenty six data readout?

Speaker 10

And I guess along the lines of that, how much data can we expect from that top line? And I guess, like, in terms of data itself, what does the combination need to show in order to be competitive? I know the trials randomized against rGenmox, but I was curious on how you're thinking about potential benchmarking against CAR T regimens or Starglow.

Speaker 6

Yeah, so in terms of the timing, we've always indicated this is a PFS driven event trial and so we have to hit the pre specified number of PFS events before we can then cleanse the data, assess it and then show the top line results. We still expect that those events to happen this year but the data readout could happen end of this year or early next year as we've been indicating up to this point. We just want to make it clear that because PFS driven, we can't control it and it does take as you know probably two to three months to cleanse the data, do all the quality control, and so that could happen end of this year or early next year. So that's still similar timing to what we disclosed in the past. Do you want to talk, Mohamed, about her other question?

Speaker 7

How differentiate it? What do you need

Speaker 3

to achieve beyond really differentiated? Well, typically, we have shown already in the safety of our F-twenty patients a fifty percent complete response and eighty percent overall response rate, and a PFS of 8.3. The trial design actually would be suggested that the trial would be successful if we are actually two months four to six months, the control arm region four every six months. That's the hypothesis of the trial how it's designed and how it's powered. So, we're very encouraged by the early data from the safety run-in, and we'll be sharing the top line results, the outcome of the PFS of the study, and later on in a conference of publication, we'll be sharing more details on the

Operator

Great, thank you so much. Thank you. Your next question is from Sedan Laganathan from Stephens. Your line is now open.

Speaker 9

Hi. Good morning, Amit, Mohammed and Pepe. Thank you for the update and glad to see the continued improvement with the LOTUS-seven data as it matures. My first question is on the progress with like the LOTUS-five and LOTUS-seven and when we can expect maybe conversations with regulators to occur. Are the communications with regulators necessary since we're kind of going after this compendia listing strategy?

Speaker 9

And if you did have a meeting with FDA regulators, what could be gained from it for listing and going forward listing on guidelines?

Speaker 6

Yeah, so I'll start and then I'll turn it to Mohammad. So meeting with regulatory agencies isn't required to continue to expand at a dose that we decide to select on. But obviously for any regulatory path forward, it is obviously critical. And so, you know, we're assessing different regulatory pathways forward, and I know Mohamed and the team plan to meet with regulatory agencies in the second half of this year, but maybe you can comment further.

Speaker 3

Yeah, we'll be we're planning to meet with the regulators second half of this year to address or discuss the dose in addition also to a potential path forward for regulatory path. Compendia is a different parallel pathway. As Amit mentioned, that's two different paths, but they're actually going to be going in parallel when we have the right amount of patients, the right amount of follow-up.

Speaker 9

Great. I appreciate that. And if I can squeeze in a second question real fast regarding the data pipeline development. You know, I noticed the six zero two program was discontinued. Does that free up capital to bring one of the exothecan base ADCs to the IND filing and even maybe initiating a phase one with the one that emerges?

Speaker 9

And is there still a goal to potentially out license or partner out in one of those preclinical assets that emerge from those developments, maybe later this year, early next year?

Speaker 6

Yeah, I'm going to turn this to Pepe to address both the cost piece of six zero two, as well as where we stand with BD efforts on our research programs.

Speaker 7

Yeah, thanks for the questions, Glenn. The six zero two program was a program partner with MD Anderson, with basically the cost implications of that study of eliminating that study is very low, it's not a large portion of our capital allocation. The investment that we have right now is mostly associated with Cinlanta and then bringing the research platform to a certain point in which we believe those targets are partnerable. Improvement in the progress on the research PD efforts is on point, we have done an exhaustive review with different strategic and financial partners, and we'll be providing updates in the near term.

Speaker 9

Thank you. I appreciate the answers and the details and congrats again on the progress.

Speaker 6

Thank you.

Operator

Thank you. Your next question is from Gregory Renza from RBC Capital Markets. Your line is now open.

Speaker 9

Good morning, team. It's Anish on for Greg. Congrats on the progress this quarter, and thanks for taking our questions. Just a couple from us. First, with LOTUS-seven being in the spotlight, we just wanted to get a sense on how the data to be presented at EHA and ICML would set the stage for data to come later on for the 40 patients in the dose expansion arm.

Speaker 9

And secondly, with LOTUS-five, what should we be expecting on the parameters to be presented? And even as a safety run-in, are there any key efficacy benchmarks you could point us to? Thanks so much.

Speaker 6

Okay, so you're really asking about what's coming at EHA and ICML for both the LOTUS-seven presentation, as well as the LOTUS-five presentation. So I'll turn that to Mohammad, who can give a little more detail on that.

Speaker 3

Yeah, we will be actually presenting more patients and longer follow-up, but we cannot share any more details on the transition due to embargo reason. We can always speak about what's in the abstract at this time. That's for lupus seven. With regards to lupus five, we'll be sharing a little bit more on the durability of complete responses that has been reaching more than two years now without reaching the median of the FCF or duration So that's technically what is planned to be shared for as the abstracts adjust.

Speaker 3

But pretty much the information we cannot share anymore because of limbal.

Speaker 6

Yeah, and obviously as you saw in the press release, for LOTUS-seven it's a poster presentation at EHA, it's an oral presentation at ICML, and it'll be a full data presentation, so you can expect all the typical things you'd want to see in a full data presentation.

Speaker 9

Great, thank you.

Operator

Thank you. There are no further questions at this time. I will now hand the call back over to Amit Malik, CEO, for the closing remarks.

Speaker 6

Well, I want to thank you all for joining our call today and for your continued support. We look forward to keeping you updated on our progress. Operator, you can now please end the call. Thank you.

Operator

Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect your lines.

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Key Takeaways

  • Total Q1 2025 revenues were $23 M, including $17.4 M in net product sales and $5.6 M in milestone/royalty payments, comparable to Q1 2024 and up from $16.4 M in Q4 2024.
  • Data from the LOTUS-7 trial of Zynlata plus glufitamab showed a 95.5% ORR and 90.9% CR in 22 evaluable patients, with updated results to be presented at EHA and ICML and plans to expand enrollment to 100 patients for regulatory and compendia discussions.
  • The LOTUS-5 Phase III trial of Zynlata plus rituximab in second-line+ DLBCL remains on track to reach its predefined PFS events by end-2025, with top-line data expected late 2025/early 2026.
  • ADC Therapeutics ended Q1 2025 with $194.7 M in cash and equivalents, providing a runway into the second half of 2026 to support ongoing trials and pipeline advancement.
  • The company discontinued its ADCT-602 (CD22) ALL trial but reported progress in preclinical exatecan ADC programs targeting PSMA, Claudin-6, and QUADME-six, and is exploring potential research collaborations.
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Earnings Conference Call
ADC Therapeutics Q1 2025
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