Title

Presentation

ADC Therapeutics SA beats earnings expectations. Reported EPS is $-0.36, expectations were $-0.38.

Operator: Good morning, ladies and gentlemen, and welcome to ADC Therapeutics’ First Quarter 2025 Earnings Call. [Operator Instructions] I would now like to turn the conference call over to Marcy Graham, Investor Relations and Corporate Affairs Officer. Please go ahead.

Marcy Graham: Thank you, operators. Today, we issued a press release announcing our first quarter 2025 financial results and business updates. This release and the slides we will use in today’s presentation are available on the Investor section of the ADC Therapeutics website. I’m joined on today’s call by our Chief Executive Officer, Ameet Mallik, who will discuss our operational performance and recent business highlights. Our Chief Medical Officer, Mohamed Zaki, who will discuss our clinical programs and updates, followed by our Chief Financial Officer, Pepe Carmona, who will review our first quarter 2025 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. They are identified and described in the accompanying slide presentation 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 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. I will now turn the call over to our CEO, Ameet Mallik. Ameet?

Ameet Mallik: Thanks, Marcy, and hello, everyone. Thank you for joining us on today’s call. The first quarter of 2025 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 million, which included net product revenues of $17.4 million. This is in line with the first quarter sales in 2024 and compares favorably to $16.4 million in the fourth quarter of 2024. We had an additional $5.6 million 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 LOTIS-7 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 LOTIS-7 EHA abstract data demonstrating the potential for ZYNLONTA plus glofitamab 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 47% to 62%. Abstract data as of January 2025 shows ZYNLONTA plus glofitamab demonstrated an overall response rate of 95.5% and a complete response rate of 90.9% in the 22 efficacy-evaluable patients, with further updated data to be presented at the meeting next month. We have recent enrollment of 40 patients in our LOTIS-7 dose expansion arm and expect to share an additional update on LOTIS-7 in the second half of 2025. 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-ups is available, we plan to discuss the path forward for ZYNLONTA and glofitamab with regulatory authorities and to pursue a Compendia strategy. LOTIS-5 remains on track to reach the pre-specified number of progression-free survival events by the end of 2025. After the pre-specified number of PFS events is reached and data are available, we expect to provide top-line data on the Phase 3 confirmatory trial evaluating ZYNLONTA in combination with rituximab and patients with second-line plus DLBCL. Lastly, updated data from the Phase 2 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 ZYNLONTA, the trial sponsored by the University of Texas MD Anderson Cancer Center evaluating ADCT602, which targets CD22, and 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 Claudin-6, PSMA, and ASCT2 featured at the American Association for Cancer Research annual meeting last month. Here, the most advanced targets are PSMA and Claudin-6, and we continue to seek potential research collaborations to further advance our programs. I’m excited about the multiple upcoming catalysts ahead within our cash runway, which is expected to fund operations into the second half of 2026. As a single-agent therapy and third-line plus DLBCL, ZYNLONTA 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. We believe efficacy is the primary driver of decision-making for treatments that are accessible and suitable for a given DLBCL patient. ZYNLONTA plus rituximab in LOTIS-5 and ZYNLONTA plus glofitamab in LOTIS-7 offer distinct approaches to addressing unmet needs in patients with DLB-CL.

In LOTIS-5, we believe the combination of ZYNLONTA plus rituximab may offer competitive second-line plus efficacy with a favorable safety and convenient dosing schedule for patients who cannot access, are not suitable for, or progress on a CART or bispecific-based therapy. In LOTIS-7, based upon the recent data we shared, we believe ZYNLONTA plus glofitamab 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. Now, I will turn the call over to our Chief Medical Officer, Mohamed Zaki, to provide an overview of the LOTIS-7 abstract data accepted for presentation at EHA and ICML next month.

Mohamed?

Mohamed Zaki: Thank you, Ameet. We are excited today to report updated results from the LOTIS-7 study, evaluating a fixed-duration combination of ZYNLONTA and glofitamab in patients with relapsed refractive DLBCL. The primary endpoint is safety and tolerability, with a secondary endpoint of efficacy, [indiscernible], and immunogenicity. As we discussed, dose escalation was completed last year with early signs of anti-tumor activity and no DLTs were observed. We are well into dose expansion, having enrolled 40 patients with this combination at either the 120 or 150 µg/kg dose levels of ZYNLONTA combined with the approved dose of glofitamab. 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 refractive 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. Toxicities 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 [Technical Difficulty] were observed. Turning to the efficacy results, a 95.5% overall response rate was seen in the 22 patients who were available for efficacy. With 20 patients or 90.9% achieving a complete response based on Lugano criteria.

All but one of those patients remained in complete response as of the data cut-out. We believe the LOTIS-7 results so far are exceptional compared to current and emerging therapies in the second line plus DLBCL. The impressive efficacy and manageable safety profile seen to date in this trial with the combination of ZYNLONTA and glofitamab, two potent anti-cancer agents with unique mechanism of action, is encouraging. The data reinforces our belief in the potential for the regimen to change the treatment paradigm for patients with aggressive lymphoma. Though we are limited in what we can speak to until the EHA embargo lifts, we look forward to providing a more comprehensive look at results from our LOTIS-7 trial in June when updated data are shared during a full-step 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 Carmona, our CFO, who will discuss financial results for the first quarter. Pepe?

Pepe Carmona: Thank you, Mohamed. On the financial front, ZYNLONTA net product revenues in the first quarter of 2025 were $17.4 million as compared to $17.8 million in the same quarter of 2024. Total revenues for the first quarter was $23 million, which includes the recognition of $5 million in licensing revenue related to a milestone due to 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 equivalent balance at March 31, 2025. Total operating expenses for the first quarter were $49.1 million on a non-GAAP basis, representing a 5% net decrease over prior year, driven primarily by a reduction in SG&A. On a GAAP basis, we reported a net loss of $38.6 million for the first quarter of 2025, or $0.36 per basic and diluted share, as compared to a net loss of $46.6 million, 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 compounding financial tables of the press release issued earlier today and in the appendix of this presentation. As of March 31, 2025, cash and cash equivalents were $194.7 million, compared to $250.9 million on December 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 discarded drugs rebate, annual bonuses, and spacing of milestones and other partner reimbursements received in the second quarter of 2025. As we have highlighted today, we made significant progress in the first quarter.

In 2025, we have several potentially de-risking using long-term data catalysts, 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 LOTIS-7 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. We also expect to have updated data from the MZL Phase 2 investigator-initiated trial to be shared by Dr. Losos from University of Miami at ICML. As we move forward, we also expect to present data on the 40 patients enrolled for our LOTIS-7 trial in the second half of this year. Beyond this, we’ll provide top-line results from LOTIS-5 once the specified number of PSS 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. With an expected cash runway into the second half of 2026, 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 Ameet.

Ameet Mallik: Thank you, Pepe. I am pleased with how we are executing against our strategy and continue to be encouraged by the consistently promising ZYNLONTA data we are generating across our ongoing trials. We believe our revenue growth opportunity comes with expanded use of ZYNLONTA through regulatory approvals as well as inclusion and 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. [Operator Instructions]. Your first question is from Kelly Shi from Jefferies.

Unidentified Analyst: This is [indiscernible] 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 time to durability, will be great. Thank you.

Ameet Mallik: Okay, thanks for the question. You are asking about the follow-up time 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 conversion. So I’ll turn that over to Mohamed to answer those questions.

Unidentified Analyst: Thank you.

Mohamed Zaki: Yes. The patients that we’re following up right now is according to the Lugano criteria, we actually have the assessments for patients based on 6 and 12 weeks and upon 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.

Ameet Mallik: Yes. If you recall in the swimmers 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 swimmers model will be coming at the presentation at EHA.

Unidentified Analyst: Thank you. Appreciate it. And a follow-up if I may. So on the compendia 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?

Ameet Mallik: Yes. We believe if you look at all the recent bispecific accommodation examples, many were added to guidelines earlier this year as a preferred regimen. We believe we’re going to 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 facilitate that for you.

Operator: Your next question is from Eric Schmidt from Cantor.

Eric Schmidt: 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?

Ameet Mallik: Yes. We didn’t disclose how many more, but obviously we’ve already indicated in this release that we have enrolled the 40 patients that we had discussed that we want to enroll already. So there’ll obviously be more patients than the 22. We can’t disclose the exact number because all the — anything beyond what’s in the abstract isn’t part of it. So we don’t want to risk that.

Eric Schmidt: I think in the past you’ve said maybe 10 to 15 additional patients by the time of the EHA update relative to the December update last year. Is that still kind of ballpark key?

Ameet Mallik: I’d say ballpark key versus the December update, yes.

Eric Schmidt: Okay. And how are you thinking about the overall profile of the combination today? I mean, again, relative to the last update, you’ve got potentially one 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?

Ameet Mallik: Yes. So it’s a great question. I mean, honestly, 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, everything from Phase 1 data to Phase 3 data, the CR rates have been anywhere from 47% to 62%, but that’s never 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 70% we think would be extremely differentiating from an efficacy standpoint. 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 like 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 glofitamab, I think makes this a great combination partner.

Operator: Your next question is from Michael Schmidt from Guggenheim Securities.

Unidentified Analyst: This is [Berzion] [ph] from Michael. Congrats on the data, EHA. Thanks for taking our questions. So in regards to LOTIS 5, I guess with the guidance of reaching PFS events by the end of 2025, do you still expect that top-line data to be a 2025 event, or is that going to be pushed to like an early 2026 data readout? 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 trial is randomized against our [GenBlocks] [ph], but I was curious on how you’re thinking about potential benchmarking against CAR-T regimens or StarGlow.

Ameet Mallik: Yes. And 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 it’s 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 the similar timing to what we disclosed in the past. Do you want to talk, Mohamed, about — did you hear her other question?

Mohamed Zaki: What do you mean by changing all the PFS data? Well, typically, we have shown already in the safety-run antibody patient a 50% complete response and 80% overall response rate, and a PFS of 8.3 months. The trial design, actually, would be suggested that the trial be successful if we are actually two months stronger, four to six months, the control algorithm 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 or publication, we’ll be sharing more details on the outcome of the study.

Operator: Your next question is from Sudan Loganathan from Stephens.

Sudan Loganathan: Thank you for the update, and glad to see the continued improvement with the LOTIS-7 data as it matures. My first question is on the progress with the LOTIS-5 and LOTIS-7, and when we can expect maybe conversations with regulators to occur, are the communications with regulators necessary since we’re kind of going after the compendia listing strategy? And if you did have a meeting with FDA regulators, what could be gained from it for, listing and going forward listing on guidelines?

Ameet Mallik: Yes. So I’ll start, and I’m going to turn it to Mohamed. So meeting with regulatory agents isn’t required to continue to expand at a dose that we decided to select on, but obviously for any regulatory path forward, it is obviously critical. And so, 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 on that.

Mohamed Zaki: Yes. We’re planning to meet with 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 patient, the right amount of follow-up.

Sudan Loganathan: Great, I appreciate that. And if I can squeeze in a second question real fast regarding the data pipeline development, I noticed the 602 program was discontinued. Does that free up capital to bring one of the exatecan-based ADCs to the IND filing and even maybe initiating a Phase 1 with the one that emerges? And is there still a goal to potentially out-license or partner out one of those preclinical assets that emerges from those developments and maybe later this year or early next year?

Ameet Mallik: Yes. I’m going to turn this to Pepe to address both the cost piece of 602 as well as where we stand with BD efforts on our research programs.

Pepe Carmona: Yes. Thanks for the questions, Sudan. The 602 program was a program partnered with MD Anderson. With basically the cost implications of that study, of eliminating that study, it’s very low. It’s not part of, it’s not a large portion of our capital allocation. The investment that we have right now is mostly associated with ZYNLONTA and then bringing the research platform to a certain point in which we believe those targets are [indiscernible]. The progress on the research BD efforts is ongoing. We have done an exhaustive review with different strategic and financial partners and we’ll be providing updates in the near term.

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

Operator: Your next question is from Gregory Renza from RBC Capital Markets.

Unidentified Analyst: Good morning, team. It’s [Nishanth] [ph] for Greg. Congrats on the progress this quarter and thanks for taking our questions. Just a couple from us. First, with LOTIS-7 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. And secondly, with LOTIS-5, 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.

Ameet Mallik: Okay. So you’re really asking about what’s coming at EHA and ICML for both the LOTIS-7 presentation as well as the LOTIS-5 presentation. So I’ll turn that to Mohamed who can give a little more detail on that.

Mohamed Zaki: Yes. We’ll be actually presenting more patients and longer follow-up, but we cannot share any more details on the precision [indiscernible] reason. We can only speak about what’s in the abstract at this time. That’s what we’re saying. With regards to LOTIS-5, 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 [indiscernible] or duration of response. So that’s technically what is planned to be shared at the end of this or as the abstract suggests. But pretty much the information we cannot share any more details [indiscernible].

Ameet Mallik: Yes. And as you saw in the press release, for LOTIS-7, 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.

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

Ameet Mallik: 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.