ADC Therapeutics SA (ADCT) 2025 Q3 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the ADC Therapeutics Q3 2025 earnings conference call. (Operator Instructions) This call is being recorded on Monday, November 10, 2025.

I will now turn the call over to Nicole Riley, Head of Investor Relations and Corporate Communications for ADC Therapeutics. Nicole, please go ahead.

Thank you, operator. Today, we issued a press release announcing our third-quarter 2025 financial results and business updates. 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, 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 third-quarter 2025 financial results. We will then open the call to 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 US 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 third-quarter earnings release for information and reconciliation of historical non-GAAP measures to the corporate GAAP financial measures.

I will now turn the call over to our CEO, Ameet Mallik. Ameet?

Thanks, Nicole, and hello, everyone. Thank you for joining us on today's call. In the third-quarter of 2025, we continue to focus on execution and delivering on our commercial strategy, maintaining ZYNLONTA as a differentiated treatment option for third-line plus DLBCL patients while advancing data across key trials. Net product revenues were $15.8 million in the third-quarter, reflecting variability in customer ordering patterns and were broadly in line with the quarterly run rate over the past two years.

We continue to progress against our key ZYNLONTA trials in second-line plus DLBCL and expect to share additional data in the coming months. We plan to provide an update on LOTIS-7, our Phase Ib trial evaluating ZYNLONTA in combination with the bispecific antibody, glofitamab, before the end of the year. Then in the first half of 2026, we plan to announce top line results from LOTIS-5, our Phase III confirmatory trial of ZYNLONTA in combination with rituximab, once the prespecified number of PFS events is reached and data are available.

Within indolent lymphomas, the lead investigator on the Phase II IIT of ZYNLONTA in combination with rituximab recently presented encouraging updated relapsed or refractory follicular lymphoma data at the 22 International Workshop on Non-Hodgkin Lymphoma. The trial is on track to enroll 100 patients. In addition, the Phase II IIT of ZYNLONTA in relapsed or refractory marginal zone lymphoma continues to enroll to the target of 50 patients. Beyond ZYNLONTA, we continued with IND-enabling activities for our PSMA-targeting ADC, which are on track to be completed by the end of the year.

Lastly, just after the quarter end, we secured a $60 million private placement led by TCGX, including participation from Redmile Group and other existing investors. This financing takes our expected cash runway at least to 2028. With our strengthened balance sheet, I am confident that we are well positioned to further invest in ZYNLONTA as we anticipate advancing into earlier lines of therapy for DLBCL and into indolent lymphomas.

As a single-agent therapy in 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 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 continue to believe that through expansion into these settings, ZYNLONTA has the potential to reach peak annual revenues of $600 million to $1 billion in the US. Our current indication has, as I noted earlier, shown relative stability in net revenues over multiple quarters, demonstrating ZYNLONTA has a clear place in the market as a monotherapy.

We believe LOTIS-5 has the potential to lift peak annual revenue for ZYNLONTA to $200 million to $300 million as we expand into the second-line setting. Not only would this double the addressable patient population, but with an improved clinical profile versus our current indication as a monotherapy, we expect to gain share in the second-line plus setting and improved duration of therapy.

With LOTIS-7, we estimate we can expand the total opportunity for ZYNLONTA in DLBCL to $500 million to $800 million in peak annual revenue with both regulatory approval and compendia listing. If the data continue to be compelling, we believe ZYNLONTA plus glofitamab has the potential to transform the future lymphoma treatment paradigm by becoming the preferred bispecific combination in the second-line plus DLBCL setting.

On top of this, we see additional potential for ZYNLONTA in relapsed or refractory marginal zone lymphoma and relapsed or refractory follicular lymphoma. If the encouraging initial data in the Phase II IITs are maintained in larger patient numbers, we believe these indolent lymphomas could provide additional peak annual revenue for ZYNLONTA of $100 million to $200 million with both regulatory approval and compendia listing, primarily driven by MZL.

Let's drill down a little more into the specifics of the DLBCL treatment landscape to explain why we believe ZYNLONTA has the opportunity to play a significant role. In both the second and third-line plus settings, there are two main segments.

The first segment includes complex therapies which require unique infrastructure and expertise to handle logistical requirements and patient management. These are primarily confined to the academic centers and more sophisticated community centers and includes therapies like CAR T, transplant and bispecifics. The second segment comprises more broadly accessible therapies which all physicians can administer in the outpatient setting and includes ADCs, monoclonal antibodies, and chemotherapy.

The launch of bispecifics as monotherapy in the third-line plus setting has resulted in an evolution of the treatment landscape, where we estimate there is currently a 60-40 split between complex and broadly accessible segments. In the second-line setting where bispecifics have not yet been approved but were recently added to NCCN guidelines for use in combination, we expect that they will continue to gain share and grow the use of complex therapies.

Through LOTIS-5 and LOTIS-7, we believe ZYNLONTA combinations have the potential to raise the bar on efficacy in second-line plus DLBCL in their respective treatment segments, offering complementary approaches to addressing unmet needs. In LOTIS-5, our Phase III confirmatory study, we are combining ZYNLONTA with the most widely used agent, rituximab, in patients with second-line plus DLBCL.

As a reminder, initial data from the safety lead-in portion showed an overall response rate of 80% and a complete response rate of 50% with no new safety signals, demonstrating that this combination has the potential to provide competitive second-line plus efficacy with a favorable safety profile, allowing broad accessibility.

In LOTIS-7, our Phase Ib trial, we are combining ZYNLONTA with a highly effective bispecific, glofitamab, in second-line plus patients. Data presented in June at EHA and ICML based on the April 2025 cutoff showed the combination was generally well tolerated with a manageable safety profile.

Furthermore, we believe it demonstrated clinically meaningful benefit with an overall response rate of 93.3% and a complete response rate of 86.7% across 30 efficacy-evaluable patients. We are encouraged by the promising early data, which we believe demonstrates the potential for ZYNLONTA plus glofitamab to be a best-in-class combination in a highly competitive market.

When you look at the CR rates among both currently available and emerging therapies in these two treatment segments, we believe the emerging clinical profile of ZYNLONTA plus glofitamab in the LOTIS-7 trial positions us well among complex therapies and, at the same time, the clinical profile of ZYNLONTA plus rituximab in the LOTIS-5 trial has the potential to differentiate us among broadly accessible therapies.

Together, we believe these combinations have the potential to double the addressable patient population as we move into the second line and increase the duration of therapy moving on average from three cycles to five to six cycles.

Now I will turn the call over to our Chief Medical Officer, Mohamed Zaki, who will share the latest on the Phase II follicular lymphoma IIT data. Mohamed?

Thank you, Ameet. I am pleased to share updated data from the Phase II investigator-initiated trial of ZYNLONTA in combination with rituximab in relapsed/refractory follicular lymphoma. The data were presented in September at the 22 International Workshop on Non-Hodgkin Lymphoma by the lead investigator, Dr. Juan Pablo Alderuccio, from the Sylvester Cancer Center, part of the University of Miami Miller School of Medicine.

Data presented from the 55 efficacy-evaluable patients to date in this trial continues to demonstrate encouraging results with an overall response rate of 98.2% and a complete response rate of 83.6%. After median follow-up of 28 months, median PFS was not reached and the 12-month PFS was 93.9%. In this trial, no new safety signals were observed and safety was consistent with the known profile of ZYNLONTA.

The University of Miami is actively enrolling towards a target of 100 high-risk relapsed/refractory follicular lymphoma patients and is opening the study at additional US cancer research centers. As soon as sufficient data are available, we plan to assess regulatory and update the compendia pathways.

Now I will turn the call over to Pepe Carmona, our CFO, who will discuss financial results for the third-quarter. Pepe?

Thank you, Mohamed. On the financial front, ZYNLONTA net product revenues in the third-quarter of 2025 were $15.8 million as compared to $18 million in the same quarter in 2024. Total operating expenses for the quarter were $45 million on a non-GAAP basis, representing a 12.1% net decrease over prior year. The reduction was primarily driven by lower R&D expenses with sales and marketing expenses stable year-over-year. We continue to be disciplined in our capital allocation towards potential value creation while driving efficiencies across the portfolio.

On a GAAP basis, we reported a net loss of $41 million for the second-quarter of 2025 or $0.30 per basic and diluted share as compared to a net loss of $44 million or $0.42 per basic and diluted share for the same period in 2024. The decrease in net loss for the quarter is primarily attributable to lower R&D and G&A expenses. You can find the reconciliation of GAAP to non-GAAP measures for the third-quarter and year-to-date in the accompanying financial tables of the press release issued earlier today and in the appendix of this presentation.

At the end of the quarter, we had cash and cash equivalents of $234.7 million, which compared to $250.9 million as of December 31, 2024. In October, we entered into a $60 million PIPE financing which, on a pro forma basis, expanded our cash and cash equivalents to approximately $292.3 million as of that date. The strengthening of our balance sheet allows us to execute our strategy with an expected cash runway extending at least to 2028.

Across the LOTIS-5, LOTIS-7, and MZL ZYNLONTA programs, we expect to have data catalysts in the remainder of 2025 and 2026. For LOTIS-5, we expect to provide top line data in the first half of 2026 once the prespecified number of PFS events is reached and data are available, assuming positive results and supplemental biologic license application submission to regulatory authorities will follow with potential confirmatory approvals in second-line plus DLBCL as well as publication and compendia inclusion in the first half of 2027.

With LOTIS-7, following presentation of the data at EHA and ICML in June, we observed an acceleration in enrollment in the study at the selected 150-microgram per kilogram dose level. We plan to provide a clinical update on all efficacy-evaluable patients with a minimum of six months of follow-up through a corporate announcement before the end of the year. Once sufficient data with longer follow-up are available, we plan to engage with the FDA.

In addition, assuming positive results, we plan to pursue publication and compendia inclusion in the first half of 2027. With indolent lymphomas, we expect additional data to be shared at medical conferences by the lead investigators, and we plan to assess regulatory and compendia strategies once sufficient data are available. Beyond ZYNLONTA, we continue to advance our exatecan-based PSMA-targeting ADC with completion of IND-enabling activities anticipated towards the end of this year.

I will now turn the call back over to Ameet.

Thank you, Pepe. Let me close by saying that I'm pleased with how we are executing against our strategy and continue to be excited by the consistently encouraging ZYNLONTA data we are generating across our ongoing trials. We have a clear vision to unlock the true potential of the company with multiple potential value-creating milestones ahead and a balance sheet that enables us to deliver on our strategy. We can now open the line for questions. Operator?

(Operator Instructions)

Eric Schmidt, Cantor.

Maybe on LOTIS-7, intrigued by Pepe's comments that we're seeing accelerated enrollment post the June data release. Not surprising, of course. But can you frame how many patients we might get later this quarter? And then in terms of your target enrollment out of 100 or so patients, are you adjusting that target? And is it possible that target could be achieved sooner rather than later?

Thanks for the question, Eric. Yes, no, we've been pleased that since the EHA and ICML update, we've had even greater interest in the trial and enrollment definitely accelerated. We're still targeting the roughly 100 patients that we've been targeting to enroll. It will occur quicker than what we originally anticipated. We're not giving any exact timeline. We're still confirming the first half of next year to have that completed.

And then in terms of the upcoming data release, Ameet, are you still targeting 40 or 40-plus?

Well, we'll give -- as you recall, we have enrolled originally 20 patients in each dose and then we continue to expand at the 150 dose, right? So it will clearly be more than the original 20 and 20 but it won't be fully all 100. And also, I want to make sure you heard what Pepe said, is that we're going to be sharing update on all efficacy-evaluable patients with a minimum six months follow-up. This is because it provides more stable, meaningful updates both in terms of the depth of response but also the durability of response.

That was -- as you may recall, some of the questions we received in the early updates is we had very limited follow-up. So now we're focused on where the data is more stable, and that's really the patients with the minimum of six months follow-up.

Clara Dong, Jefferies.

This is Jenna Li on the line. Could you talk about, in the context of the upcoming LOTIS-5 and LOTIS-7 data and the submission timeline, when should we expect to see an inflection point for ZYNLONTA sales? And could you also give some qualitative comment on the pace of revenue ramp-up once you have those potentially positive data or approval in hand?

So I think you're asking about the milestones and then also the revenue inflection. So first, I would say, for LOTIS-7, we expect to share an interim update on data later this year and, obviously, we expect to have full data sometime by the end of next year or into the first half of 2027. As you can see, what we guided to is publication and/or compendia inclusion sometime between the end of next year and the first half of 2027.

With LOTIS-5, we expect to share top line results in the first half of 2026 and then have approval sometime in the first half of 2027. So if you think of the revenue ramp-up for those two, following compendia inclusion and approvals, which we expect for both in the first half of 2027, we expect revenues to ramp up subsequent to that.

Sorry, just a quick follow-up. Did you also have any comments on the pace of ramp-up following first half '27?

Yes. I mean, I don't want to guide to the exact ramp-up. What I will say is if you look at other launches, whether it's the bispecifics or Polivy in the front line or others, I would say the majority of the ramp-up happens during the first two years post launch or approval or compendia listing of a new indication. It's typically -- the majority is going to happen in the first two years.

Michael Schmidt, Guggenheim Securities.

This is [ Sarah ] on for Michael. So I just wanted to get your thoughts on with these newer agents moving into frontline DLBCL, is that something that you are or would consider pursuing for ZYNLONTA?

Yes. And I think the frontline will be interesting because if you look at the frontline setting, for decades really, R-CHP was the standard of care. And then only a couple of years ago, you saw Polivy R-CHP get approval, and that was based on a marginal improvement in PFS without an overall survival benefit. But of course, the safety looked good and that's been actually pretty widely adopted. So frontline is the high bar is my point.

One of the biggest things being studied right now are bispecifics, and I think there's some excitement about. If those could have potential, still to be determined. I think we're still a little bit of ways away from seeing those readouts. And in terms of our future development, we'll consider how that goes for this combination post the readout of the 100 patients.

And obviously, any support would depend on a partner, too. I don't see us likely funding a Phase III study with this in the frontline or the second-line setting with this combination purely on our own. Yes, we're watching the space closely.

Leonid Timashev, RBC Capital Markets.

I just want to ask on sort of the split of community and academic. I know you've talked about LOTIS-5 potentially being more positioned in the broadly applicable therapies and the LOTIS-7 more for the academic. But I guess I'm curious how neat you think those breakdowns actually are going to be and sort of how you're going to balance ultimately where patients are found and how you want to focus your sales force across academic and community to sort of pursue the opportunity where it is.

Yes. So I wouldn't do the breakdown in terms of academic and community. What I'd say is for the more complex therapies, whether it's CAR T or bispecifics, let's just talk about bispecifics because that's more applicable to LOTIS-7. They're not only used across all of the academic centers. They are used in more sophisticated community centers and that may grow over time. So I wouldn't say it's distinction of purely community versus academic. It's more all of the academic can administer those products and a portion of the community can administer those products.

In that universe of institutions that can administer the product, obviously, LOTIS-7 is going to have a clear place. Then there's other therapies like chemotherapy, ADCs, antibodies, which are more broadly accessible and those can be ministered across all settings. But they are still administered in the academic centers and they're administered in all the community settings. So I wouldn't differentiate to say LOTIS-7 is going to be purely academic and LOTIS-5 is going to be purely community.

The reality is LOTIS-7, when a patient is suitable for it and the facility can administer the therapy, you're going to go with the highest-efficacy product and a combination that you can go with. We think LOTIS-7 is really well positioned, and that will be used again in all the academic centers and a portion of the community. Exactly how much, we'll see over time how bispecifics get adopted by the community.

With LOTIS-5, either because of accessibility of the therapy or because of suitability for the patient, remember, there are some patients that have co-morbidities or other conditions which may prevent them from getting an immune-based therapy subsequently. There may be a post-CAR T patient that's at risk of infection, may be a patient with autoimmune disease. There may be other reasons why you're not going to want to give a bispecific-based therapy. And for other centers in the community, they're not going to have access to them.

And so for all those reasons, we think LOTIS-5 still plays a big role. We still see R-based chemo regimens having a large share in the relapse/refractory market. So we think we have a good place, and that's really our strategy, is to hopefully have leading efficacy in both of these segments, both the complex therapies and the more broad accessible therapies.

(Operator Instructions)

Sudan Loganathan, Stephens.

I know you've spoken about the opportunity in the second-line, third-line plus for relapsed/refractory DLBCL with LOTIS-7, LOTIS-5 outcomes, respectively. But can you give us more details on how you view each percentage increase in penetration in either the second or third-line setting would add to the ZYNLONTA revenues to achieve your peak guidance ranges that you've noted?

And then secondly, regarding the ZYNLONTA plus rituximab for relapsed/refractory FL, data thus far at 84% CR rate seems to slide nicely right after the T cell therapeutics and then in line or slightly better than bispecifics. If this holds true, does this mostly take market share away from bispecifics? Or any opportunity to take from the T cell therapeutic options in FL? I'd like to get your details on those things.

Yes. So I would say to answer your first question about what's the share point worth, so think about in the second-line setting, there's about 12,000 patients in the US and in the third-line plus setting, there's 6,000 patients. So depending on where you're getting the share, the second-line setting or third-line plus, every share point obviously multiplied by the number of patients.

With monotherapy, we're typically seeing three cycles. Now remember, the first two doses of our product are at 150 micrograms per kilogram and then it drops to 75. So it's weight-based. But oftentimes, it can be two vials for the first two cycles and drop to one vial. What we're seeing with LOTIS-5 and LOTIS-7 is somewhere between five to six cycles.

So you can just do the subsequent calculation on vials and then you know what our net price. And our gross price is in the upper $20,000s, net price is in the lower $20,000. So if you do the kind of calculation depending on what -- if you're talking about a share point in the second-line or third-line plus in, that kind of gives you a rough estimate.

Just by way of example, like in the LOTIS-5, for example, if we were able to maintain our roughly 10% share that we have in the third-line plus setting and translate that in second-line setting but with increased duration of therapy and our net pricing, that would take our product, which is on roughly $70 million run rate, that's what it's kind of been the last couple of years, to just over $200 million. Obviously, we're hoping with efficacy improvements, you actually gain share. And that's what leads to the guidance of $200 million to $300 million. You can do similar calculation for LOTIS-7.

Now turning to the indolent lymphomas. I think we're excited both about the data that Mohamed spoke about with the relapsed/refractory follicular lymphoma and relapsed/refractory marginal zone lymphoma data that was presented at EHA and ICML. I think both right now on outstanding results. I would say in terms of the opportunity for potential adoption, right now we're basically funded to try to get compendia for both. So obviously, we will promote either of these indications.

But what I could say is the unmet need and the level of competition is probably higher -- the unmet need is higher in MZL and the level of competition is lower in MZL versus follicular lymphoma. That's why we emphasize that one to a bit more. When you look at the different agents that are approved or in compendia, the SCR rates are 29%, roughly 30%. Even if you look at subsequent data that's come out, maybe a bit higher than that. What we've been showing is closer to 70% CR in the MZL setting.

In follicular, although the data is outstanding and we hope to have a place there, it's a lot more competitive. There's literally more than 10 agents that have Phase III trials, including the bispecifics and many other agents who have large Phase III studies with overall survival. And it's just a more competitive space. So that's why we think the potential for uptake is just smaller, not because the data isn't excellent, but just because it's a much more competitive space.

There are no further questions at this time. I will now turn the call over to Ameet Mallik for closing remarks.

Well, I want to thank you all for joining our call today. We really appreciate the questions and we appreciate your continued support. We look forward to keeping you updated on our progress. Operator, you may now end the call.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.