Q4 2023 ADC Therapeutics SA Earnings Call
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Operator: Welcome to the ADC Therapeutics fourth quarter and full year 2023 Financial Results Conference call. My name is Norma, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode.
Welcome to the ADC Therapeutics fourth quarter and full year 2020 financial results Conference call. My name is Norman and I'll 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.
Operator: Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press star 1-1 on your touchtone telephone. I will now turn the call over to Nicole Riley, Head of Communications. Nicole, you may begin. Thank you, operator. This morning, we issued a press release announcing our fourth quarter and full year 2023 financial results and business update. This release is available on the ADCP website at ir.adctherapeutics.com under the Press Releases section. On today's call, Ameet Mallik, Chief Executive Officer; Kristen Harrington-Smith.
One one on you touched on telephone I will now turn the call over to shouldn't Nicole Reilly head of Communications Nicole you may begin.
Thank you operator. This morning, we issued a press release announcing our fourth quarter and full year 2023 financial results and business update.
This release is available on the a B C. T website at IR Dot ADC therapeutic dot com under the press releases section.
On today's call, Amit Malik Chief Executive Officer Christian Harrington.
Nicole Riley: Chief Commercial Officer, Mohamed Zaki, Chief Medical Officer, Patrick Van Berkel, Chief Scientific Officer, and Pepe Carmona, Chief Financial Officer, will discuss recent business highlights and review our fourth quarter and full year 2023 financial results before opening 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. The Private Securities Litigation Reform Act of 1995.
Chief Commercial officer, Mohammed Jockey, Chief Medical Officer, Patrick Van Berkel cheap.
Scientific officer, and Pepe Carmona, Chief Financial Officer will discuss recent business highlights and review our fourth quarter and full year 2023 financial results before opening 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 piece.
Nicole Riley: 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 today's press release, in the accompanying slide presentation on slide two, and in the company's filings with the SEC, including Form 10-K, 10-Q, and 8-K. ADCT is providing this information as of the date of this conference call 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 after the date hereof, except The company cautions investors not to place undue reliance on these forward-looking statements. Today's presentation also includes non-GAAP financial measures. These non-GAAP measures have limitations as financial measures and should be considered in addition to and not in isolation or as a substitute for information prepared in accordance with GAAP.
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 today's press release and the accompanying slide presentation on slide two.
And in the company's filings with the SEC, including forms 10-K, 10-Q and 8-K.
ATC T is providing this information as of the date of today's conference call 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. After the date hereof, except as required by law or otherwise.
The company cautions investors not to place undue reliance on these forward looking statements.
Today's presentation also includes non-GAAP financial measures.
These non-GAAP measures have limitations best financial measures and should be considered in addition to and not in isolation or as a substitute for the information prepared in accordance with GAAP.
Nicole Riley: You should refer to the information contained in the company's fourth quarter earnings release for definitional information and reconciliations of historical non-GAAP measures to the comparable GAAP financial measures. It is now my pleasure to pass the call over to our CEO, Ameet Mallik.
You should refer to the information contained in the company's fourth quarter earnings release for definitional information and reconciliations of historical non-GAAP measures to the comparable GAAP financial measures.
It is now my pleasure to pass the call over to our CEO Amit molecule.
Ameet Mallik: Thanks, Nicole, and thank you all for joining us today. 2023 was a year of prioritization and focus for the company. We made some tough decisions, and I firmly believe we are well positioned for success in 2024 and beyond. With enhanced talent in place, we implemented a new corporate and capital allocation strategy, focusing our resources and energy on our most advanced and highest potential clinical value drivers. As you can see here, we enhanced commercialization efforts, prioritized our pipeline, expanded our research platform, and reduced organizational costs. This reset in 2023 was critical to enable our strategy moving forward. There are two core pillars to this strategy, which we believe will unlock the tremendous value we see in this company.
Thanks, Nicole and thank you all for joining US today 2023 was a year of prioritization and focus for the company. We made some tough decisions and firmly believe we are well positioned for success in 2024 and beyond.
With enhanced talent in place, we implemented a new corporate and capital allocation strategy, focusing our resources and energy on our most advanced and highest potential clinical value drivers.
As you can see here, we enhanced commercialization efforts prioritize our pipeline expanded our research platform and reduced organizational costs.
This reset in 2023 was critical to enable our strategy moving forward.
There are two core pillars to this strategy, which we believe will unlock the tremendous value we see in this company.
Ameet Mallik: Our first pillar and primary focus is hematology. Within this, we have a de-risked asset in Zenlanta, the key product in our prioritized portfolio, which we expect to carry the company through to profitability. We are deploying the majority of our capital to the Zenlanta franchise to commercialize our existing Third Line and Third Line Plus DLBCL indications and to pursue the substantially larger potential opportunity in earlier lines of DLBCL therapy and indolent lymphoma. We believe these potential opportunities will help expand the Zalanta franchise and have the potential to generate annual peak sales in excess of half a billion dollars.
Our first pillar and primary focus is hematology.
Within this we have a derisked asset into Martha the key product in our prioritized portfolio, which we expect to carry the company through to profitability.
We are deploying the majority of our capital to this and lots of franchise to commercialize our existing third line and third line plus the <unk> indication and.
And to pursue the substantially larger potential opportunity in earlier lines of <unk> therapy, and indolent lymphomas.
We believe these potential opportunities will help expand theres been lots of franchise and has the potential to generate annual peak sales in excess of $5 billion.
Ameet Mallik: The second pillar of our strategy is grounded in our emerging solid tumor pipeline. Our most advanced asset is ADCT 601, and behind this, we have a number of exciting next-generation antibody drug conjugates that potentially address significant unmet patient needs. Driven by our novel platform, we see the potential to advance a broad portfolio of differentiated ADCs against solid tumor targets of interest.
The second pillar of our strategy is grounded in our emerging solid tumor pipeline.
Our most advanced asset is <unk> 601, and behind this we have a number of exciting next generation antibody drug conjugates, which potentially address significant unmet patient needs.
Driven by our novel platform, we see the potential to advance a broad portfolio of differentiated adcs against solid tumor targets of interest.
Ameet Mallik: To capture this opportunity, our ambition is to progress multiple assets in parallel, internally and externally, supported by non-dilutive funding from partners. From each of our presenters today, you will hear about how we are putting this strategy into action. Whether through enhancing our commercial execution, prioritizing and accelerating our most promising pipeline assets, Advancing High-Potential Early-Stage Research Programs, or through our Capital Allocation Strategy. Now I'd like to expand briefly on the substantially larger potential opportunity that I just mentioned for Zymlanta in earlier lines of DLBCL therapy and indolent lymphoma.
To capture this opportunity our ambition is to progress multiple assets in parallel internally and externally supported by non dilutive funding from partners.
Across each of our presenters today, you will hear about how we are putting this strategy into action whether through enhancing our commercial execution prioritizing and accelerating our most promising pipeline assets.
Advancing high potential early stage research programs.
Worked through our capital allocation strategy.
Now I'd like to expand briefly on the substantially larger potential opportunity that I, just mentioned person locked up in earlier lines of <unk> therapy.
Ameet Mallik: Pending the results of the LOTUS-5 and LOTUS-7 studies, our goal is to expand the usage of Zimlanta into second line and second line plus settings for DL-BCL. Furthermore, if data supports expansion into the second line and second line plus settings for follicular lymphoma and marginal zone lymphoma, we believe this would further increase the potential for this product. Now I'd like to share a snapshot of the business updates you'll hear about today. I'm pleased to confirm that Zenlanta achieved double-digit sequential sales growth in the fourth quarter, with revenues of $16.6 million.
Lymphomas.
Pending the results of the Lotus five and <unk> seven studies, our goal is to expand usage of the Martha and the second line and second line plus there'll be CL.
Furthermore, if data supports expansion into the second line and second line plus setting so politically.
Follicular lymphoma, and marginal zone lymphoma, we believe this would further increase the potential for this product.
Now I'd like to share a snapshot of the business update you'll hear about today.
I am pleased to confirm that it's in line to achieve double digit sequential sales growth in the fourth quarter with revenues of $16 6 million.
Ameet Mallik: Importantly, we saw a resumption of growth both in the community and in academic centers. We are also delighted to share positive pipeline news at the start of this year. For our LOTUS7 study of Zanlanza in combination with bi-specifics, we shared early data from the first dosing cohort. Since that time, we have successfully cleared the second dosing cohort in both arms with no dose limit. We are encouraged by what we have observed with ADC T601, our novel axle targeting ADC in sarcoma and a recently initiated screening in pancreatic cancer patients. Lastly, we disclose that we are advancing an early stage portfolio of investigational ADCs, which utilize a novel exotequin-based platform. Turning to our financial position, we ended 2023 with close to $280 million in cash.
Importantly, we saw a resumption of growth both in the community and in academic centers.
We are also delighted to share positive pipeline news at the start of this year.
For our loaded seven study of <unk> in combination with Biospecifics.
Sure. It early data from the first dosing cohort.
Since that time, we have successfully cleared the second dosing cohort in both arms with no dose limiting toxicities.
We are encouraged by what we have observed with ADC <unk> 601, our novel actual targeting ADC in sarcoma and.
And our recently initiated screening in pancreatic cancer patients.
Lastly, we disclosed that we are advancing an early stage portfolio of investigational adcs, which utilize our novel <unk> based platform.
Turning to our financial position, we ended 2023 with close to $280 million in cash.
Ameet Mallik: Together with our business plans and strict cost discipline, this provides us with an expected cash runway into Q4 2025, which will support us through multiple value-generating catalysts this year and next. But taken together, we enter 2024 with great confidence, having repositioned and refocused the company and with some encouraging early data emerging from our pipeline. With that, I would like to turn the call over to Kristen for a commercial update.
Together with our business plans and strict cost discipline. This provides us with an expected cash runway into Q4, 2025, which will support us through multiple value generating catalyst this year and next.
But taken together, we enter 2024 with great confidence, having repositioned and refocus the company.
With some encouraging early data emerging from our pipeline.
With that I would like to turn the call over to Christian for a commercial update.
Kristen Harrington: Thanks, Ameet. Today, our strategy is to grow Zanlanza in the community, where the third line, third line plus DL-BCL setting continues to be fragmented with no standard of care, and to maintain our position in academic centers for patients who are not eligible for CAR-T, or by specific criteria, or who have progressed following treatment with these complex therapies. Our strategy is supported by real-world data as presented at the recent TANDA meeting, which demonstrated Zinlanza's efficacy pre and post CAR-T. Execution against our strategy was the fundamental driver for our commercial restructuring and resulted in hires and lots of demand in November and December, similar to the levels in the first half of 2023. We delivered a 17% increase in net revenue in Q4 compared to Q3, with growth in both the community and academic settings.
<unk>.
Thanks, Amit today, our strategy is to growth in loans in the community, where the third line third line plus D. L. Bcl setting continues to be fragmented with no standard of care and to maintain our position in the academic centers for patients who are not eligible for car T or bi specifics or will have.
<unk> following treatment with these complex therapies.
Our strategy is supported by real World data as presented at the recent tandem meeting, which demonstrated the Atlantis efficacy pre and post car T.
Execution against our strategy with the fundamental driver for our commercial restructuring and resulted in higher than lots of demand in November and December similar to the levels in the first half of 2023.
We delivered a 17% increase in net revenue in Q4 compared to Q3 with growth in both the community and academic setting.
Kristen Harrington: I am especially proud of our performance, given the competitive dynamic with the recent approvals of two bi-specifics in the same 3rd line, 3rd line plus setting as in Lanza. We are confident we have the right team and the right strategy to maximize Enlanta in the current approved indication. Now I want to turn to the future market landscape and the important role we expect from lots of supply. Within the DLVCL market, a true standard of care only exists in the front line with RCHOP and recently PolaRCHIP, as well as in the academic setting in the second line with CAR-T and autologous stem cell transplant. However, accessibility to most patients treated in the community remains a challenge.
I am, especially proud of our performance given the competitive dynamic with the recent approvals of chubais specifics and the same third line third line plus setting as in Montana.
We are confident we have the right team and the right strategy to maximize the Atlanta and the current approved indications.
Now I wanted to turn to the future market landscape and the important role we expect lots of play.
Within the <unk> market, a true standard of care only exists in the frontline.
With R Chop and recently polled our check as well as in the academic setting in the second line with car T and autologous stem cell transplant. However.
However, accessibility most patients treated in the community remains a challenge.
Kristen Harrington: The market is evolving towards highly effective combinations with off-the-shelf agents as a cornerstone. As politizumab moves to the front line, we expect this will create an unmet need in the market as re-treatment in the relapse refractory setting is unlikely. With our confirmatory Phase 3 trial, LOTUS-5, our plan is to expand the Zalanta label to the second line, second line plot. We have a tremendous opportunity to build share in this broader patient population if this study continues to deliver the competitive efficacy that we have already observed with Zalansa in combination with Rituximab in the 20 patient safety run-in. These data, coupled with the potential advantages of accessibility, ease of use, and manageable tolerability, lead us to believe the results from LOTUS 5 will help to cement Vinlanta as a standard of care in the Second Line Second Line Plus among community centers, where R-based regimens are commonly used across all lines of therapy.
The market is evolving towards highly effective combinations with off the shelf agents as the cornerstone.
As policies and that moves to the frontline. We expect this will create an unmet need in the market as re treatment in the relapsed refractory setting is unlikely.
With our confirmatory phase III trial Lotus five our plan is to expand as Atlanta label to the second line second line plus.
We have a tremendous opportunity to build share in this broader patient population. If this study continues to deliver at the competitive efficacy that we have already observed with <unk> in combination with <unk> and the 20 patient safety run it.
These data coupled with the potential advantages of accessibility.
The views and manageable Tolerability lead us to believe the results from Lotus five will help to cement the Atlanta as the standard of care in the second line second line plus among community centers, where our based regimens are commonly used across all lines of therapy.
Kristen Harrington: In addition, these data have the potential to expand the use of Xenlopsa in both the second-line and third-line, third-line plus academic settings when an alternative to CAR-T and or bi-specifics is needed. Moving to Lotus 7, our Phase 1b trial evaluating Zanlanta in combination with Bi-Specific. As we progress this development program forward, our objective is to demonstrate that the combination can deliver enhanced efficacy compared to bi-specifics alone, which could significantly expand Zanlon's use. In addition, we hope to demonstrate that Zanlanza, when compared with Five Specifics, can reduce levels of CRF and eliminate the need for hospitalizations, expanding accessibility in the community.
In addition, these data have the potential to expand the use of the market in both the second line.
Third lines online plus academic settings, when an alternative to car T <unk> bi specifics as needed.
Moving to Lotus seven our phase <unk> trial evaluating <unk> in combination with bi specifics as we progressed. This development program forward. Our objective is to demonstrate that the combination can deliver enhanced efficacy compared to bi specifics alone, which could significantly expands in line to you.
Yes.
In addition, we hope to demonstrate that and launch that when compared with bi specific can reduce levels of crs and eliminate the need for hospitalization expanding accessibility in the community.
Mohamed Zaki: Ultimately, if successful, this combination has the potential to transform the treatment paradigm in the second line across both settings and substantially enhance the patient and commercial opportunity for Zinlanta. Now, I would like to turn the call over to Mohamed for a clinical update. Thanks, Kristen.
Ultimately if successful this combination has the potential to transform the treatment paradigm in the second line across both setting and substantially.
Enhancing the patient and commercial opportunity for the market.
And now I would like to turn the call over to Mohammed for a clinical update.
Mohamed Zaki: It's my pleasure to provide an update on our clinical stage pipeline, starting with Notice 5. In our Phase 3 confirmatory trial with Zinlanta and Rituximab, we significantly accelerated the pace of enrollment in 2023, and we reported encouraging updated safety lead-in results in September. While we have been pleased with the increase in patient enrollment, our clinical team recently observed higher than expected sensory side effects in the trial, which was confirmed with the IDMC. As a result, we may need to expand enrollment beyond the planned 350 patients to achieve the required number of pre-specified progression-free survival events. Based on the current pace of enrollment, we do not expect this to affect our target to complete enrollment in 2024. Importantly, the IDMC noted no safety concerns and recommended the study to proceed at its most recent meeting held on the 16th of January 2024. Moving to Route 7.
Thanks, Kristen, it's my pleasure to provide an update on our clinical stage pipeline.
Starting with <unk>, our phase three confirmatory trial with them long term as it talks about we significantly <unk>.
Enrollment in 2023, and we reported encouraging safety lead the unresolved in September.
While we have been pleased with the increase in patient enrollment our clinical team recently observed with higher than expected sensitive in the trial.
Which was confirmed with the IBM Z.
As a result, we may need to expand enrollment beyond the planned 350 patients to achieve the required number of pre specified progression free survival events.
Based on the current pace of enrollment we do not expect this to affect our target to complete enrollment in place before.
Importantly, the items noted no safety concerns and recommended the study to proceed at its most recent meeting held on the 16th of January 2024.
Moving through the seven.
Mohamed Zaki: This is our phase 1b study to explore Zalanda in novel combinations. We are focusing on the combination in two bi-specific arms, Roshes, Grafitamap, and Musintuzan.
This is our phase <unk> study to explore the Atlanta in novel combinations.
We are focusing on the combination and to buy specific are.
Russia's gafisa map and Lucentis.
Mohamed Zaki: Enrollment started in each arm in July 2023. Part one is a three plus three dose escalation and third line plus heavily treated patients, with the lambda doses starting at 90 micrograms per kilogram and then proceeding to 120 and 150 micrograms. As discussed in January, we dosed the first three patients in each arm with a 90-microgram dose and cleared the dose limit for 50 periods. Since that time, we have cleared the 120-microgram dose for both arms with no DLTs, and we are currently enrolling the 150-microgram dose. Once the escalation is complete, we plan to expand at the appropriate dose level. After the first investigator assessment, we have seen evidence of antitumor activity among the majority of patients, those at the first two levels, with mixed histologies, including DLBCL, follicular lymphoma, and marginal zone lymphoma.
Enrollment started in each arm in July 2023.
Part one is a three plus feet those Kelly ship in third line plus heavily pre treated patient was the launch of doses starting at 90 microgram per kilogram.
And then proceeding to 120 and 150 micrograms.
As we discussed in January.
We dosed the first three patients in each arm with the 90 microgram dose and cleared the dose limiting toxicity period.
Since that time, we have cleared the 120 microgram dose for both arms with no DLT is and we are currently enrolling the 150 microgram dose.
Once those escalation is complete we plan to expand at the appropriate those levels.
After the first in the <unk> assessment, we have seen evidence of anti tumor activity. Among the majority of patients dosed at the first two level with mixed histologist, including <unk> Follicular lymphoma and module is on their phone.
Mohamed Zaki: We expect to share additional data once a larger and more mature data set is available. While we are excited about what we have seen, we recognize that it is early. And once the expansion in the second line is complete and assuming data are promising, we plan to approach regulatory agencies to discuss our strategy and potential path forward. Beyond our own studies, there is a significant amount of interest from investigators exploring in the long term additional indications and combinations. At ASH in December 2023, there was an oral presentation from the University of Miami on their investigator-initiated phase 2 study of denlanta and rituximab in patients with high-risk relapsed or refractory follicular lymphoma. There is a unique population not served well by the current standard of care. Initial results from the 33 patients were very encouraging, including a best overall response rate of 96% and a complete response rate of 85%. In terms of safety, the majority of adverse events were primarily grade 1 and mild.
We expect to share additional data once a larger and more mature deficit is available.
While we are excited but what we have seen we all recognize that it is early.
Once those expansion and the second line is complete and assuming that there are promising we plan to approach that your thought is to discuss our strategy and potential path forward.
Beyond our oldest studies there is a significant amount of interest from investigators to explore the Atlanta in additional indications and combinations.
Ash in December two equally fee there was an oral presentation from University of Miami on the investigator initiated phase two study of the Lauder and Rituximab in patients with high risk relapsed or refractory Follicular lymphoma.
Is it a unique population not served well by the current standard of care.
Initial results from the 33 patients were very encouraging.
Including a best overall response rate of 96% and a complete response rate of 85%.
In terms of safety the majority of adverse events were primarily grade one and manageable.
Mohamed Zaki: The presentation was extremely well received by the physician community, and the trial is now being expanded to other centers with a target enrollment of 100 patients. The University of Miami is also conducting another investigative initiative phase two study of the lung in relapsed refractive marginal zone lymphoma, an indication with significant unmet needs. The study is designed to enroll 50 patients, and a futility analysis is expected to be conducted in the second quarter of this year. We anticipate the investigators will present the data from both studies at upcoming medical meetings. If these investigators' trials are positive..., we would move quickly to determine the regulatory and or compendia path forward. I want to turn now to our solo tumor candidate, ADCT601 Targeting Axel, which we are investigating in a Phase I study in sarcoma, pancreatic cancer, and non-small cell lung cancer. While others have explored AXL as a therapeutic target, we are especially excited by the potentially differentiated profile we see with the 601D2, its innovative design of incorporating a PB detox and access expressed in multiple keyboard types.
The presentation was extremely well received by the physician community.
<unk> is now being expanded to other centers with a target enrollment of 100 patients.
The University of Miami is also conducting another investigator initiated phase two study.
Alone in relapsed or refractory marginal zone lymphoma indications with significant unmet needs.
The study is designed to enroll 50 patients and a futility analysis is expected to be conducted in the second quarter of this year.
We anticipate the investigators will present the data from both studies at upcoming medical meetings.
If this is just to give you. The sheer trials are positive we would move quickly determined that regulatory and or compendium path forward.
I want to turn now to our solid tumor candidates <unk> 601, targeting <unk>, which we are investigating in a phase one study in sarcoma pancreatic cancer, another small cell lung cancer.
While others have explored Axel therapeutics targets, we are especially excited by the potentially differentiated profile, we see with the 600 <unk> does do is it will be.
We have designed <unk>.
Bracing.
B the toxin.
Axa is expressed in multiple tumor types and it has been shown that high expression of Axa is quarterly towards patients overall survival across many cancer types.
Mohamed Zaki: And it has been shown that high expression of AXL is correlated towards patients' overall survival across many cancer types, including non-responsive lung cancer, pancreatic, and sarcoma. Our phase one trial includes monotherapy as well as combination arms with gem cytogen in sarcoma and pancreatic cancer. Given the high level of axial expression, sarcoma is serving as the proof of concept.
Within non small cell lung cancer.
And sarcoma.
Our phase one trial includes monotherapy as well as combination arms with <unk> in sarcoma and pancreatic cancer.
Given the high level of accurate expression sarcoma is serving as the proof of concept.
Mohamed Zaki: In January, we disclosed that we reached the recommended dose of 13 milligrams. In addition, we also share that ADCT 601 was well tolerated at the doses tested, and we have been encouraged by the early signs of anti-tumor activity in both monotherapy and combination. The study is currently in part two, which includes dose optimization and expectancy. We plan to share additional data from the trial in a presentation at ECR next month, for which the abstract is now available online. With regard to the other indications, I am pleased to report that we have initiated screening in the pancreatic cancer monotherapy arm based on an enriched patient population. We also plan to initiate dosing in the non-small cell lung cancer pre-selected patients once we have optimized the assay for non-small cell lung cancer. I am encouraged by the progress we are making with our pipeline and look forward to sharing more in the future. Now, I would like to hand over to Pat.
In January we disclosed that we reach the recommended dose of 30 milligrams.
In addition, we also sure that EDC six O arm was well tolerated at the doses tested and we have been encouraged by the early signs of antitumor activity in both monotherapy and combination.
The study is currently in part two which includes those optimization and expense.
We plan to share additional data from the trial.
In the presentation at <unk> next month for which abstract is now available online.
Yes.
With regard to the other indications I am pleased to report that we have initiated screening in the pancreatic cancer monotherapy are busy reshaping our population.
We also plan to initiate dosing in the non small cell lung cancer pre selected patients. Once we have devised the assay for non small cell lung cancer.
I am encouraged by the progress we are making with our pipeline and look forward to sharing more in the future.
I would now like to hand over to Patrick.
Patrick Van Berkel: Thanks, Mohamed. It's a pleasure to update you all on our research activities. As we disclosed at the start of this year, as part of our broad toolbox, we're now developing ADCs utilizing a differentiated payload based on the topoisomerase 1 inhibitor exotequin, together with a novel hydrophilic link. Compared with commercially available toxins, such as the DXV platform, our innovative and proprietary approach has shown evidence in preclinical studies for greater potency, stronger bystand Initially, we are conducting research utilizing our Excel-Teken-based platform against four highly attractive targets and indications with high unmet needs. The first is Cloridin 6, which is a novel target that is highly expressed in ovarian, endometrial, testicular, and non-small cell lung cancer.
Thanks Margaret.
It's a pleasure to update you all on our research activities.
As we disclosed at the start of this year as part of a broad toolbox were now developing adcs utilizing a differentiated payload.
Based on the topoisomerase, one another extra taken together with a novel hydrophilic linker.
Compared with commercially available toxins, such as the <unk> platform, our novel and proprietary approach has shown evidence in preclinical studies.
Greater potency stronger bystander activity and excellent tolerability.
Initially we are conducting research utilizing our exit you can boost platform against four highly attractive targets and indications with high unmet needs.
The first is <unk> six which is a novel target that is highly expressed in ovarian endometrial testicular and non small cell lung cancer.
Patrick Van Berkel: The second target is NEPI 2B, a validated ADC target, which is also highly expressed in ovarian, endometrial, and non-small cell lymphocytes. The furthest target is PSMA, which is a validated ADC target highly expressed in metastatic cascade-resistant prostate cancer. We intend to select a clinical candidate based on a novel optimized PSMA-specific antibody. Lastly, we are applying this platform to an undisclosed target. What I can say is that the target is a novel transporter protein that is highly expressed in multiple hematological and solitumamalignin. For Cloridon 6, NAPI 2B, and the undisclosed target, we have completed in vivo pharmacology and range finding studies in Sinomogus monkeys.
The second target is <unk>.
Elevated ADC target, which is also highly expressed in ovarian endometrial and non small cell lung cancer.
The <unk>, which is a validated ADC target highly expressed in metastatic castrate resistant prostate cancer.
We intend to select a clinical candidate based on a novel optimize specific antibody.
Lastly, we are applying this platform to an undisclosed targets.
What I can say is that the target is a novel transporter protein, which is highly expressed in multiple hematological and solid tumor malignancies.
For clothing, six and happy to be in the undisclosed cargo we have completed in vivo pharmacology and those range finding studies of cinemark as monkeys.
Patrick Van Berkel: In each case, we've seen strong anti-tumor activity with an attractive therapeutic index and no evidence of interstitial lung disease. Based on the encouraging initial data from these three investigational candidates, we believe we have a differentiated ADC platform that can be applied to multiple tumor targets of interest. In terms of next steps, we will share data for Claude and Snicks and NAPI2B at AACR next month. The abstracts are available on the ASCO website, and I would encourage you to review them. Following AACR, we plan to share additional information on our differentiated wishes platform at an investor event in the second quarter. With that, I would like to hand over to Pepe.
In each case, we've seen strong anti tumor activity within a truck for equity index and no evidence of interstitial lung disease.
Based on the encouraging initial data from these three investigational candidates. We believe we have a differentiated ADC platform that can be applied to multiple tumor targets of interest.
In terms of next steps, we will share data for closing six and that would be to be at <unk> next month.
The abstracts are available on the <unk> website, and I would encourage you to review them.
Following <unk>, we plan to share additional information on our differentiated platform at an investor event in the second quarter.
With that I would like to hand over to Patrick.
Jose I. Carmona: Thank you, Patrick. Before I get into the financials and upcoming catalysts, I want to remind everyone of our corporate business development strategy. Hematology continues to be our primary focus, and within this, our key objective is to drive the value of Zin Long. We will achieve this by fully supporting our commercialization effort in the U.S. directly and through our partnership with Ex-U.S. In Solid Tumors, our aim is to pursue multiple ADC candidates in parallel and increase our shots on goal.
Thank you Patrick.
Before I get into the financials and upcoming catalyst I want to remind everyone of our corporate business development strategy.
Hematology continues to be our primary focus within this our key objective is to drive the value of it is in London.
We will achieve this by fully supporting our commercialization efforts in the U S directly and through our partnerships ex U S.
In solid tumors. Our aim is to pursue multiple ADC candidates in parallel and increase our shots on goal.
Jose I. Carmona: We will determine, on a case-by-case basis, whether we wish to progress candidates internally or seek to partner in order to share the development and financial risks. Turning to our fourth quarter performance, we're now reporting our results on the U.S. gap as we become a U.S. domestic filer starting January 1st, 2025. Starting with our balance sheet, as of December 31st, we had cash and cash equivalents of approximately $278.6 million, or a $32 million decrease from the end of Q3. Moving to the P&L, as you already heard, Zinlontanet sales were $16.6 million in the quarter, a decrease of 16% per year, primarily driven by higher gross net due to discarded drug rebates and slightly lower volume, partially offset by higher gross Our total operating expenses on a non-GAAP basis, which excludes stock-based compensation, were down 24% compared to the fourth quarter of last year.
Will determine on a case by case basis, whether we wish to progress candidates internally or seek to partner in order to share the development and financial risk.
Turning to our fourth quarter performance, we're now reporting our results under U S. GAAP as we became a U S. Domestic filer starting January one 2024.
Starting with our balance sheet as of December 31st we had cash and cash equivalents of approximately $278 6 million or $32 million decrease from the end of Q3.
Moving to the P&L as you already heard is.
As in long term net sales were $16 6 million in the quarter.
<unk> of 16% versus prior year, primarily driven by higher gross to net due to discounted drug rebate and slightly lower volume.
Partially offset by higher gross price.
Our total operating expenses on a non-GAAP basis, which excludes stock based compensation were down 24% compared to the fourth quarter of last year.
Jose I. Carmona: This menu reflected our focus on driving operating efficiencies together with reduced R&D expenditure due to focused investment in our clinical studies and lower selling and marketing. For 2024, we will continue to take a very disciplined approach to our operating expenses. This is crucial to funding the development of our key pipeline programs and maintaining our expected cash runway into the fourth quarter of 2021. You will find the reconciliation of gap measures to non-gap measures in the companion 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 gap basis, we reported a net loss of $85 million for the quarter, or $1.03 per basic and diluted share.
This mainly reflected our focus on driving operating efficiencies together with reduced R&D expenditure due to focused investment in our clinical studies and lower selling and marketing expenses.
For 2024, we will continue to take a very disciplined approach to our operating expenses.
This is crucial to funding the development of our key pipeline programs and maintaining our expected cash runway into the fourth quarter of 2025.
You will find the reconciliation of GAAP measures to non-GAAP measures in the compiling 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 $85 million for the quarter or a one point over $3 per basic and diluted share.
Jose I. Carmona: This took our full year 2023 net loss to $240 million or $2.94 per share for basic and diluted. My final slide highlights the multiple potential value driving milestones which we expect in 2025. With that, I will turn the call back to Ameet. Thanks, Pepe.
This took our full year 2023, net loss to $240 million or $2 94.
For basic and diluted shares.
My final slide highlights the multiple potential value driving milestones, which we expect in 2024.
With that I will turn the call back to Amit.
Ameet Mallik: To close, we enter 2024 with a clear strategic roadmap and the capabilities to drive value creation for all our stakeholders. My team and I are excited about the company's prospects and look forward to keeping you updated on our progress. Now, we will be available for questions. Operator.
Thanks, Pat Bay to close we enter 2024 with a clear strategic roadmap and the capabilities to drive value creation for all our stakeholders.
My team and are excited about the company's prospects and look forward to keeping you updated on our progress.
Now we will be available for questions operator.
Operator: Thank you. As a reminder, to ask your question, you'll need to press star 1-1 on your telephone. To withdraw your question, please press star 1-1 again. Please wait for your name to be announced.
Thank you.
As a reminder to ask a question you will need to press star one on your telephone to withdraw your question. Please press star one again, please wait for your name to be announced please standby, while we compile the Q&A roster.
Operator: Please stand by while we compile the Q&A roster. One moment for our first question. Our first question will come from the line of Naureen Quibria with Capital One Securities. Your line is now open. Hi, good morning.
One moment for your first question.
Our first question will come from the line of Noreen, Cuba with capital One Securities. Your line is now open.
Naureen Quibria: Thanks for taking my question and questions, actually. And congrats on the progress. So, actually, I was just curious about Lotus-7. Can you talk about the safety data with bispecifics, you know, in combination to date and, you know, what's been seen with other therapies?
Hi, Good morning, Thanks for taking my question then questions actually.
Congrats on the progress Joe.
I was just curious about Lotus seven.
Can you talk about the safety data with bi specifics in combination to date and what's been seen with other therapies and relative to that can you speak to your expectation for Lotus.
Mohamed Zaki: And relative to that, you know, can you speak to your expectations for Lotus-7, your level of confidence in this combination? And just on the same topic, you mentioned in the press release that you have a larger data set, you present, we have a larger data set, can you just talk about the size and scope of that data set that you would expect to release, you know, is it after the 120 microgram data? Appreciate some great clarity.
Your level of confidence for this combination and just on the same topic you mentioned.
On the press release.
That you'd have a larger dataset you presume.
We can have a larger dataset can you just talk about the size and scope of that dataset that you would expect to releasing or is it after the 120 microgram data.
Ameet Mallik: Thank you. Thanks, Naureen. I really appreciate it.
I appreciate it from blending Larry Thank you.
Thanks, Doreen I really appreciate it.
Mohamed Zaki: Maybe I'll turn it over to Mohamed to answer both those questions on the safety profile and what we're hoping for and what we've been seeing as well as on, Yeah, so Mohamed, do you want to take it? Sure. Thanks, Ameet. Thanks for your question. With regard to this study, as you know, it's a dose escalation study of the combination of Zanlanta plus two different bispecific agents, Ketamap and Zantuzanap, in three different disease types, marginal zone, DLPCL, and follicular, in third line plus. We are very encouraged by the fact that we have cleared the first two of those levels, the 90 micrograms per keg and the 120 micrograms with no DLT use, and all we've seen so far is either no CRS or low-grade CRS that dissolves very quickly.
Maybe I'll turn it over to Mohamad to answer both those questions on the safety profile and what we're hoping for and what we've been seeing as well as on on.
Yes so.
Mohamad you want to take it.
Sure. Thanks.
Thanks, Amit Thanks for your question.
With regard to seven as you know those escalation study of combination of the loans up plus two different.
And by specific issues.
<unk> in three different disease types.
Module zone, the Bcl two indicators in third line plus.
We are very encouraged by the fact that we have cleared the first two dose levels. The 90 microgram per kg in the oil from the Permian natural gas will be no DLT youth and all we've seen so far.
Either more trs or low grade <unk>.
<unk> resolved very quickly.
Mohamed Zaki: We are very encouraged by the anti-tumor activity we keep seeing in this study to date. It's an open-label study, and we see things live. However, it's early days, and we would like to wait until we have more mature data to be able to share more mature cohorts later this year. I think that's pretty much the answer to your question. I hope I didn't miss it. Kind of a multiple point narrative
And we are very encouraged by the antitumor activity.
Keep CA in this study to date is an open label study.
However, every days and we would like to wait until we have more mature data to be able to share more mature cohorts.
Later this year.
I think that's pretty much.
Answer to your question I Hope I didn't miss it.
Ameet Mallik: I hope I didn't miss anything. Yeah, Naureen, and maybe just one thing to add. Thanks, Mohamed. You know, we're currently dosing the 150 microgram per kilogram dose in both the glofidimab and the mozantuzumab arm. Once those are cleared, we'll move right into the dose expansion in the second line plus DL-BCL with glofidimab, and that'll be the focus.
Multiple point, what I can say that I hope I didn't miss anything.
Yes.
Just one thing to add thanks Mohammed.
We're now currently dosing of 150 microgram per kilogram dose in both.
The <unk> and the <unk> arm one of those once those are cleared.
We'll move right into the dose expansion in second line plus <unk> with both fit a map.
Ameet Mallik: That's where I think we're going to get a better representation of efficacy when we have a broader number of patients, longer follow-up, and in a single histology. And that's really the focus of part two of the study, which we will start as soon as we clear the dose. And I guess I have one for Kristen, and then I'll hop back in the queue.
And that'll be the focus that's where I think we're going to get a better.
Representation of efficacy when we have a broader number of patients longer follow up and in a single histology and Thats really the focus of part two of the study.
Rich.
We will start as soon as we clear the dose escalation.
Okay and.
And I guess.
One for Chris then.
And then I'll hop back in the queue.
Kristen Harrington: I'm just curious in terms of, you know, the penetration levels for Zalanta in academic and community settings, what those are, can you comment on that, number one? And number two, can you talk about what you saw in terms of how you were able to increase growth in academics, just out of curiosity? Sure. Thanks, Naureen. We don't share exact numbers of penetration.
Just curious in terms of the <unk>.
Penetration levels for <unk>.
<unk> in the academic and community settings.
And are those can you comment on that number one and number two.
Can you talk about.
What what you saw in terms of how.
Are you able to increase growth in academic just out of curiosity.
Sure. Thanks, Larry So we don't share that number is that penetration, but I can tell you is that we had a strong foundation in the first couple of years of lines and within the academic setting in 2023, starting in Q2, we really refined our strategy to focus more on the community.
Kristen Harrington: What I can tell you is that we had a strong foundation in the first couple of years of launch and within the academic setting. In 2023, starting in Q2, we really refined our strategy to focus more on the community. Our strategy of driving adoption with the community played out well, and we started to see the impact of that in Q4 2023. So not only did we see more community sites adopt LATSA, but we also saw an increase in volume in the academic centers as well, post the entrance of Q5. So we see this increased demand, and I would say in November and December, we started to see our demand levels come back to what we saw in the first half of 2023. And we look forward to driving progressive growth with Finland through this refined strategy. Thank you so much. I'll hop back in with you.
Our strategy of driving adoption with the community played out well and we started to see the impact of that in Q4 2020. So not only did we see more community site and thats been lumpy, but actually we are in.
And volume in the academic centers as well.
That engine and see bi specifics so we.
We see this.
Increased demand and I would say in November and December we started to see our demand level come back to what we found in the first half of 2023, and we look forward to driving progressive growth with deadlines that with this refined strategy.
Great. Thank you so much I'll hop back in the queue.
Naureen Quibria: Thank you. One moment for our next question, please. Our next question comes from the line of Brian Chen with J.P. Morgan. Your line is now open. Hey, guys, thanks for taking our questions this morning. Just a couple.
Thank you one moment for our next question. Please.
Our next question comes from the line of Brian Chen with JP Morgan. Your line is now open.
Hey, guys. Thanks for taking our questions. This morning.
Brian Cheng: You know, on Lotus 5, can you talk a little bit more about the censoring that you mentioned on the call? Specifically, what is the reason for the higher than expected censoring in Lotus 5? And how much of that is due to safety-related withdrawal? And I've, Thanks, Brian. I appreciate it. So, Mohamed, do you want to talk about Lotus 5 and censoring? Yes, so thanks for the questions Brian, and I just want to highlight that it is not uncommon initiates the need for increased enrollment in a global open-label phase 3. It's also not uncommon to see a little bit higher censoring when you are dealing with less refractory diseases. The main reason we believe for the higher than average risk is the lack of convenience from physicians and patients with a control arm, possibly.
Just a couple.
No on Lotus side can you talk about a little bit more about the censoring that you mentioned on the call.
Specifically what is the reason for the higher than expected censoring and Lotus <unk> and how much of that is due to safety related withdrawal and a couple of questions left.
Okay.
Yes.
Thanks, Brian I appreciate it sure Mohammed do you want to talk about Motorcycling censoring.
Yes.
So thanks for your questions Brian.
Just wanted to highlight that it is not uncommon.
For any shifts the need for increased enrollment in a global open label phase three.
So not uncommon to see and it's find ourselves, saying when youre dealing with relapsed refractory diseases.
The real reason, we believe for the higher than ever is the lack of convenience from.
Physicians and patients with relation to the control arm, possibly.
Mohamed Zaki: And that's usually because the physician would want to be in the active arm, of course. So you can expect to see a little bit higher than usual. And there were no concerns by the DNC that met in January with regard to any safety issue that is not related to any safety reason or anything related to do.
And that's usually because the physician doesn't want to be in the active arm of course. So you can expect to see a little bit higher than usual.
There was no concerns by the DMC that met in January with regard to any safety issues. This is not related to any safety reason or anything related to do but it is very important.
Mohamed Zaki: But it is very important. This is simply replacing possibly missing events to reach the required number of events, clear the statistical analysis plan to reach the end of the study. So it's a replacement procedure that many phases do in order to make sure they get that on time. The good news is that even with a possible increase in the size of the trial, we do not anticipate having a delay in finishing enrollment, which we have communicated to be within 2024. The reason for that is that recently, we have observed an acceleration of enrollment, and we've seen really quite a high number of enrollments per month compared to the month before. Great.
This is simply replacing possibly missing events.
The required number of events per the statistical analysis plan to reach the end of the study so it's a risk.
Replacement procedure that maybe this is due in order to make sure that you get that in time. The good news is that even possible increase in the size of this trial, we do not anticipate to have a delay on finishing enrollment, which we have so many theatres to be within 2012.
Before there is a pullback is recently we have observed.
Acceleration of enrollment season really acquired high number one seven months compared to before.
Brian Cheng: And then going back to your comment related to commercial brand profitability later this year, what does that actually entail? You know, can you talk about the growth that we should expect in our model? And, you know, related to SG&E expenses, how should we model that for the rest of the year? Okay, yeah, thanks, Brian. Pepe, do you want to take that in terms of gross net evolution?
Great and then going back to your comment related to commercial Brian profitability later this year.
What does that actually entail can.
Can you talk about the gross to net that we should expect in our model.
And related to SG&A expenses, how should we model that.
For the rest of the year. Thanks.
Yes, Thanks, Brian.
You want to take that in terms of gross in that evolution, what brand where commercial brand profitability means in the evolution of SG&A.
Jose I. Carmona: What brand, what commercial brand profitability means, and the evolution of SG&A? Yeah, thank you, Brian, for the question. So on brand profitability, what we expect this year is that the revenues coming out of Zimlanta in the U.S. will be able to pay for all the expenses, say, related to commercializing Zimlanta, which means all the sales force, marketing team, medical finance liaison, and all discretionary spending, which would include A&P, cost of goods, IAT, and other related expenses. And so basically, from a capital allocation perspective, businesses, and commercial items in the long-term are not users of funds.
Thank you Brian for the question so.
Sure.
Brown profitability.
We expect this year is that the revenues coming out of lockdown in the U S will be able to pay for all the expense say record related to commercializing it within a month, which means all of it.
The sales force marketing theme.
Medical science liaison on all discretionary spending which would include the A&P.
Cost of goods.
IAP.
And other related expenses.
Basically from a capital allocation perspective business the commercial items the long times mobile users have filed this morning, our sources of funds to start.
Jose I. Carmona: It's more like a source of funds to start funding the pipeline. For modeling purposes, if you heard our messages, in 2023, from the first half to the second half of the year, our gross net increased by high single-digit percentage points. We expect that 2024 will have a similar gross net ratio that we had in the second half of 2023. So we don't expect further increases, but as you model it, in the first half of 2024, we'll be cycling over a higher gross net than what we saw in the first half of 2023 by that same percentage point. So a high single-digit increase in the first half of 2024 compared to the prior year, but it will be more even in the second half of 2024 compared to the second half of 2023. From an expenses perspective, we will continue to drive productivity measures.
Funding the pipeline.
For modeling purposes.
Gross demand.
If you're sharing our messages.
I think 2023 from the first half to the second half of the year, our gross to net increased high single digits.
Percentage points, we expect that 2024, we will have a similar gross to net ratio now we have in the second half of 2023.
We don't expect further increase that.
But as you model made in the first half of 2024, we will be cycling over.
Higher gross to net than what we saw in the first half of 'twenty three.
That same percentage points, so high single digit increase in the first half of 2024 compared to prior year, but it will be more.
Even in the second half consequently towards second half.
From a from an expenses perspective.
Yes.
We will continue to drive productivity measures.
Jose I. Carmona: We're not providing exact guidance on all OPEX levels, but we will keep driving productivity across the board. Importantly, this year, the highest investment level that we have is in Modus V, the cost-motority trial for Zenonta, which we expect to fully enroll this year. So after full enrollment happens and then the trial winds down into 2025, we expect a decrease in R&D expenses due to Modus V. All that depends, obviously, on the success of the other trials, but that's the biggest driver of the expense of this year, which will decrease as we go on to 2025. Do you have any other questions?
Providing exact guidance.
On on all Opex level.
We will keep driving productivity across across the board.
Importantly, this year the higher is the higher highest investment level that we have.
Is it models five.
The cost of metallic ores, and Malta, which we expect will enrollment this year. So after full enrollment happened and then the trial wind down in 2025, we expect a decrease of RMB expenses.
Due to you to.
Nodal status.
All of that depends obviously on the success of the habit tayo.
The biggest driver.
R&D expenses this year, which will decrease as we don't want to quantify.
Yes.
Yes.
Great. Thanks, guys do you have any other questions.
Yeah.
Okay.
Jose I. Carmona: Thank you. One moment for our next question, please. And our next question comes from the line of Gregory Renza with RBC Capital Markets. Your line is now open.
Okay.
Thank you.
For our next question please.
Okay.
And our next question comes from the line of Gregory <unk> with RBC capital markets. Your line is now open.
Gregory James Renza: Hey, good morning, Ameet and team. Congratulations on the progress. Thanks for the updates and for the questions. Maybe just building on the commercial strategy, Ameet, it's helpful to hear the color of the poll through from the fourth quarter.
Hey, good morning, Amit and team congrats on the progress thanks for the update.
Other questions maybe.
Maybe just building on the commercial and strategy.
That's helpful to hear any color on the pull through from the fourth quarter. Just curious if that CD 20 by specific competition was within those expectations.
Ameet Mallik: Just curious if the CD20 by-specific competition was within those expectations and any factors that we should be thinking about going beyond what Kristen and Pepe had indicated on the dynamics of uptake for 2024. And maybe just related to that, if I may, as we think about the longer-term opportunity for late line, just curious if you have any updated thoughts on Zalata's positioning just relative to ADC-based combinations in third line, certainly saw the Echelon 3, Cetris triplet, meeting its OS endpoint improvement regardless of CD30 expressions. So I'm just curious if you have any updated thoughts on those evolving dynamics as well. Yeah, I'll start, and then I'll pass it on to Kristen and Mohamed in case they have additional comments. But yeah, I would say, overall, bi-specifics are definitely gaining ground in that third line setting post CAR-T. You saw there was strong growth.
Any factors that we should be thinking about going beyond the Christian.
I had indicated on the dynamics of uptake for 2024, and maybe just related to that if I may ask as we think about the longer term opportunities for late line. Just curious if you have any updated thoughts on the largest positioning just relative to ADC based combinations in third line certainly saw the echelon three.
Etc, triplet meeting its OS endpoint improve them, regardless of senior term expression. So I'm just curious if you had any updated thoughts on those evolving dynamics as well. Thanks so much.
Yes, I'll start and then I'll constant contact Chris in Omaha, and Keith any additional comments, but I.
I would say overall bispecific, so definitely gaining ground in that third line setting post car T. You saw there was strong growth while car Ts are basically kind of flattening out right now when you look at out of the sales of all the car T.
Ameet Mallik: While CAR-Ts are basically kind of flattening out right now, when you look at the sales of all the CAR-T agents in Q4 versus Q3, it's kind of flattening out. Bi-specifics, however, continue to grow dynamically, and the uptake, particularly in the academic setting, continues to grow. In the community setting, while they've been used in more sophisticated centers, the uptake there is much more limited.
Agents in Q4 versus Q3 is kind of flattening out.
You need to grow dynamically and and the uptake, particularly in the academic setting.
<unk> continues to grow in the community setting while they've been using more sophisticated centers that the uptick there is much more limited.
Ameet Mallik: I think what we found, though, is that there's a clear place for Zanlanta, you know, either for patients where a biopsy is not suitable, or where a patient may need even faster responses for ones that progress post-advisory because it doesn't work for every patient. So I think academic positions have sort of figured out how to best use Enlanta in a dynamic where there is a new competitor, and you know when prospects are growing. So we saw part of that rebound because, I think, in Q3 where there was a big push towards bi-specifics, in Q4 we saw that Enlanta continued to be used with those that progressed or those who were not as suitable as doctors sort of figure out the best patients to go to a bi-specific close to CAR-T. And then, in terms of the competitive landscape, I think the whole space is moving towards combinations. You know, I think one of the advantages we have is that we're approved as a single agent, and we have strong single agent activity. Not many drugs that have been approved as single agents. In fact, the bispecifics and SYNLONT are two of the only classes of drugs that have been approved as single agents.
I think what we found though is that there is a clear place for Samantha.
Either for patients where <unk> not suitable.
That patient may need.
<unk> been faster responses for ones that progress poster faster because it doesn't work for every patient so I think academic physicians have.
Sort of figured out how to best use them around.
Hum.
Where there is a new competitor.
Restaurants are growing so if we saw part of that rebound because I think in.
Q3, where there is a big push towards two sponsors on Q4.
<unk> continued to be used with dose to progress some of those who are not suitable as doctor sort of figure out the best patients to go into our practices the car season.
And then in terms of the competitive landscape I think the whole space is moving towards combinations.
One of the advantages we have is that we're approved as a single agent and we have strong single agent activity not many drugs that have been approved as a single agent in fact, the biospecifics and <unk> are two of the only drugs.
Assets that had been approved as single agent and so I think our combination strategy with both motive cyber motive.
Kristen Harrington: And so I think our combination strategy with both LOTUS-5 and LOTUS-7 positions us really well. I think we'll have competitive profiles with those two combinations, but in spite of an evolving landscape, will position us really well for growth, not only in the third line setting where we are today but also in the second line setting where we will move with those trials. Kristen and Mohamed, is there anything else that I missed that you would add?
Positioning us really well I think we will have competitive profiles, but those two combinations.
In spite of an evolving landscape.
Position us really well for.
Growth not only in the third third line setting where we are today, but also on the second line setting where we will move with those trials.
Kristen and Mohammad is there anything else that I missed it but you were at.
Kristen Harrington: The only thing that I would add, Ameet, two things. One, just to add to your evolving landscape, we see already with Politizumab moving up to the front line that it is creating a need for a different mechanism in the second line and third line. So definitely carving out a space for Zimantha, whether it's today or in combination once we get Lotus 5 and Lotus 7. The other question was around Echelon 3. We also saw that.
The only thing that I would add two.
Two things one just just to.
Add on to your evolving landscape, we see already with policies and that will be up.
The frontline that it is creating a need for a different mechanism.
Your line and third line so.
Definitely carving out space for 10 months out whether today or in combination once we get five to seven.
The other question was just around echelon three we also saw that we had been chatting, we always check.
Mohamed Zaki: We've been tracking, we always track our marketplace and the dynamics. And one, it's nice to see a win for an ADC. It reinforces the efficacy of ADCs. But two, we haven't seen any data on that trial other than the headline that Pfizer put out in terms of the overall survival win. R-squared is used, it's pretty uncommon in use, primarily in the community.
Our marketplace and the dynamics and <unk>.
One it's nice to see a waning for an ADC.
Reinforces the efficacy of ADP, but we haven't seen any data on that trial other than the headline upside there put out in terms of the overall survival in RF.
Our squared.
<unk>.
That's pretty uncommon.
Primarily in the community.
Patrick Van Berkel: But still, you know, we'd love to see the data that Pfizer has on their triplet versus the doublet and look forward to that so that we can better put it into context and understand any impact on the market. If I may ask, Kristen, also regarding the African story, we need to see how the control arm in the trial actually did to be able to better evaluate the data and understand it better. Specifically, this is in the third line plus, if I understand the trial correctly. Our target is for Lutus 5 and potential facilities to go to second line plus. So it's not directly, but in a very minimal number of patients.
We'd love to see the data.
Alright there.
They are typically nurses.
And look forward to that so that we can better put it into context and understand any impact in the market.
If I may ask Christian also regarding the efficacy story is that we need to see how the control arm in the trial actually did to be able to.
With the data and understand it better specifically this is in third line plus if I understand correctly.
Our target is for Luca science and potential facility has to go to a second line plus so its not exactly but isn't very minimal number of patients and.
Jose I. Carmona: And when we get to filling the first line, there may be some problems. However, we don't know the data yet to be able to, in detail, of course, to be able to understand it better. That's really helpful. And then, maybe just a follow up. Patrick discussed the NextGen platform. Just wondering, and we all look forward to an event later this year, as you've mentioned, just wonder if you could elaborate a bit on just the rationale for selecting MAPI 2B, CLAWD, and PSMA just for the NextGen ADCs.
When we get to serve the <unk> there may be some however, we don't know where that I guess could you give us.
It depends of course to be able to understand that better.
That's really helpful. And then maybe just a follow up as Patrick has discussed the Nexgen platform just wondering and we all look forward to an event later this year as you mentioned just just wondering if you could elaborate a bit on just the rationale for selecting.
I'm happy to be caught in PSM may just sort of the Nextgen ADC.
Patrick Van Berkel: And do you have a sense at this point which targets or targets have the strongest rationale for internal versus the external partnerships that have been, Thanks. Yeah, so maybe Patrick, you want to take the first part of the question, and then Pepe, you can take the second part of the question around partnering. Sure, Ameet. Yeah, thanks, Brian. So we've selected these targets because we think that they fulfill all the criteria for good ADC targets. If you look at what's known about them, it's clear that for each and every target, there's a very good level of validation for a targeted approach. Of course, they're all expressed in indications with high MED-NEAT, and we also very carefully looked at the competitive landscape for Lepi2B, Clonon6, PSMA, and the UNDISCLOSED target. And we believe that in most cases, if not all, we are among the first three to four players studying those targets, but, of course, with a differentiated approach using our novel electrothecan-based platform. To us, that means they are attractive to us all.
You have a sense at this point, which targets or or or target has the strongest rationale for internal versus the external partnerships that type of thing.
Thanks again.
Okay.
Yes, so maybe Patrick do you want to take the first part of the question and then how about you could take the second part of your question around partnering.
Sure Yeah, Thanks, Bryan so.
So we have selected these targets because we think that fulfill all the criteria for good ADC targets. If you look at whats known for them it's clear.
Target does a very good level of validation for targeted approach.
Of course.
They're all expressed in indications with iron, but Nathan we are also very carefully looked at the competitive landscape for.
Look it will be close to <unk> of the undisclosed targets.
And we believe that.
Most cases, if not all were among the first three to four players studying those targets, but of course with a different set of approaches our local electricity can bus platform. So.
To us that means study are attractive targets to work on.
Yes.
Sure.
Patrick Van Berkel: Let me take the partnership discussion. So, as we disclose the next generation, it's a Tegan-based payload, and the target early this year is January 4th. We did an outreach with several companies, and we have already started some discussions. This conversation and that potential partnership take a few quarters, so it's not something that you would do in a short turnaround. We do see the interest, and we will continue to advance those conversations for potential partnerships this year.
Let me take the partnership discussion so.
As we just closed.
The next generation expertise in base pay loan targets earlier this year than we.
We did an outrage.
Some of our competitors and we have already started some discussions this comprehensive study.
Honestly it takes few quarters. So it's not something that you would do in the short turnaround.
We do see the interest.
And we will continue to advance those conversations for potential partnerships this year.
Jose I. Carmona: Got it, thanks again, guys. Thank you. As a reminder, to ask a question, that's star 11, and please wait for your name to be announced. Our next question comes from the line of Kelly Shi with Jefferies. Your line is now open. Hi, good morning. Thank you very much for taking the question. This is Eugene on behalf of Kelly.
Got it thanks again guys.
Thank you.
As a reminder to ask a question Thats Star one one and please wait for your name to be announced.
Our next question comes from the line of Kelly <unk> with Jefferies. Your line is now open.
Hi, Good morning. Thank you very much particular questions. This is Jennifer Kelly so.
Dingding Shi: So, first question, just wanted to confirm that safety is the only thing that you need to clear before moving into second line? And when would you expect to have any data available from second-line patients? And then, secondly, for the Excel study, can you remind us if you enroll patients based on expression, will we have that biomarker data available when the data is presented at AACR? Thank you. Thanks for this question, and yes, in terms of the expectation from Lut7 dose escalation is to clear the dose levels, and based on that, per protocol, we are allowed to move directly to the second line for expansion.
So first question just wanted to confirm that is safety. The only thing that you need to clear before moving into second line.
When would you expect to have any data available from second line patients and then secondly for XO study can you remind us if you enrolled patients based on expression and we have that biomarker data available when that data is presented at ACR. Thank you.
Yes.
Yes.
Thanks for your question and yes impairment of the <unk>.
And the expectation from the <unk> business Commission is too.
Here at.
Those levels.
Based on that the theater protocol, we are allowed to move directly to second line or expansion or expecting to share it.
Mohamed Zaki: We're expecting to share information focused on safety in the second quarter, and more on the expansion of the second line in DLDCL, specifically in later 2024. In terms of AXL, so far, our enrollment is not... with a pre-selection strategy. However, as for the pancreatic, enrollment will be in Richmond, and for non-small cell lung cancer, we will be pre-selected.
Formation focused on safety.
In the second quarter and more on the expansion of second line in <unk> specifically.
Laser in play and planning for.
Sure.
In terms of XO, so far our enrollment.
Is not.
Pre selection strategy. However, as of the pancreatic enrollment will be in Richmond and for non small cell lung cancer will be selected.
Yes.
Alright.
Operator: Operator, any other questions? at this time? I'm showing no further questions. I'd like to hand the conference back over to Mr. Mallik for closing remarks. At this time, I'd like to hand the conference back over to Mr. Mallik for closing remarks. Sorry, he's in another location. We're having trouble with the connection.
Operator any other questions.
At this time.
Showing no further questions I'd like to hand, the conference back over to Mr. Malik.
For closing remarks.
Okay.
Okay.
Okay.
I'd like to hand, the conference back over to Mr. Melick for closing remarks.
Yeah.
Sorry to keep it in another location for having coupled with <unk>.
Operator: Thank you. Thank you. I'm showing no questions at this time.
Connection.
I'm showing no further.
Operator: Thank you all for your attention and interest in ADC Therapeutics. Between now and our next earnings call, we expect to share some important updates on Model 7, on the fidelity analysis and top-line data of SIN LOMPA as a single agent in marginal zoning format, and on data being presented at AACR, which we will follow up with a research investor event. As such, we look forward to many interactions with you in the coming months. With that, I would like to close the call. Thank you all. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.
Full time.
Yes.
Thanks, all for your attention and interest in ADC therapeutics between now and our next earnings call. We expect to share some important updates on model seven on the futility analysis and topline data oxygen lump as a single agent in marginal zone lymphoma.
Data being presented at ACR, which we will follow up with a research in Paris event as such we look forward to multiple interaction with you in the coming months with that I'd like to close the call. Thank you all.
This concludes today's conference call. Thank you for your participation you may now disconnect everyone have a wonderful day.
Yes.
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Yeah.
Okay.
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Okay.
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