Q3 2024 ADC Therapeutics SA Earnings Call
Speaker Change: Good morning, ladies and gentlemen, and welcome to the ADC Therapeutics 3rd Quarter 2024 Earnings Conference Call.
Speaker Change: At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star followed by zero for the operator.
Speaker Change: This call is being recorded on Thursday, November 7, 2024. I will now turn the call over to Marcy Graham, Investor Relations Officer for ADCT. Marcy, please go ahead.
Marcy Graham: Thank you operator. This morning we issued a press release announcing our third quarter 2024 financial results and business update. This release and the slides we will use in today's presentation are available on the investor section of the ADC Therapeutics website.
I'm joined on today's call by our Chief Executive Officer, Ameet Mallik, who will discuss our operational performance and recent business highlights, followed by our Chief Financial Officer, Pepe Carmona, who will review our third quarter 2024 financial results. We will then open the call to questions.
Marcy Graham: 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 a new new information future events circumstances except as required by law
Marcy Graham: The company cautions investors not to place undue reliance on these forward-looking statements.
Speaker Change: 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 comparable GAAP measures.
Marcy Graham: I will now turn the call over to our CEO, Ameet Mallik. Ameet. Thanks, Marcy, and good morning, everyone. Thank you for joining us on today's call. The third quarter of 2024 represented a solid period of continued performance for our company.
Speaker Change: Throughout the quarter, we continue to focus on execution and delivering on our commercial strategy.
Speaker Change: Even in a highly competitive market, we have been able to secure our place as a treatment option for third-line PLOS patients with DLBCL. Our third quarter net product revenues increased to $18 million during the quarter, bringing year-to-dates and lots of revenues to $52.9 million.
Speaker Change: We are confident in Zinlanta's profile, with rapid, deep, and durable efficacy, a manageable safety profile, and ease of administration.
Speaker Change: Beyond our current indication we believe in the potential to expand the use of Atlanta into earlier lines of therapy in <unk> and indolent lymphoma as through combinations significantly growing the commercial opportunity.
Speaker Change: Enrollment in Lotus five our phase III confirmatory study of <unk> in combination with your talks about it patients with second line plus D. L. P. C. L is nearing completion with full enrollment expected by the end of this year.
Speaker Change: Enrollment in LOTUS 5, our Phase 3 confirmatory study of Zananta in combination with Rituximab in patients with second line plus DLBCL, is nearing completion with full enrollment expected by the end of this year.
Speaker Change: Data are expected by the end of 2025 once the pre specified number of events is reached.
Speaker Change: Data are expected by the end of 2025, once the pre-specified number of events is reached.
Speaker Change: Interim data, including safety and efficacy in a subset of patients from our Lotus seven part two dose expansion all doesn't launch plus looked at a map combination arm.
Speaker Change: Interim data including safety and efficacy in a subset of patients from our Lotus 7 Part 2 dose expansion of the Zananta plus glofidamide combination arm in second line plus DLVCL are expected in December with additional data anticipated in the first half of 2025.
Speaker Change: <unk> are expected in December with additional data anticipated in the first half of 2025.
Speaker Change: In addition, we are excited that do key investigator initiated trials conducted at the Sylvester comprehensive cancer Center at the University of Miami Miller School of Medicine studies in laughter in Indolent lymphomas will be presented at the American Society of Hematology meeting in December.
Speaker Change: In addition, we are excited that two key investigator-initiated trials conducted at the Sylvester Comprehensive Cancer Center at the University of Miami Miller School of Medicine studying Zanlanta and indolent lymphomas will be presented at the American Society of Hematology meeting in December.
Speaker Change: This includes an oral presentation with updated data from the phase II II T evaluating <unk> in combination with Rituximab in patients with high risk relapsed or refractory follicular lymphoma, as well as a poster presentation with updated data from the phase II <unk> evaluating said laughter.
Speaker Change: This includes an oral presentation with updated data from the Phase II IIT evaluating Zinlanta in combination with Rituximab in patients with high risk
Speaker Change: Relapsed or Refractory Follicular Lymphoma, as well as a poster presentation with updated data from the Phase II IIT Evaluating Sinlanta for the treatment of relapsed or refractory marginal zone lymphoma.
Speaker Change: For the treatment of relapsed or refractory marginal zone lymphoma.
Speaker Change: We look forward to the updates from these two studies evaluating the potential of the market in these lymphomas.
Speaker Change: We look forward to the updates from these two studies evaluating the potential of Xenlanta in these lymphomas.
Speaker Change: The Phase 1-2 clinical trial sponsored by the University of Texas MD Anderson Cancer Center evaluating ADCT-602 in patients with relapsed or refractory B-cell acute lymphoblastic leukemia continues to progress and dose escalation continues at the 60 microgram per kilogram dose.
Speaker Change: Within our solid tumor programs, we have made the decision to discontinue the Phase 1B ADCT 601 program targeting Axel as a single agent and or in combination with patients with sarcoma, pancreatic cancer, and non-small cell lung cancer.
Speaker Change: Although early signs of anti-tumor activity were observed during the during the dose escalation phase,
Speaker Change: We were unable to demonstrate a favorable benefit-risk profile during the dose optimization and expansion phase.
Speaker Change: For ADCs targeting Claudin 6, PSMA, and NAPI 2B, while our ASCT2 targeting ADC is in the drug candidate selection stage.
Speaker Change: The company has selected one target to move toward IND, which is expected to be disclosed in 2025.
Speaker Change: At the same time, we continue to explore potential partnership opportunities.
Speaker Change: Then lots of delivers on all three, which we believe positions it well for use in combination and second line plus DLBCL.
Speaker Change: Given the improvement expected in the clinical profile with biospecifics and ADC-based combinations, we believe these regimens have the potential to grow at the expense of cell therapy and chemotherapy use.
Speaker Change: Here we see the promise of our LOTUS-5 and LOTUS-7 combination studies. With LOTUS-5, we are combining Xenlanta with Rituximab, a therapy that community physicians are comfortable using and is a backbone of DLPCL therapy.
Speaker Change: We feel this combination offers competitive second line plus efficacy with favorable safety and a convenient dosing schedule well suited for use across care settings.
Speaker Change: In addition, this is a non-systemic chemoregimen that avoids the irreversible toxicities associated with chemotherapy, a class that is still widely used in 2nd Line Plus TLD-CL.
Speaker Change: With LOTUS7, we are combining Zymanta and anti-CD19 ADC and glofitamab and anti-CD20-CD3 T-cell-engaging biospecific antibody and have completed dose escalation where the combination demonstrated no dose-limiting toxicities and early signs of anti-tumor activity.
Speaker Change: Our hypothesis with this study is that combining these two powerful approved single agent drugs is expected to have additive or synergistic efficacy, along with a manageable safety profile, given no overlapping non-hematologic toxicities.
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Speaker Change: We saw encouraging data in the Phase 1b dose escalation and are currently enrolling patients in Part 2 dose expansion with Enlanta at two dose levels in combination with Bofetimab in second line plus DLBCL. We anticipate sharing safety and efficacy data on 15 to 20 patients in December.
Speaker Change: This includes all DLV-CL patients from Part 1 and Part 2 dosed with gofetimab, placin and Lanta at the 120 and 150 microgram per kilogram doses where scans are available.
Speaker Change: We expect to share data on additional patients with longer follow-up in the first half of 2025.
Speaker Change: Beyond DLBCL, we also see the potential to expand into the second-line PLOS settings of indolent lymphomas based on data from investigator-initiated trials at the University of Miami exploring Zinlanta Plosvertoxamab.
Speaker Change: in high-risk relapsed or refractory follicular lymphoma, and Dinlanta Monotherapy in relapsed or refractory marginal zone lymphoma.
Speaker Change: Early data from these studies demonstrate the potential for rapid, deep, and durable efficacy with a fixed duration of therapy and a manageable side effect profile.
Speaker Change: Based on the high complete metabolic response rates seen thus far in these studies, we believe there is the potential to provide marginal zone and salicylic lymphoma patients with years of remission.
Speaker Change: We are looking forward to the lead investigator sharing more on these studies at the ASH meeting in December.
Speaker Change: As there remains significant unmet need across these lymphomas, with sufficient data we plan to discuss the path forward with regulatory authorities as well as seek inclusion in Compendia. With that, I would like to turn the call over to Pepe.
Pepe Carmona: Thank you, Ameet. On the financial front, we remain well capitalized, ending the third quarter with $274.3 million in cash and cash equivalents, which is expected to fund operations into mid-2026 based on current plans.
Pepe Carmona: The long-term net product revenues were $18.0 million for the third quarter and $52.9 million for the first nine months of 2024, as compared to $14.3 million and $52.4 million for the same period in 2023.
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Pepe Carmona: Throughout the year, we have maintained our disciplined capital allocation strategy and decreased operating expenses for the first nine months of 2024 by 12% year-over-year on a non-gap basis, which excludes stock-based compensation.
Speaker Change: In the third quarter, our non-GAAP operating expenses increased for a year by 5% due to investment in the LONTA Lotus V trial and Access Waves I clinical program.
Partially offset by efficiencies in other operating expenses.
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Speaker Change: We will continue to take a very disciplined approach to our capital allocation through the remainder of 2024 and into the coming year.
Speaker Change: You can find the reconciliation of GAAP measures to non-GAAP measures in the companion financial tables of the press release issued earlier today and in the appendix of this presentation.
Speaker Change: , , , , , , , , , , , , , ,
Speaker Change: When I got basis, it was reported a net loss of $44.0 million for the quarter, or $0.42 per basic and diluted share, as compared to a net loss of $46.7 million, or a net loss of $0.57 per basic and diluted share for the same period in 2023.
On a non-cap basis, adjusted net loss was $29.4 million.
Speaker Change: or an adjusted net loss of $0.28 per basic and diluted share as compared to adjusted net loss of $32.4 million or $0.39 per basic and diluted share for the same period in 2023.
Speaker Change: The decrease for the three months under September 30, 2024 is primarily related to higher revenues while the decreased year-to-date is primarily due to lower operating expenses.
Speaker Change: With our strong balance sheet, we believe we're well financed to continue to pursue our corporate strategy. As a reminder, hematology continues to be primary focus of our capital allocation, and within this, our key objective is to create value by expanding the use of SIN LOMPA beyond our current indication.
Speaker Change: We expect to achieve this by fully supporting our commercialization efforts in the U.S. directly and through our partnership with Ex-U.S. and by investing behind potential expansion into other lines of DLVCL and indolent informants.
Thank you for watching. We'll see you next time.
Speaker Change: In Solid Tumors, our aim is to pursue multiple ADC candidates in parallel and increase our shots on goal through our novel exothermic-based research platform.
Speaker Change: In addition to the candidates we are taking forward to IND, we will determine on a case-by-case basis whether we wish to progress additional candidates internally or seek to partner in order to share the development and financial risk.
With that, I will turn the call back to Ameet.
Speaker Change: Hey, Mark this is of course, a CD 19, ADP, where Paramount is a CD 20, CD three T cell <unk>.
Speaker Change: So.
Speaker Change: We hope to see additive or synergistic efficacy and because of the way we're dosing.
Speaker Change: By giving the globe by given the kind of like a week before to Debulk. The tumor. We're also hoping that that reduces the rates and severity of Crs. So the profile is really to improve on both dimensions of the bi specific monotherapy.
Speaker Change: In terms of the trial, we are in academic centers and large community centers.
Speaker Change: In car T centers across hundreds that don't give car T. So we're really trying to make sure that.
Speaker Change: We're testing this in a representative sample of second line plus our pace.
Speaker Change: Patients because I think it's really important to test across the whole patient sample you should expect that a piece of it.
Speaker Change: Sample thats very consistent with other large scale by specific combination trials.
Speaker Change: Thank you very much.
Speaker Change: Your last question comes from Gregory <unk> of RBC capital markets. Please go ahead.
Speaker Change: Okay.
Speaker Change: Hi, This is support on for Greg. Thanks, So much for taking our questions on Lotus seven I mean, one one of the one of the key value proposition here is the potential to reduce.
Speaker Change: Side effect profiles, such as Crs and just curious what would that data needs to look like perhaps in the initial uptake.
Speaker Change: <unk> date.
Speaker Change: To be.
Speaker Change: Consider at some meaningful improvement from bi specific by specific plus chemo and then I have a follow up.
Speaker Change: Yes, I think the most meaningful thing obviously, what we saw in the dose escalation.
Speaker Change: As in the low 30%.
Speaker Change: What I found is roughly 70% so.
Speaker Change: <unk> Crs are obviously important but I think severity is even more important because when you look at grade one crs it can be treated as simply can't operate for your hospital advised so the difference really grades is very significant and.
Speaker Change: And especially to removed.
Speaker Change: Requirement or even option for hospitalization I think the important thing is to get rid of high grade Crs no grade three grade four or so, but we would hope to see like we saw in the dose escalation was.
Speaker Change: No high grade Crs I think thats. The most important part from that standpoint, but again, we also want to see efficacy. That's strong too. So I think we're looking to hopefully improve on both dimensions first the bispecific monotherapy.
Speaker Change: Okay.
Speaker Change: Got it thanks, thanks, so much.
Speaker Change: As a follow up I'm just curious.
Speaker Change: What should we be I mean, how can you help set expectations for that in Delaware lymphoma update at Ash and can you also remind us what what are the sizes of these.
Speaker Change: This data is that that will be needed.