On August 9, 2022 ADC Therapeutics SA (NYSE: ADCT) reported financial results for the second quarter ended June 30, 2022 and provided business updates (Press release, ADC Therapeutics, AUG 9, 2022, View Source [SID1234617957]).
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"The ZYNLONTA launch is advancing steadily as we continue to increase awareness and advocacy. There is significant opportunity ahead and we have a focused plan in place to achieve continued growth in the coming quarters," commented Ameet Mallik, Chief Executive Officer of ADC Therapeutics. "Our pipeline of hematology and solid tumor programs is progressing well with impressive Cami Phase 2 data in Hodgkin lymphoma presented at the EHA (Free EHA Whitepaper) Congress in June. Our recent license agreement with Sobi in Europe gives us worldwide access for ZYNLONTA. We have a strong cash runway extending into early 2025 which makes us well-positioned to execute on our key objectives."
Recent Highlights and Developments
Corporate Update
Announced an exclusive license agreement with Swedish Orphan Biovitrum AB (Sobi) for the development and commercialization of ZYNLONTA for all hematologic and solid tumor indications outside of the United States, greater China, Singapore and Japan.
Appointed David Gilman as Chief Business & Strategy Officer.
Elected veteran oncology drug developer Jean-Pierre Bizzari, MD, and CEO Ameet Mallik to the Company’s Board of Directors.
Hematology Franchise
ZYNLONTA (loncastuximab tesirine-lpyl)
ZYNLONTA generated net sales of $17.3 million in the second quarter of 2022.
Initiated LOTIS-9, the Phase 2 clinical trial of ZYNLONTA in combination with rituximab in unfit or frail first-line diffuse large B-cell lymphoma (DLBCL) patients.
Initiated LOTIS-7, the Phase 1b clinical trial of ZYNLONTA in combination with other anti-cancer agents.
Terminated LOTIS-6, the Phase 2 clinical trial of ZYNLONTA in patients with relapsed or refractory follicular lymphoma.
The Overland ADCT BioPharma joint venture enrolled the first patient in China in the global LOTIS-5 confirmatory Phase 3 clinical trial of Lonca and rituximab in second-line or later transplant ineligible DLBCL patients.
Overland ADCT Biopharma completed enrollment of the single-agent bridging study in third-line+ DLBCL, which forms the basis for submission of a marketing application in China.
Cami (camidanlumab tesirine) in Hodgkin lymphoma
Released results from the Phase 2 Hodgkin lymphoma (HL) registrational trial at the European Hematology Association (EHA) (Free EHA Whitepaper) 2022 Congress in June. These results showed an overall response rate (ORR) of 70%, a complete response (CR) rate of 33% and a median duration of response (DOR) of 13.7 months. Safety data confirmed the manageable tolerability of Cami in these patients.
Solid Tumor Franchise
ADCT-601 (targeting AXL)
Initiated the Phase 1b combination trial in multiple solid tumors.
Upcoming Expected Milestones
Hematology Franchise
ZYNLONTA
Present LOTIS-5 safety lead-in data at an upcoming medical meeting in 2H 2022
Receive a regulatory decision for third-line DLBCL from the Committee for Medicinal Products for Human Use (CHMP), a committee of the European Medicines Agency (EMA), by 1Q 2023
Cami
Meet with the U.S. Food and Drug Administration (FDA) for HL pre-Biologics License Application (BLA) meeting in September 2022
Complete BLA submission for HL to the FDA in 2H 2023
Solid Tumor Franchise
Cami (targeting CD25)
Preliminary results of safety and clinical activity are anticipated in 2023 for the Phase 1b solid tumor trial of Cami in combination with pembrolizumab
ADCT-901 (targeting KAAG1)
Preliminary results of safety and tumor response for the Phase 1 dose escalation trial in multiple solid tumors are anticipated in 2023
Second Quarter Financial Results
Cash and Cash Equivalents
Cash and cash equivalents were $376.8 million as of June 30, 2022, compared to $466.5 million as of December 31, 2021.
Product Revenue
Product revenue (net) was $17.3 million for the quarter, compared to $3.8 million for the same quarter in 2021. Net revenues are for U.S. sales of ZYNLONTA, which received accelerated approval from the FDA on April 23, 2021.
Cost of product sales
Cost of product sales was $2.3 million for the quarter, compared to $0.1 million for the same quarter in 2021, an increase of $2.1 million associated with $1.9 million of impairment charges primarily related to the manufacturing of antibodies that was not within the Company’s specifications. The specification issues did not, and are not expected to, impact the Company’s ability to supply commercial product. In addition, cost of product sales increased due to a full second quarter of sales activity in 2022 as compared to the same period in 2021 due to the commencement of ZYNLONTA sales in May 2021.
Research and Development (R&D) Expenses
R&D expenses were $48.5 million for the quarter ended June 30, 2022, compared to $39.5 million for the same quarter in 2021. As a result of FDA approval of ZYNLONTA in April 2021, the Company reversed $6.8 million of previously recorded impairment charges during the three months ended June 30, 2021, relating to inventory costs incurred for the manufacture of product prior to FDA approval. In addition, R&D expenses increased due to clinical activities to expand ZYNLONTA’s potential market opportunities in earlier lines of therapy and advance the Company’s portfolio of solid tumor programs.
Selling and Marketing (S&M) Expenses
S&M expenses were $17.7 million for the quarter ended June 30, 2022, as compared to $15.2 million for the same quarter in 2021. The increase in S&M expenses is related to the ongoing launch of ZYNLONTA.
G&A Expenses
G&A expenses were $18.2 million for the quarter ended June 30, 2022, compared to $19.4 million for the same quarter in 2021. G&A expenses decreased primarily due to lower share-based compensation expense.
Net Loss and Adjusted Net Loss
Net loss was $64.4 million, or a net loss of $0.84 per basic and diluted share, for the quarter ended June 30, 2022. This compares to a net loss of $72.6 million, or a net loss of $0.95 per basic and diluted share, for the same quarter in 2021. The decrease in net loss for the quarter ended June 30, 2022, as compared to the same period in 2021, was primarily due to higher product revenue, partially offset by the increase in cost of product sales, R&D and S&M expenses. In addition, net loss decreased for the second quarter of 2022 as a result of income arising from changes in the fair value of derivatives associated with our Deerfield Facility Agreement, partially offset by higher interest expense associated with the deferred obligation with Healthcare Royalty Partners.
Adjusted net loss was $56.3 million, or an adjusted net loss of $0.73 per basic and diluted share, for the quarter ended June 30, 2022. This compares to $53.7 million, or an adjusted net loss of $0.70 per basic and diluted share, for the same quarter in 2021.
Conference Call Details
ADC Therapeutics management will host a conference call and live audio webcast to discuss second quarter 2022 financial results and provide a company update today at 8:30 a.m. Eastern Time. To access the conference call, please register here. Registrants will receive the dial-in number and unique PIN. It is recommended that you join 10 minutes before the event, though you may pre-register at any time. A live webcast of the call will be available under "Events and Presentations" in the Investors section of the ADC Therapeutics website at www.ir.adctherapeutics.com. The archived webcast will be available for 30 days following the call.
About ZYNLONTA (loncastuximab tesirine-lpyl)
ZYNLONTA is a CD19-directed antibody drug conjugate (ADC). Once bound to a CD19-expressing cell, ZYNLONTA is internalized by the cell, where enzymes release a pyrrolobenzodiazepine (PBD) payload. The potent payload binds to DNA minor groove with little distortion, remaining less visible to DNA repair mechanisms. This ultimately results in cell cycle arrest and tumor cell death.
The U.S. Food and Drug Administration (FDA) has approved ZYNLONTA (loncastuximab tesirine-lpyl) for the treatment of adult patients with relapsed or refractory (r/r) large B-cell lymphoma after two or more lines of systemic therapy, including diffuse large B-cell lymphoma (DLBCL) not otherwise specified (NOS), DLBCL arising from low-grade lymphoma and also high-grade B-cell lymphoma. The trial included a broad spectrum of heavily pre-treated patients (median three prior lines of therapy) with difficult-to-treat disease, including patients who did not respond to first-line therapy, patients refractory to all prior lines of therapy, patients with double/triple hit genetics and patients who had stem cell transplant and CAR-T therapy prior to their treatment with ZYNLONTA. This indication is approved by the FDA under accelerated approval based on overall response rate and continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial.
ZYNLONTA is also being evaluated as a therapeutic option in combination studies in other B-cell malignancies and earlier lines of therapy.