On November 12, 2020 ADC Therapeutics SA (NYSE: ADCT), a late clinical-stage oncology-focused biotechnology company pioneering the development and commercialization of highly potent and targeted antibody drug conjugates (ADCs) for patients with hematological malignancies and solid tumors, reported financial results for the third quarter ended September 30, 2020 and provided recent business highlights (Press release, ADC Therapeutics, NOV 12, 2020, View Source [SID1234570825]).

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"The third quarter was one of tremendous execution as we prepare for the U.S. launch of our first drug, Lonca, for the treatment of relapsed or refractory diffuse large B-cell lymphoma," said Chris Martin, Chief Executive Officer of ADC Therapeutics. "We have submitted our Biologics License Application to the U.S. Food and Drug Administration and are now working diligently to prepare for a planned commercial launch in mid-2021, including U.S. organizational build-out, the establishment of U.S. operations to ensure distribution, access and reimbursement of Lonca, and significant appropriate physician engagement. In addition to our commercial preparations, we are expanding our Lonca development activities, having initiated our Phase 3 LOTIS 5 clinical trial evaluating Lonca in combination with rituximab as a second-line therapy in DLBCL and are preparing to initiate our Phase 2 trial of Lonca in follicular lymphoma next year."

Dr. Martin continued, "Across our Cami programs, we have now enrolled more than half of the 100-patient pivotal Phase 2 trial in Hodgkin lymphoma and continue to see promising preliminary data from our Phase 1b trial in solid tumors that show robust immune activity following treatment, as well as recently published preclinical data highlighting the anti-tumor activity of CD25-targeted antibody drug conjugates. With these promising data, we expanded our Phase 1b trial to evaluate Cami in combination with pembrolizumab to better understand its potential as both a monotherapy and in combination and have dosed the first patient in the combination arm. To support these exciting developments and ensure continued growth across our pipeline, we completed an upsized public offering in September. With these additional funds, we look forward to continuing to deliver on our vision to bring transformative therapies to cancer patients as quickly and effectively as possible."

Recent Clinical and Business Highlights:

Submitted a BLA to the FDA for Lonca for treatment of relapsed or refractory DLBCL: On September 21, 2020, the Company announced the submission of a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) for Lonca for the treatment of patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL). The submission is based on data from LOTIS 2, a pivotal Phase 2 multi-center, open-label, single-arm clinical trial evaluating the efficacy and safety of Lonca in patients with relapsed or refractory DLBCL following two or more lines of prior systemic therapy.
Opened Phase 3 LOTIS 5 clinical trial of Lonca in combination with rituximab for enrollment: This Phase 3 confirmatory trial will evaluate the efficacy of Lonca in combination with rituximab in patients with relapsed or refractory DLBCL who are not eligible for autologous stem cell transplant (ASCT). The trial will evaluate the safety and efficacy of Lonca in combination with rituximab versus standard immunochemotherapy, and the primary endpoint will be progression-free survival. LOTIS 5 is designed to fulfill the Company’s post-marketing requirement to the FDA for full approval, if accelerated approval is received for relapsed or refractory DLBCL, and is intended to support a supplemental Biologics License Application (sBLA) for Lonca as a second-line therapy for patients with DLBCL who have relapsed or refractory disease following at least one multi-agent systemic treatment regimen.
Actively enrolling patients in the pivotal Phase 2 portion of LOTIS 3 clinical trial of Lonca in combination with ibrutinib: Enrollment continues in the pivotal Phase 2 portion of LOTIS 3, a 161-patient Phase 1/2 clinical trial of Lonca in combination with ibrutinib, which is being evaluated in patients with relapsed or refractory DLBCL or mantle cell lymphoma (MCL). The first patient was dosed in the pivotal Phase 2 portion of this trial in July 2020.
Planning to initiate a pivotal Phase 2 clinical trial of Lonca in follicular lymphoma (FL) in H1 2021: The Company continues to consider rapid expansion opportunities for Lonca across other non-Hodgkin lymphoma indications. Following consultation with the FDA, the Company plans to initiate a pivotal Phase 2 trial to evaluate the safety and efficacy of Lonca in patients with relapsed or refractory FL.
Dosed first patient in Phase 1b clinical trial of Cami in combination with pembrolizumab for treatment of solid tumors: Earlier this month, the Company announced that the first patient was dosed with Cami in combination with pembrolizumab, a checkpoint inhibitor, in an ongoing Phase 1b trial in patients with selected advanced solid tumors. Based on preclinical data and initial pharmacodynamic data from the Phase 1b monotherapy trial, the Company has expanded the Phase 1b trial to evaluate the safety, tolerability, pharmacokinetics and antitumor activity of Cami in combination with pembrolizumab in select solid tumors. Pharmacokinetic and biomarker data from the Phase 1b trial were presented at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Virtual Congress 2020, and preclinical data were published in the Journal for ImmunoTherapy of Cancer.
Announced multiple abstracts accepted for presentation at ASH (Free ASH Whitepaper): The Company announced earlier in November that six clinical abstracts and two preclinical abstracts have been accepted for presentation at the 62nd American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting, including an oral presentation of Cami Phase 2 data in Hodgkin lymphoma (HL) and poster presentations of Lonca subgroup data from the pivotal Phase 2 LOTIS 2 trial in relapsed or refractory DLBCL and the Phase 1b pivotal trial of Lonca combined with ibrutinib in relapsed or refractory DLBCL and MCL.
Amended 2013 collaboration and license agreement with Genmab for Cami: In October 2020, the Company and Genmab agreed to amend their original 2013 agreement to allow the Company to continue the development and commercialization of Cami. Under the amendment, Genmab agreed, among other things, to convert its economic interest into a mid-to-high single-digit royalty on net sales.
Completed upsized public offering: In September 2020, the Company completed an upsized public offering of 6,000,000 common shares at a price of $34.00 per share. Gross proceeds from the public offering, before deducting underwriting discounts and commissions and offering expenses payable by the Company, were approximately $204 million.
Anticipated Upcoming Milestones:

FDA feedback on BLA submission for Lonca for the treatment of patients with relapsed or refractory DLBCL.
Initiation of a pivotal Phase 2 trial of Lonca in relapsed refractory FL in the first half of 2021.
Reporting of interim results from the pivotal Phase 2 trial of Cami in HL in the first half of 2021.
Potential FDA approval and launch of Lonca in mid-2021.
Third Quarter 2020 Financial Results

Cash and Cash Equivalents

Cash and cash equivalents were $494.4 million as of September 30, 2020, compared to $115.6 million as of December 31, 2019.

Research and Development (R&D) Expenses

R&D expenses were $32.2 million for the quarter ended September 30, 2020, compared to $30.5 million for the same quarter in 2019. The increase was primarily due to increased share-based compensation expense.

General and Administrative (G&A) Expenses

G&A expenses were $20.3 million for the quarter ended September 30, 2020, compared to $2.3 million for the same quarter in 2019. The increase was primarily due to an increased number of Commercial employees, increased costs due to new commercial activities and increased share-based compensation expense.

Net Loss and Adjusted Net Loss

Net loss was $20.3 million, or a net loss of $0.29 per basic and diluted share, for the quarter ended September 30, 2020, compared to $31.3 million, or a net loss of $0.62 per basic and diluted share, for the same quarter in 2019. The net loss for the quarter ended September 30, 2020 includes a $33.9 million non-cash gain related to the changes in fair value of derivatives associated with the convertible loans under the Convertible Credit Facility with Deerfield. The decrease in fair value was driven by the decrease in the Company’s share price from June 30, 2020. In addition, net loss included share-based compensation expense of $11.0 million for the quarter ended September 30, 2020, compared to $0.2 million for the same quarter in 2019.

Adjusted net loss was $41.3 million, or an adjusted net loss of $0.58 per basic and diluted share, for the quarter ended September 30, 2020, compared to $31.1 million, or an adjusted net loss of $0.62 per basic and diluted share, for the same quarter in 2019. The increase in adjusted net loss was primarily driven by higher employee headcount across the organization and costs associated with the build out of the Company’s commercial organization in preparation for the anticipated launch of Lonca in 2021.

Conference Call Details

ADC Therapeutics management will host a conference call and live audio webcast to discuss third quarter 2020 financial results and provide a company update today at 8:30 a.m. Eastern Time. To access the call, please dial +41 225 675632 (international) or (833) 249-8403 (U.S.). A live webcast of the presentation will be available on the Investors section of the ADC Therapeutics website at www.ir.adctherapeutics.com. The archived webcast will be available after the completion of the event.