ADC Therapeutics Reports Fourth Quarter And Year-End 2020 Financial Results And Provides Business Updates

  • Initiate a Phase 1b combination study of ADCT-601, targeting AXL, in multiple solid tumors in the second half of 2021.
  • File Investigational New Drug (IND) application for ADCT-901, targeting KAAG1, in the first half of 2021.

Fourth Quarter and Full Year 2020 Financial Results

Cash and Cash Equivalents

Cash and cash equivalents were $439.2 million as of December 31, 2020, compared to $115.6 million as of December 31, 2019.

Research and Development (R&D) Expenses

R&D expenses were $48.6 million for the quarter and $142.0 million for the full year ended December 31, 2020, compared to $30.4 million and $107.5 million for the same quarter and year-end 2019. R&D expenses increased as we continue to expand the potential market opportunities for Lonca in earlier lines of therapies and multiple indications, advance Cami to support BLA submission, and build our pipeline. As a result of these initiatives, employee headcount and share-based compensation increased.

Selling and Marketing (S&M) Expenses

During the fourth quarter of 2020, the Company began to present S&M expenses as a separate line item in its Consolidated Statement of Operation in anticipation for its commercial launch of Lonca. S&M expenses were $9.4 million for the quarter and $22.1 million for the full year ended December 31, 2020. The Company did not incur a material amount of S&M expenses, which were classified within general and administrative expenses, during the quarter and full year ended December 31, 2019. The increase in S&M expenses related to the build-out of the Company’s commercial organization and preparation activities for the anticipated launch of Lonca in 2021.

General and Administrative (G&A) Expenses

G&A expenses were $20.1 million for the quarter and $55.1 million for the full year ended December 31, 2020, compared to $5.3 million and $14.2 million for the same quarter and year-end 2019. The increase was primarily due to increased share-based compensation expense and costs of being a public company.

Net Loss and Adjusted Net Loss

Net loss was $55.9 million, or a net loss of $0.73 per basic and diluted share, for the quarter and $246.3 million, or a net loss of $3.77 per basic and diluted share, for the full year ended December 31, 2020, compared to $35.3 million, or a net loss of $0.69 per basic and diluted share, and $116.5 million, or a net loss of $2.36 per basic and diluted share, for the same quarter and year-end 2019. Net loss included share-based compensation expense of $15.4 million for the quarter and $42.9 million for the full year ended December 31, 2020, compared to $0.8 million and $1.1 million for the same quarter and year-end 2019. The Company recognized a gain of $24.5 million during the quarter and full year ended December 31, 2020 related to its contribution of intellectual property for its equity interest in the Overland ADCT BioPharma joint venture. The net loss for the full year ended December 31, 2020 includes a non-cash charge of $45.4 million related to the changes in fair value of derivatives associated with the convertible loans under the Facility Agreement with Deerfield. The year-to-date increase in fair value was driven by the increase in the Company’s share price from its initial public offering.

Adjusted net loss was $63.0 million, or an adjusted net loss of $0.82 per basic and diluted share, for the quarter and $176.1 million, or an adjusted net loss of $2.69 per basic and diluted share, for the full year ended December 31, 2020, compared to $34.5 million, or an adjusted net loss of $0.68 per basic and diluted share, and $115.4 million, or an adjusted net loss of $2.34 per basic and diluted share, for the same quarter and year-end 2019. The increase in adjusted net loss was primarily driven by higher employee headcount across the organization, costs associated with the expanding clinical portfolio and the 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 fourth quarter and full-year 2020 financial results and provide a company update today at 8:30 a.m. Eastern Time. To access the live call, please dial 833-303-1198 (domestic) or +1-914-987-7415 (international) and provide conference ID 4985202. A live webcast of the presentation will be available under “Events and Presentations” in the Investors section of the ADC Therapeutics website at ir.adctherapeutics.com. The archived webcast will be available for 30 days following the call.

About ADC Therapeutics

ADC Therapeutics SA (NYSE: ADCT) is a late clinical-stage oncology-focused biotechnology company pioneering the development and commercialization of potent and targeted antibody-drug conjugates (ADCs) for patients with hematological malignancies and solid tumors. The Company has created a deep clinical pipeline by combining its decades of experience and strategic target selection with proprietary next-generation pyrrolobenzodiazepine (PBD) technology. The Company’s Biologics License Application for its lead product candidate, loncastuximab tesirine (Lonca, formerly ADCT-402) for the treatment of relapsed or refractory diffuse large B-cell lymphoma was given priority review status by the U.S. Food and Drug Administration and a Prescription Drug User Fee Act (PDUFA) target date of May 21, 2021. The Company’s second lead product candidate, camidanlumab tesirine (Cami, formerly ADCT-301), is being evaluated in a 117-patient pivotal Phase 2 clinical trial for the treatment of relapsed or refractory Hodgkin lymphoma.

ADC Therapeutics is based in Lausanne (Biopôle), Switzerland and has operations in London, the San Francisco Bay Area and New Jersey. For more information, please visit https://adctherapeutics.com/ and follow the Company on Twitter and LinkedIn.

Use of Non-IFRS Financial Measures

In addition to financial information prepared in accordance with IFRS, this document also contains certain non-IFRS financial measures based on management’s view of performance including:

  • Adjusted net loss
  • Adjusted net loss per share

Management uses such measures internally when monitoring and evaluating our operational performance, generating future operating plans and making strategic decisions regarding the allocation of capital. We believe that these adjusted financial measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and facilitate operating performance comparability across both past and future reporting periods. These non-IFRS measures have limitations as financial measures and should be considered in addition to, and not in isolation or as a substitute for, the information prepared in accordance with IFRS. When preparing these supplemental non-IFRS measures, management typically excludes certain IFRS items that management does not believe are indicative of our ongoing operating performance. Furthermore, management does not consider these IFRS items to be normal, recurring cash operating expenses; however, these items may not meet the IFRS definition of unusual or non-recurring items. Since non-IFRS financial measures do not have standardized definitions and meanings, they may differ from the non-IFRS financial measures used by other companies, which reduces their usefulness as comparative financial measures. Because of these limitations, you should consider these adjusted financial measures alongside other IFRS financial measures.

The following items are excluded from adjusted net loss and adjusted net loss per share:

Shared-Based Compensation Expense: We exclude share-based compensation from our adjusted financial measures because share-based compensation expense, which is non-cash, fluctuates from period to period based on factors that are not within our control, such as our stock price on the dates share-based grants are issued. Share-based compensation has been, and will continue to be for the foreseeable future, a recurring expense in our business and an important part of our compensation strategy.

Certain Other Items: We exclude certain other significant items that may occur occasionally and are not normal, recurring operating expenses, cash or non-cash, from our adjusted financial measures. Such items are evaluated by management on an individual basis based on both quantitative and qualitative aspects of their nature and generally represent items that, either as a result of their nature or significance, management would not anticipate occurring as part of our normal business on a regular basis. While not all-inclusive, examples of certain other significant items excluded from our adjusted financial measures would be: changes in the fair value of derivatives, and the effective interest expense, associated with the Facility Agreement with Deerfield, transaction costs associated with debt or equity issuances that are expensed pursuant to IFRS, as well as the non-cash gain related to the contribution of our intellectual property for our equity interest in Overland ADCT BioPharma.

See the attached Reconciliation of IFRS Measures to Non-IFRS Measures for explanations of the amounts excluded and included to arrive at the non-IFRS financial measures for the three- and twelve-month periods ended December 31, 2020 and 2019.

Forward-Looking Statements

This press release contains statements that constitute forward-looking statements. All statements other than statements of historical facts contained in this press release, including statements regarding our future results of operations and financial position, business strategy, product candidates, research pipeline, ongoing and planned preclinical studies and clinical trials, regulatory submissions and approvals, planned commercialization activities, research and development costs, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including those described in our filings with the U.S. Securities and Exchange Commission. No assurance can be given that such future results will be achieved. Such forward-looking statements contained in this document speak only as of the date of this press release. We expressly disclaim any obligation or undertaking to update these forward-looking statements contained in this press release to reflect any change in our expectations or any change in events, conditions, or circumstances on which such statements are based unless required to do so by applicable law. No representations or warranties (expressed or implied) are made about the accuracy of any such forward-looking statements.

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