ADC Therapeutics SA

Welcome to the ADC Therapeutics second quarter 2023 financial results conference call. My name is Corey 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 1-1 on your touchtone phone. To withdraw your question, please press star 1-1 again. Please be advised that today's conference call is being recorded. I would now like to turn the call over to Eugenia Litz, Flights President of Investor Relations and Corporate Communications. You may begin.

Thank you, Operator. This morning, we issued a press release announcing our second quarter 2023 financial results and business updates. This release is available on the ADCT website at ir.adctherapeutics.com under the Press Releases section. On today's call, Amit Malik, Chief Executive Officer, Kristen Harrington-Smith, Chief Commercial Officer, Muhammad Zaki, Chief Medical Officer, and Pepe Carmona, Chief Financial Officer, will discuss recent business highlights and review our second quarter 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. Examples of forward-looking statements include those related to our future financial and operating results, the impact of our updated strategic plan forward, including our commercial field strategy, portfolio prioritization, and capital allocation and restructuring plan, our ability to achieve our guidance for 2023 Zalanta revenue and operating expenses, as well as our future cash requirement projections, future revenue growth, market acceptance, competition, and volume growth for our products, product launches, and market share for our products, either alone or through our foreign partners, timing and results of ongoing and future development programs, and clinical trials for our products, either alone or in combination with our partner products, FDA informed regulatory authorities' actions and potential regulatory approval for our products, either alone or in combination with our strategic partners' products, future strategic partnerships and business development efforts, our ability to repay our outstanding debt obligations, and future access to capital. These forward-looking statements are subject to certain risks and uncertainties and actual results 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 on form 20F and as updated in ADCT's recent periodic filings on form 6K. ADCT 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-IFRS financial measures. 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. You should refer to the information contained in the company's second quarter earnings release for definitional information and reconciliations of historical non-IFRS measures to the comparable IFRS financial measures. It is now my pleasure to pass the call over to our CEO. Amit Malik. Amit?

Thanks, Eugenia, and thank you all for joining us. It's my pleasure to provide an update on our progress during the second quarter. Starting with Zinlanta, we delivered net sales of $19.2 million, up 11% year-over-year. The growth was slightly offset by higher growth to net, including the new Medicare discarded drug policy and GPO contracting. Compared with the prior quarter, dollar sales were up slightly and volume grew by just over 3%. Importantly, during Q2, we implemented our new commercial go-to-market model to better align with local healthcare ecosystems and the evolving treatment dynamics. We completed the staffing of the organization by the end of June, and we expect to see a progressive benefit from these changes in the coming months and to exit 2023 with a healthy run rate. As for geographic expansion, our partner Sobe completed the first European commercial sales in Manta with the launch in Germany. This sale triggered a $75 million milestone payment under our purchase and sale financing agreement with healthcare relative partners. In China, NMPA accepted the BLA submission for Zynlanta and granted priority review. Finally, in Japan, our partner Mitsubishi Tanabe initiated the Phase 1-2 bridging study. Turning to our clinical development program for Zynlanta, we proactively took the tough decision to discontinue the Phase II LOTUS-9 clinical trial as we did not see a clear regulatory path forward. This is an example of our data-driven approach to clinical development decisions and our disciplined capital allocation strategy. We are nevertheless disappointed that we are unable to offer these patients a potential new option. Separately, our ongoing Phase III LOTUS-5 confirmatory trial of Zolanta and rituximab in Second Lines, Second Lines Plus, and our Phase 2 Lotus 7 clinical trial in Zermatta in combination with BISpecifics continue to progress as planned. As a reminder, both of these trials include very different patient populations from Lotus 9. Turning to the remainder of our pipeline, we enhanced investments in our focus portfolio during the quarter, taking the opportunity to accelerate and expand our prioritized development programs. As a result, we look forward to several potential value-creating data readouts in the next 12 months. In particular, we expect to share initial Phase I data from ADCT 601 targeting ACTL and from ADCT 901 targeting CAG1. We also expect to share additional Phase I data from ADCT 602 targeting CD22. To summarize the quarter, overall, I am pleased with how we executed on the new corporate and capital allocation strategy we announced three months ago. Our new commercial model is now ramping up, our pipeline has potential meaningful catalysts over the next 12 months, and our expected cash runway continues to provide us with the ability to execute on our business plan. I remain confident that we are on a path to unlock the tremendous value that my executive team and I see in the coming months and years. With that, I'd like to turn the call over to Kristen for a commercial update. Kristen?