ADC Therapeutics SA

Good day, and thank you for standing by. Welcome to the ADC Therapeutics First Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Nicole Riley, Head of Communications. Please go ahead.

Thank you, operator. This morning, we issued a press release announcing our first quarter 2024 financial results and business updates. This release is available on the ADCT website at ir.adctherapeutics.com under the press releases section. The event is being recorded, and the slides accompanying this call are available on the ADCT website at ir.adctherapeutics.com under the Latest Events and Presentations section. On today's call, Amit Malik, Chief Executive Officer, and Pepe Carmona, Chief Financial Officer, will discuss recent business highlights and review our first quarter 2024 financial results. We will then open the call to questions. when we will be joined by Kristen Harrington-Smith, Chief Commercial Officer, and Mohammad Zaki, Chief Medical Officer. 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. 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 on slide three and in the company's filings with the SEC, including Form 10-K, 10-Q, and 8-K. 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-GAAP financial measures. These non-GAAP 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 GAAP. You should refer to the information contained in the company's fourth quarter earnings release for definitional information and reconciliations of historical non-GAAP measures to the comparable GAAP financial measures. It is now my pleasure to pass the call over to our CEO, Amit Malik. Amit?

Thanks, Nicole, and thank you all for joining us today. As you will have seen, we have shared some very exciting news items earlier this morning. But to begin with, I'd like to focus on key business updates for the quarter. Starting with our commercial performance, CINLATA continued its return to sequential growth with revenues of $17.8 million in Q1. This represents a 7% increase over the fourth quarter of 2023. Importantly, we saw continued growth both in the community and in academic centers, despite the intensified competitive landscape. Turning next to our pipeline, we have made significant progress. Last month, we announced that our Lotus 7 study of Zynlanta in combination with bispecifics successfully cleared the final dosing cohort in both arms with no dose-limiting toxicities, no ICANNs, and either no or low-grade levels of CRS. We are now dose-expanding at 120 and 150 micrograms per kilogram in the Zynlanta plus clofidamab combination arm in second-line plus DLBCL. Today, we are delighted to share for the first time encouraging initial data recently presented from the University of Miami's Phase II investigator-initiated trial of Zynlanta in relapsed refractory marginal zone lymphoma. Based on initial results from the first 15 available patients, 13 achieved a complete response and one achieved a partial response with all patients maintaining response at the time of data cutoff. Moving to ADCT 601, our novel actual targeting ADC, we began enrolling pancreatic cancer patients and continue to enroll sarcoma patients, and we are in the process of optimizing the dose and schedule. Lastly, we shared a comprehensive update on our novel exotecan-based solid tumor platform, including early preclinical data on our four preclinical ADC candidates for the first time at our recent research investor event. Finally, in terms of a corporate update, we maintained our disciplined capital allocation strategy and decreased operating expenses in Q1 by 16% year over year on a non-GAAP basis. This, in turn, enabled us to manage our cash burn so that we ended the first quarter with cash of $234.3 million. On top of this, we have just announced today that we have priced an underwritten offering to raise $105 million in gross proceeds. The offering at the closing price per share on Friday included common shares and pre-funded warrants and is expected to close on May 8th. We expect this will extend our cash runway into mid-2026 and provide the company with enhanced financial flexibility to execute our strategy. Given our strength and balance sheet, I would like to remind everyone of the strategy we are pursuing, which we believe will unlock the tremendous value we see in the company. Our first pillar and primary focus remains hematology. Within this, we have a de-risked asset in Zonlanta, the key product in our prioritized portfolio, which we expect to carry the company through to profitability. We are deploying the majority of our capital to the Zonlanta franchise, to commercialize our existing third-line PLOS DLBCL indication and to pursue the substantially larger potential opportunity in earlier lines of DLBCL therapy and indolent lymphomas, such as marginal zone lymphoma. We believe these potential opportunities will help expand this Enlanta franchise and have the potential to generate annual peak sales in excess of half a billion dollars. The second pillar of our strategy is grounded in our emerging solid tumor pipeline. ADCT601 is our most advanced asset. Behind this, we see the potential to advance a broad portfolio of differentiated ADCs against solid tumor targets of interest driven by our novel exotecan-based platform. I'd like to expand now on the substantially larger potential opportunity for Zymanta in earlier lines of DLVCL therapy and indolent lymphomas. Pending the results of the LOTUS-5 and LOTUS-7 studies, our goal is to expand usage of Zynlanta into second-line PLOS DLBCL. As a reminder, LOTUS-5 is our confirmatory Phase III study of Zynlanta in combination with rituximab. Here, we remain on track and expect to complete enrollment by the end of this year, with the potential for a headline readout by the end of 2025. If positive, we believe this trial will lead to full approval for Zynlanta and expand our indication into second-line plus DLBCL in combination with rituximab, potentially as early as the end of 2026. VOTUS-7 is our phase 1B trial of Zynlanta in combination with bispecifics. We are encouraged by the initial safety and tolerability profile, as well as the observed antitumor activity amongst the majority of patients. in part one of the dose escalation. We are now enrolling in part two dose expansion with Zolanta plus clofidamab in second line plus DLBCL and expect a complete enrollment and plan to share additional efficacy and safety data before year end. We also see the potential to expand the use of Zolanta into the second line plus settings of follicular lymphoma and marginal lymphoma based on initial data from investigator-initiated trials at the University of Miami. Today, I want to focus on the marginal zone lymphoma data that was shared this past weekend at the Lymphoma Research Foundation's 2024 Marginal Zone Lymphoma Scientific Workshop by the trial's lead investigator, Dr. Isidore Losos, at the University of Miami. Relastrofactory MZL represents an unmet need Based on publicly available incidence data, there are an estimated 3,000 to 4,000 second-line plus MZL patients who are drug-treated in the U.S. Unmet medical need remains in the last refractory MZL, less than 30% CR for second-line plus approved or NCCN preferred treatments. At present, there are two FDA-approved regimens and several other preferred regimens for the treatment of MZL patients. and Second Line Plus included in NCCN guidelines. Complete response rates are modest, and sample sizes in the study supporting this data are relatively small. As complete response rates are a strong predictor of time-related outcomes in MZL, clinicians continue to seek novel agents with higher and durable CR rates, a manageable safety profile, and a fixed duration of treatment. The University of Miami is leading a multi-center phase two IIT studying Zynlanta as a single agent, fixed duration regimen to treat 50 relapsed refractory MZL patients. Initial data from the first 15 available patients showed 13 achieved a complete response and one achieved a partial response. According to the lead investigator, Zynlanta was generally well tolerated and safety was consistent with the known profile. There are two sites currently enrolling, University of Miami and City of Hope, and the lead investigator is currently expanding to five sites to accelerate trial enrollment. As soon as we have sufficient data, assuming it remains positive, we plan to potentially pursue a regulatory pathway and compendia strategy in parallel. In terms of the opportunity, based on our analysis, we believe the total addressable Second Life Plus MCL patient population has a potential peak market opportunity of approximately $500 million, valued at Sinlanta price and an expected average number of cycles. If successful, that means every 10% of market share captured represents $50 million in incremental annual peak sales opportunity. While still early in the Phase II IIT, If this trial continues to yield similar results, the potential opportunity to expand into MZL could contribute to the overall Sinatra growth strategy in NHL. The current standard of care in MZL includes CD20-based regimens across all lines in addition to BTK inhibitors in second-line MZL. The data used for FDA approvals and inclusion in NCCN guidelines were based on either single-arm studies or a subset of larger indolent NHL studies and offer modest CR rates, which are below 30%. Per the study protocol, all patients included must have failed one or more lines of systemic therapy, including at least one anti-CD20 antibody. Under the protocol, patients receive a fixed duration of treatment of six cycles of Zolanta across 18 weeks. The primary endpoint is CR rate at 6 and 12 months, and patients will be followed for up to three years with progression-free survival and overall survival measured at 24 months. The predetermined futility threshold for efficacy was set at 31% CR rate. Looking at the baseline characteristics of the patients enrolled so far in the study, there are a few things I want to point out. We believe this initial group of patients is representative of the overall MCL population, including MCL subtypes. In addition, of the patients treated with Venanta so far, 10 of the 15 were stage 4 MCL patients, with 8 of the 15 designated as POD24, meaning they progressed within 24 months of initial treatment, a group that is typically harder to treat. The median prior lines of therapy is 2, ranging from 1 to 4, And as you can see on the right side of the slide, included multiple currently available systemic treatments. As shared by Dr. Losos at the Lymphoma Research Foundation's 2024 Marginal Zone Lymphoma Scientific Workshop on May 4th, these initial results showed 13 out of 15 patients achieved a CR, with one additional patient achieving a PR. Of the 13 CRs, nine were achieved after two cycles. In addition, all patients achieving responses had maintained them as of the data cutoff, with the longest responder reaching approximately 20 months. And from an initial safety perspective, per the lead investigator in this study, Zinlata was generally well tolerated and consistent with a known safety profile. One patient discontinued after cycle two, A second patient discontinued after cycle four due to a toxicity which fully resolved upon discontinuation of treatment. Both of these patients remain in CR at 10 and six months respectively. Based on this initial data from University of Miami's phase two trial evaluating Zymanta in relapsed refractory MZL, we are encouraged by the potential opportunity in the second line plus setting for patients with this rare disease. Moving on to Lotus 7, we are sharing here additional safety data from the Part 1 dose escalation portion of the study. The important takeaways are that the majority of CRS events were Grade 1 and that no CRS greater than Grade 2 is observed. Those patients who have experienced a Grade 2 CRS were managed with no requirement for ICU management or pressers. On the left-hand side, you will see that the overall CRS rate with glofidamab was 33%, which is the combination of focus for part two of this study. Important to note, the current glofidamab label in third-line PLOS DLVCL includes a 70% CRS rate, including some higher-grade events. We believe that dosing wizenlanta one week prior to glofidamab may be debulking the tumor. Turning to our research platform, we hosted a virtual investor research event on April 9th, which provided a comprehensive overview of our solid tumor research strategy, our novel Exotecan-based platform, and our four lead ADC candidates. Our focus is on advancing differentiated ADC candidates against prostate, non-small cell lung cancer, colorectal, endometrial, and ovarian cancers. For each tumor type, the combination of incidence and five-year survival offers large potential opportunities and indicates that better treatment options are needed. Furthermore, in each case, chemotherapy remains a key part of the treatment armamentarium. Our four lead ADC targets are NAPI2B, CLAUDIN6, PSMA, and ASCT2. We believe each offers the potential to improve the standard of care for cancer patients, and each utilizes our novel exotekin-based platform. Preclinical work suggests that our four lead candidates each have a high therapeutic index, reflecting the proprietary design of the ADC. In terms of stage, our now B2B and quad and six ADCs are in IND enabling studies, and we are pleased to share exciting early data on these at AACR last month. Our PSMA and ASCT2 ADCs are in the drug candidate selection stage, which we expect to complete this year. Looking ahead, we plan to move forward with one candidate to IND and to seek research collaborations to advance a broad portfolio. Given the unmet medical need coupled with the market opportunity, a successful outcome for one or more our early research programs has the potential to transform the lives of patients and create significant value in the future. With that, I would like to turn the call over to Pepe.