ADC Therapeutics SA

Good morning, ladies and gentlemen, and welcome to the ADC Therapeutics First Quarter Fiscal Year 2024 Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. I will now turn the call over to Marci Graham, Investor Relations Officer for ADC Therapeutics. Marci, please go ahead.

Thank you, Operator. This morning, we issued a press release announcing our fourth quarter and full year 2024 financial results and business update. The release and the slides we will use in today's presentation are available on the Investor section of the ADC Therapeutics website. I'm joined on today's call by our Chief Executive Officer, Amit Malek, who will discuss our operational performance and recent business highlights, followed by our Chief Financial Officer, Pepe Carmona, who will review our fourth quarter and full year 2024 financial results. We will then open the call to 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. 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 and in the company's filings with the SEC, including Form 10-K, 10-Q, and 8-K. ADC Therapeutics is providing this information as of today's date 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, except as required by law. The company cautions investors not to place undue reliance on these forward-looking statements. Today's presentation also includes non-GAAP financial reporting. These non-GAAP measures 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 company's fourth quarter earnings release for information and reconciliation of historical non-GAAP measures to the comparable GAAP financial measures. I will now turn the call over to our CEO, Amit Malik. Amit?

Amit Malik Thanks, Marcie, and good morning, everyone. Thank you for joining us on today's call. Looking back, 2024 was a year focused on execution where we achieved multiple exciting milestones, helping to advance our strategy to unlock value for our shareholders. We made significant progress across key areas in our ADC portfolio, both with Zynlanta and our early stage solid tumor pipeline, all while strengthening our balance sheet. We are confident in the path ahead as we work to make an impact for more patients moving forward. Among our key 2024 accomplishments, we reached commercial brand profitability with Zynlanta as we continue to maintain our position in the highly competitive third line plus DLBCL space. Sales of $69.3 million were in line with the prior year, despite the growth of bispecifics in the setting. We made significant progress in advancing our strategy to expand the use of Zinlanta into earlier lines of DLBCL and indolent lymphomas. December included completion of enrollment in our pivotal Phase III LOTUS V trial and an initial efficacy and safety update on Part II of our Phase 1b LOTUS 7 trial. In addition, we were pleased to see Phase 2 IIT indolent lymphoma data presented at ASH and the simultaneous publication of the follicular lymphoma data in Lancet Hematology. From a solid tumor perspective, we continue to advance our exotecan-based preclinical candidates. The most advanced targets are PSMA in column 6, and we continue to seek potential research collaborations to further advance our programs. Additionally, in a year marked by continued progression, we were able to achieve a double digit reduction in operating expenses for our second year in a row. In addition, we strengthened our balance sheet through an equity financing, providing an expected cash runway into the second half of 2026. We are proud of what we accomplished in 2024 and are confident in our path forward. In support of our commitment to further expand usage of Zynlanta, we are pursuing the substantially larger opportunity in earlier lines of DLV-CL therapy with combinations through LOTUS 5 and LOTUS 7. With LOTUS 5, we are pleased to have closed 2024 by completing enrollment of our phase three trial, bringing us a step closer to providing a potential combination treatment in the second-line plus DLBCL setting. Initial data from the safety lead-in portion of the study showed an overall response rate of 80% and a complete response rate of 50% with no new safety signals, demonstrating that this combination of Zolanta plus rituximab has the potential to provide competitive second-line plus efficacy with a favorable safety profile, allowing broad accessibility. Updated data are expected by the end of 2025 once the pre-specified number of events is reached. With Lotus 7, in December, we reported encouraging initial data, including safety and efficacy in a subset of patients from the Part 2 dose expansion of the Zolanta plus clofidamab combination arm in non-Hodgkin lymphoma. Initial data showed a best overall response rate among the 18 efficacy-evaluable relapsed or refractory DLPCL patients of 94% and a complete response rate of 72%. These encouraging efficacy data were observed across patients with different numbers of lines and types of prior treatments. Initial safety data on all 29 NHL patients suggest the combination is generally well-tolerated with no dose-limiting toxicities across all dose levels. We believe these initial data support our hypothesis that combining these two potent approved single-agent drugs with complementary mechanisms of action will yield additive or synergistic efficacy, a manageable safety profile, and accessibility across care settings. This combination has the potential to be best in class in a highly competitive market. Enrollment of 40 patients in dose expansion is expected to be completed in the second quarter of 2025. We expect to share data on a subset of patients in the second quarter of this year with a fuller, more mature data update anticipated during the second half of 2025. In addition to our expansion trials in DLBCL, promising phase two data from two key investigator-initiated trials led by the Sylvester Comprehensive Cancer Center at the University of Miami Miller School of Medicine were reported in indolent lymphomas with presentations at ASHE. on Xenlanta in combination with rituximab in high-risk relapsed or refractory follicular lymphoma and as monotherapy in relapsed or refractory marginal zone lymphoma with a simultaneous Lancet hematology publication of the FL data. Data shows strong results in high-risk relapsed or refractory FL patients treated with the combination of Xenlanta plus rituximab with a best overall response rate of 97% and a complete response rate of 77%. In addition, Zinlanta data from the relapsed or refractory MZL study showed clinically meaningful activity with an overall response rate of 91% and a complete response rate of 70%. We look forward to further updates at future medical conferences from these two studies evaluating the potential of Zinlanta in FL and MZL. With sufficient data, we plan to discuss the path forward with regulatory authorities as well as seek inclusion in Compendia. Looking forward into 2025, we expect to have multiple data catalysts, which can further de-risk and unlock the lifecycle management opportunities. Together, these have the potential to lead to a peak revenue of $600 million to $1 billion in the U.S., assuming regulatory approval and compendia listing. Within our current indication, our commercial strategy remains focused on relapsed or refractory DLBCL patients who need a treatment with a fast, durable response and a manageable safety profile which can be administered in the outpatient setting. We are holding our own in the competitive third-line plus market, demonstrating that Zynlanta has a place as a monotherapy with a significantly greater opportunity as we move toward combinations in earlier lines of DLBCL therapy. We believe Lotus 5 has the potential to take Zynlanta to $200 million to $300 million in peak sales as we expand into the second-line setting. taking the company to profitability. This is driven by doubling the patient population, extending the duration of therapy, and improving the clinical profile versus our current indication as a monotherapy. Market research suggests that only about 50% of the second-line population are expected to have access to and or be suitable for CAR-T and bispecific-based therapies. For patients who are not treated with or progress on a CAR-T or bispecific, Zynlanta Plus Rituximab has the potential to have a differentiated clinical profile with high and durable response rates, a manageable safety profile, and ease of administration. With Lotus 7, we estimate we can expand the total opportunity for Zynlanta in DOBCL to $500 to $800 million in peak revenue with regulatory approval and compendia listing. If the data persists, we believe Zynlanta plus clofidimab has the potential to transform the future lymphoma treatment paradigm by becoming the preferred bispecific combination in the second-line plus DLBCL setting. Additionally, in indolent lymphomas, there's a clear unmet need in both relapsed or refractory marginal zone lymphoma and relapsed or refractory follicular lymphoma. We are encouraged by the data seen in the Phase II IITs suggesting a Zynlanta regimen could provide significant benefit in these indolent lymphomas and plan to engage regulatory agencies and pursue competitive strategies as soon as sufficient data are available. The indolent lymphomas opportunity could provide additional peak revenue of $100 to $200 million. Taken together, we believe we are well positioned for success as we progress toward key milestones in 2025 and beyond. With that, I would like to turn the call over to Pepe.