ADC Therapeutics SA (NYSE:ADCT) Q1 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed outlook. Financial performance shows improvement with reduced losses and controlled expenses, but revenue growth is stagnant. Regulatory and clinical trial risks, along with competitive pressures, are notable concerns. Positive aspects include a strong cash runway and potential growth from LOTIS trials, but lack of share repurchase plans and unclear management responses in Q&A add uncertainty. Overall, the sentiment balances between positive future prospects and current challenges, leading to a neutral prediction for stock movement.
Key Financial Performance
Total Revenues $23 million, which is in line with the first quarter sales in 2024.
Net Product Revenues $17.4 million, a decrease from $17.8 million in the same quarter of 2024.
Licensing Revenue $5 million related to a milestone due to ZYNLONTA’s approval by Health Canada.
Total Operating Expenses $49.1 million on a non-GAAP basis, representing a 5% net decrease over prior year, driven primarily by a reduction in SG&A.
Net Loss $38.6 million, or $0.36 per share, compared to a net loss of $46.6 million, or $0.56 per share, for the same period in 2024.
Cash and Cash Equivalents $194.7 million, down from $250.9 million on December 31, 2024, primarily driven by net loss from operations and timing of cash receipts and payments.
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Operating Highlights
ZYNLONTA Revenue: ZYNLONTA net product revenues in Q1 2025 were $17.4 million, consistent with Q1 2024.
LOTIS-7 Data Presentation: Data from LOTIS-7 accepted for presentation at EHA and ICML in June, showing promising results for ZYNLONTA plus glofitamab.
LOTIS-5 Progress: LOTIS-5 remains on track to reach the pre-specified number of progression-free survival events by the end of 2025.
Market Positioning: ZYNLONTA is positioned as a treatment option for third-line plus DLBCL patients, with potential expansion into earlier lines of therapy.
Combination Therapy Potential: ZYNLONTA plus glofitamab shows potential to be a best-in-class combination in a competitive market.
Operational Efficiency: Total operating expenses for Q1 2025 were $49.1 million, a 5% decrease from the prior year.
Cash Position: As of March 31, 2025, cash and cash equivalents were $194.7 million, down from $250.9 million at the end of 2024.
Regulatory Strategy: Plans to discuss the path forward for ZYNLONTA and glofitamab with regulatory authorities based on sufficient data.
Research Collaborations: Seeking potential research collaborations to advance exatecan-based ADCs targeting Claudin-6, PSMA, and ASCT2.
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Risk or Challenges
Regulatory Risks: The company is pursuing regulatory discussions regarding ZYNLONTA and glofitamab, which may involve uncertainties in approval processes and compliance with evolving regulations.
Competitive Pressures: The market for DLBCL treatments is highly competitive, with ADC Therapeutics aiming to position ZYNLONTA plus glofitamab as a best-in-class combination against other emerging therapies.
Supply Chain Challenges: The company mentioned potential impacts from the timing of cash receipts and payments, which could affect operational cash flow and financial stability.
Economic Factors: The financial results indicate a net loss of $38.6 million for Q1 2025, highlighting ongoing economic pressures and the need for effective cost management.
Clinical Trial Risks: The discontinuation of the ADCT602 trial due to clinical data raises concerns about the viability of certain programs and the potential impact on future revenue streams.
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Guidance & Outlook
Commercial Strategy Execution: ADC Therapeutics is focused on maintaining its position as a treatment option for third-line plus DLBCL patients, with total first quarter revenues of $23 million, including net product revenues of $17.4 million.
LOTIS-7 Study: Data from LOTIS-7 accepted for presentation at EHA and ICML, showing promising results for ZYNLONTA plus glofitamab with a 95.5% overall response rate.
Expansion Plans: Assessing options to expand enrollment in LOTIS-7 to 100 patients to support regulatory discussions.
Regulatory Strategy: Plans to discuss the path forward for ZYNLONTA and glofitamab with regulatory authorities once sufficient data is available.
Preclinical Assets: Continuing progress on preclinical assets targeting Claudin-6, PSMA, and ASCT2, seeking potential research collaborations.
Revenue Expectations: Total revenues for Q1 2025 were $23 million, with expectations for significant growth opportunities from upcoming data catalysts.
Cash Runway: Expected cash runway into the second half of 2026, allowing for continued operational funding.
Future Data Releases: Expecting updates on LOTIS-7 and LOTIS-5 trials, with top-line results anticipated once the specified number of PFS events is reached.
Financial Projections: Net loss for Q1 2025 was $38.6 million, a decrease from $46.6 million in Q1 2024, indicating improved financial performance.
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Shareholder Return Plan
Share Repurchase Program: None
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Key Q&A
Q:Could you please provide some color on the follow-up time for the patients from the update today and also for the 18 patients who achieved a complete response last year?
A:The follow-up time is based on the Lugano criteria with assessments at 6 and 12 weeks and monthly. It's too early to speak about durability or the degree of follow-up at this stage.
Q:On the compendia strategy, do you plan to engage with regulatory authorities when you have data from 40 patients or wait for 100 patients?
A:We believe we need a publication including approximately 100 patients with about a year of follow-up, based on recent examples.
Q:How many more patients should we expect to see at the conference itself, EHA?
A:We can't disclose the exact number, but we have enrolled 40 patients and there will be more than the 22 already mentioned.
Q:Is it time to start thinking about this combination as a more efficacious but equally safe combination?
A:From an efficacy standpoint, the data is very encouraging. Anything over 70% CR rate would be extremely differentiating.
Q:With the guidance of reaching PFS events by the end of 2025, do you still expect that top-line data to be a 2025 event?
A:We still expect those events to happen this year, but the data readout could happen end of this year or early next year.
Q:When can we expect conversations with regulators to occur?
A:We plan to meet with regulatory agencies in the second half of this year.
Q:Does the discontinuation of the 602 program free up capital for other developments?
A:The cost implications of discontinuing the 602 program are very low and won't significantly affect our capital allocation.
Q:What should we be expecting on the parameters to be presented for LOTIS-5?
A:We’ll be sharing more on the durability of complete responses, but cannot share more details at this time.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the exact number of patients expected at the EHA conference, stating they cannot disclose the exact number due to abstract limitations. Additionally, there was vagueness in the response about the specific parameters to be presented for LOTIS-5, indicating they cannot share more details.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Association
Chief Medical
Compendia
DLBCL efficacy
DLBCL profile
ICML trial
ICML webcast
Instructions conference
LOTIS EHA
LOTIS glofitamab
LOTIS presentation
LOTIS result
MD ADCT
Medical Officer
Miami ICML
SA expectation
Therapeutics Instructions
Transcript ADC
cash runway
combination glofitamab
combination trial
endpoint
enrollment patient
expectation lady
front product
level dose
meeting month
milestone approval
partner
path glofitamab
patient LOTIS
patient response
patient rituximab
payment
potential glofitamab
presentation EHA
presentation ICML
result LOTIS
royalty
therapy line
trial combination
update LOTIS
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ADC Therapeutics SA (NYSE:ADCT) Q1 2025 Earnings Call Transcript
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The earnings call presents a mixed outlook. Financial performance shows improvement with reduced losses and controlled expenses, but revenue growth is stagnant. Regulatory and clinical trial risks, along with competitive pressures, are notable concerns. Positive aspects include a strong cash runway and potential growth from LOTIS trials, but lack of share repurchase plans and unclear management responses in Q&A add uncertainty. Overall, the sentiment balances between positive future prospects and current challenges, leading to a neutral prediction for stock movement.
ADCT Report
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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
