Hi, good afternoon, everyone. Thanks for joining Jefferies Healthcare Conference in London. My name is Clara Dunn, one of the biotech analysts here at Jefferies. I am joined by the Chief Executive Officer of ADC Therapeutics, Ameet Mallik, and then we have the team, Pippin, Mohamed, and Nicole in the audience here as well. Welcome.
Thank you so much. Pleasure to be here.
Before we dive in, maybe, Amit, you can give us a high-level overview of the company, what's the focus right now, what's, you know, maybe give us a talk a little bit about your commercial-approved products at ZYNLONTA as well.
Sure. Yeah, so ADC Therapeutics is obviously focused on antibody-drug conjugates. We're a commercial-stage company with an approved product in ZYNLONTA, approved in the third-line setting, but we have multiple studies to expand its use into earlier lines of DLBCL, as well as in indolent lymphomas. We also have an IND, near IND-ready asset with a PSMA targeting ADC.
Great. Maybe we'll start with the commercial products at ZYNLONTA. How is it doing in the market? Maybe just kind of set the context of, you know, with a current approved indication, and how's it doing in the DLBCL?
Yeah, overall, I mean, you know, in the third-line setting, there's been a lot of change within the market. You know, just taking a step back at the DLBCL market, when you get into that relapse refractory setting, therapies basically fall into two categories. You have complex therapies like CAR T and bispecifics, and then you have more broadly accessible therapies like ADCs and monoclonal antibodies and chemotherapy. We're obviously playing as a monotherapy in that second category. When you look at that third-line plus setting, transplant and CAR T have had roughly a 25% share. When bispecifics were introduced about two and a half years ago, they gained another 35% share. We have had relatively stable sales during a period of time where bispecifics have really transformed the market.
Of that, of the market, we have roughly a 10% share, and that's been stable despite bispecifics gaining, you know, significant share. I think some of the attributes physicians really like about the product is it works really fast. You get to a CR quickly. When you get to a CR, it's very durable. The median duration of response for CRs wasn't reached even two years later. It's a safe and easy-to-administer profile. It works particularly in a lot of different subpopulations. In particular, we see a lot of traction amongst the older patient population.
Maybe we can talk about the market of DLBCL a little bit broadly as well. Where do you see which part of the market do you think is untapped, and especially in the context of community settings versus academic settings as well?
Yeah, so I mean, you know, when you look at the front-line setting, about 30% of patients are treated in the academic institutions, about 70% in the community. Essentially, everyone's getting the same therapies. Usually either R-CHOP or Pola-R-CHP. There's a clear standard of care. Independent of where you're getting treated, it's sort of you're going to get the same thing. As you move up to subsequent lines, the referrals to the academic institutions start to grow, and the divergence and complexity of therapy starts to increase as well, and the fragmentation of care increases. On the one hand, going back to that category of complex therapies, you see if you're treated in an academic institution, you're going to get a lot of CAR T bispecific use.
In the community, there's a small portion of the sophisticated community centers that can administer bispecifics, but the majority of the community isn't able to administer, especially the step-up dosing of bispecifics. That is where you see a lot of use of more broadly accessible therapies. There's still a lot of targeted therapy use, ADC use, chemotherapy use in those segments. If you think about where we're going as a strategy, we have two different trials in combination, and that's the strategy of the company is to move into combination, both by combining with glofitamab, one of the leading bispecifics in that complex therapy segment, and then with rituximab in the broadly accessible segment. Both of those studies are ongoing right now.
Let's talk about those two studies and very exciting studies as well. Maybe we will start from LOTIS-5, and you, you know, you will read out, you move the top-line readout from year end to the first half of 2026. Maybe tell us what drove the change, especially since it's event-driven, and are you going to report the data after reaching a specified number of PFS events?
Yeah, LOTIS-5 is our confirmatory study. We were approved as a monotherapy via accelerated approval, and we have a very large study. We have a 420-patient randomized one-to-one study with ZYNLONTA+ rituximab versus R-GemOx. Essentially, if you think about it, instead of the chemo component, we're using an ADC with rituximab. That's the way the study design is. The primary endpoint is PFS, and of course, we have key secondary endpoints like overall survival and ORR, CR, duration of response, and other key secondary endpoints. We confirmed the timing that we think we're going to get to top-line results in the first half of next year. Before, we said sometime between the end of this year and first half of next year. Obviously, it's a PFS-driven event. We need to get to 262 prespecified PFS events.
It is not unusual when you get to the end of a study that you're waiting a little bit for those last events to happen. We still believe in the first half of next year we'll hit the events, be able to clean the database, clean the data, lock the database, and get to top-line results all in the first half of next year.
Earlier in the year, you've also reported some data from the trial. Maybe just walk us through the trial and what are the key highlights here?
Yeah, we presented data at ASH, I'm sorry, EHA, on the LOTIS-5 study, which showed really strong durability. Before, because we got approved as a single-agent monotherapy drug, we had to do a safety run-in before we could go into the randomized portion of the phase three study. We originally presented that data in SOHO 2023, where in those 20 patients, there was an 80% overall response rate, a 50% CR rate, and an 8.3-month median progression-free survival. The data update that happened at EHA was about the durability. In those 20 patients, what we saw is the median duration of response, even after a two-year follow-up, was not reached yet for those patients that achieved a CR. That is very similar to what we saw with the monotherapy data with ZYNLONTA as well in our approval study.
Maybe just to set the expectation for the data you're reading out in the first half of 2026 as well. In that setting, what do you think is a relevant benchmark?
Yeah, so again, there are these two segments of complex therapies and broadly accessible therapies. What drives the choice between which therapy you are going to end up with is, one, what is accessible? What does a physician have access to administer? Because not every physician can administer a CAR T or administer a bispecific. It also comes down to the patient's suitability. You have patients that, for example, are older and have comorbidities, patients that have a risk of infection, patients that have autoimmune disease, patients that may have neurotoxicity from front-line chemotherapy. All those help to determine the treatment set that a physician is going to give. It is going to fall into one of these camps of either the complex therapies or broadly accessible. Amongst those broadly accessible therapies, there is still a lot of chemo use. Chemotherapy has a CR rate of roughly 25%.
When you look at the other ADC and monoclonal combination therapies, they're typically around 40%. What we saw again in our safety run-in was about a 50% CR. I think if we're anywhere at the competitive level of 40% or higher, I think we're going to have a differentiated profile in that broadly accessible segment. Beyond just the CR rate, again, we want to see really good durability in the data and continuing to see a very good safety profile that we've seen with the monotherapy.
Maybe you also walk us through the key highlights of safety profile in monotherapy as well.
Yeah, overall, I think one of the important things to know is with this therapy is a fixed duration therapy. And, you know, when you ask doctors, what are they looking for in that relapse refractory setting? They want to achieve durable CRs in a fixed duration in a chemo-free regimen that's tolerable for patients. That's ultimately what they want to do. I think one of the benefits we have is, again, being chemo-free, having a fixed duration therapy, both as monotherapy and now in combination, but also having a safety profile where the side effects with this drug, and some of the unique ones given our payload, are either skin rash or edema, are both manageable, but they're also reversible when you stop that fixed duration therapy. That's an important thing.
We know that there's toxicities sometimes with chemotherapy, with other ADCs, with other products that may be irreversible, that continue even post-treatment discontinuation. That is a very important factor.
When we were thinking about the market opportunity for LOTIS-5, maybe just help us break down how the market opportunity looks like with this combo, and how does it really translate to the value of the companies as well?
Yeah, so I think there's three drivers of growth opportunity with LOTIS-5 versus where we are as a monotherapy. First of all, we're playing in the third-line setting, third-line plus setting. That's about 6,000 patients in the US. When you move to second line, you double that patient population to 12,000 plus patients. The second thing is the duration of therapy. On average, what we see with our monotherapy is three cycles. What we're seeing in the combination studies is anywhere from five to six cycles. You're going to increase the duration of therapy as well. Finally, we think when you go from efficacy that's at the lower end of efficacy in that relapsed refractory setting with a 25% CR to something that's more competitive, you should also be able to gain share. Just to dimensionalize, we think it's roughly a $200 million-$300 million opportunity.
The reason you get to those numbers is we're roughly a $70 million drug now with a 10% share in the third-line setting. If you take into account doubling the patient population, increased duration of therapy, even with the same share, you get to about $200 million. Assuming you have a much better profile in combination, we should actually be able to gain share. That's what leads us to the estimate of roughly $200 million-$300 million.
Can we also talk about the regulatory pathway for this as well?
Yeah, so obviously, because we got approval via accelerated approval, things like the CMC package and other things, there's nothing more to update. We have to get to the top-line readout. It usually takes about three months after that to prepare the sBLA and then file that with the FDA. We would get, assuming a positive study, confirmatory, we'd get a full approval then with the confirmatory study.
Can we also talk about whether there's expanded opportunity in, you know, marginal zone lymphoma and follicular lymphoma as well? How large is that opportunity?
Yeah, we've seen great data. We have two different phase two IITs right now in follicular and marginal zone lymphoma. Starting with marginal zone lymphoma, we're currently running a 50-patient study. This is an area of very high and met need. There's about 3,000-4,000 relapsed refractory marginal zone lymphoma patients. There's only four different regimens, mainly BTK inhibitors that have either been approved or in guidelines, based on pretty small sample sizes, so anywhere from 36-63 patients. We think 50 is a relatively good number to be able to represent this patient population. When you look at the CR rates in this population and amongst all the competitive therapies, the best CR rates are around 30%. What we're showing right now in the first, roughly, it was over half the patients. There was a presentation at ICML, just over 25 patients.
We had a 69% CR rate, so significantly higher than what you're seeing. This is with ZYNLONTA monotherapy, again, fixed duration therapy. We think there's a good opportunity. If you just think of what's the total addressable market opportunity within marginal zone, if you were to take that number of patients, 3,000-4,000, multiply it by our net price and the average number of cycles, it's about a $500 million overall market opportunity. Meaning for every 10 share points, you get about $50 million in incremental sales. With follicular, it's a bit more crowded, I would say. Although the data looks good, there's a number of therapies right now that have phase three studies with overall survival. I'd say the clinical bar is higher from an evidence standpoint.
Nonetheless, we're seeing really good data looking at the same combination that's in LOTIS-5, which is ZYNLONTA plus rituximab. Recent Dr. Arducho, who's the PI on the study, presented data in September showing that in the first 55 efficacy evaluation patients, an 84% complete response rate, which is very competitive when you look at the data in the relapsed refractory setting. In particular, we know this is a patient population that we're only studying this in high-risk follicular lymphoma patients with a large portion of the study POD24. There may be a niche that we can carve out there in terms of high-risk patient populations and POD24. We think, again, this study of 100 patients should be able to lead to favorable inclusion into Compendia, assuming the results continue.
Great. Maybe let's turn to LOTIS-7 trial as well. Maybe just give us an overview of the trial and then what's the opportunity for this trial we are looking at.
Yeah, so bispecifics obviously are very potent drugs and have played a big role already today in the third-line setting. Increasingly, I think they'll play a bigger role in earlier lines of therapy as well. When you look at that second-line setting, you already have three different bispecific combinations, one with glofitamab, one with ePCOritamab, one with mosunetuzumab that have all been added into guidelines at the beginning of this year. They're already starting to gain share in that second-line plus setting. Now, the majority of that is, you know, they're either being added to other ADCs or with chemo. Typically, when you look at the data with bispecific combinations, while bispecific monotherapy gives about a 40% CR rate, when you look at the combinations data from all the studies with bispecific combinations, they range anywhere from 47% to 62%.
We're currently running a study right now, a 100-patient expansion cohort right now, looking at the combination of ZYNLONTA plus glofitamab. Essentially replacing the chemotherapy, which is in the glofitamab-GemOx combination, with our ADC, but sticking with glofitamab. There's obviously a lot of biological rationale for this combination, given that your CD20, CD3, plus the CD19 ADC are very complementary mechanisms of action. In addition to the cell killing you get from the ADC, you get the immunogenic effect from both agents. There is a lot of biological rationale for why this combination should make sense. We did a dose escalation, cleared all the dose cohorts, and we're currently expanding right now at the approved doses of both products.
One of the interesting things that we're doing when we dose the product is we're giving ZYNLONTA right after the obinutuzumab in the step-up dosing to try to reduce the CRS rates. Because by debulking the tumor, we believe we can actually potentially reduce some of the side effects with the bispecific, like CRS and ICANS, both in terms of rates and grades. These drugs are given every three weeks, both for fixed duration. It is simple to combine these drugs together. For a patient getting an infusion, you can get the ZYNLONTA, and then after that, on the same day, get the Glofitamab. It is actually pretty easy from a patient administration standpoint. What we saw in the first 30 patients, we shared data at EHA and ICML in June.
In the first 30 patients, we showed an overall response rate of 93% and a CR rate of 87%. Very good data looking at this combination. In addition, we were able to reduce the rates and grades of CRS when you look at it versus monotherapy, glofitamab, so that was also important. Also importantly, there are no additive or new toxicities seen. Even in areas like neutropenia, where you have both agents can contribute to neutropenia, the levels of neutropenia grade three or higher were very similar to either agent alone. Overall, we're really pleased right now with the initial data we've seen, both from an efficacy and a safety standpoint.
Based on that initial data, how would you say, how does that data support your LOTIS-7 combo kind of compete against, you know, maybe CAR T or other bispecific combos in the complicated landscape as well?
Yeah, I think CAR T is going to have a place because you have five-year survival data where roughly 30% of patients have long-term cure rates. I think until someone proves something differently, I think CAR T is going to have a place. When you look at CAR T, it has about roughly 20% share, and it has not really grown over the last few years. I think it has found a good niche. I think we are talking about the other 80% of the market. I do think bispecifics will play an increasing role. You know, right now, the community adoption is smaller, but I think it is going to grow over time as community physicians get more comfortable giving bispecifics. You know, Glofitamab and ePCOritamab are really kind of the key standards of care. Those are the two approved agents. They both have high efficacy.
Doctors feel comfortable with both agents. We feel good combining with one of those standards of care and glofitamab. We think that this combination, if the data persists and continues, can play a real role. Importantly, there is no bispecific combination that has been approved in the second line. The three agents are all in guidelines. We are currently running a 100-patient study that we believe, if successful, can lead to publication and Compendia inclusion in the first half of 2027.
You are also going to report some updated data by the end of the year. Just maybe tell us, what should we expect there for the updated data?
Yeah, more patients and more durability. I think that's the big question is, you know, how do the response rates continue when you get larger patient samples? With more follow-up, how's the durability of the CRs? Obviously, as the data is maturing right now in the study, we want to give a larger number of patients and more durability. Of course, continued safety update as well.
Maybe let's also talk about the market opportunities that LOTIS-5 is, sorry, LOTIS-7 is targeting. You mentioned $200 million-$300 million for LOTIS-6. What's the number we're targeting here for LOTIS-7?
Right now, the initial strategy is around Compendia, but obviously, we would consider a phase three approach. If we had both regulatory approval and Compendia inclusion, this could be an incremental $300 million-$500 million on top of the $200 million-$300 million I mentioned for LOTIS-5, because we do think that bispecifics will play a bigger role. If the efficacy persists, we believe we could have the leading efficacy amongst any of the bispecific combinations.
What could be the possible scenarios for maybe the NCCN guideline inclusion versus the regulatory approval?
Certainly, NCCN guidelines is probably a faster pathway. When you look at some of the other studies, like ePCO, glofitamab as an example, which is a very good regimen, typically, it was about a 100-patient size that led to the preferred inclusion into NCCN and other Compendia guidelines. We think that's roughly the sample size that you need to get an inclusion. That's a faster pathway. We'll continue to evaluate potential phase three approaches.
Great. In the big scheme of having two trials, LOTIS-5 and LOTIS-7, for expanding the opportunity for ZYNLONTA, how should we think about kind of the growth trajectory for ZYNLONTA in the coming years?
Yeah, so if you look at, you know, during these last couple of years where bispecifics have gained a lot of share in the third-line setting, we've been stable. Our sales have been roughly $69 million in the last two years. If you look at the first three quarters of this year, we're at $51 million. Trending in that same direction so far. We don't see that there's going to be any growth opportunity as we look forward through 2026 because we'll have the same indication. As you get into 2027, and we, you know, again, assuming positive study, we could have an approval with LOTIS-5, we could be in guidelines for LOTIS-7 and potentially guidelines for one or both of the indolent lymphomas. That will lead to, we believe, significant growth opportunity following those events in the first half of 2027.
Beyond ZYNLONTA, anything else you're exploring right now at the company?
Yes, we also have a PSMA-directed ADC using an exotic platform that's going to be IND-ready by the end of this year. The strategy there is really to look to partner. Obviously, we're focusing right now heavily on ZYNLONTA right now in the expansion opportunity because, again, we believe this could be, you know, with success across all these indications, you know, $600 million to $1 billion asset. That's where the focus is. With our PSMA-directed ADC, the goal is really to try to partner that asset.
Great. Lastly, can you remind us, you know, your cash position and the runway?
Sure. At the end of Q3, we ended with a pro forma cash position of $293 million. The reason I say pro forma is we did a $60 million pipe in the month, right around that time of Q3 closing. When you add the proceeds from that plus our cash position at the end of Q3, it was roughly $293 million. Our cash runway before we did that raise was already into 2028. Right now we're saying at least into 2028. Depends a bit, obviously, on the revenue ramp-up during that period. What that additional pipe allowed us to do is to make sure we had the resources to really relaunch the product, both from a commercial and medical affairs standpoint, and to continue to strengthen the balance sheet versus where it was before.
Great. Thank you. That will bring us to the end of our discussion here. Thank you very much, Ameet, and thank you to the audience for joining us. Enjoy the rest of the conference. Thank you, everyone.
Yeah, thank you very much.