Welcome to our Fireside Chat with ADC Therapeutics. I'm Robert Burns, a Managing Director and Senior Biotech Analyst at H.C. Wainwright. I'm joined now by Ameet Mallik, the CEO of ADC. Ameet, thank you for joining us today.
Thank you so much. It's a pleasure to be here.
Why don't we just dive in? For those who may be unfamiliar with ADC, could you please provide a brief overview of the company?
Sure, yeah. ADC Therapeutics is a commercial stage company focused on antibody-drug conjugates. Obviously one of the pioneers. The focus of our company is really on our CD19-directed approved product, ZYNLONTA. ZYNLONTA is currently approved as a third-line plus DLBCL setting. Beyond our current approval, we have multiple studies to move into earlier lines of DLBCL, as well as to move into indolent lymphomas. That's the strategy of the company, is really maximizing the value of ZYNLONTA. In particular, we have our LOTIS-5 study, which is our phase III confirmatory of ZYNLONTA in combination with rituximab. That's actually gonna read out in the second quarter of this year, so it's coming soon. We also have our LOTIS-7 study, which is a study looking at ZYNLONTA plus glofitamab at second-line plus DLBCL as well.
That study will read out by the end of this year. Of course, we also have indolent lymphoma studies as well.
Mm-hmm. You know, before we get into LOTIS-5 and LOTIS-7, why don't we talk about the sort of sales trajectory over the past four quarters and how you envisage the potential sales growth of ZYNLONTA in 2026.
Yeah. We don't provide any annual net revenue guidance, but we do expect that the ZYNLONTA sales in 2026 to be broadly in line with what we've seen in recent quarters. As you know, we have a third-line plus label as a monotherapy, and our sales have been relatively stable over the last couple of years, so we expect that to be the case in 2026. We think the real growth opportunity starts when we move into the second-line setting.
Mm.
You know, following the approval, the anticipated approval of LOTIS-5 in 2027, we think we'll start seeing growth in 2027 and even more substantial long-term growth starting in 2020 and beyond.
Okay. You know, when we think about Q4 of last year, obviously it was $22.3 million for sales of ZYNLONTA versus, you know, $15.8 million in Q3 and $18.1 million in Q2. You know, obviously there's a little bit of variability in there. You know, can we expect to see that variability as we move into 2026?
Yeah, you can. I think with this product we've seen quarter-to-quarter variability. What's it driven by? I think it's really driven by two things. One is particularly in academic centers or large community centers, because we're a relatively low volume product, you know, it's a rare disease, you know, you may be ordering, you may get an order from a big academic center and then nothing the next quarter, then you get an order the next quarter because they're ordering a set of vials. So there's a little bit of that kind of inventory fluctuation. The other thing is there's just patient variability. So particularly in the community where, you know, a community doctor may see one, two, three third-line plus patients in a year.
Mm-hmm.
You know, they could see two in one quarter, and then not see any for the next two quarters at all. There's a little bit of variability that we've seen in the brand. We're averaging around $18 million this quarter. That's what we've been averaging in the last couple of years, but that does vary, as you just mentioned. The last three quarters were more like $18 million, $16 million, and $22 million. You know, I think we do expect to continue to see variability, but for the overall annual sales to be roughly in line with what we've seen the past couple of years.
All right. Why don't we move. Obviously ZYNLONTA's approved in the third-line plus setting. You got LOTIS-5, LOTIS-7, which are going into the second line. Why don't we talk about the treatment paradigm in that second-line setting, and how does that differ between community and academic medical centers?
Yeah. I think, you know, when you look at the overall treatment landscape, you know, whether it's the second line or the third-line plus setting, there's really two main segments that exist, and I'll tell you how they differ in terms of use in the academic and the community settings. The first is there's more complex therapies. These are therapies like CAR-Ts and transplant bispecifics, and these are therapies that require more unique infrastructure and expertise to handle the logistical requirements. For example, you know, to do a CAR-T, you have to be a CAR-T administer site. There's about 150 in the country. You know, to administer bispecifics, you need access to a hospital. You need capabilities to administer these therapies that not all centers have.
Now, typically, these therapies are available on all the academic centers, but the majority of the community does not have access to these therapies. You have more broadly accessible therapies. That's the second segment, which are therapies like antibody-drug conjugates, monoclonal antibodies, chemotherapy. These are simple outpatient therapies that really anyone can give, whether it be in the academic center or the community setting. Academic centers have access to both of these therapies. The community largely has access to the broadly accessible. There is a portion of the more sophisticated or larger community centers that have access to bispecific-based therapies, but for the majority of the community, they're really focused on broadly accessible therapies.
Okay. You know, obviously there are a few trials for these competitor agents, CD19-targeted CAR-Ts, as well as CD20 bispecifics, that are being evaluated in the front-line setting, right? ZUMA -1 is a great example of that, ZUMA-23, or the SKYGLO trial. You know, when we think about those specific trials, you know, if those regimens were to be approved in that front-line setting, how does that affect the market opportunity for ZYNLONTA in the second-line context?
Yeah. There is more and more going on in the front-line setting. I would say, you know, many are R-CHOP or R-CHIP regimens outside of CAR-T, so that we can talk about that separately. Most things are adding on to standard of care. We know in the front-line setting that 60%-70% of patients are cured, so the front-line treatments are quite effective and work quite well. You know, the only approval we've had really in the last 20 years in the front-line setting is the POLARIX study, which, you know, compared POLIVY R-CHIP to R-CHOP, right? And had a modest, you know, PFS improvement, not really overall survival improvement. And that's, you know, that was a big, a big breakthrough. I would say the bar is high in front-line because, you know, these therapies work extremely well.
If you look at what's being studied though, in terms of the, you know, bispecifics or MONJUVI, other things, I think it's possible that they play a role. Most of those regimens are being studied in the high IPI population, sort of where the POLARIX study we've also studied. That's about two-thirds of patients. POLIVY is already captured about 35% share in that frontline setting, so they already captured about half of the total addressable market of those high IPI patients. You know, I think the bispecific-based therapies, we'll have to see what the outcome is. You know, what's the efficacy look like? What's the safety profile? If it's positive and get approved, they'll certainly take some of that share. I think it's, you know, it's unlikely it's the majority of patients are gonna get access to that, unless it's absolutely breakthrough therapy.
A breakthrough clinical profile. The reality is the majority of patients are still gonna need access to these therapies in the second-line, but we also like having the benefit of having LOTIS-5 and LOTIS-7. Because for example, if a patient was exposed to a bispecific upfront, they could get a LOTIS-5 regimen. If they weren't, they could get a LOTIS-7 regimen. We like having multiple regimens in that second-line-plus setting. When you look at CAR-Ts, most of the CAR-T studies are looking at only high IPI, the IPI definition is different. Whereas for the bispecific-based therapies, it's IPI 3-5. This is only 4-5, which is about 20% of patients.
The majority of patients, I would say, are unlikely to get a CAR- T in the frontline. We already see in second line and third line, where you see more patients being treated in academic center than the frontline setting. Only 20% of patients in either of those settings gets access to a CAR- T. In this case, because they're being studied mostly in that, you know, higher IPI, you know, the four and five patients, that's only about 20% of patients that could get access to a CAR- T. We think, again, the majority of patients will not get access to a CAR -T frontline and it won't, you know, significantly change the patient population for the second-line plus opportunities that we're studying.
Okay. You know, one of the competitive threats that I've taken note of is liso-cel. Now, that targets both CD19 and CD20, and it's not really demonstrated any grade 3 CRS in the trials that we've seen previously. It's also being evaluated in the second-line setting. I wanted to get your thoughts as to the uptake of an agent like that in the academic center and how it might erode, like, you know, physician preference for that agent versus the combination of, let's say, glofitamab and ZYNLONTA in the second-line setting.
Yeah, look, I think Rondocel, you know, as you said, it's a CAR- T that targets CD19, CD20, supports the rationale for combinations we're studying. Obviously, CD19 and CD20-based therapies, both of which we see in LOTIS-5 and LOTIS-7, you know, I think that combination makes a lot of sense. I think it sort of supports what we're doing with our combinations. I think the reality is when you look at the CAR- T market, about 20% of patients in that second-line plus setting have access and are receiving a CAR- T. That hasn't changed in the last few years. It's been relatively stable. While there's been share movement between products, there hasn't been actually a fundamental growth in the class.
We think even if that trial is positive, which most likely wouldn't happen before 2030, it's gonna compete primarily with the CAR- T class and be limited to the academic centers. I don't think it's gonna broadly impact the spaces that we're going after with LOTIS-7 and LOTIS-5.
Okay. You know, obviously, we've seen the emergence of these trispecific T-cell engagers. I wanna get your thoughts as to, let's say, you know, you were to see a CD19, CD20 trispecific or a CD19, CD20, CD22 agent move into that second-line setting as well. How would you view that competitive threat?
Yeah, it's hard to speculate without real, I think, robust clinical data.
Yeah.
Because I think there's a lot of theory that sounds good. I think at the end of the day, it's what efficacy are you offering? You know, are you getting to a high rate of CRs? Are they durable? And is it with a manageable safety profile in a fixed duration non-chemotherapy regimen? I mean, I think that's essentially what physicians really want.
Yeah
Speculate on early-stage compounds. I think what I would say is, if I look at the competitive landscape today or what's emerging in the next few years, I think LOTIS-5 and LOTIS-7 are very well-positioned in that competitive landscape.
Okay. You know, obviously, you noted earlier that top-line data from LOTIS-5 trial, which is evaluating the combination of loncastuximab plus RITUXAN versus RITUXAN GemOx, for the treatment of second-line, transplant-ineligible DLBCL, is expected by mid-2026. You know, given that upcoming data set, could you remind us of the safety run-in results that you presented at EHA last year and help frame expectations for investors regarding this upcoming release?
Sure, yeah. LOTIS-5, as a reminder, is our phase III confirmatory study of ZYNLONTA plus rituximab. The comparator arm is our GemOx. That's what we're going against. The initial safety results, because we got approved as an accelerated pathway, as a monotherapy, we had to do first a 20-patient safety run-in before we started this randomized phase III study. In those 20 patients, with this combination, we saw an overall response rate of 80% and a complete response rate of 50%. Also, we saw that the durability looked really good. The median duration of CRs wasn't reached even after two years of follow-up for those patients. We didn't see any new safety signals, and the safety profile was overall well manageable. We think that's a really good starting point.
Of course, now we have a 420-patient randomized study that's ongoing, and that study is gonna read out in the second quarter of this year. In that second quarter, we plan to be able to share obviously PFS, which is our primary endpoint of the trial, and that's what the study is powered for. We also will share all secondary endpoints that are mature, as well as key safety tables. I think investors will be able to get a good view of what this data is. We're gonna be as transparent as we can without compromising obviously publication and a medical conference that we expect by the end of this year.
Yeah. What do you need to have a positive study? You know, for instance, you know, can you talk a little bit about the powering of this study with regard to PFS, and what would success look like in terms of meaningful clinical differentiation for you guys?
Yeah. The primary endpoint of the study, which was discussed and agreed to with the FDA, is PFS. In LOTIS-5, the PFS is powered at 90% to show a hazard ratio of 0.67. In other words, we need to show a hazard ratio of 0.67 or less to have a positive primary endpoint. If you look at R-GemOx, which is the standard of care in the second line setting, it's a widely used comparator really across almost every phase III study in relapsed refractory DLBCL, including LOTIS-5. When you look at the data from R-GemOx as a comparator arm across, you know, most of the recent studies, it's really anywhere from 2.3-5 months. When you look at the most recent studies, it's typically between 3-4 months.
You look at the two most recent phase III studies are in that 3- 4 month range. What this means is if R-GemOx, for example, delivered a 4-month median PFS, ZYNLONTA plus rituximab would have to deliver a 2-month difference to be positive with that hazard ratio of 0.67. In the context of our primary endpoint that's positive, with no detrimental effect on overall survival and a positive benefit-risk profile, we think we'd have a very good submission for the FDA.
Right.
Approvability I think is differentiating because, you know, Rob, like outside of CAR- T and chemotherapy, there's no full approvals in second line. MONJUVI, lenalidomide, has an accelerated approval, which could turn into a full approval if their frontline trial gets approved. But right now there's very few full approvals in second line, so getting a full approval is in and of itself differentiating.
Yeah. You know, given what the sort of benchmarks that you cited for R-GemOx, from a PFS perspective, as well as what we've seen, you know, in that safety run and in all the previous datasets, it seems like, you know, there's really high confidence behind this trial being successful. Would you tend to agree with that statement?
We're confident for really two reasons, I would say. One is the design of the study. If I think about other setbacks from competitors, one is you wanna have a really good clinical trial design and conduct of the study, and I think we feel quite confident about that. This is, you know, a sufficient size with 420 randomized patients. It's powered at 90% with one-to-one randomization. So that gives us a lot of confidence. The other thing I'd say that gives us confidence is we know how R-GemOx has traditionally performed, which is typically, as I mentioned, that 3- 4 month range. We saw in our safety run-in a median PFS of 8.3 months, and so with a CR rate of 50%.
I think that's what gives us confidence that even if you saw some erosion, you know, essentially you're keeping rituximab the same in both arms, you're comparing R² ZYNLONTA to GemOx. You know, based on the data that's been seen in other studies as well as the data we saw in the safety run-in, that's what gives us confidence. I think the other thing is that there was an interim futility analysis that was conducted in the second quarter of 2024. We have an Independent Data Monitoring Committee. We are obviously blinded, completely blinded to the data, but they're able to look at the data unblinded from an efficacy and safety standpoint.
Even in the interim futility analysis, which was an efficacy look at the data, there was a pre-specified efficacy boundary that had to be met. That was passed, and the IDMC told us to continue as is. In addition, they've looked at the safety of this multiple times, including most recently last fall, and again, told us to continue without any modifications as is. Those are the data points we have. We're blinded to the study, but I think just based on the information that we know, those are the things that give us confidence.
Okay. You know, obviously PFS is a event-driven endpoint, you know. Is there any possibility of slippage for this data readout to go into like third quarter or potentially longer?
No, we're confident that we're gonna have a top-line readout in second quarter.
Assuming the top-line data readout comes out positive, talk to me a little bit about the regulatory strategy that you intend on pursuing with regard to the LOTIS-5 dataset.
You know, assuming a positive study happens in Q2, it typically takes about 4-5 months to file the SBLA, followed by what we expect to be a 10-month standard review period. That gets you to an expected approval sometime in the middle of 2027.
Okay. You know, let's say it were to be approved, you know, per the LOTIS-5 trial, what sort of incremental market opportunity would you expect to see from the LOTIS-5 trial dataset alone, excluding LOTIS-7?
Yeah. I think when you look at it today, we basically are playing in the third line plus market, so it's about 6,000 patients in the third line market. We have about a 10% share, and with an average of three cycles, that translates to $70 million-$75 million. That's basically where our sales have been. If you look at the second line, if you add the second line opportunity and the third line opportunity, second line adds an additional 12,000 patients. If we're able to just maintain that same 10% share that we have in the third line in the second line setting with the expected increased number of doses, so in the safety run-in we saw that on average patients were getting five cycles versus monotherapy we see three cycles.
With the extra patients keeping the same share, but with a longer duration of therapy, that would get you to $300 million just with the same share. Conservatively, I think we've guided to even if you only get 5%-10% share in second line and maintain the same 10% share in third line with a longer duration, you get to $200 million-$300 million. We think that's, you know, that's very doable.
Now, does that include, let's say, Compendia listings from, let's say, LOTIS-7?
No, no, that would be all incremental on top of that. The LOTIS-7 and indolent lymphoma opportunity is on top of that. We think the total opportunity with approvals and Compendia listings for ZYNLONTA could be anywhere between $600 million-$1 billion in peak sales. LOTIS-5 is only a portion of that total opportunity that we believe we could have.
Okay. Talk to me a little bit more about the trial design here as well. 'Cause obviously we know that crossover can affect various survival endpoints. Is there crossover in this trial?
There's no crossover.
Okay, perfect. Well, why don't we shift gears now to the combination with glofitamab, and that's being evaluated in relapsed/refractory NHL in the LOTIS-7 trial. You know, you recently presented updated data at ASH 2026. You know, can you give us a high-level overview of those results?
I mean, LOTIS-7, we're looking at, it's a phase I-B trial, and we're combining ZYNLONTA with the highly effective bispecific glofitamab in second-line plus DLBCL patients. We know that outside of CAR-T, the only products that have ever been approved as single agents in any line of therapy in DLBCL are the two bispecific products, epcoritamab and glofitamab, and ZYNLONTA. We're combining two of the only products that have ever been approved as single agents together. These are two of the most potent molecules. And we're very pleased so far with the initial results. We had, in the first 49 efficacy-evaluable patients, which all had a minimum of six months of follow-up, we were able to demonstrate a 90% overall response rate, and a 78% complete response rate across those 49 patients.
That means 38 of the patients achieved a CR. Of those, 33 of those 38 remained a CR as of the data cutoff. We had all patients with at least six months of follow-up. We had patients going out to almost two years. In that population, we also had about 8 patients that were previously treated with CAR- T. Six of those patients achieved a CR. We really believe that this combination can provide clinically meaningful benefit for patients.
Data showed that the combination, in addition to having very strong efficacy, it would continue to be generally well-tolerated with a manageable safety profile, and the side effects that we're seeing were known side effects with either one of the agents. We didn't see any new side effects. Taken together, we think together with LOTIS-5, we think that also having LOTIS-7, we really can provide multiple options to physicians, depending on what's accessible and suitable for patients in that second-line-plus setting, and that these two approaches are very complementary for us to play a meaningful role in that second-line-plus DLBCL setting.
Yeah. You know, given the data that we've seen with the CD20 bispecifics in diffuse large B-cell lymphoma, what sort of CR delta relative to those historical controls would you wanna see in order to pursue these regulatory or compendia pathways?
Yeah. If you look at, there are three different bispecific combinations that are preferred right now in NCCN guidelines. They all have CR rates anywhere between 51%-61%. You know, what physicians have told us, if you're in the 60s, you've already differentiated yourself from the pack, right? If you get to 70 or above from a CR standpoint, it can be transformative. That's obviously our goal is to be transformative, both in terms of the depth of response, but we also wanna make sure the durability of those responses is very meaningful.
It's a manageable safety profile. You know, that's the, I would say, the scenario we're going for, but I think we, you know, given that we showed a 78% complete response rate in 49 patients, I think we feel quite confident with, you know, where we can land with a 100-patient result that we expect to share by the end of this year.
Yeah. You know, I know that there was a paper that was published last year by Hutchings colleagues in the JCO and presented results for glofitamab plus polatuzumab in the second-line-plus DLBCL setting. In that paper, we saw a 78.2% objective response rate, 59.7% CR rate, with an MPFS and MOS of 4.3 and 33.8 months respectively. Now, when I compare that data set to what we saw at ASH, obviously, you know, your data set looks better from a efficacy standpoint on a cross-trial comparison basis. We do note that there were more third line plus patients in that trial than in LOTIS-7.
I'm curious to get your thoughts as to how you see the combination of glofitamab plus polatuzumab stacking up against ZYNLONTA plus glofitamab, and whether there's an opportunity here to potentially move into the front-line setting as well?
Yeah. I'd say, first of all, we're well-balanced. If you look at the data across those 400 patients, between second-line patients and third-line-plus patients, they're very well-balanced. Like most other studies, I would say we have, it's almost 50/50 between patients who had one prior line of therapy versus, you know, two or more. It's pretty balanced between the second line and the third line plus settings.
I think, you know, what's unique about obviously glofitamab is, you know, one of the two most potent bispecific products, right? It's a very, very good product. Combining with POLIVY though is a product that doesn't have strong single-agent activity. It was never approved as a single-agent drug, as opposed to ZYNLONTA, which has very strong single-agent activity. We think it's a more active drug, and that's why this combination is so powerful. The other thing I think to note is that POLIVY is playing a very important role in the front-line setting.
It's you know the POLARIX data led to kind of 35% share in that frontline setting. A lot of patients are getting exposed to POLIVY upfront. I think most physicians don't wanna re-treat for patients that progress on a therapy in the next line of therapy. Again, I think the fact that we have very potent single-agent activity, the data so far looks you know best in class from a bispecific combination standpoint. We're not being used in that frontline setting. I think those are all advantages. In terms of could we move to the frontline, there's a lot of physicians that are excited about it because they ask you know "If you can get to you know 78% CR rate in the second-line plus setting where you know you have heavily pre-treated patients. We have high-risk groups. We have high-grade B-cell lymphoma.
We have high IPI patients, post CAR-T patients. We have a lot of high-risk groups, a lot of primary refractory. You looked at our data, a lot of primary refractory patients in our study, and yet we still have the strong efficacy. What could it be in frontline? Could you get to significantly more? That's something we'll consider in the future. I think right now what we're focused on is, you know, how do we make sure that we can deliver on these studies and really create a very meaningful commercial opportunity in that second-line plus setting.
Yeah. You know, one of the things that I'm recalling now, because I remember a data set that you guys presented where it showed that the efficacy of ZYNLONTA post CD19 CAR- T isn't really affected by the prior CD19 CAR- T usage. Do you really expect any sort of erosion in market opportunity if the CD19 CAR- Ts go into the frontline setting? You know, obviously the IPI score, the IPI classifications, it's much more stringent for the CAR- Ts. You know, just based on that data set alone, it doesn't seem like you would have much erosion just from CD19 CAR -T going into the frontline.
I think it could be an opportunity because we get a lot of our use, especially in the academic centers, post CAR-T or post CAR-T bispecific right now.
We get a lot of our use today in that setting. You know, if CAR- Ts were to move out front, again, they're playing in that IPI four and five population, which is about 20% of the population that could be eligible for CAR- T. Even if all 20% were to get a CAR- T, those same patients. Remember the share that CAR- T has in second line and in third line plus is also only 20%. If a lot of patients get treated in frontline, I think that will reduce the number of patients that get it in the second line or third line. It's actually an opportunity for us. We know that the product today is being used pretty extensively in that post CAR- T and bispecific setting.
Yeah. You know, one of the questions that I get a lot is, you know, how do you see the utilization of LOTIS-7 versus LOTIS-5 in that second line setting? Like, you know, if physicians didn't have, like, if they got just like the POLARIX trial regimen, you know, how, like, which regimen do you think a physician would sort of reach to, you know, if LOTIS-5 or LOTIS-7?
I think it all depends on what's accessible and what's suitable for the patient. Obviously, the LOTIS-7 regimen is likely to be much more powerful, potent, right? I mean, that efficacy, we haven't seen efficacy like this from any of these combination regimens. It's definitely the more potent combination, but not everyone has access to or are suitable for a bispecific-based therapy.
I think you look today at the second-line setting, you know, about 10% of patients get a bispecific-based product. In the third-line setting, plus setting, it's about 35%. I think it depends how this market shapes up, you know, between complex therapies and broadly accessible therapies. Right now, the split between those two settings in the second line is, you know, 35% complex therapies like CAR- Ts and bispecifics, 65% broadly accessible. In the third line setting, it's actually 60% complex therapies versus 40% broadly accessible.
I think what we like is that between LOTIS-5 and LOTIS-7, we're playing in both of those segments, and depending on what the physicians have access to, and depending on what's suitable based on also the comorbidities and patient characteristics, what's the most suitable therapy, we can play in both of those segments. Every 10 share points in that second-line plus setting with our product is worth about $300 million.
If we were to get to 10% share, that'd be $300 million. If we were able to get to 20% share between the two therapies, that's $600 million. Depending on the share we can get across both therapies, you could see how this can be a significant opportunity for us between LOTIS-5 and LOTIS-7.
Yeah. You know, obviously when we think about that frontline setting again, Allogene's approach is differentiated relative to ZUMA-23 and some of the other CAR- T trials in the frontline setting. Is there any specific impact from the way that Allogene is conducting their trial, and like, is there any direct read-through as to the opportunity for you guys in that second-line setting?
Look, I'd say, so far what we've seen is that when new CAR- T products come out, they tend to cannibalize each other.
We've seen, you know, a lot of share movement between products, but the class itself hasn't really grown for the last several years really. It's been kind of stuck at that roughly 20% penetration. The more outpatient they get, the more accessible they could be in the community. I think you're still competing with the bispecific-based combinations, which are, you know, how deep are the responses, how durable. That's always been the question on some of the allogeneic CAR-Ts, you know, around durability and stuff.
I think it's gonna depend on the clinical profile. I think we feel very good on the data that we've shared so far with LOTIS-7 on both the depth of response and the durability of response, and the potential even for this to go outpatient. If you remember, like, the CRS f or glofitamab on its own, if you look at the label, has about a 70% all grade CRS. Most of that was grade 1 and 2, but there was even some grade 3 and 4. In those 49 patients that we showed, we significantly were able to reduce the CRS. In fact, at the 150 dose of ZYNLONTA, which is our approved dose, that's the dose we're expanding and moving forward with, we were able to reduce the CRS to 25% all grade.
Yeah
That could be a substantial improvement versus other bispecific-based therapies. We think we have a chance to differentiate on depth of response, durability of response, and safety profile.
That's what the CAR- Ts are gonna have to compete against too, especially the allogeneic CAR- Ts, you know?
Yeah. I completely agree with you there, with regard to the differentiation, both from an efficacy perspective, but also CRS perspective, with these ZYNLONTA combinations. Just high level, I want to get your thoughts on in vivo CAR- T and whether you see any potential impact on you guys from that next wave of CAR- T, you know, ingenuity.
Yeah, I don't want to speculate. I think it's all gonna depend on the clinical efficacy. Like, and what I said is, so far outside of the autologous CAR-Ts, we haven't seen. We've definitely seen more convenience. I think it's all gonna come down to the durability, and it's too soon to tell, I'd say, because I think what's so good about the autologous CAR-T is that for 30% of patients, they're still in a CR 5 years later, essentially, like almost functionally cured, right? I think that's gonna always be the question about any of these newer CAR-T platforms is, can you get to that same level of durability and long-term response that you see with autologous? I think it's still just an open question right now.
Okay. Why don't we shift gears a little bit to MZL and follicular lymphoma. Obviously, we've seen some data from these investigator-initiated trials. You know, provide an overview of those datasets as, you know, how are you thinking about pursuing or whether you're pursuing potential registrational trials in either of those indications?
Yeah. We have really promising phase II data from both two different multi-center IITs. One is in ZYNLONTA in combination with rituximab in relapsed refractory follicular lymphoma. We also have another study with ZYNLONTA as a monotherapy to treat relapsed refractory marginal zone lymphoma. The data was presented at medical congresses for both of these last year. We're encouraged that, for example, in follicular lymphoma, there was data presented from 55 efficacy-evaluable patients, and these are in high-risk relapsed refractory FL patients. The overall response rate was 98% with a complete response rate of 84%. When you look at it versus competitive benchmarks, it's really outstanding data.
Similarly with MZL, the data presented on the first 26 efficacy-evaluable patients last year at ICML showed an overall response rate of 85% and a CR rate of 69%. Both of these, also combinations or the combination of follicular and the monotherapy in MZL, had very manageable safety profiles. We think these can be highly differentiating. The phase I right now is a 100-patient study with follicular, 50-patient study with marginal zone. We expect that both of these studies to read out and be presented at medical congresses sometime between the end of this year and the middle of next year. We think that can form the basis for a Compendia inclusion after the publication.
In addition to the Compendia strategy that we are evaluating regulatory strategies, in particular for MZL, where, you know, when you look at the datasets that led to the approval, for example, R-squared or BTK inhibitors, it's on the basis of 70 patients or less, typically 60-70 patients. We already have a 50-patient study ongoing. We will discuss with the FDA about, you know, potential pathways for, you know, accelerated approval or what the regulatory pathway could be for the individual lymphomas.
Yeah. Obviously, you know, you've mentioned both potentially pursuing regulatory pathways with the FDA as well as compendia listings. You know, could you sort of help frame what the incremental benefit would be, you know, not just from compendia, but also from FDA approval? Like let's say you get a compendia listing for MZL or for the LOTIS-7 regimen, right? Maybe you'd see 5% uptake. What sort of incremental uptake would you see with an FDA approval?
I mean, obviously, you know, if it's only in Compendia, not yet approved, that's an off-label indication, and although it would be reimbursed, we will not promote off-label. You know, your ability to educate on the regimen, if it's not approved, you're not gonna promote the product.
Yeah
T he uptake generally is less with Compendia than it would be with a full approval where you could promote, particularly in the community setting. You know, academic physicians tend to be very aware of the data, tend to be very knowledgeable, and, you know, it's up to them to decide what they think is best for their patients to treat. Of course, as I said, we're not gonna promote it, but it's up to them. Whereas in the community, they tend to be less aware. Although Compendia strategies can provide a point of access for physicians to use a product if it's in the patient's best benefit, because there's no promotion, they tend to be used less.
I don't want to give you an order of magnitude, but when you look to, say, an MDL, for example, there's two main regimens that are approved, two main regimens that are in Compendia. The two main regimens that are approved have the majority of the market. It definitely helps to get approval, but data matters as well. When you look at the R-squared and the BTK inhibitors, the CR rates, you know, are typically around 30% or less, and what we've seen again with our study is 69% CR rate. I think the clinical profile matters as well, and we feel good about the data we're generating right now and plan to continue to finish out these studies to get into compendia, but also then we'll discuss with the FDA and other regulatory bodies about potential approval pathways as well.
Okay. You know, last month you announced an amended HealthCare Royalty financing agreement. Could you sort of discuss that announcement and what that provides to the company?
Yeah. We have a royalty agreement with HealthCare Royalty, where initially they invested $300 million into the company in exchange for a royalty strip. That royalty right now is at 7%, but could go up to, depending on where the revenue is, up to 10%. That's what the essence, the basic agreement is. Also, in that agreement, there was a change of control provision that would be $750 million, should there be a strategic transaction. What we negotiated is to reduce that change of control payment from $750 million to $150 million, if something were to happen between now and the end of 2027. Thereafter, it'd be $200 million.
In the event of a change of control in exchange for that, HealthCare Royalty will continue to receive the same royalties that they were up to this point, that 7%-10%, until the original royalty cap is reached. Of course, that $150 -$200 million change in control would also contribute to the royalty agreement. They don't get more money in total, but that would happen. In addition, we granted HCRx warrants to purchase approximately $9.8 million of common shares with an exercise price of $3.81. These are exercisable through the end of 2030, but they're subject to a lockup through the end of 2027. That's the basic provision of this.
I think for us, it just provides the company more strategic flexibility, and I think it shows the great partnership we have with HCRx and also the confidence that they have in ZYNLONTA long term, to be able to restructure this deal like this.
Right. Last question from me. It's actually a two-part question. You know, in the past, we've seen some preclinical data for some of your earlier stage assets. I know you don't really talk about them that much anymore, but how are you thinking about potential BD opportunities moving forward? The second part to the question is, what's your current cash position and what sort of runway does it provide?
Yeah. I think in terms of BD, right now we're really focused on, you know, executing these ZYNLONTA trials and really helping to translate that into a significant opportunity for ZYNLONTA, starting with growth in 2027. That's the core focus of the company. As the company eventually transitions to, you know, a profitable P&L with our current indications, that can allow us to continue to invest, do some combination of either more life cycle management for ZYNLONTA, but also potentially complementary hematology assets. Those are the things that we'll explore as we get into a positive cash position as a company. Again, right now we're focused on executing and delivering on what we have. In terms of our cash position, we have a very strong cash position.
We raised last year about $160 million, so we ended the year with a cash balance of $261 million. That will give us an expected cash runway to at least into 2028. Together with all the milestones that we have this year, where we have LOTIS-5 and LOTIS-7 data coming this year, the indolent data coming between the end of this year and middle of next year, and the ability, we think, through Compendia and through regulatory approvals for this asset to get to $600 million-$1 billion, we think we're really well-financed to be able to do that. You know, as the data gets unlocked this year, we think it'll significantly de-risk the growth opportunity that we see starting next year.
Awesome. Thank you, Mallik. You know, is there anything we haven't touched on today that you sort of want to highlight for our investors?
No, I would just say, look, this is an exciting year. This is a really, as I mentioned, a year where the data gets unlocked, and it's gonna open up an opportunity to start the growth of ZYNLONTA, and then that growth can be further accelerated through additional life cycle management or through potentially complementary new assets. You know, we think this is a key year. Last year was key for us to execute, to, you know, finance the company well, and we think this is a key unlocking year for us from a data standpoint.
Well, I sort of look forward to all the data that's going to be presented later this year. Ameet, thank you so much for joining us today.
Thank you, Rob. I really appreciate it.