Welcome to the ADC Therapeutics second quarter 2021 financial results conference call. My name is Victor, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question- and- answer session. During the question- and- answer session, if you have any question, please press star then one on your touch-tone phone. I will now turn the call over to Amanda Hamilton, Investor Relations Manager. Amanda, you may begin.
Thank you, operator. This morning we issued a press release announcing our second quarter 2021 financial results and business updates. This release is available on the ADCT website at ir.adctherapeutics.com under the Press Releases section. On today's call, Chris Martin, Chief Executive Officer, Jennifer Herron, Chief Commercial Officer, Jay Feingold, Chief Medical Officer, Jenn Creel, Chief Financial Officer, will discuss recent business highlights and review our second quarter 2021 financial results before opening the call for questions. As a reminder, this conference call may contain forward-looking statements. Such statements are subject to risks and uncertainties.
For additional information concerning forward-looking statements and factors that could cause actual results to differ materially from those expressed or implied in these statements, we refer you to the section titled Cautionary Statement Regarding Forward-Looking Statements in Exhibit 99.3 of our report on Form 6-K filed with the U.S. Securities and Exchange Commission earlier today. Such statements speak only as of the date of this conference call, and we expressly disclaim any obligation or undertaking to update these forward-looking statements unless required to do so by applicable law. Today's presentation also includes non-IFRS financial measures. These non-IFRS 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 IFRS.
You should refer to the information contained in the company's second quarter earnings release for definitional information and reconciliations of historical non-IFRS measures to the comparable IFRS financial measures. It is now my pleasure to pass the call over to our CEO, Chris Martin. Chris?
Thanks, Amanda, and thank you everyone for joining us today. The second quarter was nothing less than transformative for our company as we received our first accelerated FDA approval and brought ZYNLONTA with its broad label and differentiated profile to this area of high unmet medical need. We achieved key objectives across the board, including commercial, clinical development, and corporate development goals. Let's start with our first commercial product. In April, we received accelerated FDA approval for ZYNLONTA for our first indication in relapsed/refractory DLBCL and became a fully integrated biopharma company. Today, it's early in the launch, and we're pleased with our progress and the positive reception from the physician and payer communities. Jennifer Herron, our Chief Commercial Officer, will share more details about our launch a little later in this call.
On the R&D front, we continue to advance our pipeline programs, which we expect to also drive long-term value for the company. We presented new data at ASCO and ICML on a few of our key programs, including updated duration of response for the pivotal ZYNLONTA phase II LOTIS-2 trial and the phase I trial of ZYNLONTA in combination with ibrutinib. We also presented encouraging interim data for the phase II trial of our second program, Cami, in Hodgkin lymphoma. Jay will elaborate further on these and our other programs in a few moments. We are also focused on expanding our geographic footprint to provide ZYNLONTA to as many patients as possible worldwide. As you know, we formed the joint venture Overland ADCT BioPharma to develop and commercialize four of our products, including ZYNLONTA, in Greater China and Singapore.
The joint venture has made tremendous progress, including the hire of a CEO, Eric Koo, who has substantial experience in China. Eric and his team are now making rapid progress towards initiating a pivotal bridging study. As for Europe, we have recently engaged with EU regulators, and based on that feedback, we plan to submit a marketing authorization application to the EMA in the second half of 2021. We are evaluating all of our go-to-market options and look forward to updating you on our plans for Europe when we have more specific details to share. I would now like to turn the call over to Jennifer to provide some insights from the early days of the ZYNLONTA launch. Jennifer.
Thank you, Chris. Good morning, everyone. Let me start with our focus: to bring ZYNLONTA to any third-line DLBCL patient who may benefit. We have an exceptional team of seasoned industry professionals who have executed very well with this single objective in mind. To that end, I'm happy to report that the ZYNLONTA launch is off to an encouraging start in its early stages. We are pleased to report ZYNLONTA net sales in the second quarter of $3.8 million. This represents approximately two months of sales following approval in late April and reflects launch-to-date patient demand with no material inventory build.
The encouraging early launch performance is the result of the strong execution of our seasoned cross-functional team of oncology professionals across medical, market access, marketing, sales, and commercial operations, all working together to educate physicians, nurses, and pharmacists on ZYNLONTA's differentiated product profile in third-line DLBCL, which remains an area of high unmet medical need. Providing some additional context on the early launch dynamics, our commercial team has engaged all key accounts, with patient starts at a significant number of those accounts. A substantial number of NCCN centers have ordered and reordered ZYNLONTA. The differentiated ZYNLONTA product profiles, as reflected in our pivotal LOTIS-2 trial, has been well received by both academic and community-based physicians.
ZYNLONTA's consistent efficacy across a broad patient population, including heavily pre-treated patients and patients with difficult-to-treat disease, its manageable safety profile, and ease of administration applies equally well to the real-world patient populations in both the academic and community settings, resulting in an approximate 50/50 split in terms of accounts ordering ZYNLONTA. Over the next few quarters, we expect a greater proportion of ZYNLONTA volume to come from community-based physicians. We have seen significant increases in aided and unaided awareness, reflecting the impact of our hybrid launch approach and comprehensive digital campaign. In terms of access, we are pleased with our progress to date. Our payer and medical teams have actively engaged with key payer stakeholders, laying the groundwork for swift access. Nearly all key payer accounts have now been engaged, and we have made strong progress with published medical policies.
With inclusion in the NCCN guidelines just two weeks after accelerated approval, we are gaining access ahead of plan. We expect to receive our permanent J-code in January 2022, which will help with local community reimbursement. As for operating in the COVID environment, we were fully prepared to launch under these exceptional circumstances and thus far have executed a strong hybrid launch with the flexibility to engage both virtually or in person, depending on geography and physician preferences. We are encouraged to see increases in face-to-face visits, which we expect to continue to improve over the coming months. To summarize the first two months of launch, we are encouraged by the early positive launch momentum we've generated to date. There remains some uncertainty with the pandemic.
We believe there is a lot of opportunity to continue driving awareness and demand. Our team is motivated, focused, and determined to bring ZYNLONTA to any third-line DLBCL patient who may benefit. We look forward to keeping you updated on our progress. I'll turn the call over to Jay to provide an update on our pipeline. Jay?
Thank you, Jennifer. Beyond the first approved indication for ZYNLONTA, we are exploring opportunities to expand the addressable patient population into earlier lines of treatment and into additional histologies. As Chris mentioned earlier, updated data from the ZYNLONTA pivotal LOTIS-2 trial were presented at ASCO and ICML. The overall response rate was 48% and the complete response rate 25%. As of the March 1, 2021 cutoff date, the median duration response increased to 13.4 months for all responders with durable responses, even in high-risk subgroups. The median duration of response for completely responding patients was not reached. As a reminder, the patient population of this trial included patients who did not respond to first-line therapy or any prior lines of therapy, patients who failed CAR T therapy or stem cell transplant, and patients with high-grade B-cell lymphoma, including those with double-hit and triple-hit genetics.
These results reinforce the efficacy and safety of ZYNLONTA as a monotherapy, the manageable safety profile, and its convenient ease of administration. Data were recently presented at ICML from the LOTIS-3 trial of ZYNLONTA in combination with ibrutinib for patients with relapsed or refractory DLBCL or mantle cell lymphoma. Updated phase I data showed encouraging efficacy and manageable toxicity with an overall response rate of 67% and a complete response rate of 38% in non-GCB subtype DLBCL patients. Based on interim data from the ongoing phase II trial, we have decided to amend the protocol to evaluate the administration of ZYNLONTA with every cycle to potentially further enhance efficacy and durability. Based on this additional data, we could potentially pursue a phase III study in second-line DLBCL, expanding the addressable market and the number of patients who could benefit from ZYNLONTA.
The phase II portion of this trial continues to enroll. Our ongoing confirmatory phase III LOTIS-5 clinical trial of ZYNLONTA in combination with rituximab is intended to support a supplemental BLA filing as a second-line therapy for relapsed or refractory DLBCL patients not eligible for stem cell transplant. This trial continues to enroll patients, and we expect to complete the safety reading portion of this trial in the second half of the year. We also plan to initiate several additional ZYNLONTA trials in the second half of the year, including an umbrella trial of ZYNLONTA in multiple combinations in relapsed/refractory B-cell non-Hodgkin lymphoma and a dose-finding study of ZYNLONTA in combination with R-CHOP in previously untreated DLBCL patients. These trials will explore the expansion of ZYNLONTA into earlier lines of therapy across B-cell non-Hodgkin lymphomas.
The pivotal phase II trial in relapsed/refractory follicular lymphoma is now open for enrollment as well. As Chris mentioned, we plan to file an MAA in Europe later this year based on the LOTIS-2 data. Moving to Cami, we have made progress in both our Hodgkin lymphoma and solid tumor programs. We completed enrollment of our 117-patient pivotal phase II trial in relapsed or refractory Hodgkin lymphoma. Updated interim results were presented at ICML and showed an overall response rate of 66% and a complete response rate of 28% in a heavily pretreated population with a median of six prior lines of systemic therapy. Median duration of response was not reached, and no new safety signals have been identified.
We are encouraged by these results, which highlight the potential to address an unmet medical need in heavily pretreated Hodgkin lymphoma patients, most of whom have failed stem cell transplant, and all of whom have failed brentuximab vedotin and a checkpoint inhibitor. We look forward to providing additional updates as these data continue to mature. We also continue to advance Cami with our ongoing phase I-B dose escalation trial in combination with pembrolizumab in patients with advanced solid tumors. Data presented at ASCO showed that Cami monotherapy had an encouraging safety profile, and the maximum tolerated dose was not reached. It is also encouraging to see that treatment with Cami showed a significant increase in T-effector to T-reg ratio in a number of patients with T-cell infiltration of their tumors, which is thought to be associated with immune-related antitumor effects.
As our Cami program exemplifies, we are deploying our validated ADC platform in the treatment of solid tumors. ADCT-901, targeting the antigen KAAG1, is a novel first-in-class candidate for the treatment of patients with advanced solid tumors with high unmet medical needs, including patients with platinum-resistant ovarian cancer and triple-negative breast cancer. We filed the IND for ADCT-901 in the second quarter, which the FDA cleared, and we expect to initiate the phase I study in the second half of this year. Another of our promising pipeline candidates, ADCT-601, is targeting AXL, which is overexpressed in many solid tumors, such as lung, breast, prostate, pancreas, glioma, and esophageal cancer. We expect to initiate the phase I-B combination study in multiple solid tumors in the first half of 2022.
In addition, our ADCT-602 program, targeting CD22, continues to enroll patients in a phase I/II trial for relapse refractory acute lymphoblastic leukemia in collaboration with MD Anderson. Finally, we have a robust R&D pipeline with six preclinical development programs, and we look forward to keeping you updated on our progress. With that, I will turn the call over to Jenn to give a financial update.
Thank you, Jay, and good morning, everyone. As reported in the press release issued earlier today, ZYNLONTA second quarter net sales were $3.8 million, reflecting the two months of ZYNLONTA sales. As of June 30th, 2021, we had cash and cash equivalents of approximately $372 million as compared to approximately $383 million as of March 31st, 2021. During the quarter, we drew down the last $50 million tranche from our Deerfield facility, which was contingent upon ZYNLONTA approval. We used approximately $58 million in net cash for operating activities in the second quarter of 2021. R&D expenses were $40 million for the second quarter of 2021 compared to $26 million for the same quarter in 2020. The increase was primarily related to the medical affairs support of the ZYNLONTA launch and the expansion of our ZYNLONTA clinical program and our broad portfolio.
Selling and marketing expenses were $15 million for the second quarter of 2021 compared to $4 million for the same quarter of 2020. The increase in selling and marketing reflects the preparations for the ZYNLONTA launch and the ongoing commercial efforts. G&A expenses were $19 million for the second quarter of 2021 compared to $15 million for the same quarter of 2020. The increase was primarily due to the cost of being a public company. Net loss was $73 million for the second quarter of 2021 compared to a net loss of $127 million for the same quarter of 2020. Net loss included share-based compensation expense of $18 million for the second quarter of 2021. Our diluted net loss per share was $0.95 in the second quarter of 2021 compared to a net loss of $2.01 for the same quarter of 2020.
Adjusted net loss, a measure that excludes certain items associated with the Deerfield convertible loan and share-based compensation expense, was $54 million for the second quarter of 2021 compared to an adjusted net loss of $32 million in the same quarter 2020. The increase in adjusted net loss was primarily driven by the investment in the ZYNLONTA launch and our clinical programs. The adjusted diluted net loss per share was $0.70 for the quarter compared to a loss of $0.51 for the same quarter 2020. I will turn the call back to Chris for closing remarks. Chris?
Thank you, Jenn, Jay, and Jennifer. To conclude, this has been a productive and important first half of 2021. We achieved important milestones, including, of course, the transformative ZYNLONTA approval and launch. Our objectives for the remainder of the year are equally ambitious, and we are well-positioned to execute on all aspects of the business. We look forward to updating you on the progress of our launch and our advancing pipeline in the coming quarters. I'm pleased now to open the call to your questions. Operator?
Thank you. We will now begin the question- and- answer session. If you have a question, please press star then one on your touch-tone phone. If you wish to be removed from the queue. Please press the pound sign or the hash key. If you're using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star then one on your touch-tone phone. Our first question will come from the line of Brian Cheng from Cantor Fitzgerald. You may begin.
Hey, team. Congrats on the launch, and thanks for taking my question. It's good to see the 50/50 split of academic versus community docs using ZYNLONTA. Can you talk about how that split coincides with your launch strategy and expectations? Given you have a differentiated data set, double-hit, triple-hit subset compared to other recently approved agents, do you see a more concentrated uptick there? Then I have a follow-up. Thanks.
Jennifer.
Thanks, Chris. Brian, thanks for your question. As I mentioned in my remarks, our accounts ordering ZYNLONTA are split 50-50 across academic and community. I think that's really reflective of the differentiated product profile, our broad 3rd-line indication, ease of administration, and the fact that we haven't seen any significant payer barriers to date. We do believe that the versatility of ZYNLONTA's differentiated profile has enabled both academic and community physicians to identify patients who may benefit from ZYNLONTA. We do, however, expect a greater proportion of patients to come from the community as an increasing number of medical policies are published and ultimately with our permanent J-code expected in January 2022. In terms of your question on double-hit, triple-hit subpopulations.
From what we've heard anecdotally in the early weeks of launch, physician and patient real-world experience to date has been consistent with the profile as described in the pivotal LOTIS-2 trial, in terms of efficacy, safety, and dosing across a broad patient population in third line DLBCL. We haven't seen any specific concentration in subgroups. We believe it's being used broadly in alignment with our indication.
Okay. Thank you, Jennifer. For Jenn, one quick one. In the $3.8 million number for ZYNLONTA, how much of that is rolled over from the EAP that you started earlier this year versus organic new patient start? I know that you don't have inventory build this year. Should we expect any inventory build later this year? Thank you.
Hi. This is Jenn. Thanks, Brian, for the question. We did not have any significant material rollover from the EAP program. I'm sorry, can you remind me of your second question? Sorry.
Should we expect any inventory build later this year?
We're not expecting any material build. The second quarter sales didn't have any material impact from an inventory build, and we're not expecting that in the future.
Great. Thank you. Chat soon.
Thank you.
Our next question will come from the line of Matthew Harrison from Morgan Stanley. You may begin.
Great. Good morning. Thanks for taking the questions. Two from me. I guess first on launch dynamics. Can you maybe just talk about, I assume these are all demand patients, and you didn't see any sort of bolus of patients waiting for drug, but maybe if you could just confirm that. The second question is just around the ibrutinib combo. It sounds like there's a point here at which you're going to enroll more patients and then be able to speak to regulators about potentially a phase III program. Maybe you could just talk about when you think you're going to get to that point. Thanks.
Jennifer, do you want to take part one, and Jay, part two?
Yeah, absolutely. Matthew, thanks for the question. Yeah, I can confirm that we don't believe there was any pent-up demand in Q2, largely because of the aggressive nature of the disease. We do believe that all of the $3.8 million in net sales in Q2 reflects real-time patient demand and more importantly, the unmet medical needs for these patients.
Matthew, with regards to the ibrutinib trial, this is Jay. We have to amend the trial, which always takes time to not only write, but more importantly, to get to the Institutional Review Boards, the IRBs. To do that, it's going to take a bit of time, and then we'll reopen for enrollment. We really want to nail down the appropriate dosing regimen and just as importantly, we want to make sure we find out with regard to cell of origin. We will take some time to enroll that study. I'm not anticipating that we'll have much more to say about that study into 2022. We'll see how it goes then.
Thank you. Once again, as a reminder, that's star one for questions. Our next question will come from the line of Kennen MacKay from RBC. You may begin.
Hi. Thanks for taking the question. Maybe initially a question on Cami. After the data at ICML, can you maybe talk at all around any regulatory interactions you've had around plans for an accelerated approval? I'd love to also hear any KOL feedback you've had on the data as well as managing the incidence of GBS and what the current thinking is around that mechanism and whether there are any sort of preventative measures or even differences in expected incidence between lymphomas and solid tumors. I just have a quick follow-up on ZYNLONTA.
Okay. This is Jay Feingold again. With regard to regulatory, we have an agreement with FDA from the end of phase I meetings that we would follow patients for one year after the last patient was enrolled and responded to Cami. We're in that time follow-up right now. All the patients were enrolled in January. We anticipate that we'll have data, obviously, in the first half of 2022. We have to review the data, write a BLA, submit the BLA, and go from there. Probably anticipate a regulatory path in terms of our planning similar to what we did for ZYNLONTA. We're not, at this point, advising yet on when we exactly plan to submit that BLA. In terms of KOL feedback, first, with regard to a response, I think it's important to understand the patients we're treating in this study.
During ICML, we reported on the first 101 patients enrolled in the study from the point of view of efficacy. Those patients had failed a median of six prior lines of therapy. All the patients had failed a checkpoint inhibitor. All except one had failed brentuximab vedotin. That one was a mistake on the part of the investigator enrolling the patient. Over 60% of the patients had failed stem cell transplant as well, both mostly auto, some with auto or with allo, and some with both. Despite all that, we had a 66% overall response rate and a 28% complete response rate. We didn't reach the median duration of response. I think it's important to understand all that in the context of the safety issue with GBS.
Clearly, we believe, our advisors believe, our independent data safety monitoring board believes, and FDA believes that there's enough anti-tumor activity in these very late-stage patients to warrant the continuation of the study. The potential for positive benefit over risk continues. That's why the study is continuing. In terms of GBS itself, the number of cases of GBS in this study are very similar to what we saw in the phase I study. We have never seen a case of GBS or polyradiculopathy in the B-cell lymphoma patients, the T-cell lymphoma patients, the acute leukemia patients, or the solid tumor patients that have been treated with Cami. There is some connection between the diagnosis of Hodgkin lymphoma and GBS, which is actually reported in the literature, and obviously some connection between being treated with Cami and GBS.
We are continuing to investigate what that link might be and if we can establish any risk features. So far, we haven't been able to do that. We don't have any plan in place specifically to mitigate. We do, of course, have all sorts of requirements for checking for viruses and other things that are known to be associated with GBS prior to enrollment on study and receiving Cami. All that's in place. We'll continue to follow up closely. It's important also to note that when the patients are treated quickly and aggressively with the onset of symptoms of GBS, they've generally done pretty well and recovered fairly quickly. Definitely a serious issue, GBS, but so far, our investigators, advisors, the DSMB, and the FDA agree with us that the drug is certainly well worth studying in these Hodgkin patients with no alternatives.
Jay, thank you. Completely agree there, and as you mentioned, really unparalleled efficacy in those late-stage patients there in Hodgkin lymphoma. Just that follow-up on ZYNLONTA, just wondering if you could talk about progress getting ZYNLONTA listed on hospital protocols, especially some of the largest academic centers. Is that at all associated with getting that permanent J code, or is this sort of a step-by-step approach through those large academic hospitals? Thanks, and congrats again on the quarter and the progress.
Thanks, Ken. Jennifer, do you want to take that?
Yeah. Thanks, Chris. Ken, thanks for the question. I think from an access perspective, it all started with the fact that we got our NCCN guidelines less than two weeks after approval with a category 2A listing and recommendation. That's really helped us accelerate all of our patient access efforts and evidenced in our published medical policies, which we believe will enable faster access for patients both in the community and in the academic centers. We haven't received significant payer pushback, and I think that's reflective of the quality of our data, our documentation, such as our AMCP dossier, and the strong execution of our market access and medical teams. We are, in general, very pleased with our access to date through these medical policies. It is early days, and we anticipate receiving that permanent J-code in the beginning of 2022.
In the meantime, we'll be continuing to support the local community practices through our reimbursement-related services, which is called ADVANCING Patient Support.
Thank you. I'm not showing any further questions in the queue. I'd like to turn the call back over to Chris for any closing remarks.
Well, thank you very much for joining our call today, everyone, and we look forward to keeping you updated on our progress. Take care and stay safe. Bye.
This concludes the program. You may now disconnect.