Welcome to the ADC Therapeutics Second Quarter 2021 Financial Results Conference Call. My name is Victor,
and I will 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 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 Q2 2021 financial results and business update. 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 and Jen Creel, Chief Financial Officer, will discuss recent business highlights and review our Q2 2021 financial results before opening the call for questions. 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 ks filed with the U.
S. 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 The information contained in the company's 2nd quarter earnings release for definitional information and reconciliations of historical non IFRS measures With the comparable IFRS financial measures.
It is now my pleasure to pass the call over to our CEO, Chris Martin.
Thanks, Amanda, and thank you, everyone, for joining us today. The Q2 was nothing less than transformative for our company as we received our 1st accelerated FDA approval and bought ZYNOLTA 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 VINYLONTA for our first indication in relapsedrefractory 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 Heron, our Chief Commercial Officer, will share more details about our launch a little later in this call. On the R and 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 ZINLONTA Phase to LOTUS II trial and the Phase I trial of ZYNLONTA in combination with Ibrutinib. We also presented encouraging interim data for the Phase Two trial of our second program, KAN E, 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, providing Lonza to as many patients as possible worldwide. As you know, we formed the joint venture Overland ADCT Biopharma to develop and commercialize all of our products including ZINLANTA in Greater China and Singapore. Wu. The joint venture has made tremendous progress, including the horror of the CEO, Eric Ku, 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 twenty twenty one. 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 I'm from the early days of the ZYNOLTA launch.
Jennifer?
Thank you, Chris. Good morning, everyone. Let me start with our focus, To bring ZENLONTA 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 XENLANTA launch is off to an encouraging start in its early stages. We are pleased to report XENLANTA net sales In the Q2 of $3,800,000 This represents approximately 2 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 ZYNOLTA's differentiated product profile in 3rd 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 profile, as reflected in our pivotal LOTUS-two trial has been well received by both academic and community based physicians. ZYNLANTA's consistent efficacy across a broad patient population, including heavily pretreated patients and patients with difficult to treat disease, its manageable safety profile and ease of administration applies equally well To the real world patient population in both the academic and community settings, resulting in an approximate fifty-fifty split In terms of accounts ordering ZYNLANTA.
Over the next few quarters, we expect a greater proportion of ZYNLANTA volume to come from community based Finally, 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 2 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 we're 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 1st 2 months of launch, we are encouraged by the early positive launch momentum we've generated to date. We also recognize that these are early days of the ZYNOLTA launch, and there remains some uncertainty with the pandemic. However, we believe there is a lot of opportunity To continue driving awareness and demand, our team is motivated, focused and determined to bring ZYNOLTA to any third line DLBCL patient who may benefit.
We look forward to keeping you updated on our progress. Now 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 XINLARTA, we are exploring opportunities to expand the addressable patient population As Chris mentioned earlier, updated data from the ZEMONTA pivotal LOTUS-two trial We're presented at ASCO and ICML. The overall response rate was 48% and the complete response rate 25%. As of the March 1, 2021 cut off date, the median duration response increased to 13.4 months for all responders with durable responses even in high risk subgroups. In addition, the median duration of response for complete 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 ZERMARA as a monotherapy, A manageable safety profile and its convenient ease of administration. Data were recently presented at ICML in the LOTUS-three trial of ZIMMATA in combination with ibrutinib for patients with relapsed or refractory DLBCL or mantle cell lymphoma. Updated Phase 1 data Showed encouraging efficacy and manageable toxicity with an overall response rate of 67% and a complete response rate of 38% and non GCB subtype DLBCL patients. Based on interim data from the ongoing Phase 2 trial, we have decided to amend the protocol to evaluate the administration of ZENMATA with every cycle to potentially further enhance efficacy and durability.
Based on this additional data, we could potentially pursue a Phase 3 study in second line DLBCL, expanding the addressable market and the number of patients who could benefit from XERMONTA. The Phase 2 portion of this trial continues to enroll. Our ongoing confirmatory Phase 3 LOTUS-five Clinical trial of ZEMONTA in combination with rituximab is intended to support a supplemental BLA filing as a second line therapy for relapsedrefractory DLBCL patients not eligible for stem cell transplant. This trial continues to enroll patients and we expect to complete the safety leading portion of this trial in the second half of the year. We are also planning to initiate several additional ZEMONTA trial in the second half of the year, Including an umbrella trial is MANTA in multiple combinations in relapsed refractory B cell non Hodgkin lymphoma.
And a dose finding study is MANTA in combination with R CHOP and previously untreated DLBCL patients. These trials will explore the expansion of ZENMCA into earlier lines of therapy across T cell non Hodgkin lymphomas. A pivotal Phase 2 trial in relapsedrefractory for licking 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 LILIS-two data. Moving to KAMI, we have made progress in both our Hodgkin lymphoma and solid tumor programs.
We completed enrollment of our 117 patient pivotal Phase 2 trial and relapsed to refractory Hodgkin lymphoma. Updated interim results were presented at ICML and showed an overall response rate of 66% Complete response rate of 28% in a heavily pretreated population with a median of 6 prilines of systemic therapy. Leading duration 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 cintuximab vedotin and a checkpoint inhibitor. We look forward to providing additional updates as these data continue to mature.
We also continue to advance Kami with our ongoing Phase 1b dose escalation trial in combination with pembrolizumab and patients with advanced solid tumors. Data presented at ASCO showed that KAMI monotherapy had an encouraging safety profile and the maximum tolerated dose was not reached. It's also encouraging to see that treatment with Kami showed a significant increase in T Effector to Treg ratio in a number of patients with T cell infiltration of the tumors, which is thought to be associated with immune related antitumor effects. As our accounting program exemplifies, we are deploying a validated ADC platform And the treatment of solid tumors. ABCT-nine zero one targeting the antigen KAG-one is a novel first in class candidate for the treatment of patients with advanced solid tumors with higher medical needs, including patients with platinum resistant ovarian cancer and triple negative breast cancer.
We filed the IND for ADCT-nine zero one in the second quarter, which the FDA cleared and we expect to initiate the Phase 1 study in the second half of this year. Another of our promising pipeline candidates, ADCT-six
zero one,
is targeting XL, which over expressed many solid tumors such as lung, breast, prostate, pancreas, glioma and esophageal cancer. We expect to initiate the Phase 1b combination study in multiple solid tumors in the first half of 2022. In addition, our ADCP-six zero two program targeting CD22 continues to enroll patients in a Phase onetwo trial for relapsedrefractory acute lymphoblastic leukemia in collaboration with MD Anderson. Finally, we have a robust R and D pipeline with 6 preclinical development programs and we look forward to keeping you updated on our progress. With that, I will turn the call over to Jen to give a financial update.
Thank you, Jay, and good morning, everyone. As reported in the press release issued earlier today, ZINLANTA 2nd quarter net sales were $3,800,000 reflecting the 2 months of XINLANTA sales. As of June 30, 2021, We had cash and cash equivalents of approximately $372,000,000 as compared to approximately $383,000,000 as of March 31, 2021. During the quarter, we drew down the last $50,000,000 tranche from our Deerfield facility, which was contingent upon ZYNLANTA approval. We used approximately $58,000,000 in net cash for operating activities in the Q2 of 2021.
R and D expenses were $40,000,000 for the Q2 of 2021 compared to $26,000,000 for the same quarter in 2020. The increase was primarily related to the medical affairs support of the ZYNLANTA launch and the expansion of our ZYNLANTA clinical program and our broad portfolio. Selling and marketing expenses were $15,000,000 for the Q2 of 2021 compared to $4,000,000 for the same quarter of 2020. The increase in selling and marketing reflects the preparations for the XELONTA launch and the ongoing commercial efforts. G and A expenses were $19,000,000 for the Q2 of 2021 compared to $15,000,000 for the same quarter of 2020.
The increase was primarily due to the cost of being a public company. Net loss was $73,000,000 for the Q2 of 2021 compared to a net loss of $127,000,000 for the same quarter of 2020. Net loss included share based compensation expense of $18,000,000 for the Q2 of 2021. Our diluted net loss per share was $0.95 in the Q2 of 2021 compared to a net loss of $2.01 for the same quarter of 2020. Finally, adjusted net loss, a measure that excludes certain items associated with the Deerfield convertible loan And share based compensation expense was $54,000,000 for the Q2 of 2021 compared to an adjusted net loss of $32,000,000 in the same quarter 2020.
The increase in adjusted net loss was primarily driven by In the Zimlanta 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. With that, I will turn the call back to Chris for closing remarks. Chris?
Thank you, Jay and Jennifer. To conclude, this has been a productive and important first half of twenty twenty one. We achieved important milestones, including, of course, the transformative XINLONZA 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. Royston.
Thank you. We will now begin the question and answer Our first question comes from the line of Brian Chang from Cantor Fitzgerald. You may begin.
Hey, team. Congrats on the launch and thanks for taking my question. It's good to see the fifty-fifty What's off academic versus community docs using Solanta? Can you talk about how that split coincides with your launch strategy and expectations? And 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?
And then I have a follow-up. Thanks.
Sure. Yes. Thanks, Chris. And Brian, thanks for your question. As I mentioned in my remarks, Our accounts orderings in Lonza are split fifty-fifty across academic and community.
And I think that's really reflective of the differentiated product profile, Our broad third 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 ZENLANTA's differentiated profile has enabled both academic and community physicians To identify patients who may benefit from ZYNOLTA. 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 of 2022. And 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 LOTUS-two 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. And then for Jen, one quick one. So in the $3,800,000 number for Solanta, How much of that is rolled over for the EAP that you started earlier this year versus organic new patients start? And 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 Jen. Thanks,
Brian, for
the question. We did not have any significant material rollover from the EAP program. And then, 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 2nd quarter sales didn't have any Material impact from an inventory build and we're not expecting that in the future.
Great. Thank you. 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. 2 from me. So 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.
And then 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 3 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 1 and Jay part 2?
Yes, absolutely. Matthew, thanks for the question. Yes, 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. So we do believe that all of the $3,800,000 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. So we have to amend the trial, which always takes time to not only write, but more importantly to get to the institutionally the boys, the IRBs. So to do that, it's going to take a bit of time, and then we'll reopen for enrollment. And 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 selaborigin, so we will take some time to enroll that study. So I'm not anticipating that we'll have much More to say about that study for into 2022 and we'll see how it goes then.
Thank you. 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 Kami. After the data at ICML, can you maybe talk at all around Any regulatory interactions you've had around plans for an accelerated approval? And I'd love to also hear any KOL feedback you've had on the data as well as Managing the incidence of GBS and whether there's what the current thinking is around that mechanism and Whether there are any sort of any preventative measures or even differences in expected incidence between lymphomas and And then I just have a quick follow-up on Zenmonte.
Okay. So sorry, Chris. This is Jay again. With regard to regulatory, we have an agreement with FDA from the end of Phase 1 meetings That we would follow patients for 1 year, after the last patient was enrolled and responded to Kami. We're in that time to follow-up right now, while the patients were enrolled in January.
So we anticipate that we'll have data obviously in the first half of twenty twenty two, then we have to review the data, Try the BLA, submit the BLA and go from there. Probably anticipate a regulatory path In terms of our planning, similar to what we did for Simonta, but we're not at this point advising yet on when we exactly plan to submit that BOA. In terms of KOL feedback, first with regard to a response, it's important to understand the patients we're treating in this study. So during ICML, we report on the first 101 patients enrollment study from the point of view of efficacy. And those patients who failed a meeting of 6 prior lines of therapy, all the patients who failed the checkpoint inhibitor, all except one had failed brentuximab without in that one, who is a mistake on the part of the investigator involving the patient.
And over 60% of the patients have failed Stem cell transplant as well, mostly auto, some with auto or with auto and some with both. And despite all that, we had a 66% overall response rate and a 28% complete response rate, and we didn't reach the mid duration response. I think it's important to understand all that in context of the safety issue of GBS. Clearly, we believe our advisors believe Independent Data Safety Monitoring Board believes and FDA believes that there's enough anti tumor activity in these very late stage patients So warrant the continuation of the study, and so the potential for a positive risk positive benefit over risk continues. So that's why the study has continued.
In terms of GBS itself, the number of cases of GBS in this study are very similar to what we saw in the Phase 1 study. We have never seen a case of GBS or poly radiculopathy 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 Kami. So 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 Kamiq and GBS. And we are continuing to investigate what that might be and if we can establish Any risk features so far, we haven't been able to do that. So we don't have any plan in place.
Specifically to mitigate, we do, of course, All such requirements for, checking for viruses and other things that are known to be associated with GBS prior to enrollment on the study in receiving Kami. So while that's in place, we'll continue to follow 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. So 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.
Got it. Thank you. Completely agree there and as you mentioned, really unparalleled efficacy in those late stage patients Sir, Vinhochens. Maybe just that follow-up on ZYNLONTA. Just wondering if you could talk about progress getting Siwonka 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?
Yes. 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 2 weeks After approval for the Category 2A listing and recommendation. And 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, 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. And we are, in general, very pleased with our access to date through these medical policies. But 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. And 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.
Thank you very much for joining our call today, everyone, and we look forward to keeping you updated on our progress. So take care and stay safe. Thanks.
This concludes the program. You may now disconnect.