Good morning, and welcome to the ADC Therapeutics 4th Quarter and Full Year 2020 Financial and Operating Results Conference Call. At this time, all participants are in a listen only mode. Following the formal remarks, we will open up the call for your questions. Please be advised that this call is being recorded at the company's request. At this time, I'd like to turn it over to Amanda Hamilton, Investor Relations Manager at ADC Therapeutics.
Please proceed.
Thank you, operator. This morning, we issued a press release announcing our 4th quarter and year end 2020 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 Jay Feingold, Chief Medical Officer and Jen Creel, Chief Financial Officer, will discuss recent business highlights and review our Q4 year end 2020 financial results. In addition, Jennifer Herron, our Chief Commercial Officer, will be available for questions.
As a reminder, this conference call may contain forward looking statements. Such statements are subject to risks and uncertainties. Additional information concerning factors that could cause actual results to differ materially from those expressed or implied in these statements is contained in our annual report on Form 20 F filed today with the SEC. 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 Q4 earnings release for definitional information and reconciliation 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 all for joining us this morning. We made tremendous progress over the last year at ADC Therapeutics. We reported several meaningful data readouts across our programs at key medical meetings such as EHA and ASH, advanced our promising development pipeline of potent and targeted antibody drug conjugates for patients, built out our commercial team and infrastructure and finance the company to ensure we can execute on our goals and objectives. During the Q4, we saw much of this hard work come together when we received FDA acceptance of our BLA submission for our lead product candidate, Lonka, for the treatment of relapsed refractory DLBCL. As we approach our May 21 PDUFA date and the planned commercial launch, we are ensuring that we are well prepared across our commercial, medical affairs, CMC and support functions.
I'll share more about our launch preparations in a moment. For our 2nd lead program, Kandi, we completed enrollments in our pivotal trial, bringing us one step closer to potentially addressing an unmet need in heavily pretreated Hodgkin lymphoma patients. We look forward to reporting updated interim data from the trial in the first half of this year. Jay will go into more detail on the Kami program shortly. We also had a very productive research pipeline at ADC Therapeutics, and we are continuing to invest in our research portfolio.
To support this effort, we are moving our London based research team to a new state of the art antibody drug conjugate research center at the Translation and Innovation Hub, or ihub, of Imperial College in Central London. The research center would enable further innovation, including advancement of our ADC platform and pipeline of 7 preclinical and research stage programs. As we continue to build out our global footprint, we announced in December the formation and launch of a new joint venture, Overland ADCT Biopharma, to develop and commercialize 4 of ADCT's product candidates for hematologic and solid tumors in Greater China and Singapore. I would now like to give you a more in-depth update for Lonka and our launch preparations. In November, the FDA accepted our BLA filing for longer and granted priority review with a PDUFA target date of May 21, 2021.
As we have previously discussed, this submission is based on data from our pivotal Phase II trial LOTUS-two, which evaluated the efficacy and safety of Lonka in patients with relapsed or refractory DLBCL following 2 or more lines of prior systemic therapy. The data demonstrates significant single agent activity and durability as well as manageable toxicities across a broad population of relapsed or refractory DLBCL patients, including patients with a difficult to treat disease. We are finalizing our preparations for Lonca's launch subject to approval. We have deployed a highly experienced and focused oncology field to the FAIR's team, who has been very successfully engaging with thought leaders, academic medical centers and community leaders across the country. We're very encouraged with the access to leading DLBCL clinicians and the valuable insights we have gained through these interactions.
Our sales force is fully on board and making the final preparations for anticipated launch. We have recruited a national sales force of seasoned oncology professionals with deep hematological experience, strong local networks and the experience to effectively communicate the longer value proposition. Our launch plans include customer engagement ranging from purely virtual to hybrid to face to face interactions. And our teams are ready and well positioned to engage all of our customers with an individual approach respecting local and institutional guidelines as well as the customer preference. We have developed multi channel communications to ensure that all key audiences, physicians, nurses, office managers, payers and patients receive the necessary information and support to ensure the open access and safe administration of Lonka.
Our account directors and MSLs have begun appropriate discussions with payers and other key stakeholders regarding the unmet medical needs in patients with DLBCL. As our cross functional teams have met with Access stakeholders, our MSLs have been able to address questions about the differentiated profile of Lonka. The 10,500 third line plus DLBCL patients estimated in the U. S. And EU create a market size of $1,000,000,000 And we believe that Lonka's differentiated profile creates an opportunity for it to become the standard of care in 3rd line.
We are also on track from a CMC perspective. All of our contract manufacturers are highly experienced. For example, Avid, Lonza and BSP and all have been previously inspected by regulatory agencies. We're also implementing our 3rd party supply logistics in the U. S.
To ensure our launch readiness. In addition to our launch preparations, we have also made important progress towards realizing the full potential of Lonka through our life cycle development efforts. We are fully developing Lonka to move into earlier lines of treatment and new indications in the future. I will now hand the call over to our Chief Medical Officer, Jay Feingold, who will discuss this as well as Kami and our earlier stage programs in greater detail. Jay?
Thank you, Chris, and good morning. I'm pleased to present an update today on both the clinical and preclinical programs, starting with our lead program MANCA. As Chris mentioned, we see great opportunity to expand the addressable patient population. Updated data from our LOTUS-two single arm open label 145 in Phase 2 clinical trial were presented at the recent ASH meeting in December. These data continue to demonstrate MANCA's significant and durable antitumor activity.
Based on the robust single agent activity, we are currently advancing multiple clinical trials evaluating MANCA in combinations in earlier lines of therapy in DLBCL and in additional histologies. 1st among these studies is our ongoing pivotal Phase 2 LOTUS-three trial of MANCA combined with Ibrutinib for patients with relapsed or refractory diffuse large B cell lymphoma or mantle cell lymphoma, which is intended to support the submission of a supplemental BLA. Interim data from this trial were presented at ASH and showed encouraging efficacy and manageable toxicity an overall response rate of 62.9% across all patients and 67% in non GCB DLBCL patients. Enrollment for the pivotal Phase 2 portion of the trial is ongoing with 26 out of 66 non GCV patients enrolled as of February 12. We we expect to report additional data from the Phase 1 portion of this trial in the first half of this year.
We also initiated our Phase 3 LOTUS-five clinical trial with MANCA in combination with rituximab. This confirmatory trial is designed to fulfill our post marketing requirement to the FDA for full approval if accelerated approval is received for relapsed or refractory DLBCL. LOTUS-five is also intended to support a supplemental BLA for MANCA as a second line therapy for relapsed or refractory DLBCL patients who are not eligible for stem cell transplant. The trial is evaluating The safety and efficacy of ONCA in combination with rituximab versus standard immuno chemotherapy and the primary endpoint is progression free survival. In order to ensure that all eligible patients have access to ONCA at the start of 2021, we initiated an expanded access program for patients in the United States with relapsedrefractory DLBCL.
The FDA approved program requires treating physicians in the U. S. To request access for patients cannot be treated by currently available drugs, cell therapy or clinical trials. We intend to initiate several additional market trials this year. First, we plan to commence a pivotal Phase 2 clinical trial in follicular lymphoma in the first half.
In addition, we will also evaluate MANCA in multiple combinations in B cell non Hodgkin lymphoma. Finally, we plan to initiate a dose finding study of bronchocon combination with our track in first line DLBCL. All these trials will accelerate the development of ONCA in the earlier lines of therapy across B cell non Hodgkin lymphoma. Moving to our 2nd lead program, KAMI, we have made progress across both our HL and solid tumor programs. We completed enrollment in our Phase 2 pivotal trial in patients with relapsed or refractory Hodgkin lymphoma.
Interim data from this trial were presented at ASH. The data as of August 24, 2020 included 51 treated patients who had a median of 7 prior lines of therapy. These data were consistent with the Phase 1 trial demonstrating encouraging single agent anti tumor activity. The overall response rate for this patient population was 83% with a complete response rate of 38.3%. No new safety signals were observed and the trend with regard to Guillain Barre syndrome remains unchanged, suggesting Kymri's potential to offer an effective treatment with a management safety profile to address an unmet medical need in heavily pretreated patients.
As of January 29, 117 patients were enrolled in the trial. Updated data from this trial are expected in the first half of twenty twenty one, and we expect these days to support an FDA BLA submission for relapsedrefractory Hodgkin lymphoma. In addition to our HL program, In late 2020, we dosed our first patient with Kami in combination with pembrolizumab, a checkpoint inhibitor, in ongoing Phase Ib clinical trial in patients with selected advanced solid tumors. The multicenter open label dose escalation and dose expansion trial is evaluating the safety, tolerability pharmacokinetics and antitumor activity of Kami as monotherapy or in combination with pembrolizumab. The trial was expanded into a combination arm as a result of encouraging PD and biomarker data presented at the ESMO Congress in September 2020.
Enrollment is ongoing. In our earlier stage pipeline, MD Anderson continues to enroll a Phase onetwo trial of ADCT602 targeting CD22 in relapsed or refractory acute lymphoblastic leukemia. We are also preparing to initiate a Phase 1b combination trial with ADCT-six zero one targeting AXL in patients with certain solid tumors in the second half of twenty twenty one. In addition, we've planned to submit an IND for ADCT-nine zero one targeting CAD-one for the treatment of advanced solid tumors with high unmet medical need in the first half of twenty twenty one. And finally, we have a robust R and D pipeline with 7 programs in preclinical development.
With that, I will turn the call over to Jen to give a financial update.
Thank you, Jay, and good morning, everyone. As we reported in our press release, we ended the year with cash and cash equivalents of approximately $439,200,000 as compared to approximately $115,600,000 as of December 31, 2019. We used approximately $51,700,000 in net cash for operating activities in the 4th quarter and $168,700,000 in net cash for the full year 2020. We expect our spend to continue to increase over the next few quarters, funded by our strong balance sheet as we prepare for the anticipated launch of Lonka and continue to invest in our broad pipeline. R and D expenses were $48,600,000 for the 4th quarter $142,000,000 for the full year ended December 31, 2020, compared to $30,400,000 $107,500,000 for the same quarter and full year 2019.
The increase for the quarter and for the full year was primarily due to the growth of our R and D organization to support the Lonka BLA submission, medical affairs, pre launch activities and multiple Lonka and Kami clinical programs. During the Q4 of 2020, we started to present sales and marketing expenses as a separate line item in anticipation of the commercial launch of Lonka. Sales and marketing expenses were $9,400,000 for the quarter $22,100,000 for the full year ended December 31, 2020. The company did not incur a material amount of sales and marketing expenses during the quarter and full year ended December 31, 2019. And those 2019 expenses were classified as general and administrative.
The increase in sales and marketing related to the build out of the company's commercial organization and investments in preparation for the anticipated launch of Lonka in mid-twenty 21. G and A expenses were $20,100,000 for the quarter $55,100,000 for the full year ended December 31, 2020, compared to $5,300,000 $14,200,000 for the same quarter year end 2019. The increase was primarily due to increased share based compensation expense and the cost of being a public company. Our net loss was $55,900,000 for the 4th quarter $246,300,000 for the full year ended December 31, 20 20 compared to $35,300,000 $116,500,000 for the same quarter and full year 2019. Net loss was impacted by share based compensation expense of $15,400,000 for the 4th quarter and $42,900,000 for the full year 2020.
We also recognized a gain of $24,500,000 during the quarter and full year ended December 31, 2020, related to our contribution of intellectual property to the Overland ADCT Biopharma joint venture. The net loss for the full year ended December 31, 2020 also includes a non cash charge of $45,400,000 related to the changes in fair value of derivatives associated with the convertible loans under the convertible credit facility with Deerfield. The year to date increase in fair value was driven by the increase in the company's share price since its initial public offering in May 2020. Our diluted net loss per share was $0.73 in the 4th quarter and $3.77 for the full year 2020 compared to $0.69 $2.36 in the Q4 and full year 2019. Finally, our adjusted net loss excludes certain items, including the Deerfield convertible loan, share based compensation and the gain related of IP to the Overland ADCT Biopharma joint venture.
Adjusted net loss was $63,000,000 for the 4th quarter and $176,100,000 for the full year 2020 compared to $34,500,000 and $115,400,000 in the same quarter and full year 2019. The adjusted diluted net loss per share was $0.82 for the quarter $2.69 for the year ending December 31, 2020, compared to $0.68 $2.34 for the same quarter and full year 2019. With that, I will turn the call back to Chris for closing remarks. Chris?
Thanks, Jen. As I said earlier in the call, this year has been remarkable one for ADCT and we are eager to maintain this momentum going forward. As we are working to ensure that we are well prepared for the successful launch of Lonka, if approved. We are also excited about advancing the other programs in our pipeline. To expand longer to earlier lines of therapy, in the first half of twenty twenty one, we expect to begin a pivotal Phase II trial in follicular lymphoma and the first line dose finding study with R CHOP.
We will also report updated data from the Phase 1 trial of Lonka in combination with Ibrutinib in relapsedrefractory DLBCL as well as complete enrollment in the pivotal Phase 2 expansion portion of this study. Later in the year, we expect to report data from the safety lead in of the Phase 3 LOTUS-five confirmatory trial in combination with rituximab. Moving to Kami. We await interim results from the pivotal Phase 2 trial in HL in the first half of the year and continue enrollment for the Phase Ib clinical trial of Kami in combination with pembro for the treatment of select advanced solid tumors. In our earlier stage clinical programs, we will continue patient enrollments in the ongoing Phase I study of ADCT602 targeting CD22 in acute lymphoblastic leukemia.
And we plan to start a Phase 1b combination study of ADCT-six zero one targeting Axle in multiple solid tumors in the second half of this year. Lastly, we continue to advance our preclinical assets and anticipate an IND submission for AGCT-nine zero one targeting KAG-one in the first half of twenty twenty one. I look forward to updating you on our progress in the future and will now open the call for questions. Operator?
Thank you. We will now take any questions you may have. Please press the pound key. Our first question comes from Tazeen Ahmad with Bank of America. You may proceed with your question.
Hello. Good morning. Thank you for taking my questions. Chris, just wanted to get your thoughts on how interactions with FDA are going As you approach your first PDUFA, there have been instances recently of some surprise feedback from Actually across multiple therapeutic areas. And so with that in mind, I think investors are going to be keenly interested in hearing about how your And if you think you are on track to an uneventful hopefully PDUFA in the middle of the year.
And then secondly, can you just remind us of how big of an initial commercial team you will launch with Lonka? How much of your commercial endeavors will initially be virtual? And how we should think about the early ramp expectations? Thank you.
Good morning, Jazeen. Thank you for those questions. I'll ask Jay to answer the first Question, because he's daily interacting with this. And perhaps Jennifer can then jump in on the commercial side. Jay?
Sure. Thanks. Good morning, Tazeen and Alphys. With regard to the FDA, we've been very actively engaged with them. The process is moving along nicely.
There have been absolutely no issues to date. We have no reason to anticipate Any problems with either site visits to manufacturing facilities or to clinical sites. Everything is going along very well.
Thanks, Jay. Are your visits are the visits virtual to the sites or are they in person?
Sort of a combination, but I'll leave it at that. Okay.
Okay. Tazeen, hi. This is Jennifer. Thanks for your questions around the commercialization of WAMKA. I think I've mentioned before that we have built an entire commercial organization and infrastructure to enable launch on our own and we're very excited about that opportunity to bring Lonka to patients.
We have a customer facing team that's over 70 Highly skilled and individuals deepened with oncology, hematology experience that spans market access, medical fairs and sales. And we've sized our organization to cover more than 90% of
the DLBCL
opportunity. In terms of our deployment or how we're going to deploy, we've trained all of these teams already to launch Lonka in a hybrid environment, which is going to include, as Chris mentioned in his earlier remarks, purely virtual engagement through hybrid and then opportunistic face to face meetings. And the teams have actually already been operating in this hybrid approach. And we think that we're going to monitor it carefully as we go through the launch. It is Fairly dynamic and it's variable across the country, but we're going to be very opportunistic and we're going to be managing and In terms of the launch uptake, we're confident and prepared that we believe Lonza represents a meaningful treatment for patients with relapsed refractory DLBCL.
As I alluded to, we've got a sophisticated plan to maximize that uptake and We expect our launch to be very successful and well received by customers and patient end hires.
Okay. Thanks, John. Maybe just one quick follow-up. In your discussions with physicians, have they been talking about Patients during COVID reducing their visits and seeing physicians with less frequency. We have heard that from other oncology Companies as difficult as that might seem, people are skipping important appointments.
And so just wanted to get a sense You're hearing that.
Yes. I really think it depends on the specific tumor type that you're talking about. I think in the Relapsed refractory DLBCL setting because of the aggressive nature of the disease. We have not heard that type of patient behavior, if you will, from physicians directly, but I do I am aware that other companies have made mention that COVID because of patient visits has interrupted their business to some extent. But we don't we do not expect that particularly as the country is opening up a little bit more.
Okay. Thank
you. Thank you. Our next question comes from Matthew Harrison with Morgan Stanley. You may proceed with your question.
Thanks. Good morning. So I guess just one follow-up to the commentary that you made about The site visits, has there been I guess specifically, has there been a manufacturing inspection or is there one scheduled? And just if you could comment on that. And then I guess 2 other questions.
First, on I believe in your prepared remarks, I heard you make a comment about our frontline study with Archop. Could you just talk? And then secondarily, I guess, could you comment on The CD25 solid tumor combination study and I guess the real question here is, How are you or what are you going to look for in that initial study to figure out if you're getting incremental activity versus PD-one? Thanks.
Okay. So, Matt, if I forget any of those questions, remind me.
With regard to
the first question, With regard to the first question, we've not provided much detail with regard to FDA interactions. But I think it's fair to say that as far as we know all of the FDA's investigations and orders of our manufacturing is complete. So can we leave it at that for the moment?
Sure. Sure. Thank you.
In terms of MANCO plus R CHOP, that's a really great question. The first thing we have to find out is can you give MANCO in addition to R CHOP. And so it's a dose finding study. And depending on what sort of signal we see, then we have to identify which population of front We want to go into the broad population or specific subpopulation, but first we need to see, 1st and foremost, can you 2 together. As you know, I'm not a fan of eliminating parts of our chop, but rather adding to it would be my preference, if it's possible.
And then can you remind me what the third question was? I'm sorry.
Yes. So the third question was basically Kami plus PD-one That Phase 1 study that you're starting, how are you going to what are you going to look at in terms of either clinical data or biomarkers to figure out if you're getting incremental activity over PD-one in those to patients?
Yes, that's a great question, Tycho. So where PD-one is approved, obviously, we have to see some incremental improvement in response above what PD-one is known to do itself. So in tumor types where it's approved, that's what you would expect to see. Where it's not approved, there have been studies In many different tumors where it's not approved, but there's data, right? So again, we would have to be able to show against literature where it's available when we're adding anything in terms of responsiveness.
The other place we have to look of course is that durability of response, which is always of course extremely important Clinical benefit beyond just responding. So I think those are the things we're going to be looking for. We are doing a variety of biomarker studies as Part of the study and we'll have more to say on that in the future.
Thank you.
Thank you. Our next question comes from Santino's Afrinath with Stifel. You may proceed with your question. Good morning, guys. Thanks for taking my questions.
I've got a few on LOTUS-three and then one on the competitive landscape. So first on the pivotal Phase 2 portion of LOTUS-three, you're guiding to enrollment completion in the first half of this year. That seems to be ahead of schedule since you only initiated dosing in July of last year. Can you comment on the pace of enrollment for that trial and perhaps what is driving its rapidity? And should we expect initial data from this trial by year end?
And then I'll wait for the follow-up for the next question.
Thanks for not stretching my memory. So in terms of the first question, yes, the enrollment that I must say has been steady. I can't I don't recall predicting that enrollment would take longer than the first half. But I remain optimistic we can still complete enrollment this year. This study is going to require some follow-up of the response data.
So I don't think At this point, I can advise on when we might see data from that trial, from the Phase 2 part of that trial.
Okay, got it. And then on the competitive landscape, just Earlier this week, your competitor in the DLBCL space where Phosys provided revenue guidance for 2021 fell short of consensus. What learnings Have you been able to glean from ANJUVY's recent entry into the DLBCL market, both with respect to impact from the ongoing COVID-nineteen pandemic and positioning with community oncologists versus to academic centers.
I'll leave that to Jennie.
Yes. Thanks. Constantinos, thanks for
the question. Yes. So I
mean in terms of the learnings that we've had as we've been monitoring the landscape, I mean it's been a really exciting time to be in relapsedrefractory DLBCL. And Over the last say 18 to 24 months, there have been a couple new options for patients, which is exciting and really good news for patients. I think it also underlies the continuing unmet medical need in relapsedrefractory DLBCL. I think that with Blanca, we have a unique opportunity because we have a differentiated profile. As we put our profile even against the competitors in front of treating physicians both academic and community, the profile has resonated with them as a real world an example of the patients that they're treating every day.
And so we are very excited about the opportunity hopefully in the very near future to bring Lonka to physicians and patients. We are confident in our plans and we are just looking for FDA approval so that we're we are ready
Please stand by and we'll provide the Q and A roster. And I'm not showing any further questions at At this time, I would now like to turn the call back over to Chris Martin for any closing remarks.
Well, thank you. Thank you all very much for joining our call today. We look forward to keep you updated on our progress and I wish you all a good day. Thank you. Bye.
Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.