Thank you for holding. Good morning, welcome to the ADC Therapeutics Fourth 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 fourth quarter and year-end 2020 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, Jay Feingold, Chief Medical Officer, and Jenn Creel, Chief Financial Officer will discuss recent business highlights and review our fourth quarter and 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 fourth 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. 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 financed the company to ensure we can execute on our goals and objectives. During the fourth quarter, we saw much of this hard work come together when we received FDA acceptance of our BLA submission for our lead product candidate, Lonca, for the treatment of relapsed refractory DLBCL. As we approach our May 21st 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 second lead program, Cami, we completed enrollments in our pivotal trial, bringing us one step closer to potentially addressing an unmet need in heavily pre-treated 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 Cami 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 & Innovation Hub, or I-HUB, of Imperial College in Central London. The research center would enable further innovation, including advancement of our ADC platform and pipeline of seven pre-clinical 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 four 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 Lonca and our launch preparations. In November, the FDA accepted our BLA filing for Lonca and granted priority review with a PDUFA target date of May 21st, 2021. As we have previously discussed, this submission is based on data from our pivotal phase II trial, LOTIS-2, which evaluated the efficacy and safety of Lonca in patients with relapsed or refractory DLBCL following two or more lines of prior systemic therapy.
The data demonstrated significant single-agent activity and durability as well as manageable toxicities across a broad population of relapsed or refractory DLBCL patients, including patients with 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 medical affairs 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 Lonca 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 Lonca. 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 Lonca. The 10,500 third-line plus DLBCL patients estimated in the U.S. and EU create a market size of $1 billion.
We believe that Lonca's differentiated profile creates an opportunity for it to become the standard of care in third line. We are also on track from a CMC perspective. All of our contract manufacturers are highly experienced. For example, Avid, Lonza, and BSP. All have been previously inspected by regulatory agencies. We also are implementing our third-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 Lonca through our lifecycle development efforts. We are fully developing Lonca 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 Cami and our earlier-stage programs in greater detail. Jay?
Thank you, Chris. Good morning. I am pleased to present an update today on both the clinical and pre-clinical programs, starting with our lead program, Lonca. As Chris mentioned, we see great opportunity to expand the addressable patient population. Updated data from our LOTIS-2 single-arm open-label 145 patient phase II clinical trial were presented at the recent ASH meeting in December. These data continue to demonstrate Lonca's significant and durable anti-tumor activity. Based on the robust single-agent activity, we are currently advancing multiple clinical trials evaluating Lonca in combinations in the earlier lines of therapy in DLBCL and in additional histologies. First among these studies is our ongoing pivotal phase II LOTIS-3 trial of Lonca 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 with an overall response rate of 62.9% across all patients and 67% in non-GCB DLBCL patients. Enrollment for the pivotal phase II portion of the trial is ongoing, with 26 out of 66 non-GCB patients enrolled as of February 12th. We expect to report additional data from the phase I portion of this trial in the first half of this year. We also initiated our phase III LOTIS-5 clinical trial of Lonca 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.
LOTIS-5 is also intended to support a supplemental BLA for Lonca 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 Lonca in combination with rituximab versus standard immunochemotherapy, and the primary endpoint is progression-free survival. In order to ensure that all eligible patients have access to Lonca, at the start of 2021, we initiated an expanded access program for patients in the United States with relapsed or refractory DLBCL. The FDA-approved program requires treating physicians in the U.S. to request access for patients who cannot be treated by currently available drugs, cell therapy, or clinical trials. We intend to initiate several additional Lonca trials this year. First, we plan to commence a pivotal phase II clinical trial in follicular lymphoma in the first half.
In addition, we will also evaluate Lonca in multiple combinations in B-cell non-Hodgkin lymphoma. Finally, we plan to initiate a dose-finding study of Lonca in combination with R-CHOP in first-line DLBCL. All these trials will accelerate the development of Lonca in the earlier lines of therapy across B-cell non-Hodgkin lymphoma. Moving to our second lead program, Cami, we have made progress across both our HL and solid tumor programs. We completed enrollment in our phase II pivotal trial in patients with relapsed or refractory Hodgkin lymphoma. Interim data from this trial were presented at ASH. The data as of August 24th, 2020, included 51 treated patients who had a median of seven prior lines of therapy. These data were consistent with the phase I 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 a trend with regard to Guillain-Barré syndrome remains unchanged, suggesting Cami's potential to offer an effective treatment with a manageable safety profile to address an unmet medical need in heavily pre-treated patients. As of January 29th, 117 patients were enrolled in the trial. Updated data from this trial are expected in the first half of 2021. We expect these data to support an FDA BLA submission for relapsed or refractory Hodgkin lymphoma. In addition to our HL program, in May 2020, we dosed our first patient with Cami in combination with pembrolizumab, a checkpoint inhibitor, in an ongoing phase I-B 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 anti-tumor activity of Cami 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 I/II trial of ADCT-602, targeting CD22 in relapsed or refractory acute lymphoblastic leukemia. We are also preparing to initiate a phase I-B combination trial with ADCT-601 targeting AXL in patients with certain solid tumors in the second half of 2021. In addition, we plan to submit an IND for ADCT-901, targeting KAAG1, for the treatment of advanced solid tumors with high unmet medical need in the first half of 2021. Finally, we have a robust R&D pipeline with seven programs in preclinical development.
With that, I will turn the call over to Jenn 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 $439.2 million, as compared to approximately $115.6 million as of December 31, 2019. We used approximately $51.7 million in net cash for operating activities in the fourth quarter and $168.7 million 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 Lonca and continue to invest in our broad pipeline.
R&D expenses were $48.6 million for the fourth quarter and $142 million for the full year ended December 31, 2020, compared to $30.4 million and $107.5 million 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&D organization to support the Lonca BLA submission, medical affairs, pre-launch activities, and multiple Lonca and Cami clinical programs. During the fourth quarter of 2020, we started to present sales and marketing expenses as a separate line item in anticipation of the commercial launch of Lonca. Sales and marketing expenses were $9.4 million for the quarter and $22.1 million 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 Lonca in mid-2021. G&A expenses were $20.1 million for the quarter and $55.1 million for the full year ended December 31, 2020, compared to $5.3 million and $14.2 million for the same quarter and 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 $55.9 million for the fourth quarter and $246.3 million for the full year ended December 31, 2020, compared to $35.3 million and $116.5 million for the same quarter and full year 2019. Net loss was impacted by share-based compensation expense of $15.4 million for the fourth quarter and $42.9 million for the full year 2020. We also recognized a gain of $24.5 million 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 $45.4 million 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 fourth quarter and $3.77 for the full year 2020, compared to $0.69 and $2.36 in the fourth quarter and full year 2019.
Finally, our adjusted net loss excludes certain items, including the Deerfield convertible loan, share-based compensation, and the gain related to the contribution of IP to the Overland ADCT BioPharma joint venture. Adjusted net loss was $63 million for the fourth quarter and $176.1 million for the full year 2020, compared to $34.5 million and $115.4 million in the same quarter and full year 2019. The adjusted diluted net loss per share was $0.82 for the quarter and $2.69 for the year ending December 31, 2020, compared to $0.68 and $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, Jenn. As I said earlier in the call, this year has been a 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 Lonca, if approved, we are also excited about advancing the other programs in our pipeline. To expand Lonca to earlier lines of therapy, in the first half of 2021, we expect to begin a pivotal phase II trial in follicular lymphoma and a first-line dose-finding study with R-CHOP. We will also report updated data from the phase I trial of Lonca in combination with ibrutinib in relapsed/refractory DLBCL, as well as complete enrollment in the pivotal phase II expansion portion of this study.
Later in the year, we expect to report data from the safety lead-in of the phase III LOTIS-5 confirmatory trial in combination with rituximab. Moving to Cami, we await interim results from the pivotal phase II trial in HL in the first half of the year and continue enrollment for the phase I-B clinical trial of Cami in combination with pembro for the treatment of select advanced solid tumors. In our earlier-stage clinical programs, we will continue patient enrollment in the ongoing phase I study of ADCT-602 targeting CD22 in acute lymphoblastic leukemia, and we plan to start a phase I-B combination study of ADCT-601 targeting AXL 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 ADCT-901 targeting KAAG1 in the first half of 2021.
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. If you have a question, press the star then one key, and you will be put into the queue. If you would like to cancel your question, 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 the FDA, actually across multiple therapeutic areas. With that in mind, I think investors are going to be keenly interested in hearing about how your discussions are going and if you think you are on track to an uneventful, hopefully, PDUFA in the middle of the year. Secondly, can you just remind us of how big of an initial commercial team you will launch with Lonca? How much of your commercial endeavors will initially be virtual, and how we should think about the early ramp expectations? Thank you.
Good morning, Tazeen. 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 others. 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 the visits virtual to the sites, or are they in person?
Sort of a combination, and I'll leave it at that.
Okay.
Okay. Tazeen, hi. This is Jennifer. Thanks for your questions around the commercialization of Lonca. 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 Lonca to patients. We have a customer-facing team that's over 70 highly skilled and individuals deep with oncology, hematology experience that spans market access, medical affairs, and sales. 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 Lonca 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. The teams have actually already been operating in this hybrid approach.
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. We're going to be very opportunistic.
We're going to be managing and monitoring the in-market performance very carefully. In terms of the launch uptake, we're confident and prepared that we believe Lonca represents a meaningful treatment for patients with relapsed/refractory DLBCL. As I've 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 payers.
Okay. Thanks, Jenn. 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 if you're hearing that.
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. I am aware that other companies have made mention that COVID, because of patient visits, has interrupted their business to some extent. 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. I guess just one follow-up to the comment, Jay, 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? I guess two other questions. First on, I believe in your prepared remarks, I heard you make a comment about a frontline study with R-CHOP. Secondarily, I guess could you comment on the CD25 solid tumor combination study? 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 a PD-1? Thanks.
Okay. Matt, if I forget any of those questions, just remind me.
Okay.
With regard to the first question, we've not provided much detail with regard to FDA interactions. 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. Can we leave it at that for the moment?
Sure. Thank you.
In terms of Lonca plus R-CHOP, that's a really great question. The first thing we have to find out is, can you give Lonca in addition to R-CHOP? It's a dose-finding study, depending on what sort of signal we see, we have to identify which population of frontline patients we want to go into. Is it the broad population or a specific subpopulation? First we need to see, first and foremost, can you give the two together? As you know, I'm not a fan of eliminating parts of R-CHOP, but rather add them to it would be my preference, if it's possible. Can you remind me what the third question was? I'm sorry.
Yeah. The third question was basically Cami plus PD-1, that phase I study that you're starting. 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-1 in those solid tumor patients?
Yeah, that's a great question. Thanks. Where PD-1 is approved, obviously we have to see some incremental improvement in response above what PD-1 is known to do itself. 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? 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 at durability of response, which is always, of course, extremely important, clinical benefit beyond just responding. I think those are the things we're going to be looking for. We are doing a variety of biomarker studies as part of this study, and we'll have more to say on that in the future.
Thank you.
Thank you. Our next question comes from Konstantinos Aprilakis with Stifel. You may proceed with your question.
Good morning, guys. Thanks for taking my questions. I've got a few on LOTIS-3 and then one on the competitive landscape. First, on the pivotal phase II portion of LOTIS-3, 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? Should we expect initial data from this trial by year-end? I'll wait for the follow-up for the next question.
Thanks for that, stretching my memory. In terms of the first question, yeah, the enrollment on that study has been steady. I don't recall predicting that enrollment would take longer than the first half. 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 II part of that trial.
Okay, got it. On the competitive landscape, just earlier this week, your competitor in the DLBCL space, MorphoSys, provided revenue guidance for 2021, fell short of consensus. What learnings have you been able to glean from MONJUVI's recent entry into the DLBCL market, both with respect to impact from the ongoing COVID-19 pandemic and positioning with community oncologists versus academic centers.
I'll leave that to Jennifer.
Yeah, thanks. Konstantinos, thanks for the question. Yeah, in terms of the learnings that we've had as we've been monitoring the landscape, it's been a really exciting time to be in relapsed/refractory DLBCL and over the last, say, 18-24 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 relapsed/refractory DLBCL. I think that with Lonca, we have a unique opportunity because we have a differentiated profile. As we've 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 example of the patients that they're treating every day. We are very excited about the opportunity, hopefully in the very near future, to bring Lonca to physicians and patients.
We are confident in our plans, and we're just looking for FDA approval. We are ready for launch right now, but we'll have to wait for FDA approval.
All right. Thanks, guys. Looking forward to it.
Thank you. As a reminder, to ask a question, you'll need to press star one on your telephone. Please stand by while we compile the Q&A roster. I'm not showing any further questions 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 keeping 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.