ADC Therapeutics S.A. (NYSE:ADCT) Q3 2025 Earnings Call Transcript

ADC Therapeutics S.A. (NYSE:ADCT) Q3 2025 Earnings Call Transcript November 10, 2025

ADC Therapeutics S.A. beats earnings expectations. Reported EPS is $-0.30023, expectations were $-0.4.

Operator: Good morning, ladies and gentlemen, and welcome to the ADC Therapeutics Q3 2025 Earnings Conference Call. At this time, lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call, you require assistance, please press 0 for the operator. This call is being recorded on Monday, November 10, 2025. I will now turn the call over to Nicole Riley, Head of Investor Relations and Corporate Communications for ADC Therapeutics. Nicole, please go ahead.

Nicole Riley: Thank you, Operator. Today, we issued a press release announcing our third quarter 2025 financial results and business updates. This release and the slides we will use in today’s presentation are available on the Investors section of the ADC Therapeutics website. I’m joined on today’s call by our Chief Executive Officer, Ameet Mallik, who will discuss our operational performance and recent business highlights. Our Chief Medical Officer, Mohamed Zaki, who will discuss our clinical programs and updates, followed by our Chief Financial Officer, Pepe Carmona, who will review our third quarter 2025 financial results. We will then open the call to questions. Before we begin, I would like to remind listeners that some of the statements made during this conference call will contain forward-looking statements within the meaning of the Safe Harbor provisions of The US Private Securities Litigation Reform Act of 1995.

These forward-looking statements are subject to certain known and unknown risks and uncertainties, and actual results, performance, and achievements could differ materially. They are identified and described in the accompanying slide presentation and in the company’s filings with the SEC, including Form 10-Ks, 10-Qs, and 8-Ks. ADC Therapeutics is providing this information as of today’s date and does not undertake any obligation to update any forward-looking statements contained in this conference call as a result of new information, future events, or circumstances, except as required by law. The company cautions investors not to place undue reliance on these forward-looking statements. Today’s presentation also includes non-GAAP financial reporting.

These non-GAAP measures should be considered in addition to and not in isolation or as a substitute for the information prepared in accordance with GAAP. You should refer to the company’s third quarter earnings release for information and reconciliation of historical non-GAAP measures to the corporate GAAP financial measures. I will now turn the call over to our CEO, Ameet Mallik. Ameet?

Ameet Mallik: Thanks, Nicole, and hello, everyone. Thank you for joining us on today’s call. In 2025, we continued to focus on execution and delivering on our commercial strategy. Maintaining ZENLATA as a differentiated treatment option for third-line plus DLBCL patients while advancing data across key trials. Net product revenues were $15.8 million in the third quarter, reflecting variability in customer ordering patterns and were broadly in line with the quarterly run rate over the past two years. We continue to progress against our key ZENLATA trials in second-line plus DLBCL and expect to share additional data in the coming months. We plan to provide an update on LOTUS seven, our Phase 1b trial evaluating ZENLATA, in combination with the bispecific antibody glafitamab before the end of the year.

Then in 2026, we plan to announce top-line results from LOTUS V, our Phase III confirmatory trial of ZENLATA in combination with rituximab once the prespecified number of PFS events is reached, and data are available. Within indolent lymphomas, the lead investigator on the Phase II IIT of ZENLATA in combination with rituximab recently presented encouraging updated relapsed or refractory follicular lymphoma data at the 22nd International Workshop on Non-Hodgkin Lymphoma. The trial is on track to enroll 100 patients. In addition, the Phase II IIT of ZENLATA in relapsed or refractory marginal zone lymphoma continues to enroll to the target of 50 patients. Beyond ZENLATA, we continued with IND enabling activities for our PSMA targeting ADC, which are on track to be completed by the end of the year.

Lastly, just after the quarter end, we secured a $60 million private placement led by TCGX, including participation from RedMob Group and other existing investors. This financing takes our expected cash runway at least to 2028. With our strengthened balance sheet, I am confident that we are well-positioned to further invest in ZENLATA as we anticipate advancing into earlier lines of therapy for DLBCL and into indolent lymphomas. As a single-agent therapy in third-line plus DLBCL, ZENLATA has a profile of rapid, deep, and durable efficacy as well as manageable safety with simple, and convenient administration. Beyond our current indication, we believe in the potential to reach significantly more patients by expanding use into earlier lines of therapy in DLBCL and into indolent lymphomas.

The data we’ve seen across these settings so far has been consistently encouraging, with the potential to be highly differentiating. We continue to believe that through expansion into these settings, ZENLATA has the potential to reach peak annual revenues of $600 million to $1 billion in the U.S. Our current indication has, as I noted earlier, shown relative stability in net revenues over multiple quarters demonstrating ZENLATA has a clear place in the market as a monotherapy. We believe LOTUS V has the potential to lift peak annual revenue for ZENLATA to $200 million to $300 million as we expand into the second-line setting. Not only would this double the addressable patient population, but with an improved clinical profile versus our current indication as a monotherapy, we expect to gain share in the second-line plus setting and improve the duration of therapy.

With LOTUS seven, we estimate we can expand the total opportunity for ZENLATA in DLBCL to $500 million to $800 million in peak annual revenue with both regulatory approval and compendia listing. If the data continue to be compelling, we believe ZENLATA plus glafitamab has the potential to transform the future lymphoma treatment paradigm by becoming the preferred bispecific combination in the second-line plus DLBCL setting. On top of this, we see additional potential for ZENLATA in relapsed or refractory marginal zone lymphoma and relapsed or refractory follicular lymphoma. If the encouraging initial data in the Phase II IITs are maintained in larger patient numbers, we believe these indolent lymphomas could provide additional peak annual revenue for ZENLATA of $100 million to $200 million with both regulatory approval and compendia listing, primarily driven by MZL.

Let’s drill down a little more into the specifics of the DLBCL treatment landscape to explain why we believe ZENLATA has the opportunity to play a significant role. In both the second and third-line plus settings, there are two main segments. The first segment includes complex therapies, which require unique infrastructure and expertise to handle logistical requirements and patient management. These are primarily confined to the academic centers and more sophisticated community centers and include therapies like CAR T, transplant, and bispecifics. The second segment comprises more broadly accessible therapies which all physicians can administer in the outpatient setting and includes ADCs, monoclonal antibodies, and chemotherapy. The launch of bispecifics as monotherapy in the third-line plus setting has resulted in an evolution of the treatment landscape where we estimate there is currently a 60/40 split between complex and broadly accessible segments.

In the second-line setting where bispecifics have not yet been approved, but were recently added to NCCN guidelines for use in combination, we expect that they will continue to gain share and grow the use of complex therapies. Through LOTUS V and LOTUS VII, we believe ZENLATA combinations have the potential to raise the bar on efficacy in second-line plus DLBCL in their respective treatment segments offering complementary approaches to addressing unmet needs. In LOTUS V, our Phase III confirmatory study, we are combining ZENLATA with the most widely used agent, rituximab, in patients with second-line plus DLBCL. As a reminder, initial data from the safety lead-in portion showed an overall response rate of 80% and a complete response rate of 50% with no new safety signals demonstrating that this combination has the potential to provide competitive second-line plus efficacy with a favorable safety profile allowing broad accessibility.

In LOTUS VII, our Phase Ib trial, we are combining ZENLATA with a highly effective bispecific glafitamab in second-line plus patients. Data presented in June at ICML based on the April 2025 cutoff showed the combination was generally well tolerated with a manageable safety profile. Furthermore, we believe it demonstrated clinically meaningful benefit with an overall response rate of 93.3% and a complete response rate of 86.7% across 30 efficacy evaluable patients. We are encouraged by the promising early data which we believe demonstrates the potential for ZENLATA plus glafitamab to be a best-in-class combination in a highly competitive market. When you look at the CR rates among both currently available and emerging therapies in these two treatment segments, we believe the emerging clinical profile of ZENLATA plus glafitamab in the LOTUS VII trial positions us well among complex therapies.

At the same time, the clinical profile of ZENLATA plus rituximab in the LOTUS V trial has the potential to differentiate us among broadly accessible therapies. Together, we believe these combinations have the potential to double the addressable patient population as we move into the second line and increase the duration of therapy moving on average from three cycles to five to six cycles. Now I will turn the call over to our Chief Medical Officer, Mohamed Zaki, who will share the latest on the Phase II follicular lymphoma IIT data. Mohamed?

Mohamed Zaki: Thank you, Ameet. I am pleased to share updated data from the Phase II investigator trial of ZENLATA in combination with rituximab in relapsed/refractory follicular lymphoma. The data were presented in September at the 22nd International Workshop on Non-Hodgkin’s Lymphoma by the lead investigator, Dr. Juan Pablo Adrushio from the Sylvester Cancer Center, part of the University of Miami Miller School of Medicine. Data presented from the 55 efficacy evaluable patients to date in this trial continues to demonstrate encouraging results with an overall response rate of 98.2% and a complete response rate of 83.6%. After a median follow-up of 28 months, median PFS was not reached. And the 12-month PFS was 93.9%. In this trial, no new safety signals were observed, and safety was consistent with the known profile of ZENLATA.

The University of Miami is actively enrolling towards the target of 100 high-risk relapsed/refractory follicular lymphoma patients and is opening the study at additional US cancer research centers. As soon as sufficient data are available, we plan to assess regulatory and update the compendia pathways. Now I will turn the call over to Pepe Carmona, our CFO, who will discuss financial results for the third quarter. Pepe?

Pepe Carmona: Thank you, Mohamed. On the financial front, the long-term net product revenues in 2025 were $15.8 million as compared to $18 million in the same quarter in 2024. Total operating expenses for the quarter were $45 million on a non-GAAP basis, representing a 12.1% net decrease over the prior year. The reduction was primarily driven by lower R&D expenses, with sales and marketing expenses stable year over year. We continue to be disciplined in our capital allocation towards potential value creation while driving efficiencies across the portfolio. On a GAAP basis, we reported a net loss of $41 million for 2025 or 30¢ per basic and diluted share, as compared to a net loss of $44 million or 42¢ per basic and diluted share for the same period in 2024.

The decrease in net loss for the quarter is primarily attributable to lower R&D and G&A expenses. You can find the reconciliation of GAAP to non-GAAP measures for the third quarter and year to date in the companion financial tables of the press release issued earlier today and in the appendix of this presentation. At the end of the quarter, we had cash and cash equivalents of $234.7 million, which compared to $250.9 million as of December 31, 2024. In October, we entered into a $60 million PIPE financing, which on a pro forma basis expanded our cash and cash equivalents to approximately $292.3 million as of that date. The strengthening of our balance sheet allows us to execute our strategy with an expected cash runway extending at least to 2028.

Across LOTUS V, LOTUS VII, and MZL ZENLATA programs, we expect to have data catalysts in the remainder of 2025 and 2026. For LOTUS V, we expect to provide top-line data in 2026 once a prespecified number of PFS events is reached and data are available. Assuming positive results, a supplemental biologic license application submission to regulatory authorities will follow, with potential confirmatory approvals in second-line plus DLBCL as well as publication and compendia inclusion in 2027. With LOTUS VII, following the presentation of the data at EHA and ICML in June, we observed an acceleration in enrollment in the study at the selected 150 microgram per kilogram dose level. We plan to provide a clinical update on all efficacy evaluable patients with a minimum of six months of follow-up through a corporate announcement before the end of the year.

Once sufficient data with longer follow-up are available, we plan to engage with the FDA. In addition, assuming positive results, we plan to pursue publication and compendia inclusion in 2027. We expect additional data to be shared at medical conferences by the lead investigators, and we plan to assess regulatory and compendia strategies once sufficient data are available. Beyond ZENLATA, we continue to advance our exatecan-based PSMA targeting ADC with completion of IND enabling activities anticipated toward the end of this year. I will now turn the call back over to Ameet.

Ameet Mallik: Thank you, Pepe. Let me close by saying that I am pleased with how we are executing against our strategy and continue to be excited by the consistently encouraging ZENLATA data we are generating across our ongoing trials. We have a clear vision to unlock the true potential of the company with multiple potential value-creating milestones ahead and a balance sheet that enables us to deliver on our strategy. We can now open the line for questions. Operator?

Q&A Session

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. Your first question comes from Eric Schmidt with Cantor. Your line is now open.

Eric Schmidt: Maybe I’m intrigued by Pepe’s comments that we’re seeing accelerated enrollment post the June data release. Not surprising, of course, but can you frame how many patients we might get later this quarter? And then in terms of your target enrollment, out of 100 or so patients, are you adjusting that target? And is it possible that that target could be reached sooner rather than later? Thank you.

Ameet Mallik: Thanks for the question, Eric. Yeah, no. We’ve been pleased that since the EHA and ICML update, we’ve had even greater interest in the trial, and enrollment has definitely accelerated. We’re still targeting the roughly 100 patients that we’ve been targeting to enroll. It will occur quicker than when we originally anticipated. We’re not giving an exact timeline, but we’re still confirming the first half of next year to have that completed. And then in terms of the upcoming data release, are you still targeting 40 or forty plus? Well, we’ll give you know, as you recall, we had enrolled originally twenty patients in each dose, then we continue to expand at the 150 dose, right? So it’ll clearly be more than the original twenty and twenty.

But it won’t be fully all 100. And, also, I want to make sure you heard what Pepe said is that we’re going to be sharing updates on all efficacy evaluable patients with a minimum six months follow-up. This is because it provides more stable, meaningful updates, both in terms of the depth of the response but also the durability of response. That was, as you can recall, some of the questions we received in the early updates is we had very limited follow-up. So now we’re focused on where the data is more stable, and that’s really when patients with a minimum six-month follow-up. Okay. Thank you very much.

Operator: Your next question comes from Clara Dong with Jefferies. Your line is now open.

Jenna Li: Hi, good morning. Thanks for taking our questions. This is Jenna Li on the line. Could you talk about in the context of the upcoming LOTUS V and LOTUS VII data and the submission timelines, when should we expect to see an inflection point for ZENLATA sales? And could you also give some qualitative comments on the pace of revenue ramp-up once you have those potentially positive data or approval in hand? Thank you so much.

Ameet Mallik: Yes. I think you’re asking about the milestones and then also the revenue inflection. So first, I would say, for LOTUS VII, we expect to share an interim update on data later this year. And, obviously, we expect to have full data sometime by the end of next year or into 2027. As you can see, what we guided to is publication and or compendia inclusion sometime between the end of next year and 2027. With LOTUS V, we expect to share top-line results in 2026, and then have approval sometime in 2027. So if you didn’t get the revenue ramp-up for those two following compendia inclusion and approvals, which we expect for both, the first half of 2027, we expect revenues to ramp up subsequent to that.

Jenna Li: So sorry. Just a quick follow-up. Did you also have any comments on the pace of ramp-up following each first half of 2027?

Ameet Mallik: Yeah. I mean, I don’t want to guide to the exact ramp-up. What I will say is if you look at other launches, whether it’s the bispecifics or Polivy in frontline or others. I would say the majority of the ramp-up happens during the first two years post-launch or approval or compendia listing of a new indication. It’s typically the majority that’s going to happen in the first two years.

Jenna Li: That’s super helpful. Thank you so much.

Operator: Your next question comes from Michael Schmidt with Guggenheim Securities. Your line is now open.

Sarah: Hey. This is Sarah on for Michael. Thanks so much for taking my question. So I just wanted to get your thoughts on with these newer agents moving into frontline DLBCL, is that something that you are or would consider pursuing for ZENLATA? Thanks so much.

Ameet Mallik: Yeah. No. I think the frontline will be because if you look at the frontline setting, for decades, really, R-CHOP was the standard of care. Then only a couple of years ago, saw 0.1 of the biggest things being studied right now are bispecifics. I think there’s some excitement about if those could have potential still to be determined, I think, still a little bit of ways away from seeing those readouts. And in terms of our future development, we’ll consider how that goes for this combination post the readout of 100 patients and any support would depend on a partner too. I don’t see us likely funding a phase three study with this in the frontline or the second-line setting with this combination purely on our own.

Sarah: Thanks so much.

Ameet Mallik: Yeah. We’re watching the space closely.

Operator: Your next question comes from Leonid Timashev with RBC Capital Markets. Your line is now open.

Leonid Timashev: Hey, thanks for taking my question. I just want to ask on sort of the split of community and academic. I know you’ve talked about LOTUS V potentially being more positioned in the broadly applicable therapies and LOTUS VII more for the academic. But I guess I’m curious how neat you think those breakdowns actually are going to be and sort of how you’re going to balance ultimately where patients are found and how you want to focus your sales force across academic and community to sort of pursue the opportunity where it is. Thanks.

Ameet Mallik: Yeah. So I would I wouldn’t do the breakdown in terms of academic community. What I’d say is for the more complex therapies, whether it’s CAR T or bispecifics, so let’s just talk about bispecifics because that’s more applicable to LOTUS VII. They’re not only used across all the academic subjects. They are used in more sophisticated community centers, and that may grow over time. So I wouldn’t say the distinction is purely community versus academic. It’s more of all of the academic can administer those products. And a portion of the community can administer those products. In that universe of institutions that can administer the product, obviously LOTUS VII is going to have a place. Then there’s other therapies, like chemotherapy, ADCs, antibodies, which are more broadly accessible, and those can be administered across all settings.

But they are still administered in the academic centers, and they’re administered in all the community settings. So I wouldn’t differentiate to say LOTUS VII is going to be purely academic and LOTUS V is going to be purely community. The reality is LOTUS VII, when a patient is suitable for it, and if the facility can administer the therapy, you’re going to go with the highest efficacy product and combination that you can go with. We think LOTUS VII is really well positioned, and that will be used, again, in all the academic centers and a portion of the community. Exactly how much, we’ll see over time how bispecifics are adopted by the community. With LOTUS V, either because of accessibility of the therapy or because of suitability for the patient, remember, there’s some patients that have comorbidities or other conditions which may prevent them from getting an immune-based therapy.

It may be a post-CAR T patient that’s at risk of infection. It may be a patient with autoimmune disease. There may be other reasons why you’re not going to want to give a bispecific-based therapy. And for other centers in the community, they’re not going to have access to them. So for all those reasons, we think LOTUS V still plays a big role. We still see our base chemo regimens having a large share in the relapsed refractory market. So we think we have a good place, and that’s really our strategy, to hopefully have leading efficacy in both of these segments, both the complex therapies and the more broadly accessible therapies.

Operator: Ladies and gentlemen, as a reminder, should you have a question, please. Your next question comes from Sudan Loganathan with Stephens. Your line is now open.

Sudan Loganathan: Hey, good morning Ameet, Mohamed, and Pepe. I know you’ve spoken about the opportunity in the second line, third line plus for relapsed refractory DLBCL with LOTUS VII, LOTUS V outcomes respectively. But can you give us more details on how you view each percentage increase in penetration in either the second or third line setting would add to the ZENLATA revenues to achieve your peak guidance ranges that you’ve noted? And then secondly, regarding the ZENLATA plus rituximab, for relapsed/refractory FL, data thus far at 84% CR rate seems to slide in nicely right after the T cell therapeutics. And then in line are slightly better than the bispecific. If this holds true, does this mostly take market share away from bispecifics or any opportunity to take from the T cell therapeutic options in FL? Glad to get your details on those things. Thanks.

Ameet Mallik: Yeah. So I would say, you know, to answer your first about what’s SharePoint worth, so think about in the second line setting, there’s about twelve thousand patients in the U.S. And in the third line plus setting, there’s six thousand patients. So depending on where you’re getting the share, is it second line setting or third line plus every share point, obviously, multiplied by the number of patients. With monotherapy, we’re typically seeing three cycles. Now remember, the first two doses of our product are 150 micrograms per kilogram, then it drops to 75. So it’s weight-based, but oftentimes it could be two vials for the first two cycles and drop to one vial. What we’re seeing with LOTUS V and LOTUS VII is somewhere between five to six cycles.

So you can just do the subsequent calculation on vials. And then you know what our net price and our gross price is in the upper twenties, thousands. Net price is in the lower 20,000. So if you do the kind of calculation depending on what if you’re talking about a SharePoint, the second line, a third line plus setting, that kind of gives you a rough estimate. Just by way of example, like in the LOTUS V, for example, if we were able to maintain our roughly 10% share that we have in the third line plus setting and translate that in the second line setting. But with increased duration of therapy in our net pricing, that would take our product, which is on a roughly $70 million run rate, what it’s kind of been the last couple of years. To just over $200 million.

Obviously, we were hoping with efficacy improvements, you actually gain share, and that’s what leads to the guidance of $200 to $300 million. You can do similar calculations for LOTUS VII. Now turning to the indolent lymphomas. I think we’re excited both about the data that Mohamed spoke about with the last refractory follicular lymphoma. And relapsed/refractory marginal zone lymphoma data that was presented at EHA and ICML. I think both right now are showing outstanding results. I would say in terms of the opportunity for potential adoption, right now we’re basically funded to try to get into compendia for both. So obviously, we won’t promote either of these indications. But what I could say is the unmet need and the level of competition is probably higher.

Unmet need is higher in MZL, and the level of competition is lower in MZL versus follicular lymphoma. That’s why we’ve emphasized that one a bit more. When you look at the different agents that are approved during compendia, the FCR rates are 29%, roughly 30%. Even if you look at subsequent data that’s come out, maybe a bit higher than that, what we’ve been showing is closer to 70% CR rate in that MZL setting. In follicular, although the data is outstanding, and we hope to have a place there, it’s a lot more competitive. There’s literally more than 10 agents that have phase three trials including the bispecifics, and many other agents, who have large phase three studies with overall survival. And it’s just a more competitive space. That’s why we think the potential for uptake is just smaller, not because the data isn’t excellent, but just because it’s a much more competitive space.

Operator: No further questions at this time. I will now turn the call over to Ameet Mallik for closing remarks.

Ameet Mallik: Well, I want to thank you all for joining our call today. We really appreciate the questions, and we appreciate your continued support. We look forward to keeping you updated on our progress. Operator, you may now end the call.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.