ADC Therapeutics SA (NYSE:ADCT) Q3 2023 Earnings Call Transcript

Unidentified Analyst: Got it. Thank you so much.

Operator: Thank you. One moment for our next question. Boris Peaker with TD Cowen is on the line with a question.

Unidentified Analyst: Great. Thanks for taking our question. This is Nick on for Boris. So my first one is can you provide a little more color on the new commercial strategy and how like what changes you’ve made to focus more on the community setting rather than on the academic setting? And then the second question is on gross to net, was it a higher gross to net for the year like the highest gross to net that you’ve had for the year? And do you expect this gross to net to continue moving on like years to come, quarters to come. Thanks.

Kristen Herrington-Smith: Hi, Nick. Thanks for the question. So I’ll start with the changes to the commercial model. And like Ameet said, we absolutely believe that the changing how we go to market was essential particularly with the new competitive environment. Some of the key changes that we made were really adapting our model to local health care ecosystems. One of the key advantages that we have with this new model is that we have one world that is fully dedicated to driving demand in the community. These teams work together at the local level to make sure that they are aligned with how the referral patterns work. We’re set up better to enable the leveraging of advocacy from the medical experts in the academic setting to the community treaters.

So essentially who these community treaters turn to for advice or where they would generally send their patients. So making sure that we can leverage that advocacy from the academic centers to the community treaters is essential in this model. And we also overall improve the collaboration between the teams. With that, I can hand it over to Pepe.

Pepe Carmona: Yeah. And thanks for the question. So in gross to net, we communicated at the beginning of the year that there were two elements that were going to impact gross to net in 2023 compared to 2022 one was the GPA contracting, and that would be in the two to three percentage points year-over-year. And the second one is in Medicare Part B discarded drug policy, which we said it would be between mid to high single-digits, that those two elements are going to impact every quarter and have impacted the year-to-date numbers as well as Q3 numbers. And so there’s going to be always fluctuation from quarter-to-quarter. But that those are the key drivers. I cannot comment on the specific quarter. We don’t disclose the data, but that’s the main driver of the increase versus prior year.

Unidentified Analyst: Great. Thank you very much.

Ameet Mallik: One thing I just add to what Kristen said about the commercial model is, you know, before we had people that were sort of working independently and you have systems of care that cut across territories. And when you’re working independently, very tough to penetrate a more rare disease like third-line plus DLBCL, if you’re working in isolation. Now, we have small focused teams that cut across academic and community to do a lot of the pull through that she was talking about. So those teams only got up and running in August. So, you know, you don’t see the result in the first two months completely. But I believe they’re really hitting their stride right now. And we’ll start seeing the impact over time.

Unidentified Analyst: Understood. Thanks very much.

Operator: Thank you. One moment for our next question. Naureen Quibria from Capital One Securities is on the line with the question.

Naureen Quibria: Hi. Good morning. Thanks for taking my question. I guess the first one that I have is either for Ameet or Mohamed. So you have that ASH presentation, oral presentation from the ZYNLONTA with rituximab and follicular lymphoma. So seeing the early results, are you considering a move into that setting now or is it too early?