ADC Therapeutics SA
For the period ended Mar 31, 2025. Filed May 14, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 14, 2025
ADCT$1.58-3.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001628280-24-046050
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-14.
0001628280-25-025481
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 136 previous paragraphs and 86 current paragraphs.
45 unchanged; 24 reworded; 17 added; 46 removed; 21 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Product revenues, net, were $17.4 million for the three months ended March 31, 2025 as compared to $17.8 million for the three months ended March 31, 2024, a decrease of $0.4 million, or 2.5%. The decrease is primarily attributable to lower sales volume, partially offset by a higher price and favorability in GTN sales adjustments.
Current report
License revenues and royalties were $5.6 million for the three months ended March 31, 2025 as compared to $0.2 million for the three months ended March 31, 2024, an increase of $5.4 million. In March 2025, the Company recognized $5.0 million in license revenue in connection with a milestone due upon ZYNLONTA’s conditional approval by Health Canada for the treatment of relapsed or refractory DLBCL after two or more lines of systemic therapy, which was paid to us by SOBI in the second quarter of 2025.
Current report
(1) ADCT-601 was discontinued in November 2024.
Current report
Our research and development expense may fluctuate from period to period based on a number of factors, including the timing, progress and stage of clinical trials, costs associated with regulatory approval processes and manufacturing costs associated with commercialization activities prior to the receipt of regulatory approval.
Current report
Our R&D expenses were $28.9 million for the three months ended March 31, 2025 as compared to $25.7 million for the three months ended March 31, 2024, an increase of $3.2 million, or 12.4%, driven by the following programs and activities.
Current report
Research and development expenses for ZYNLONTA were $14.4 million for the three months ended March 31, 2025 as compared to $15.0 million for the three months ended March 31, 2024, a decrease of $0.6 million, or 4.2%. The overall decrease was primarily due to a net decrease in external clinical trial costs of $1.5 million including a net decrease in costs associated with LOTIS 9 and other trials (as a result of the wind down of those trials) and timing of LOTIS 7 expenses, partially offset by fewer expenses being shared and reimbursed by our partners under our cost sharing arrangements as well as higher personnel expenses of $0.8 million.
Current report
Research and development expenses for ADCT-601 were $2.0 million for the three months ended March 31, 2025 as compared to $3.3 million for the three months ended March 31, 2024, a decrease of $1.3 million, or 38.8%. The decrease is primarily attributable to fewer patients on study as the ADCT-601 program was discontinued in November 2024.
Current report
(1)Excludes share-based compensation expense (reversal).
Current report
Selling and marketing expenses were $10.6 million for the three months ended March 31, 2025 as compared to $11.4 million for the three months ended March 31, 2024, a decrease of $0.8 million or 7.3%. The net decrease in external costs and overhead was primarily attributable to a reduction of $1.1 million in marketing and advertising and travel-related expenses as a result of cost cutting initiatives. The decrease in employee expenses was primarily due to lower wages and benefits of $0.5 million. The increase in share-based compensation expense of $0.9 million was primarily due to the timing of forfeitures of awards in connection with employee terminations.
Current report
(1)Excludes share-based compensation expense.
Current report
Interest Income
Current report
Interest income was $2.1 million for the three months ended March 31, 2025 as compared to $2.9 million for the three months ended March 31, 2024, a decrease of $0.9 million, or 30.3%. The decrease was primarily due to lower yields received on our cash deposits and lower average cash balances.
Current report
Interest Expense
Current report
Other, net
Current report
Income Tax Expense
Current report
Net cash used in operating activities was $56.3 million for the three months ended March 31, 2025 as compared to $44.1 million for the three months ended March 31, 2024, an increase of $12.2 million. The increase was primarily due to the payment of the 2023 discarded drug rebate of $7.2 million paid in the first quarter of 2025, a $4.0 million period over period increase in annual bonus and retention payments and the timing of other operating cash payments and receipts.
Current report
Net cash provided by financing activities was $0.3 million for the three months ended March 31, 2025 as compared to $0.4 million for the three months ended March 31, 2024, a decrease of $0.1 million. The decrease primarily relates to the timing of share issuances under our employee stock purchase plan.
Removed paragraphs (46)
Previous report
Our goal is to be a leading ADC company that transforms the lives of those impacted by cancer. To achieve this, we are focused on unlocking the potential value of our robust ADC portfolio across two pillars of growth: hematology and solid tumors. We are a pioneer in the ADC field with specialized end-to-end capabilities unique to ADCs including a validated technology platform, a growing next-generation research & development toolbox and a proven track record that includes an approved and marketed product. We aim to expand our portfolio and accelerate the development of our pipeline through targeted investments and in collaboration with strategic partners. In this way, we plan to pursue multiple targets in parallel, enabling us to prioritize and ensure a disciplined capital allocation strategy while advancing the most promising candidates in both hematologic and solid tumors.
Previous report
Product revenues, net, were $18.0 million for the three months ended September 30, 2024 as compared to $14.3 million for the three months ended September 30, 2023, an increase of $3.7 million, or 26.3%. The increase is primarily driven by higher sales volume and a higher selling price. The increase in product revenues is also attributable to lower GTN deductions primarily due to a lower discarded drug rebate accrual for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Previous report
Royalties were $448 thousand for the three months ended September 30, 2024 as compared to $226 thousand for the three months ended September 30, 2023.
Previous report
Our R&D expenses were $32.5 million for the three months ended September 30, 2024 as compared to $27.1 million for the three months ended September 30, 2023, an increase of $5.4 million, or 20.0%, primarily due to higher spend on ZYNLONTA, ADCT-601 and other R&D research strategy, platform and pipeline initiatives, partially offset by other productivity and cost savings initiatives and decreased spending on discontinued programs, as discussed below.
Previous report
Research and development expenses for ZYNLONTA were $18.2 million for the three months ended September 30, 2024 as compared to $17.1 million for the three months ended September 30, 2023, an increase of $1.1 million. The increase was primarily due to higher chemistry, manufacturing and controls (“CMC”) expense of $1.8 million for LOTIS 5 and LOTIS
Previous report
7, partially offset by lower professional fees of $0.5 million related to ZYNLONTA for the three months ended September 30, 2024 as a result of productivity initiatives and portfolio prioritization.
Previous report
Research and development expenses for ADCT-601 were $5.6 million for the three months ended September 30, 2024 as compared to $2.2 million for the three months ended September 30, 2023, an increase of $3.4 million. The increase is primarily attributable to higher patient enrollment and progress towards the completion of the study. The ADCT-601 program will be discontinued and is no longer enrolling patients.
Previous report
Spending on our discontinued programs have decreased from $2.5 million for the three months ended September 30, 2023 to $0.7 million for three months ended September 30, 2024, a decrease of $1.8 million. The decrease was attributable to decreased spending on ADCT-901 of $1.2 million, Cami of $0.3 million and ADCT-212 of $0.3 million.
Previous report
Selling and marketing expenses were $10.7 million for the three months ended September 30, 2024 as compared to $13.7 million for the three months ended September 30, 2023, a decrease of $3.1 million or 22.3%. The decrease in external costs and overhead was primarily attributable to $3.1 million in lower spend on marketing and advertising expenses as a result of reduced spending initiatives within the U.S. The decrease in employee expenses was primarily due to lower wages and benefits of $0.3 million. The increase in share-based compensation expense was primarily due to fluctuations in our share price, as well as lower forfeitures of awards in connection with employee terminations.
Previous report
General and administrative expenses were $10.0 million for the three months ended September 30, 2024 as compared to $9.6 million for the three months ended September 30, 2023, an increase of $0.4 million, or 3.9%. External costs and overhead costs decreased primarily as a result of lower insurance costs of $0.4 million. The increase in employee expenses was primarily due to higher wages, benefits and recruitment costs of $1.0 million. The decrease in share-based compensation expense was primarily due to fluctuations in our share price.
Previous report
Interest income was $3.4 million for the three months ended September 30, 2024 as compared to $2.7 million for the three months ended September 30, 2023, an increase of $0.7 million. The increase was due to higher average cash balances and higher yields received on cash deposits.
Previous report
Cumulative catch-up adjustment income, deferred royalty obligation
Previous report
We periodically assess the expected payments to HCR based on our underlying revenue projections and to the extent the amount or timing of such payments is materially different than our initial estimates we will record a cumulative catch-up adjustment to the deferred royalty obligation. The adjustment to the carrying amount is recognized in Other, net as an adjustment in the period in which the change in estimate occurred. The cumulative catch-up adjustment income of $0.2 million and $0.4 million as a result of changes in the deferred royalty obligation for the three months ended September 30, 2024 and 2023, respectively, was primarily due to the quarterly revenue results incorporated into the valuation model during the respective periods.
Previous report
Income Tax (Expense) Benefit
Previous report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Previous report
Revenue
Previous report
Product Revenues, net
Previous report
Product revenues, net, was $52.9 million for the nine months ended September 30, 2024 as compared to $52.4 million for the nine months ended September 30, 2023, an increase of $0.5 million, or 0.9%. The increase is primarily attributable to a higher price, partially offset by lower sales volume.
Previous report
License revenues and royalties
Previous report
Royalties were $1.0 million for the nine months ended September 30, 2024 as compared to $0.4 million for the nine months ended September 30, 2023.
Previous report
Operating Expenses
Previous report
Cost of Product Sales
Previous report
Cost of product sales were $4.6 million for the nine months ended September 30, 2024 as compared to cost of product sales of $1.3 million for the nine months ended September 30, 2023. The increase is primarily attributable to a $1.1 million batch cancellation fee, higher stability, shipping and storage costs of $1.2 million recognized during the nine months ended September 30, 2024, a $0.6 million increase in our excess inventory reserve, and a $0.3 million manufacturing credit received from a contract manufacturer which was recorded as a reduction to cost of product sales for the nine months ended September 30, 2023.
Previous report
Research and Development Expenses
Previous report
Our R&D expenses were $82.5 million for the nine months ended September 30, 2024 as compared to $96.8 million for the nine months ended September 30, 2023, a decrease of $14.3 million, or 14.7%, primarily due to lower spending on ZYNLONTA and focused investment toward prioritized development programs, as discussed below.
Previous report
ZYNLONTA
Previous report
Research and development expenses for ZYNLONTA were $45.4 million for the nine months ended September 30, 2024 as compared to $52.8 million for the nine months ended September 30, 2023, a decrease of $7.5 million. The decrease was primarily due to lower clinical trial costs for LOTIS 3, LOTIS 5, LOTIS 6 and LOTIS 7 of $2.6 million, as well as lower professional fees of $1.9 million related to ZYNLONTA for the nine months ended September 30, 2024 as a result of productivity initiatives and portfolio prioritization.
Previous report
ADCT-601
Previous report
Research and development expenses for ADCT-601 were $13.5 million for the nine months ended September 30, 2024 as compared to $6.7 million for the nine months ended September 30, 2023, an increase of $6.7 million. The increase is primarily attributable to higher patient enrollment and progress towards the completion of the study. The ADCT-601 program will be discontinued and is no longer enrolling patients.
Previous report
Research and development expenses associated with our preclinical product candidates and research pipeline were $12.0 million for the nine months ended September 30, 2024 as compared to $7.7 million for the nine months ended September 30, 2023, a decrease of $4.3 million. The increase is primarily attributable to increased spending on our research strategy, platform and pipeline initiatives including Claudin-6, Napi2b, PSMA and ASCT2.
Previous report
Discontinued programs
Previous report
Share-based compensation
Previous report
Share-based compensation expense was $0.8 million for the nine months ended September 30, 2024 as compared to $3.2 million for the nine months ended September 30, 2023, a decrease of $2.3 million. The decrease was primarily driven by fluctuations in our share price as well as forfeitures of awards in connection with employee terminations.
Previous report
Selling and Marketing Expenses
Previous report
Selling and marketing expenses were $32.8 million for the nine months ended September 30, 2024 as compared to $43.5 million for the nine months ended September 30, 2023, a decrease of $10.8 million or 24.7%. The decrease in external costs and overhead was primarily attributable to $8.4 million in lower spend on marketing and advertising expenses as a result of reduced spending initiatives within the U.S., partially offset by higher travel and IT expenses of $0.4 million. The decrease in employee expenses was primarily due to lower wages and benefits of $2.2 million primarily due to decreased headcount, as well as lower recruitment costs of $0.2 million. The decrease in share-based compensation expense of $0.3 million was primarily due to fluctuations in our share price as well as forfeitures of awards in connection with employee terminations.
Previous report
General and Administrative Expenses
Previous report
Other Income (Expense)
Previous report
Interest income was $9.6 million for the nine months ended September 30, 2024 as compared to $7.3 million for the nine months ended September 30, 2023, an increase of $2.4 million or 33.0%. The increase was due to higher average cash balances and higher yields received on cash deposits.
Previous report
Interest expense is primarily related to the accretion of our deferred royalty obligation with HCR and the senior secured term loan facility. Interest expense was $38.3 million for the nine months ended September 30, 2024 as compared to $33.4 million for the nine months ended September 30, 2023, an increase of $4.9 million, or 14.6%. The increase was related to higher accretion of our deferred royalty obligation with HCR as a result of the $73.1 million, net of transaction costs, received in June 2023 upon the first commercial sale of ZYNLONTA in the United Kingdom or any European Union country, which increased the liability.
Previous report
Cumulative catch-up adjustment income (expense), deferred royalty obligation
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Reworded paragraphs (24)
Previous wording
ADC Therapeutics is a leading, commercial-stage global pioneer in the field of antibody drug conjugates (“ADCs”).
Current wording
ADC Therapeutics is a commercial-stage global pioneer in the field of antibody drug conjugates (“ADCs”). The Company is advancing its proprietary ADC technology to transform the treatment paradigm for patients with hematologic malignancies and solid tumors. We have a validated and differentiated technology platform with multiple payloads, linkers and conjugation chemistry, enabling the design of next-generation potent ADCs with an enhanced therapeutic index. Our strategy is focused on expanding and maximizing the ZYNLONTA opportunity in hematology and pursuing our early-stage research portfolio in solid tumors. We are a pioneer and leader in the ADC field with specialized end-to-end capabilities for developing optimized ADCs. This includes a strong, integrated research & development organization and a validated technology platform with clinical-stage product candidates currently in the pipeline, multiple next-generation ADCs being developed and a proven executional track record that includes ZYNLONTA.
Previous wording
In our hematology program, our flagship product, ZYNLONTA, a CD19-directed ADC, received accelerated approval from the U.S. Food and Drug Administration (“FDA”) and conditional approval from the European Commission for the treatment of relapsed or refractory diffuse large B-cell lymphoma (“DLBCL”) after two or more lines of systemic therapy. We have a direct commercialization model in the U.S. to help drive growth of ZYNLONTA. Outside the U.S., we continue to advance the development and commercialization of ZYNLONTA through strategic partnerships. We are seeking to continue expanding ZYNLONTA internationally, and into earlier lines of DLBCL and other indolent lymphomas, including follicular lymphoma (“FL”) and marginal zone lymphoma (“MZL”) as a single and combination agent of choice through our LOTIS-5 confirmatory Phase 3 clinical trial and LOTIS-7 Phase1b clinical trial as well as through investigator-initiated trials (“IITs”) at leading institutions. In addition, we are investigating a CD-22 targeted compound, ADCT-602, in collaboration with MD Anderson Cancer Center in a Phase 1/2 investigator-initiated study in relapsed or refractory B-cell acute lymphoblastic leukemia.
Current wording
In our hematology program, our flagship product, ZYNLONTA, a CD19-directed ADC, received accelerated approval from the U.S. FDA, conditional approval from the European Commission, conditional approval from the China National Medical Products Administration (“NMPA”) and conditional approval by Health Canada for the treatment of relapsed or refractory DLBCL after two or more lines of systemic therapy. We are seeking to continue expanding ZYNLONTA internationally, and into earlier lines of DLBCL and indolent lymphomas, including marginal zone lymphoma (“MZL”) and follicular lymphoma (”FL”), as a single agent and in combination through our LOTIS-5 confirmatory Phase 3 clinical trial and LOTIS-7 Phase 1b clinical trial as well as through investigator-initiated trials (“IITs”) at leading institutions. Based on the available clinical data, we have made the decision to discontinue the Phase 1/2 ADCT-602 clinical trial, sponsored by The University of Texas MD Anderson Cancer Center, evaluating ADCT-602 in patients with relapsed or refractory B-cell acute lymphoblastic leukemia.
Previous wording
In our solid tumor program, we have a pipeline of early stage pre-clinical research programs, and our clinical-stage program ADCT-601 (mipasetamab uzoptirine) targeting AXL as a single agent and/or in combination in sarcoma, pancreatic, and non-small cell lung cancer (“NSCLC”). Based on the available clinical data and capital requirements for continued development, we have made the decision to discontinue the phase 1b ADCT-601 program. Although early signs of antitumor activity were observed during the dose escalation phase, we were unable to demonstrate a favorable benefit-risk profile during the dose optimization/expansion phase. Our pre-clinical stage pipeline includes a portfolio of next generation investigational ADCs targeting Claudin-6, PSMA, NaPi2b and ASCT2. Investigational New Drug (IND) enabling studies are in progress for ADC targeting Claudin-6, PSMA and NaPi2b programs while ASCT2 targeting ADC is in drug candidate selection stage and is expected to be completed this year. In addition, we are advancing research with a range of payloads, linkers and conjugation technologies against undisclosed targets.
Current wording
In our solid tumor program, we have early stage preclinical research programs, including a portfolio of next-generation investigational ADCs targeting Claudin-6, PSMA, NaPi2b, and ASCT2, the most advanced of which are PSMA and Claudin-6. In addition, we are advancing research with a range of payloads, linkers and conjugation technologies against undisclosed targets. The Company is seeking to maximize the value of its solid tumor program through strategic partnerships, collaborations and license arrangements for one or more of its research programs.
Previous wording
We generate product revenue through the sale of ZYNLONTA in the United States. Revenue is recognized when control is transferred to the customer at the net selling price, which includes reductions for gross-to-net (“GTN”) sales adjustments such as government rebates, chargebacks, distributor service fees, other rebates and administrative fees, sales returns and allowances and sales discounts. In the long term, we expect that our product revenue will increase as we execute our business strategy, although our product revenue may fluctuate from period to period based on a number of factors, including patient demand, as well as the timing, dose and duration, of patient therapy and customers’ buying patterns and GTN deductions. We expect a similar level of GTN sales adjustments as a percentage of gross sales, and may also experience variability in GTN sales adjustments due to additional information and actual experience such as actual rebate and return rates.
Current wording
We generate product revenue through the sale of ZYNLONTA in the United States. Revenue is recognized when control is transferred to the customer at the net selling price, which includes reductions for gross-to-net (“GTN”) sales adjustments such as government rebates, chargebacks, distributor service fees, other rebates and administrative fees, sales returns and allowances and sales discounts. In the long term, we expect that our product revenue will increase as we execute our business strategy, although our product revenue may fluctuate from period to period based on a number of factors, including patient demand, as well as the timing, dose and duration of patient therapy and customers’ buying patterns and GTN deductions. We expect a relatively consistent level of GTN sales adjustments as a percentage of gross sales, but may also experience variability in GTN sales adjustments due to additional information and actual experience such as actual rebate and return rates.
Previous wording
Cost of product sales primarily includes direct and indirect costs relating to the third-party manufacture and distribution of ZYNLONTA, royalties payable to a collaboration partner based on net product sales of ZYNLONTA and inventory write-downs. We expect that cost of product sales will increase over time as we sell through pre-approval inventory that was previously expensed prior to commercialization under U.S. GAAP. Factors such as inflation may also increase our cost of product sales as a percentage of product revenue if we are not able to increase the price at which we sell ZYNLONTA to offset such increases in our cost of product sales.
Current wording
Cost of product sales primarily includes direct and indirect costs relating to the third-party manufacture and distribution of ZYNLONTA, royalties payable to a collaboration partner based on net product sales of ZYNLONTA and inventory write-downs. We expect that cost of product sales will increase over time as we sell through pre-approval inventory that was previously expensed prior to commercialization under U.S. GAAP. Factors such as inflation may increase our cost of product sales as a percentage of product revenue if we are not able to increase the price at which we sell ZYNLONTA to offset such increases in our cost of product sales.
Previous wording
Cost of product sales were $0.9 million for the three months ended September 30, 2024 as compared to cost of product sales of $0.2 million for the three months ended September 30, 2023 an increase of $0.6 million, or 309.1%. The increase in cost of product sales was primarily driven by higher commercial shipping, storage and stability costs during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.
Current wording
Cost of product sales were $2.1 million for the three months ended March 31, 2025 as compared to cost of product sales of $2.5 million for the three months ended March 31, 2024, a decrease of $0.4 million, or 17.9%. The decrease in cost of product sales was primarily driven by a $1.1 million batch cancellation fee recognized during the three months ended March 31, 2024 and a $0.6 million increase in our excess inventory reserve during the three months ended March 31, 2024, partially offset by an inventory write-down of $1.2 million during the three months ended March 31, 2025.
Previous wording
(1) Beginning in September 30, 2024, Cami, ADCT-901 and ADCT-212 were included in Discontinued programs. Prior to September 30, 2024 these programs were separately presented as major development programs. Prior periods have been recast to conform to the current period presentation.
Current wording
(2)For the three months ended March 31, 2025, Cami, ADCT-901, ADCT-212 and ADCT-602 were included in Discontinued programs. For the three months ended March 31, 2024 these programs were separately presented as major development programs. Prior periods have been recast to conform to the current period presentation.
Previous wording
(2)Includes third-party contracting and employee expenses, as well as expense for preclinical research, storage, shipping and lab consumables that span multiple programs.
Current wording
(3 )Includes third-party contracting and employee expenses, as well as expense for preclinical research, storage, shipping and lab consumables that span multiple programs.
Previous wording
Research and development expenses associated with our preclinical product candidates and research pipeline were $4.6 million for the three months ended September 30, 2024 as compared to $2.8 million for the three months ended September 30, 2023. The increase is primarily attributable to increased spending on our research strategy, platform and pipeline initiatives including Claudin-6, PSMA and ASCT2.
Current wording
Research and development expenses associated with our preclinical product candidates and research pipeline were $7.8 million for the three months ended March 31, 2025 as compared to $3.7 million for the three months ended March 31, 2024, an increase of $4.1 million, or 110.3%. The increase is primarily attributable to a $4.8 million net increase in spending on our next-generation investigational ADCs, partially offset by a net decrease of $0.7 million in spend on other research strategy, platform and pipeline initiatives.
Previous wording
Spending on our discontinued programs including Cami, ADCT-901 and ADCT-212 have decreased from $19.4 million for the three months ended September 30, 2023 to $3.4 million for three months ended September 30, 2024, a decrease of $16.1 million. The decrease was attributable to decreased spending on Cami of $8.4 million, ADCT-212 of $4.4 million and ADCT-901 of $3.3 million.
Current wording
Research and development expenses associated with our discontinued programs including Cami, ADCT-901, ADCT-212 and ADCT-602 have decreased to $1.1 million for three months ended March 31, 2025 from $2.0 million for the three months ended March 31, 2024, a decrease of $0.9 million, or 47.0%. The decrease was attributable to decreased spending on Cami of $1.0 million, ADCT-212 of $0.1 million and ADCT-602 of $0.1 million, partly offset by an increase of $0.3 million for ADCT-901.
Previous wording
Share-based compensation expense was $1.0 million for the three months ended September 30, 2024 as compared to $0.2 million for the three months ended September 30, 2023, an increase of $0.8 million. The increase was primarily driven by fluctuations in our share price and forfeitures of awards in connection with employee terminations during the three months ended September 30, 2023.
Current wording
Share-based compensation expense was $1.0 million for the three months ended March 31, 2025 as compared to a reversal of $0.6 million for the three months ended March 31, 2024, an increase of $1.5 million. The increase was primarily driven by the timing of forfeitures of awards in connection with employee terminations.
Previous wording
General and administrative expense includes employee expenses (including share-based compensation expense) for general and administrative employees, external costs (including, in particular, professional fees, legal costs associated with maintaining patents and other intellectual property, communications costs and IT costs, facility expenses and travel expenses), depreciation of property and equipment, depreciation of right-of-use assets and amortization of intangible assets.
Current wording
General and administrative expense includes employee related costs (including wages, benefits and share-based compensation expense) for general and administrative employees, external costs (including, in particular, professional fees, legal fees and costs associated with maintaining patents and other intellectual property, communications costs and IT costs, facility expenses and travel expenses) and depreciation of property and equipment and right-of-use assets.
Previous wording
General and administrative expenses were $32.3 million for the nine months ended September 30, 2024 as compared to $37.1 million for the nine months ended September 30, 2023, a decrease of $4.9 million, or 13.1%. The decrease in external costs and overhead was primarily related to lower insurance and IT costs of $1.1 million. The decrease in employee expenses was primarily due to lower wages and benefits of $0.4 million partially offset by higher recruitment costs of $0.2 million. The decrease in share-based compensation expense was primarily due to fluctuations in our share price as well as forfeitures of awards in connection with employee terminations.
Current wording
General and administrative expenses were $10.0 million for the three months ended March 31, 2025 as compared to $12.0 million for the three months ended March 31, 2024, an overall decrease of $2.1 million, or 17.3%. The decrease in external costs and overhead of $2.2 million was primarily related to lower professional fees of $1.4 million primarily as a result of lower legal and accounting expenses and VAT recoveries of $0.5 million. The increase in employee expenses was primarily due to higher wages and benefits of $0.4 million, partially offset by lower recruitment costs of $0.1 million. The decrease in share-based compensation expense was primarily due to the timing of forfeitures of awards in connection with employee terminations.
Previous wording
Interest expense is primarily related to the accretion of our deferred royalty obligation with HCR and the senior secured term loan facility. Interest expense was $13.1 million for the three months ended September 30, 2024 as compared to $12.8 million for the three months ended September 30, 2023, an increase of $0.3 million, or 2.3%. The increase was related to higher accretion of our deferred royalty obligation with HCR.
Current wording
Interest expense is primarily related to the accretion of our deferred royalty obligation with HCR and the senior secured term loan facility. Interest expense was $12.2 million for the three months ended March 31, 2025 as compared to $12.5 million for the three months ended March 31, 2024, a decrease of $0.3 million, or 2.1%. The overall decrease was related to lower interest on our senior secured term loan facility of $0.6 million as a result of a lower effective interest rate, partially offset by higher accretion of our deferred royalty obligation with HCR of $0.3 million.
Previous wording
Other, net consists primarily of changes in the fair value (gains or losses) of the Deerfield warrant obligation; and cumulative catch-up adjustments related to our deferred royalty obligation.
Current wording
Other, net consists primarily of the change in the fair value losses of the Deerfield warrant obligation; and cumulative catch-up adjustments related to our deferred royalty obligation.
Previous wording
Deerfield Warrant Obligation, Change in Fair Value Income
Current wording
Deerfield Warrant Obligation, Change in Fair Value Expense
Previous wording
Pursuant to an Exchange Agreement with Deerfield entered into on August 15, 2022, the Company issued warrants to Deerfield to purchase an aggregate of 4,412,840 common shares. The Deerfield warrant obligation has been recorded at its initial fair value at the time the agreement was entered into on August 15, 2022 and is remeasured to fair value at the end of each reporting period. The income of $1.1 million for the three months ended September 30, 2024 was primarily due to a decrease in projected volatility of the underlying shares during the period while the income of $0.1 million for the three months ended September 30, 2023 was primarily due to the decrease in fair value of the underlying shares during the respective period.
Current wording
Pursuant to an Exchange Agreement with Deerfield entered into on August 15, 2022, the Company issued warrants to Deerfield to purchase an aggregate of 4,412,840 common shares. The Deerfield warrant obligation has been recorded at its initial fair value at the time the agreement was entered into on August 15, 2022 and is remeasured to fair value at the end of each reporting period. The fair value of the warrant obligation as of March 31, 2025 and December 31, 2024 was $0 and therefore no change in fair value expense was recognized during the three months ended March 31, 2025. The expense of $3.1 million for the three months ended March 31, 2024 was primarily due to the increase in fair value of the underlying shares during the respective period.
Previous wording
We are subject to corporate taxation in Switzerland. We are also subject to taxation in other jurisdictions in which we operate, in particular, the United States and the United Kingdom, where our two wholly-owned subsidiaries are incorporated. We recorded an income tax (expense) benefit of $(0.1) million for the three months ended September 30, 2024 as compared to $0.1 million for the three months ended September 30, 2023. The change is primarily driven by the new transfer pricing model which was implemented in the fourth quarter of 2023.
Current wording
We are subject to corporate taxation in Switzerland. We are also subject to taxation in other jurisdictions in which we operate, in particular, the United States and the United Kingdom, where our two wholly-owned subsidiaries are incorporated. We recorded an income tax expense of $0.2 million for both the three months ended March 31, 2025 and March 31, 2024.
Previous wording
We recorded our proportionate share of Overland ADCT BioPharma’s net loss of $0.3 million and $1.4 million for the three months ended September 30, 2024 and 2023, respectively. For the three months ended September 30, 2024 we recorded our share of Overland ADCT Biopharma’s net loss up until the point at which our share of losses exceeded our interest in Overland ADCT BioPharma. Losses were not recognized in excess of our total investment, as we have not incurred legal or constructive obligations or committed to additional funding on behalf of the joint venture.
Current wording
We recorded our proportionate share of Overland ADCT BioPharma’s net loss of $0.7 million for the three months ended March 31, 2024. We recorded our share of Overland ADCT Biopharma’s net loss up until the point at which our share of losses exceeded our interest in Overland ADCT BioPharma. Losses were not recognized in excess of our total investment, as we have not incurred legal or constructive obligations or committed to additional funding on behalf of the joint venture.
Previous wording
As of September 30, 2024, we had cash and cash equivalents of $274.3 million and believe that our current cash position and capital resources are sufficient to fund our operation and meet capital requirements for at least the next twelve months from the date of this report.
Current wording
As of March 31, 2025, we had cash and cash equivalents of $194.7 million and believe that our current cash position and capital resources are sufficient to fund our operation and meet capital requirements for at least the next twelve months from the date of this report.
Previous wording
We plan to continue to fund our operating needs through our existing cash and cash equivalents, revenues from sales of ZYNLONTA, potential milestone and royalty payments under our licensing agreements and additional equity financings, debt financings and/or other forms of financing, as well as funds provided by collaborations. We are continuously exploring strategic collaborations, business combinations, licensing opportunities or similar strategies for clinical development and commercialization of ZYNLONTA and/or our product candidates. However, we may be unable to obtain such financing, licensing and collaboration arrangements on favorable terms, if at all.
Current wording
We plan to continue to fund our operating needs through our existing cash and cash equivalents, revenues from sales of ZYNLONTA, milestone and royalty payments under our licensing agreements and additional equity financings, debt financings and/or other forms of financing, as well as potential funds provided by collaborations. We are continuously exploring strategic collaborations, business combinations, licensing opportunities or similar strategies for our early-stage research pipeline and for clinical development and commercialization of ZYNLONTA and/or our product candidates. However, we may be unable to obtain such financing, licensing and collaboration arrangements on favorable terms, if at all, and if we are unable to do so we may need to prioritize our portfolio and reduce our investment in early stage research and development activities.
Previous wording
The following table summarizes our cash flows for the nine months ended September 30, 2024 and 2023:
Current wording
The following table summarizes our cash flows for the three months ended March 31, 2025 and 2024:
Previous wording
Net cash used in investing activities was $0.8 million for the nine months ended September 30, 2024 as compared to $2.9 million for the nine months ended September 30, 2023, a decrease of $2.1 million. The decrease in net cash used in investing activities relates to timing of purchases of property and equipment.
Current wording
Net cash used in investing activities was $0.3 million for the three months ended March 31, 2025 as compared to $0.5 million for the three months ended March 31, 2024, a decrease of $0.3 million. The decrease in net cash used in investing activities relates to timing of purchases of property and equipment.
Previous wording
Refer to Note 2 to our unaudited condensed consolidated financial statements for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this Quarterly Report.
Current wording
Refer to Note 2 to our unaudited condensed consolidated financial statements for recently issued accounting pronouncements not yet adopted as of the date of this Quarterly Report.
Rearranged previous paragraphs (21)
Previous report — wording carried elsewhere
We generate product revenue through the sale of ZYNLONTA in the United States. Revenue is recognized when control is transferred to the customer at the net selling price, which includes reductions for gross-to-net (“GTN”) sales adjustments such as government rebates, chargebacks, distributor service fees, other rebates and administrative fees, sales returns and allowances and sales discounts. In the long term, we expect that our product revenue will increase as we execute our business strategy, although our product revenue may fluctuate from period to period based on a number of factors, including patient demand, as well as the timing, dose and duration, of patient therapy and customers’ buying patterns and gross-to-net deductions. We may also experience variability in GTN sales adjustments as a percentage of gross sales due to additional information and actual experience such as actual rebate and return rates.
Previous report — wording carried elsewhere
The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023:
Previous report — wording carried elsewhere
We generate license revenue and royalties from our strategic agreements for the development and commercialization of ZYNLONTA and other product candidates outside of the United States. Under these agreements, we receive upfront payments and are eligible for certain milestone payments and royalties. We are unable to predict the timing and amounts of license revenue and royalties as meeting milestones is subject to many factors outside of our control and we have limited control over our partners’ commercialization efforts.
Previous report — wording carried elsewhere
Cost of product sales primarily includes direct and indirect costs relating to the third-party manufacture and distribution of ZYNLONTA, royalties payable to a collaboration partner based on net product sales of ZYNLONTA and inventory write-downs. We expect that cost of product sales will increase over time as we sell through pre-approval inventory that was previously expensed prior to commercialization under U.S. GAAP. Factors such as inflation may also increase our cost of product sales as a percentage of product revenue if we are not able to increase the price at which we sell ZYNLONTA to offset such increases in our cost of product sales.
Previous report — wording carried elsewhere
The following table summarizes our research and development expenses for our major development programs for the nine months ended September 30, 2024 and 2023:
Previous report — wording carried elsewhere
(1) Beginning in September 30, 2024, Cami, ADCT-901 and ADCT-212 were included in Discontinued programs. Prior to September 30, 2024 these programs were separately presented as major development programs. Prior periods have been recast to conform to the current period presentation.
Previous report — wording carried elsewhere
(2)Includes third-party contracting and employee expenses, as well as expense for preclinical research, storage, shipping and lab consumables that span multiple programs.
Previous report — wording carried elsewhere
Research and development expense consists primarily of employee related expenses, including share-based compensation expense; costs for production of preclinical and clinical-stage product candidates by CMOs; fees and other costs paid to contract research organizations in connection with the performance of preclinical studies and clinical trials; costs of related facilities, materials and equipment; external costs associated with obtaining intellectual property; depreciation; and upfront fees and achieved milestone payments associated with R&D collaboration arrangements.
Previous report — wording carried elsewhere
Preclinical product candidates and research pipeline
Previous report — wording carried elsewhere
The following table summarizes our selling and marketing expenses for the nine months ended September 30, 2024 and 2023:
Previous report — wording carried elsewhere
Selling and marketing costs (“S&M”) are expensed as incurred and are primarily attributable to commercialization of ZYNLONTA in the United States. S&M includes employee costs and share-based compensation expense for commercial employees and external costs related to commercialization (including professional fees, communication costs and IT costs, travel expenses and depreciation of property and equipment).
Previous report — wording carried elsewhere
The following table summarizes our general and administrative expenses for the nine months ended September 30, 2024 and 2023:
Previous report — wording carried elsewhere
General and administrative expense includes employee expenses (including share-based compensation expense) for general and administrative employees, external costs (including, in particular, professional fees, legal costs associated with maintaining patents and other intellectual property, communications costs and IT costs, facility expenses and travel expenses), depreciation of property and equipment, depreciation of right-of-use assets and amortization of intangible assets.
Previous report — wording carried elsewhere
Interest income includes interest received from banks on our cash balances. Our policy is to invest funds in a variety of capital preservation instruments, which may include all or a combination of cash and cash equivalents, short-term and long-term interest-bearing instruments, investment-grade securities, and direct or guaranteed obligations of the U.S. government.
Previous report — wording carried elsewhere
Other, net consists primarily of changes in the fair value (gains or losses) of the Deerfield warrant obligation; and cumulative catch-up adjustments related to our deferred royalty obligation.
Previous report — wording carried elsewhere
Other, net for the nine months ended September 30, 2024 and 2023 included the following:
Previous report — wording carried elsewhere
Deerfield Warrant Obligation, Change in Fair Value Income
Previous report — wording carried elsewhere
Pursuant to an Exchange Agreement with Deerfield entered into on August 15, 2022, the Company issued warrants to Deerfield to purchase an aggregate of 4,412,840 common shares. The Deerfield warrant obligation has been recorded at its initial fair value at the time the agreement was entered into on August 15, 2022 and is remeasured to fair value at the end of each reporting period. The income of $0.3 million for the nine months ended September 30, 2024 was primarily due to a decrease in the projected volatility of the underlying shares partially offset by an increase in fair value of the underlying shares during the respective period while the income of $0.8 million during the nine months ended September 30, 2023 was primarily due to the decrease in fair value of the underlying shares during the respective period.
Previous report — wording carried elsewhere
We are subject to corporate taxation in Switzerland. We are also subject to taxation in other jurisdictions in which we operate, in particular, the United States and the United Kingdom, where our two wholly-owned subsidiaries are incorporated. We recorded an income tax (expense) of $(0.5) million for the nine months ended September 30, 2024 as compared to an income tax benefit of $4.1 million for the nine months ended September 30, 2023, primarily driven by our U.S. and UK operations and transfer pricing model which was implemented in the fourth quarter of 2023.
Previous report — wording carried elsewhere
Equity in Net Losses of Joint Venture
Previous report — wording carried elsewhere
We recorded our proportionate share of Overland ADCT BioPharma’s net loss of $1.5 million and $3.5 million for the nine months ended September 30, 2024 and 2023, respectively. For the nine months ended September 30, 2024 we recorded our share of Overland ADCT BioPharma’s net loss up until the point at which our share of losses exceeded our interest in Overland ADCT BioPharma. Losses were not recognized in excess of our total investment, as we have not incurred legal or constructive obligations or committed to additional funding on behalf of the joint venture.