ADC Therapeutics SA (NYSE: ADCT) today reported financial results
for the fourth quarter and full year ended December 31, 2023, and
provided business updates.
“During 2023, we reset our business and capital
allocation strategy, strengthened our team and established a clear
roadmap to drive value creation for all our stakeholders,” said
Ameet Mallik, Chief Executive Officer of ADC Therapeutics. “In the
fourth quarter we saw results of our strategy in action across a
number of key areas. The impact of our new commercial model
resulted in a resumption of growth for ZYNLONTA® sales volume
compared to the third quarter, in both community and academic
settings. Meanwhile, our prioritized pipeline delivered encouraging
data, which we were pleased to share in a business update in
January. We also disclosed for the first time our new,
differentiated solid tumor platform, which can bring substantial
opportunities for the Company through internal and external
development. With an expected cash runway into the fourth quarter
of 2025 and multiple potential value-generating catalysts ahead, I
am excited about our prospects and look forward to updating you on
our progress in 2024.”
Recent Highlights and
Developments
ZYNLONTA®
(loncastuximab tesirine-lpyl)
- ZYNLONTA generated product net
sales of $16.6 million in the fourth quarter of 2023, representing
a 17% increase over the third quarter of 2023 and a 16% decrease
over the fourth quarter of 2022. A return to sequential
quarter-over-quarter growth in the fourth quarter of 2023 followed
the restructuring of the commercial model, with sales volume
increasing in both community and academic settings. The
year-over-year net sales decline reflected disruption during the
year from the restructuring of the go-to-market model together with
the impact of increased competition and higher gross-to-net sales
deductions, partially offset by a slight price increase.
Hematology Pipeline
- LOTIS-5: The Phase
3 confirmatory trial for ZYNLONTA in combination with rituximab in
patients with 2L+ diffuse large B-cell lymphoma (DLBCL) continues
to see accelerated enrollment. As noted by the clinical team and
confirmed with the Independent Data Monitoring Committee (IDMC), we
have observed higher-than-expected censoring in this trial. As a
result, we may need to enroll additional patients, beyond the
originally planned 350 patients, to achieve the required number of
pre-specified progression-free survival events. The Company
continues to expect to complete enrollment of this trial in 2024.
The IDMC noted no safety concerns and recommended the trial to
proceed at its most recent meeting held on January 16, 2024.
- LOTIS-7: The Phase
1b trial of ZYNLONTA in combination with bispecific antibodies
glofitamab or mosunetuzumab for the treatment of heavily
pre-treated patients with DLBCL, follicular lymphoma (FL) and
marginal zone lymphoma (MZL) is actively enrolling patients. The
dose-limiting toxicity (DLT) period has been cleared for the first
two dosing levels of ZYNLONTA (90 µg/kg, 120 µg/kg) in both arms
and we are currently enrolling patients at 150 µg/kg. After the
first Investigator assessment, we have seen evidence of anti-tumor
activity among the majority of patients dosed at the first two
levels, with mixed histologies including DLBCL, FL and MZL. The
Company expects to share additional data once a larger and more
mature dataset is available.
- Investigator-Initiated
Trial: As announced by the Company on January 4, 2024, an
oral presentation at the American Society of Hematology (ASH) 2023
Annual Meeting from the University of Miami investigator-initiated
trial exploring ZYNLONTA in combination with rituximab in high-risk
relapsed or refractory FL patients indicated a best overall
response rate of 96.3% and a complete response rate of 85.2%.
After a median follow-up of 9.7 months, the median progression-free
survival (PFS) was not reached, and the 12-month PFS was 92.3%.
The majority of AEs were grade 1. Grade 3 AEs included neutropenia
(n=2; 6.2%), and one case each (3.1%) of hyperglycemia, increased
ALT, fatigue, dyspnea and skin infection. Neutropenia was the only
grade 4 AE (n=1; 3.1%).
- ADCT-602 (targeting
CD22): Dose escalation and expansion in the Phase 1 study
with relapsed or refractory acute lymphoblastic leukemia in
collaboration with MD Anderson Cancer Center is progressing and
additional clinical trial sites are being added to accelerate
enrollment.
Solid Tumor Pipeline
- ADCT-601 (targeting
AXL): In the Phase 1b trial, the maximum tolerated dose
has been reached, and the study is currently in dose optimization.
On January 4, 2024, the Company announced that early signs of
anti-tumor activity had been seen in both monotherapy and in
combination and that the safety profile indicated that ADCT-601 was
well tolerated at the doses tested. Additional data from the trial
are expected to be shared in a presentation at the American
Association for Cancer Research (AACR) Annual Meeting 2024 (April
5–10, 2024). The abstract details are available online. The ongoing
dose-optimization/expansion phase is comprised of a monotherapy arm
including patients with sarcoma, pancreatic cancer and
AXL-expressing non-small cell lung cancer (NSCLC) and a combination
arm with gemcitabine in patients with sarcoma and pancreatic
cancer. Screening was recently initiated for pancreatic cancer in
the monotherapy arm.
- Early-stage
pipeline: The Company is advancing a portfolio of
investigational ADCs including those targeting Claudin-6, NaPi2b
and PSMA. These candidates are based on an innovative proprietary
approach which utilizes exatecan with a novel hydrophilic linker as
a highly potent and differentiated payload. Data on the Claudin-6
and NaPi2b programs are expected to be shared in presentations at
the AACR Annual Meeting 2024. Abstracts details are currently
available online. A research investor event is being planned for 2Q
2024 to share additional information.
Upcoming Expected
Milestones
ZYNLONTA
- Achieve commercial brand
profitability in 2024
- LOTIS-5: Complete enrollment in
2024
- LOTIS-7: Additional data from the
Phase 1b dose-escalation in 3L+ in mixed histologies (Part 1) in 2Q
2024 and from the dose-expansion in 2L+ DLBCL (Part 2) in 2H
2024
- Investigator-initiated trial in FL:
The study is being expanded to 100 patients in a multicenter
clinical trial. Updates are expected at medical meetings.
- Investigator-initiated trial in
MZL: The study is designed to enroll 50 patients in a multicenter
clinical trial. A futility analysis is expected to be conducted in
2Q 2024. Updates are expected at medical meetings.
Pipeline
ADCT-601 (targeting AXL)
- Additional data updates from the
Phase 1 study in patients with sarcoma, pancreatic cancer and NSCLC
in 2024
ADCT-602 (targeting CD22)
- Additional data from the Phase 1
study in 2024
Preclinical
- Advancing a broad portfolio of
investigational ADCs for solid tumor indications
Fourth Quarter and FY 2023 Financial
Results
Cash and Cash Equivalents
Cash and cash equivalents were $278.6 million as
of December 31, 2023, compared to $326.4 million as of December 31,
2022. The Company currently expects its cash runway to extend into
the fourth quarter of 2025.
Product Revenues
Net product revenues were $16.6 million for the
fourth quarter and $69.1 million for full year 2023, compared to
$19.8 million and $74.9 million, respectively, for the fourth
quarter and full year 2022. Net product revenues are for U.S. sales
of ZYNLONTA. The fourth quarter and full year decrease was
primarily due to higher gross-to-net deductions and lower sales
volume which was impacted by disruption following restructuring of
the commercial organization and increased competition, partially
offset by a slightly higher price.
License Revenues and
Royalties
License revenues and royalties were $0.1 million
for the fourth quarter and $0.5 million for full year 2023,
compared to $50.0 million and $135.0 million, respectively, for the
fourth quarter and full year 2022. The fourth quarter and full year
decrease was primarily due to upfront and milestone payments under
our exclusive license agreements with Sobi and MTPC that were
recognized in 2022.
Research and Development (R&D)
Expenses
R&D expenses were $30.3 million for the
fourth quarter and $127.1 million for full year 2023, compared to
$48.1 million and $186.5 million, respectively, for the fourth
quarter and full year 2022. R&D expenses decreased due to less
investment in camidanlumab tesirine (Cami), as well as productivity
initiatives and focused investment toward prioritized development
programs. The decrease in R&D expenses related to Cami was
primarily due to completion of the Phase 2 study in 2022 and the
Company’s decision to pause the program while it evaluated FDA
feedback.
R&D expenses in the fourth quarter and full
year 2023 also decreased due to lower share-based compensation
expense resulting from fluctuations in the share price and award
forfeitures in connection with terminations.
Selling and Marketing (S&M) Expenses
S&M expenses were $13.9 million for the
fourth quarter and $57.5 million for full year 2023, as compared to
$16.2 million and $69.1 million, respectively, for the fourth
quarter and full year 2022. The decrease in S&M expenses for
the fourth quarter and full year was primarily due to lower spend
on marketing and analytics, lower wages and benefits, as well as
lower share-based compensation expense resulting from fluctuations
in the share price and award forfeitures in connection with
terminations.
General & Administrative (G&A)
Expenses
G&A expenses were $11.3 million for the
fourth quarter and $48.4 million for full year 2023, compared to
$15.7 million and $74.4 million, respectively, for the fourth
quarter and full year 2022. G&A expenses decreased for the
fourth quarter and full year primarily due to lower share-based
compensation expense resulting from fluctuations in the share price
and award forfeitures in connection with terminations, as well as
lower wages and benefits and insurance costs.
Net Loss and Adjusted Net
Loss
Net loss was $85.0 million, or a net loss of
$1.03 per basic and diluted share, for the fourth quarter of 2023
and $240.1 million, or a net loss of $2.94 per basic and diluted
share for full year 2023. This compares to a net loss of $23.3
million, or a net loss of $0.29 per basic and diluted share, for
the fourth quarter of 2022 and $157.1 million, or a net loss of
$2.01 per basic and diluted share, for full year 2022. The increase
in net loss in both periods primarily reflects the reduction in
license revenues and royalties, together with higher income tax
expense and lower product revenues, partially offset by lower
operating expense.
Adjusted net loss, which is a non-GAAP financial
measure, was $79.5 million, or an adjusted net loss of $0.97 per
basic and diluted share for the fourth quarter of 2023 and $185.7
million, or an adjusted net loss of $2.27 per basic and diluted
share for the full year 2023. This compares to an adjusted net loss
of $6.7 million, or an adjusted net loss of $0.08 per basic and
diluted share, for the fourth quarter of 2022 and $80.3 million, or
an adjusted net loss of $1.03 per basic and diluted share, for full
year 2022. The increase in adjusted net loss for the fourth quarter
and full year 2023 primarily reflects the reduction in License
revenues and royalties, together with higher income tax expense and
lower product revenues, partially offset by lower operating
expense.
Conference Call Details
ADC Therapeutics management will host a
conference call and live audio webcast to discuss fourth quarter
and full year 2023 financial results and provide a company update
today at 8:30 a.m. Eastern Time. To access the conference call,
please register here. Registrants will receive the dial-in number
and unique PIN. It is recommended that you join 10 minutes before
the event, though you may pre-register at any time. A
live webcast of the call will be available under “Events &
Presentations” in the Investors section of the ADC Therapeutics
website at ir.adctherapeutics.com. The archived webcast will be
available for 30 days following the call.
About ZYNLONTA® (loncastuximab
tesirine-lpyl)
ZYNLONTA® is a CD19-directed antibody drug
conjugate (ADC). Once bound to a CD19-expressing cell, ZYNLONTA is
internalized by the cell, where enzymes release a
pyrrolobenzodiazepine (PBD) payload. The potent payload binds to
DNA minor groove with little distortion, remaining less visible to
DNA repair mechanisms. This ultimately results in cell cycle arrest
and tumor cell death.
The U.S. Food and Drug Administration (FDA) and
the European Medicines Agency (EMA) have approved ZYNLONTA
(loncastuximab tesirine-lpyl) for the treatment of adult patients
with relapsed or refractory (r/r) large B-cell lymphoma after two
or more lines of systemic therapy, including diffuse large B-cell
lymphoma (DLBCL) not otherwise specified (NOS), DLBCL arising from
low-grade lymphoma and also high-grade B-cell lymphoma. The trial
included a broad spectrum of heavily pre-treated patients (median
three prior lines of therapy) with difficult-to-treat disease,
including patients who did not respond to first-line therapy,
patients refractory to all prior lines of therapy, patients with
double/triple hit genetics and patients who had stem cell
transplant and CAR-T therapy prior to their treatment with
ZYNLONTA. This indication is approved by the FDA under accelerated
approval and in the European Union under conditional approval based
on overall response rate and continued approval for this indication
may be contingent upon verification and description of clinical
benefit in a confirmatory trial. Please see full prescribing
information including important safety information about ZYNLONTA
at www.ZYNLONTA.com.
ZYNLONTA is also being evaluated as a
therapeutic option in combination studies in other B-cell
malignancies and earlier lines of therapy.
About ADC Therapeutics
ADC Therapeutics (NYSE: ADCT) is a
commercial-stage global leader and 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.
ADC Therapeutics’ CD19-directed ADC ZYNLONTA
(loncastuximab tesirine-lpyl) received accelerated approval by the
FDA and conditional approval from the European Commission for the
treatment of relapsed or refractory diffuse large B-cell lymphoma
after two or more lines of systemic therapy. ZYNLONTA is also in
development in combination with other agents and in earlier lines
of therapy. In addition to ZYNLONTA, ADC Therapeutics has multiple
ADCs in ongoing clinical and preclinical development.
ADC Therapeutics is based in Lausanne (Biopôle),
Switzerland and has operations in London, the San Francisco Bay
Area and New Jersey. For more information, please visit
https://adctherapeutics.com/ and follow the Company on
LinkedIn.
ZYNLONTA® is a registered trademark of ADC Therapeutics SA.
Use of Non-GAAP Financial
Measures
In addition to financial information prepared in
accordance with U.S. Generally Accepted Accounting Principles
(GAAP), this document also contains certain non-GAAP financial
measures based on management’s view of performance including:
- Adjusted total operating
expenses
- Adjusted net loss
- Adjusted net loss per share
Management uses such measures internally when
monitoring and evaluating our operational performance, generating
future operating plans and making strategic decisions regarding the
allocation of capital. We believe that these adjusted financial
measures provide useful information to investors and others in
understanding and evaluating our operating results in the same
manner as our management and facilitate operating performance
comparability across both past and future reporting periods. These
non-GAAP 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 GAAP.
When preparing these supplemental non-GAAP measures, management
typically excludes certain GAAP items that management does not
believe are indicative of our ongoing operating performance.
Furthermore, management does not consider these GAAP items to be
normal, recurring cash operating expenses; however, these items may
not meet the GAAP definition of unusual or non-recurring items.
Since non-GAAP financial measures do not have standardized
definitions and meanings, they may differ from the non-GAAP
financial measures used by other companies, which reduces their
usefulness as comparative financial measures. Because of these
limitations, you should consider these adjusted financial measures
alongside other GAAP financial measures.
The following items are excluded from adjusted
net loss and adjusted net loss per share:
Shared-Based Compensation Expense: We exclude
share-based compensation expense from our adjusted financial
measures because share-based compensation expense, which is
non-cash, fluctuates from period to period based on factors that
are not within our control, such as our stock price on the dates
share-based grants are issued. Share-based compensation expense has
been, and will continue to be for the foreseeable future, a
recurring expense in our business and an important part of our
compensation strategy.
Certain Other Items: We exclude certain other
significant items that we believe do not represent the performance
of our business, from our adjusted financial measures. Such items
are evaluated by management on an individual basis based on both
quantitative and qualitative aspects of their nature. While not
all-inclusive, examples of certain other significant items excluded
from our adjusted financial measures would be: changes in the fair
value of derivatives and warrant obligations and the effective
interest expense associated with the Facility Agreement with
Deerfield and the senior secured term loan facility and the
effective interest expense and cumulative catch-up adjustments
associated with the deferred royalty obligation under the royalty
purchase agreement with HealthCare Royalty Partners.
See the attached Reconciliation of GAAP Measures
to Non-GAAP Measures for explanations of the amounts excluded and
included to arrive at the non-GAAP financial measures.
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. In some cases you
can identify forward-looking statements by terminology such as
“may”, “will”, “should”, “would”, “expect”, “intend”, “plan”,
“anticipate”, “believe”, “estimate”, “predict”, “potential”,
“seem”, “seek”, “future”, “continue”, or “appear” or the negative
of these terms or similar expressions, although not all
forward-looking statements contain these identifying words.
Forward-looking statements are subject to certain risks and
uncertainties that can cause actual results to differ materially
from those described. Factors that may cause such differences
include, but are not limited to: the success of the Company’s
updated corporate strategy; the expected cash runway into the
beginning of Q4 2025, the effectiveness of the new commercial
go-to-market strategy, competition from new technologies, the
Company’s ability to grow ZYNLONTA® revenue in the United States;
Swedish Orphan Biovitrum AB (Sobi®) ability to successfully
commercialize ZYNLONTA® in the European Economic Area and market
acceptance, adequate reimbursement coverage, and future revenue
from the same; approval by the NMPA of the BLA for ZYNLONTA® in
China submitted by Overland ADCT BioPharma and future revenue from
the same, our strategic partners’, including Mitsubishi Tanabe
Pharma Corporation, ability to obtain regulatory approval for
ZYNLONTA® in foreign jurisdictions, and the timing and amount of
future revenue and payments to us from such partnerships; the
timing and results of the Company’s or its partners’ research and
development projects or clinical trials including LOTIS 5 and 7,
ADCT 601 and 602 as well as IITs in FL and MZL and early research
in certain solid tumors with different targets, linkers and
payloads; the timing and outcome of regulatory submissions for the
Company’s products or product candidates; actions by the FDA or
foreign regulatory authorities; projected revenue and expenses; the
Company’s indebtedness, including Healthcare Royalty Management and
Blue Owl and Oaktree facilities, and the restrictions imposed on
the Company’s activities by such indebtedness, the ability to
comply with the terms of the various agreements and repay such
indebtedness and the significant cash required to service such
indebtedness; and the Company’s ability to obtain financial and
other resources for its research, development, clinical, and
commercial activities. Additional information concerning these and
other factors that may cause actual results to differ materially
from those anticipated in the forward-looking statements is
contained in the “Risk Factors” section of the Company's Annual
Report on Form 10-K and in the Company's other periodic and current
reports and filings with the U.S. Securities and Exchange
Commission. These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results,
performance, achievements or prospects to be materially different
from any future results, performance, achievements or prospects
expressed in or implied by such forward-looking statements. The
Company cautions investors not to place undue reliance on the
forward-looking statements contained in this document.
ADC Therapeutics SAConsolidated Statement
of Operations (Unaudited)(in thousands, except for
per share data) |
|
|
|
For the three months ended December 31, |
|
For the years ended December 31, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Revenue |
|
|
|
|
|
|
|
|
Product revenues, net |
|
$ |
16,643 |
|
$ |
19,798 |
|
$ |
69,060 |
|
$ |
74,908 |
License revenues and royalties |
|
147 |
|
50,000 |
|
498 |
|
135,000 |
Total revenue,
net |
|
16,790 |
|
69,798 |
|
69,558 |
|
209,908 |
Operating expense |
|
|
|
|
|
|
|
|
Cost of product sales |
|
(1,215) |
|
(320) |
|
(2,529) |
|
(3,301) |
Research and development |
|
(30,331) |
|
(48,081) |
|
(127,127) |
|
(186,457) |
Selling and marketing |
|
(13,927) |
|
(16,176) |
|
(57,464) |
|
(69,052) |
General and administrative |
|
(11,295) |
|
(15,689) |
|
(48,424) |
|
(74,442) |
Total operating expense |
|
(56,768) |
|
(80,266) |
|
(235,544) |
|
(333,252) |
Loss from
operations |
|
(39,978) |
|
(10,468) |
|
(165,986) |
|
(123,344) |
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
Interest income |
|
3,291 |
|
2,259 |
|
10,540 |
|
2,568 |
Interest expense |
|
(12,909) |
|
(9,756) |
|
(46,325) |
|
(36,731) |
Loss on debt extinguishment |
|
— |
|
— |
|
— |
|
(42,114) |
Other, net |
|
9,724 |
|
1,211 |
|
6,352 |
|
52,804 |
Total other income
(expense) |
|
106 |
|
(6,286) |
|
(29,433) |
|
(23,473) |
Loss before income
taxes |
|
(39,872) |
|
(16,754) |
|
(195,419) |
|
(146,817) |
Income tax expense |
|
(43,171) |
|
(3,055) |
|
(39,106) |
|
(227) |
Loss before equity in
net losses of joint venture |
|
(83,043) |
|
(19,809) |
|
(234,525) |
|
(147,044) |
Equity in net losses of joint venture |
|
(1,988) |
|
(3,535) |
|
(5,528) |
|
(10,084) |
Net loss |
|
$ |
(85,031) |
|
$ |
(23,344) |
|
$ |
(240,053) |
|
$ |
(157,128) |
|
|
|
|
|
|
|
|
|
Net loss per
share |
|
|
|
|
|
|
|
|
Net loss per share, basic and diluted |
|
$ |
(1.03) |
|
$ |
(0.29) |
|
$ |
(2.94) |
|
$ |
(2.01) |
Weighted average shares outstanding, basic and diluted |
|
82,292,594 |
|
80,463,306 |
|
81,712,166 |
|
78,152,964 |
|
|
|
|
|
|
|
|
|
ADC Therapeutics SAConsolidated Balance
Sheet (Unaudited)(in thousands) |
|
|
|
December 31 2023 |
|
December 31 2022 |
ASSETS |
|
|
|
|
Current
assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
278,598 |
|
$ |
326,441 |
Accounts receivable, net |
|
25,182 |
|
72,971 |
Inventory |
|
16,177 |
|
12,073 |
Prepaid expenses and other current assets |
|
16,334 |
|
23,495 |
Total current
assets |
|
336,291 |
|
434,980 |
Non-current
assets |
|
|
|
|
Property and equipment, net |
|
5,622 |
|
3,355 |
Operating lease right-of-use assets |
|
10,511 |
|
6,905 |
Interest in joint venture |
|
1,647 |
|
7,613 |
Deferred taxes, net |
|
— |
|
37,104 |
Other long-term assets |
|
711 |
|
902 |
Total
assets |
|
$ |
354,782 |
|
$ |
490,859 |
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities |
|
|
|
|
Accounts payable |
|
$ |
15,569 |
|
$ |
12,351 |
Accrued expenses and other current liabilities |
|
50,634 |
|
68,491 |
Operating lease liabilities, short-term |
|
1,467 |
|
1,097 |
Total current
liabilities |
|
67,670 |
|
81,939 |
|
|
|
|
|
Deferred royalty obligation |
|
303,572 |
|
212,353 |
Senior secured term loans |
|
112,730 |
|
109,714 |
Operating lease liabilities, long-term |
|
10,180 |
|
6,564 |
Other long-term liabilities |
|
8,879 |
|
838 |
Total
liabilities |
|
503,031 |
|
411,408 |
|
|
|
|
|
Total shareholders’
(deficit) equity |
|
(148,249) |
|
79,451 |
|
|
|
|
|
Total liabilities and
shareholders’ equity |
|
$ |
354,782 |
|
$ |
490,859 |
|
|
|
|
|
ADC Therapeutics SAReconciliation of GAAP
Measures to Non-GAAP Measures (Unaudited)(in
thousands, except for share and per share data) |
|
|
Three Months Ended December 31, |
|
Years Ended December 31, |
(in thousands) |
2023 |
|
2022 |
|
Change |
|
% Change |
|
2023 |
|
2022 |
|
Change |
|
% Change |
Total operating
expense |
(56,768) |
|
(80,266) |
|
23,498 |
|
(29)% |
|
(235,544) |
|
(333,252) |
|
97,708 |
|
(29)% |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
expense (i) |
2,220 |
|
8,344 |
|
(6,124) |
|
(73)% |
|
13,495 |
|
50,637 |
|
(37,142) |
|
(73)% |
Adjusted total
operating expenses |
(54,548) |
|
(71,922) |
|
17,374 |
|
(24)% |
|
(222,049) |
|
(282,615) |
|
60,566 |
|
(21)% |
|
|
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|
|
|
|
|
|
|
|
|
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|
|
|
Three months ended December 31, |
|
Twelve months ended December 31, |
in thousands (except for share and per share
data) |
2023 |
|
2022 |
|
2023 |
|
2022 |
Net loss |
$ |
(85,031) |
|
$ |
(23,344) |
|
$ |
(240,053) |
|
$ |
(157,128) |
Adjustments: |
|
|
|
|
|
|
|
Share-based compensation
expense (i) |
2,220 |
|
8,344 |
|
13,495 |
|
50,637 |
Convertible loans,
derivatives, change in fair value income (ii) |
— |
|
— |
|
— |
|
(25,650) |
Loss on debt extinguishment
(iii) |
— |
|
— |
|
— |
|
42,114 |
Deerfield warrants obligation,
change in fair value expense (income) (ii) |
279 |
|
(2,086) |
|
(497) |
|
(11,504) |
Effective interest expense on
convertible loans (iv) |
— |
|
— |
|
— |
|
7,684 |
Effective interest expense on
senior secured term loan facility (iv) |
4,650 |
|
3,912 |
|
18,398 |
|
5,845 |
Deferred royalty obligation
interest expense (v) |
8,253 |
|
5,844 |
|
27,915 |
|
23,200 |
Deferred royalty obligation
cumulative catch-up adjustment (income) expense (v) |
(9,823) |
|
631 |
|
(4,972) |
|
(15,482) |
Adjusted net
loss |
$ |
(79,452) |
|
$ |
(6,699) |
|
$ |
(185,714) |
|
$ |
(80,284) |
|
|
|
|
|
|
|
|
Net loss per share, basic and
diluted |
(1.03) |
|
(0.29) |
|
(2.94) |
|
(2.01) |
Adjustment to net loss per
share, basic and diluted |
0.06 |
|
0.21 |
|
0.67 |
|
0.98 |
Adjusted net loss per
share, basic and diluted |
(0.97) |
|
(0.08) |
|
(2.27) |
|
(1.03) |
Weighted average shares
outstanding, basic and diluted |
82,292,594 |
|
80,463,306 |
|
81,712,166 |
|
78,152,964 |
|
|
|
|
|
|
|
|
(i) |
Share-based compensation expense represents the cost of equity
awards issued to our directors, management and employees. The fair
value of awards is computed at the time the award is granted, and
is recognized over the requisite service period less actual
forfeitures by a charge to the statement of operations and a
corresponding increase in additional paid-in capital within equity.
These accounting entries have no cash impact. |
|
|
(ii) |
Change in the fair value of the
convertible loan derivatives and Deerfield warrant obligation
results from the valuation at the end of each accounting period.
There are several inputs to these valuations, but those most likely
to result in significant changes to the valuations are changes in
the value of the underlying instrument (i.e., changes in the price
of our common shares) and changes in expected volatility in that
price. These accounting entries have no cash impact. |
|
|
(iii) |
As a result of the exchange
agreement entered into on August 15, 2022, the Company recognized a
loss on debt extinguishment which primarily consists of the
difference between the aggregate principal amount and carrying
amount of the convertible loans and exit fee as well as the unpaid
interest payments through the maturity date. |
|
|
(iv) |
Effective interest expense on
convertible loans and senior secured term loans relates to the
increase in the value of our loans in accordance with the amortized
cost method. |
|
|
(v) |
Deferred royalty obligation
interest expense relates to the accretion expense on our deferred
royalty obligation pursuant to the royalty purchase agreement with
HCR and cumulative catch-up adjustment (income) expense relates to
changes in the expected payments to HCR based on a periodic
assessment of our underlying revenue projections. |
|
|
CONTACTS:
Investors and MediaNicole RileyADC
TherapeuticsNicole.Riley@adctherapeutics.com+1 862-926-9040
________________
(1) on a non-GAAP basis or 29% on a GAAP basis including
stock-based compensation expense. See reconciliation of GAAP
measures to non-GAAP measures in accompanying financial tables
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