ADC Therapeutics SA (ADCT) Earnings Call Transcript & Summary

Okay. Everybody, good morning. Welcome to my very first presentation of the 2021 Bank of America Health Care Conference. I'm Tazeen Ahmad. I am one of the senior research biotech analyst here at BofA. It's my pleasure to have my first presenting company this morning, ADC Therapeutics. Presenting for ADC is CEO, Chris Martin. Hi, Chris.

Hi, Tazeen. How are you?

I'm well. Thank you for joining us, and thank you for accommodating the bank with all the scheduling as well. For those who might not be familiar with the company, maybe you can give us a quick 1-minute summary of ADC and its platform. And then we can go straight into some questions about recent and future catalysts, if that works for you?

Yes, happy to do that. Yes. So ADC Therapeutics is developing a pipeline of antibody-drug conjugates based on PBD toxin platform. And I think a significant recent highlight was the accelerated FDA approval of Zynlonta, a month before the PDUFA date. And this is interfused large B-cell lymphoma where we treated in the registrational study a very broad population. I think the key differentiator here is that we treated patients with high-grade B-cell lymphoma in the patients who were primary refractory. And this is reflected in our label, which we're very pleased with. We're also pleased that we -- within 2 weeks of approval, we received a 2A categorization NCCN guidelines, which was very encouraging. Again, for adult patients with relapsed/refractory DLBCL up to 2 or more lines of systemic therapy. And the commercial team was ready to execute and we launched immediately with the first orders shipped within days of the approval. So very happy with that. And we continue to take Zynlonta forward with several clinical studies in earlier lines of therapy and in additional histologies. And behind Zynlonta, we have Cami, which is being developed in Hodgkin lymphoma and various solid tumors and a number of earlier-stage pipeline programs.

Okay. Excellent. So COVID has obviously been an overhang for many of our companies over the past year or so. I wanted to ask your thoughts about how it's impacting ADC now that you're past getting Lonca approved. How is it impacting your strategy for commercial launch?

Okay. So broadly, yes, all of us have been learning to work in new ways with COVID. And I think as you rightly point out, with the approval of Zynlonta, filing the BLA and interacting with the FDA really worked remarkably smoothly. But similar to our peers, we've experienced some delays due to COVID, particularly in terms of site initiation and trial start-up. But once we've got trials up and running, recruitment's been good. So I think really the impact is more in terms of site initiation. In terms of supply, again, some of our manufacturing organizations have been impacted, but as in long term manufacturing hasn't been impacted at all, I'm very pleased to say. In terms of our launch, we are plans and prepared for a hybrid launch, and this is what we're doing. We are seeing the U.S. market opening up now. So there are a mixture of face-to-face interactions. But I'd say still the preponderance of interactions are online and virtual, both in terms of conferences and in terms of meeting health care providers. But it's -- it goes both ways because when it is virtual, you can meet a lot more people in a day as you get their undivided attention. People are work -- used to working this way now. Of course, it doesn't have the richness of sitting down and having a coffee with somebody. But -- so I would say there are pros and cons. But so far, we're very pleased with the way it's going, both with the commercial team and with medical affairs.

Okay. Excellent. Now as we talk about the first indication for Zynlonta in refractory DLBCL, in a space that your [ entrants ] that does have options available for patients already. How do you think the drug will fit into the treatment regimen initially and over time, just taking into account what the current landscape is with the approved products that might include products from CGEN and MorphoSys, for example?

So it's a good question. I think key to this is the profile of Zynlonta. Zynlonta has very good single-agent activity. And as I mentioned, we tested this clinically in a very broad patient population. Transplant eligible and ineligible patients, patients who were primary refractory, patients who've never responded to any prior line of therapy. And we have this activity with a very convenient formulations that to once every 3 weeks in an outpatient setting, a 30-minute infusion. And a manageable tolerability profile, which doesn't have, for example, many overlapping toxicities with R-CHOP. So in the launch setting in the third-line-plus, we see this that we've tested and proven the performance of the drug in what is fairly classic third-line set of patient populations. By definition, you've got the harder to treat patients there that didn't respond upfront to R-CHOP, both patients who were transplant eligible and ineligible. So we see with this single-agent profile and the convenience that the opportunities have become standard of care in the third-line-plus setting. But we also see this strong single-agent activity and manageable tolerability profile as a very good foundation for combinations as we move into earlier lines of therapy. And there, we have ongoing studies, we have a confirmatory study in combination with rituximab in the transplant ineligible second-line setting. And we have combination with ibrutinib in the third-line and second-line patients. And later this year, we will initiate a dose-finding study alongside R-CHOP, which potentially provides a route into the frontline setting. So I think really the key our fitting into the landscape, both now and into the future as, for example, bispecifics and other therapies come through, is this strong single-agent activity, particularly in that patient group, which has the high unmet need. Those patients are the ones that don't do well with R-CHOP, either don't respond or relapse quite quickly.

And as we look for this launch to accelerate and then mature, when do you think you would start to potentially see use in earlier lines of therapy? Do you think that as physicians get comfortable with the drug, they will just naturally gravitate towards that? Or do you think that you would need to have additional data in order to make that more compelling?

Well, what I can say, Tazeen, is clearly, we interact with our investigators and with other potential investigators frequently, and there's a lot of interest in exploring the potential of Zynlonta in earlier lines of therapy. So I think there is a lot of physician interest and enthusiasm given its profile.

And maybe just to address the question of safety. So ADCs as a class have long been known to be very potent and each of them seems to have a slightly different safety profile. If you were to compare Lonca to other ADCs on the market, how would you describe a safety profile and what has feedback been thus far from physicians about that?

So that's a good question. I mean, ADCs typically have a safety profile, which is defined by 2 things. One is the toxin. There tend to be classes of side effects associated with a particular toxin. So in our case, that's the PBDs. And with the PBDs, you typically will see things like raised GGT, which is a laboratory finding liver enzyme test, that's not associated with the change of the synthetic function. Certainly no highs, low or anything like that and it's manageable and reversible. So the other ones you see with the PBDs, you see some skin rash. Again, that's been quite limited with Zynlonta and certainly in the Phase II studies. And then you have the target-related toxicities. So if we're targeting B cells with CD19, so you see the hematological toxicities, which are common really to all of the B-cell targeting therapies and they're manageable in the hematological setting. Would you compare it to other ADC payloads? You've -- typically, you have the tubulin inhibitors, which have been associated with things like peripheral neuropathy and some ocular toxicities. We don't see those at all with the PBDs. And then when you look at other combination therapies that have been approved in DLBCL. So other ADCs and antibodies recently approved have been in combinations, you then have to take into account the toxicities of a combination partners or the overall combination setting. And again, Lonca as a single-agent compares well as the single-agent, which with a manageable toxicity profile compared. And that gives us the basis for combining Lonca, for example, with ibrutinib where we're seeing a very -- again, a very favorable profile so far.

Okay. Now as we think about other indications, what are you most excited about for future indications for Lonca?

We should be starting a study in follicular lymphoma, and this is on the back of Phase Ib data where we saw a very nice level of activity. We have an overall response rate of 79% and a complete response rate of 64%. We didn't reach the median duration of response. And I think even more significantly, only patients fell off in the first couple of months, 1 or 2 patients. And then after that, they stayed on the study through to the end of the trial. So based on this strong single-agent profile, we're now about to start a study in relapse/refractory follicular lymphoma. It's intended to be a pivotal study as a single-agent. And clearly, the duration of response will be fairly key in this indolent -- relatively indolent disease setting compared to DLBCL. But as I say, based on the Phase Ib data, we're very excited to see that. And it's a reasonable-sized patient population in follicular. As you know, it's not a -- generally a curable disease. So there's still a substantial unmet need in the relapsed/refractory setting.

So how big is this study, that you're going to start to enroll, going to ultimately be? And when should we expect ideally to see some data?

It's a 150-patient study. It's a randomized study, randomized 2:1 against rituximab. And we've been looking for conditional approval in the third-line and later follicular settings in the U.S. and Europe. We haven't really given guidance on this yet because we -- the study is soon to be initiated, but we'll be giving an update on that as the trial progresses.

Okay. Can you just remind us what your market data indicates the size of the U.S. population would be?

I don't have that on my fingertips, I'm afraid, so.

Okay. That's fine. But it is something that you consider to be still under met need and still something that could be aided by something like Lonca?

Yes, very much so. Yes. So patients with follicular lymphoma, they respond well to the front-line therapy typically. But then as they move down through lines of therapy, the disease becomes harder to treat. So there's still a very significant unmet need there. I think it's approximately half the size of the setting in DLBCL.

Okay. So maybe I'll move on now to your second molecule, Cami. Maybe you could spend a minute of time of, I guess, what the major differences are between Cami and Lonca? And then of course, you do have a study that's going to be reading out soon in refractory HL. And maybe we could talk a little bit about that study and what to expect there.

Certainly. So Cami targets CD25. So that's -- the main difference is the protein target. CD25 has got a novel ADC target. It's expressed in very few tumors, but its expressing T cells and it's expressed in the Reed-Sternberg cells in Hodgkin lymphoma. So we're developing Cami in Hodgkin lymphoma initially with the CatcHLight study. And we presented data at ASH last year on this with single-agent Cami in patients who received a median of 7 prior lines of therapy. So these patients that failed frontline, they failed an ADC. They failed the checkpoint inhibitor. And these patients really had very few options left. And still, we had an overall response rate of 83% and a complete response rate of 38%. And this is very similar to the data we saw in the Phase I study, where we treated 77 patients. So we completed that study with 117 patients enrolled earlier this year, and we'll see the efficacy data on that full population later this month -- sorry, later this half in a conference. And if that data holds up as we expect it to, I think it's a very good option for these late-line HL patients.

And so can you give us a little bit more color on what you would consider to be clinically meaningful data in this particular population?

Yes. So these generally are young patients. As I say, they have very few options, and I think anything close to the degree of activity that we've seen. Clearly, with these patients, what you want to do is to offer them the opportunity to get transplants and potentially a curative outcome. As I say, they tend to be younger, fairly -- relatively fit patients. And so that's the desired outcome. So yes, I think anything close to what we presented last year would certainly be very meaningful.

And how does the safety profile of Cami at this point of time solely differ from Lonca based on your observations in patients?

Yes. So we see the classic PBD-related toxicities maybe slightly less because it's dosed to a lower level with Zynlonta. But the kind of one toxicity, which we hadn't expected was Guillain-Barre syndrome, or GBS. We see this in a low single-digit percentage of patients. We've seen it -- the incident is fairly consistent late through the Phase I and the Phase II study. Patients who are diagnosed quickly are treated with standard of care, with plasmapheresis or IgG, and those patients tend to recover fairly quickly within a couple of months. So both, we and the FDA, we've reviewed this -- yes, based on those data, the benefits to risk was worth continuing to develop this drug. And we continue to think that's the case. Interestingly, we're also developing Cami in solid tumors where we're targeting regulatory T cells in tumors with high levels of infiltrating Tregs. And we now have an ongoing study in combination with pembro dose. We're still dose escalating. But we've not seen GBS in any of the patients that we've treated with solid tumors or with leukemia, that's been a similar number of patients that we've treated with HL. It is known that HL itself is a risk factor for GBS. So we're also excited about the potential for Cami in the solid tumor setting. It's a very novel mechanism of action in areas of substantial unmet need.

Okay. You said a lot, so I maybe want to spend a minute or 2 just getting some additional clarity. As it relates to GBS, investors have asked us about the particular observation now. Obviously, you've already said that this is occurring in a small subset of patients. Can you give us color on what physician feedback has been on this particular potential safety effect? And how they balance that on a risk-reward scale for this particular patient population? I guess, basically, I'm asking, do you think that if Cami were to become commercial, that, that particular chance of side effects could be rate-limiting in any way in HL?

Yes. I think the best indication I have for this is, look, we had a partial clinical hold in the Phase II study and we paused enrolling new patients. We continued to treat patients who were on study. Then when we were released from the partial clinical hold, the study continued to enroll very rapidly. And as I think you can see, we were intending to roll 100 patients, we ended up enrolling 117, and that was because we don't like to not treat patients who've been screened. So you can see from that, I think, that there was a considerable enthusiasm. And we're really addressing an unmet need here. And I think both for patients and the investigators remained very enthusiastic.

Okay. Excellent. Now when we talk about solid tumors, are there particular types of tumors that you think Cami might be particularly efficacious in? And when is the next time we're going to be seeing data for solid tumors for Cami?

Yes. At the moment, we're treating a range of solid tumors, which are known in the literature to have high levels of regulatory T cells. So these include things like ovarian cancer, colorectal cancer, pancreatic cancer, esophageal, gastric and others. As we look at the results of the patient, the data, both the clinical readout and also the pharmacodynamic readout where we can take patient biopsies and measure the impact on the regulatory T cells, first of all, the level of prior to treatment and then the impact post or on therapy. And we're going to be -- we presented some of this data last year where we showed a very significant increase in patients with significant levels of infiltrating regulatory T cells on the ratio of T effector to regulatory T cells. And we'll use those data to guide the selection of the particular solid tumors that we expand into in the study, but we're not at that point yet. In terms of data, I'm not expecting us to be publishing or presenting data on this during this year. And so I'm not -- but I'm hoping next year, we will be.

Okay. And just to go back to the COVID topic, how has enrollment, if at all been impacted, in this study and anything else that might be ongoing?

So I'm really not aware of enrollment being impacted on the study. It's a dose escalating study. So we have to wait for the DLT period during each cohort. And we've been able to fill those cohorts quickly.

Okay. So then let's move on to your earlier stage pipeline. What are things that you are currently exploring as a company now at the earlier stage that we could start to see move into the clinic and/or see data for, I don't know, over the next year or 2?

Yes. So yes, we've mentioned Cami in solid tumors. We've got ADCT-602, which targets CD22. We're continuing to enroll patients there. We have seen clinical activity in that. We had a patient early on who got a complete response and went on to transplant. So that's in adult ALL. That study is being run by MD Anderson. So we're not in control of when those data are published. But I would expect to foresee that data, say, over the next 18 months or so. Later this half, we will file an IND on the ADCT-901 program, that's targeting a very novel ADC target, KAAG1. This is going to be a first-in-class KAAG1-targeting ADC. It's in multiple solid tumors, including breast cancer, including triple-negative breast and ovarian. And so -- yes, I'm very, very excited to see that. And it's always really interesting when you have a novel target like that, that you're taking in demand for the first time. And we have ADCT-601, that's our AXL program. Again, we saw clinical activity in that as a single-agent as we dose escalated. We're now reformulating that. It was originally a frozen liquid product. We're reformulating that as a lyophilized drug product. And that will go back into the clinic in the first half of next year in a combination study across a range of solid tumors, including lung, breast, prostate, pancreatic and esophageal. And behind that, we have a pipeline of 6 additional preclinical programs that we're moving forward towards IND.

Okay. Great. Maybe just look back to commercial. How are the different regions that you will be marketing to potentially differ, if at all, in terms of addressability of patients and patient finding efforts. So let's say, difference between U.S. and Europe. And then you have a specific approach that you've taken in China, so maybe we could take a few minutes also to talk about that.

Yes, certainly. our DLBCL, it's a rapidly progressing aggressive tumor type. And it tends to be treated in the community early on, on diagnosis, both in the U.S. and -- it's different across Europe and in different countries, but generally a similar pattern. As the disease progresses, if patients aren't cured with R-CHOP or don't get a very long remission, they move later into academic centers. Again, that's fairly similar, both in the U.S. and Europe. Maybe in some countries in Europe, they move more early in the treatment paradigm to academic census. But it's really driven by the nature of the disease and the treatment paradigms. So we don't see a very substantial difference in that between territories. Looking across to China, yes, we have the AD -- Overland ADCT BioPharma venture. So far, we've been delighted with the way that this is running with the energy and the professionalism within which the local partners have addressed that...

And maybe can you tell us what that is for those who may not know the details of Overland.

Yes. Certainly. So it's a joint venture. We have a 49% equity holding in this. Overland is a wholly owned company -- with Hillhouse is the founding financial investor, the large New York-based fund. And to get -- they see the debenture with a $50 million investment. And on the ground, Overland has the teams to manage the regulatory process, manage the clinical development process and develop the program in the commercial environment in China. It's Greater China and Singapore are the territory, which is covered by the venture. And yes, it's a large marketplace. There's 37,000 DLBCL patients diagnosed each year. So it's a very large marketplace. Non-GCB, which is relevant in the ibrutinib combination is estimated to be higher, about 70% to 80% of DLBCL in China. And obviously, the population, certainly the older population is growing as a demographic. So we see this as a very substantial market opportunity. And it's a very fragmented marketplace with little development of mobile-targeted therapies in DLBCL. So again, we see an opportunity here to really bring a very substantial amount of benefits to those patients. We've recently appointed the CEO, Eric Koo. He's very experienced with a strong commercial background and also he's played a significant role in bringing drugs into the Chinese market. So we're delighted to have him and his team's local insight, which makes it a very efficient and productive way to address the China market.

Okay. Excellent. And I guess, ultimately, how are you thinking about the size of the commercial footprint that you'll need in order to maximize the potential of first Lonca and eventually, Cami in multiple indications. How big is the sales force now? And where do you think ideally would kind of even out?

Yes, we have a 70-plus market-facing team. That's the commercial team and the medical payers, the team in the field. With that, we can address over 90% of the prescription lease, and we're happy with that. Now we're up and running, and we see a very solid level of activity and engagements in the target areas that we're looking at. As we develop into earlier lines of therapy and different histologies and our plans for Cami in Hodgkin lymphoma, we will need to expand the force. Clearly, where we're still operating in the hematological space, it won't be a doubling of the sales force, but it will be a steady increase as we address the larger and larger market opportunity. Clearly, over time, our solid tumor franchise begins to produce data and moves towards the clinic, that would require a very significant increase in the commercial organization.

Okay. What do you think is the aspect of ADC that investors still don't fully appreciate right now?

I think there's still some education to be done on the profile of Zynlonta, how it's differentiated in the marketplace and why that provides a very good, strong foundation to moving into earlier lines of therapy and combinations with multiple different modalities of targeted therapy. And then beyond that, I think Cami, people are not paying much attention to it. I think once we publish the data, the interim efficacy data later this year, that will solidify that position to some extent. But then there's a whole solid tumor opportunity with Cami with our first-in-class, very novel mechanism of action. And behind that, our solid tumor franchise. The PBDs, I think with Zynlonta have demonstrated what they were designed to do, which is to be active in tumor types, which are resistant or have become refractory to treatment with other types of therapy. And in solid tumors, that's really where the very substantial area of unmet need is. So I think we've demonstrated that it does what it was designed to do in terms of the mechanism of the PBDs. And once we start to see the activity in the solid tumor setting, I think investors will really understand that potential more clearly.

Okay. Perfect. With that, our 30 minutes together for this morning is up. So thank you so much, Chris, for joining us. And there's a lot going on at ADC. We're looking forward to metrics of the launch as well as future pipeline updates.

It's always a pleasure, Tazeen. Take care.

Have a good day.

You too. Bye.