ADC Therapeutics — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net product revenue was $21.0 million for the quarter ended September 30, 2026, compared to $15.8 million in the same period in 2025, driven primarily by volume increases.
• Total revenue was $21.7 million for the quarter, compared to $16.4 million in 2025.
• License revenues and royalties were $0.7 million for the quarter, remaining flat compared to $0.7 million in 2025; for the nine-month period, these were $2.1 million compared to $7.1 million in 2025, a decrease driven by a prior-year milestone.
• Net loss was $25.3 million ($0.16 per share) for the quarter, compared to $41.0 million ($0.30 per share) in 2025.
• For the nine months ended September 30, 2026, net loss was $74.8 million ($0.48 per share), compared to $136.2 million ($1.14 per share) in 2025.
• Adjusted net loss was $8.8 million ($0.06 per share) for the quarter, compared to $25.5 million ($0.19 per share) in 2025.
• Total operating expenses were $36.1 million for the quarter, a 24% reduction from $47.4 million in 2025; for the nine months, expenses were $126.8 million, a 22% reduction from $161.9 million in 2025.
• Research and development expenses were $14.7 million for the quarter, down from $26.8 million in 2025, driven by reduced spending on discontinued programs and lower ZYNLONTA spend.
• Selling and marketing expenses were $8.7 million for the quarter, down from $10.7 million in 2025.
• General and administrative expenses were $10.7 million for the quarter, up from $8.3 million in 2025, due to increased professional expenses and share-based compensation.
• Cash and cash equivalents were $189.2 million as of September 30, 2026, down from $261.3 million as of December 31, 2025.
• Senior secured loan principal was reduced to $50 million from a higher outstanding balance prior to the restructuring.
• Deferred royalty obligation was $303.5 million as of September 30, 2026, down from $322.5 million as of December 31, 2025.

Guidance and Future Outlook:

• The company expects its cash runway to extend into 2029 following strategic financial restructuring.
• Management anticipates revenue growth in 2027 and aims to sustain or grow ZYNLONTA revenue in the future.
• The company plans to use LOTIS-7 and marginal zone lymphoma data presented at ASH to guide clinical development priorities and regulatory strategy.
• Future regulatory milestones include the potential approval of ZYNLONTA in Japan and the submission of a supplemental Biologics License Application (sBLA) for LOTIS-5 data.

Business Segments and Product Lines:

• ZYNLONTA is the company's primary commercial product, approved by the FDA and EMA for relapsed or refractory diffuse large B-cell lymphoma (DLBCL).
• Multiple abstracts, including five oral presentations, were accepted for the ASH 2026 meeting, featuring full results from the Phase 3 LOTIS-5 trial and updated results from the Phase 1b LOTIS-7 trial.
• LOTIS-7 evaluates ZYNLONTA in combination with glofitamab in relapsed or refractory large B-cell lymphoma.
• LOTIS-5 evaluates ZYNLONTA in combination with rituximab in relapsed or refractory DLBCL.
• Investigator-initiated trials (IITs) are ongoing in marginal zone lymphoma, mantle cell lymphoma, and Waldenström macroglobulinemia.
• Tanabe Pharma Corporation has submitted a marketing authorization application to Japan's Ministry of Health, Labor and Welfare for ZYNLONTA to treat r/r DLBCL.
• Tanabe Pharma entered an exclusive sublicensing agreement with Nippon Shinyaku Co., Ltd. for the commercialization of ZYNLONTA in Japan.

Market and Competitive Landscape:

• The company views ZYNLONTA as having an opportunity to address significant unmet needs in the evolving treatment landscape for B-cell malignancies.
• ZYNLONTA is being evaluated in earlier lines of therapy and in combination with other agents.
• The company faces competition from evolving treatment options for patients with B-cell malignancies.

Risks and Challenges:

• Risks include the adequacy of LOTIS-5 data to support full regulatory approval and the FDA's serious concerns regarding LOTIS-5 trial results raised during a pre-sBLA meeting.
• Uncertainties exist regarding the timing and outcome of the sBLA submission and potential approval in the U.S. and foreign jurisdictions.
• The company faces risks related to its indebtedness, including the HealthCare Royalty Management and Blue Owl and Oaktree facilities, and the significant cash required to service such debt.
• Potential risks include the outcome of a proposed change of domicile from Switzerland to Delaware, including tax analyses and shareholder approval.
• International trade policies, including tariffs and sanctions, could impact the business and financial condition.
• The ability of partners (Tanabe Pharma and Nippon Shinyaku) to successfully commercialize ZYNLONTA in Japan and obtain regulatory approvals is a key risk.

Management Commentary and Tone:

• CEO Ameet Mallik stated the company made meaningful progress in strengthening the balance sheet and increasing strategic optionality while advancing clinical opportunities for ZYNLONTA.
• Management expressed confidence in delivering on sales and expanding ZYNLONTA's role in B-cell malignancies to drive growth.
• CMO Mohamed Zaki, M.D., Ph.D., highlighted the potential for ZYNLONTA to play an important role in treating r/r DLBCL and indolent lymphomas based on upcoming data.
• The tone reflects a focus on cost reduction, strategic restructuring, and advancing clinical data to support regulatory milestones.

Other Key Points:

• In October 2026, the company completed a strategic financial restructuring including an $86.6 million PIPE financing with participation from Bain Capital Life Sciences, Redmile, TCGX, and Nantahala Capital.
• The PIPE transaction involved the issuance of approximately 12.9 million common shares and 48 million warrants with a strike price of CHF 0.08.
• The company amended its HealthCare Royalty financing agreement to eliminate a $150 million change-of-control payment.
• The senior secured loan agreement was amended to reduce outstanding principal by $68.5 million to $50 million, eliminate scheduled principal amortization, and remove the minimum liquidity covenant.
• The company recognized a $0.1 million expense reversal for restructuring costs in the third quarter and $2.6 million in employee severance costs for the nine-month period.
• Share-based compensation expense was $4.1 million for the quarter and $12.1 million for the nine-month period.
• The company excluded changes in the fair value of warrant obligations and cumulative catch-up adjustments of the deferred royalty obligation from its adjusted net loss.