Welcome to the Morgan Stanley Global Healthcare Conference. I'm Jeffrey Hung, one of the biotech analysts. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. For this session, we have ADC Therapeutics with CEO, Ameet Mallik. Welcome, Ameet. Thank you. Maybe for those who are not as familiar with ADC Therapeutics, can you provide a brief introduction? Sure. Well, first of all, thanks for having me here. It's great to be here with you. Yeah, so just to give you an overview of the company, we're a commercial stage antibody drug conjugate-focused company, really with three pillars of our strategy. The first is centered on our commercial product, ZYNLONTA, where we believe we have significant opportunity to create value with the asset, both with our current indication, the third-line, third-line plus setting, but also as we move into earlier lines of therapy in novel combinations. Second, we have a PBD-based clinical pipeline, where we have three different assets currently in phase one that will read out initial data next year. And then finally, we have a research platform that's working on novel antibody constructs, novel payloads, multiple different payloads, many of which are gonna start, w e'll be sharing more data on the research platform next year. Now, beyond our current strategy, or just diving deep, at least into ZYNLONTA, we have three different ways to grow. First, as I mentioned, is our third-line, third-line plus setting. We know that currently it's a very fragmented market. There's no current standard of care. You see very different treatment dynamics between the academic and the community setting. There's still a lot of R-based therapy, a lot of systemic chemo being used in that setting, and we think there's an opportunity to establish ZYNLONTA as a standard of care. Next, we have our LOTIS-5 study, which is a study between ZYNLONTA and rituximab in the second-line plus setting. We just announced data last week with an updated data from the first 20 patients of our safety lead-in data, which showed an overall response rate of 80% and CR rate of 50%, with a PFS of 8.3 months, and importantly, no new safety signals. We're doing a study called LOTIS-7, combining ZYNLONTA with different bispecifics, so we're studying both glofitamab and mosunetuzumab both in follicular, marginal zone, and DLBCL. We're doing a dose escalation right now. That study's kicked off, and I can go through more details of that. So there's multiple ways to drive growth within ZYNLONTA. And then finally, as I'd say, we have a cash, we have a cash roughly of $348 million as of the end of second quarter. So we have a cash runway that goes into the middle of 2025, and multiple value-driving catalysts, both with ZYNLONTA, our clinical pipeline, and our research platform, that'll occur over the next 12-15 months. Great. Let's start with ZYNLONTA. Given how competitive the evolving market dynamics are, what do you see as the potential for ZYNLONTA in third line DLBCL? Yeah, I think the peak potential certainly is over $100 million peak opportunity. We think it could be somewhere in the one to two hundred million dollar range in terms of peak sales opportunity. As I mentioned, there is no standard of care, and where you see a lot of CAR- T use in the academic setting, that's moving into the second line setting. There's still some third line use, and really it's evolving landscapes and a lot more competition in that third line setting, post-CAR -T. When you look at the community, that's not the case. Only about 25% of patients who can who would qualify for a CAR T ever get to a CAR- T in any line of therapy. You still see the predominant use of either systemic-based chemo or R-based regimens. So there's still a huge opportunity to establish, I think, a standard of care there. That's where we see our biggest growth opportunity, and we think the profile of our compound fits particularly well. When you look at the patient split, about 40% of the patients are in an academic setting. That's where a lot of this new competition sort of emerging, but about 60% of patients are in the community, so that's a big opportunity for ZYNLONTA. Maybe just to clarify on that last point. So then how do you think about the potential growth in the academic versus community settings? Yeah, I think we'll see even more growth in the community setting, because I think the academic environment, while we think there's clearly still a place for ZYNLONTA to play, that's where it's more competitive with bispecifics and other new regimens, even clinical trials. You see clinical trials taking up a lot of patients when you get to later relapse refractory setting, and that's been the case since the launch. I think the bigger opportunity where you're gonna see less CAR-T, less bispecifics, and less clinical trials is in the community setting. So that's where we see the majority of our future growth potential. Okay. And earlier in the year, you adjusted your go-to-market model. So I guess, how is that different than what you had before? And then you've also announced that the implementation took longer than you expected. So can you just talk about this, and how far along do you think you are in implementing the new commercial model? Yeah, what's clear is that you know, the healthcare market for oncology has changed dramatically in the last few years, and just the level of new product entry makes it much more difficult for a community physician to keep track of every single product that's coming out. DLBCL, I think, is one of the most competitive, dynamic markets there is. You know, if you're a community doctor, you're seeing a lot of breast cancer, lung cancer, colorectal, maybe prostate. You don't see a lot of DLBCL patients in your practice day-to-day. And there's some therapies, like CAR -T, that you can't really give in the community. So by definition, you're much more interlinked with the academic centers that are local to you. So I'll just give you an example of how we changed the model. Before, in an example like Florida, we would have three different reps calling on the state independently, kind of dividing the state into one third, one third. But we know there's an interlink. We know that you have big centers like Florida Cancer, that are about 50% of the community centers in all of Florida. You have Moffitt, which is one of the biggest CAR-T centers in the state. University of Miami, also a big CAR-T and top academic site. And those sites, by the way, have been building up, particularly University of Miami, a lot of community centers, too. They've been buying up and going north. So it's not as simple as a rep just calling on a doctor. You have to think about the account level as well. So now we formed, in the case of Florida, three-person teams, where you have an account manager calling on those big sites of care, with two different reps calling on satellite and community offices in a much more coordinated way. Because how physicians in the community are accessing information, they're not always going to the big congresses, so they're getting a lot of their influence from those academic physicians, from local symposia, from local programs. And so our teams are coordinating in a much more, in a much more coordinated way across the academic and community centers within a local healthcare system. And that's how we've reorganized the teams. Now, we announced that we're going to start doing this in Q2. We implemented the change. It did take a little longer because we went pretty deep. 50% of the people in the organization are either new to the organization or new to their role, so it's a significant change for the organization. And obviously, during that time, you have disruption. We wanted to make sure we had all the right talent, though, not only with the right capabilities, but with the right mindset to win in a competitive market like DLBCL. We implemented that change in July. That's when the teams got up and running, and we kind of returned to normal call activity in August. So just given that time frame from sort of April until we had it fully implemented in August, there was obviously a level of disruption that you see, and especially with a product like ZYNLONTA, where on average, patients are getting about four cycles. Every quarter, we're almost getting our business almost entirely new patients. Mm-hmm. But I'd say encouragingly, we've seen the field force fully implemented now. Call activity has resumed to where it should be, and we're seeing, you know, nice early signs in terms of new community use that we hadn't had before. So the goal of the implementation was always to exit the year with a strong run rate to set ourselves up for 2024, 2024 and 2025, and that still remains the same. Mm-hmm. Great. Well, moving to LOTIS-9, this summer, you decided to discontinue the phase II study in unfit or frail patients. Can you just talk about what led you to pause enrollment and ultimately discontinue the study? Yeah. So just to remind you, the population within LOTIS-9, it's a frail and unfit population. So these are patients that not only couldn't get R-CHOP, typically couldn't get mini R-CHOP either. So these are patients, many of the patients, most of the patients are over the age of 80, with significant respiratory and cardiovascular comorbidities. So this is a really high unmet need population, where there aren't really good approved regimens out there. While we saw encouraging activity in those patients, we also saw Grade 3 and above adverse events. So at the time, when we did an aggregate review of the 40 patients, there were 12 Grade 3 or higher adverse events, mostly related to the pulmonary system. 11 of 12—11 of the 12 of which were deemed to be unrelated or likely unrelated to the study drug regimen. Nonetheless, there's not really a good control group because there's very little approved. We followed these patients for 15 weeks post the last dose, and so because of that, it's very hard to compare it to what other data is out there. So we took the decision. It's a very tough to treat patient population that rather than try to cut it back even further and try to restart the study, we just made the decision that it didn't make as much sense as a lot of the other LOTIS programs. What kind of read-through, if any, is there to LOTIS-5? And just to be clear, I don't mean necessarily if there's any negative read-throughs, but also positive read-throughs in terms of, you know, the high response rates in that population. Is any kind of that increase your confidence in ZYNLONTA in the second-line patients? Can you talk about those aspects? Yeah, I mean, it's obviously the same combination of ZYNLONTA plus rituximab. So I think the activity is definitely encouraging that we saw with the combination in LOTIS-9. Obviously, it's a different patient population. Most of the patients that were in LOTIS-9 would never make it to LOTIS-5. They just would be excluded because of the significance of their comorbidities. So while we have elderly patients in LOTIS-5, but just the significant nature of the underlying comorbidities entering the trial, most of those patients would be excluded from LOTIS-5. I think also importantly, when you look at LOTIS-5, we see also encouraging initial data when we look at the safety running data, where, again, we saw 80% overall response rate, 50% CR rate in the second-line plus population. But from a safety standpoint, we haven't seen the same. So independently, the DMC for the LOTIS-5 study looked at the all of our data, and it's a significant amount of patients that they looked at, at the end of July, and they're obviously looking at the data in an unblinded way to look at risk-benefit and didn't see an issue, and so the study should continue as is. But also importantly, with the safety run-in data, where there's been now two-year follow-up, again, no new safety signals. So I think it's a very different patient population, although it's the same drug treatment, and we haven't seen those safety issues. But again, we've seen encouraging initial clinical activity. Okay, maybe moving on to the second line, DLBCL with LOTIS-5. Can you just talk about that study and how enrollment's going? Yeah, sure. So, it's a 350-patient study, so beyond the 20-patient safety run-in, there's a 330-patient randomized portion, randomizing either patients with ZYNLONTA and rituximab, comparing to R-GemOx. The study's really picked up and is enrolling actually quite well, and we're well on track to finishing the enrollment next year. You touched upon this at the beginning, but maybe if you can just repeat again, like, you know, that you presented updated safety read-in results last week. So can you just highlight the key takeaways from that data? Sure. So we presented last week at SOHO, a poster just showing the updated data from the first 20 patients from the safety run-in. And what we saw in those 20 patients was an overall response rate of 80%, a CR rate of 50%, which last year when we presented the one-year data was 40%. So it was encouraging to see the improvement, where some of the PRs converted, 2 of the patients of the 20 who had PRs converted to CR, and then the PFS was 8.3 months. Now, the median follow-up was only about 10 months. So I think when you look at small sample sizes, I want to caution just based on that, it's only 20 patients, but I think that was encouraging. But also importantly, it's a safety run-in, and it confirmed that the safety of this combination was suitable for this population. You mentioned the caution on the data based on the sample size, but maybe, how should investors think about the data in the context of part two, which you had said earlier, that it's about 330 patients? Yeah, look, I think if you look at our comparator arm, our GEMOX, again, when you look at different studies, typically have a PFS in the range of four to six months. We'll need to show roughly a two-month difference of PFS to have a positive study. Okay. You're also studying novel combinations with ZYNLONTA. Can you just talk about the LOTIS-7 study and what you hope to see? Yeah, we're really excited about the combinations, potential combinations with bispecifics. Like I mentioned before, we're doing a study where we're dose-escalating the ZYNLONTA. It's going to be a fixed-duration treatment, and we're combining either with glofitamab or mosunetuzumab across three different types of conditions. So DLBCL, follicular, and marginal zone. We're currently in dose escalation. The study is opened. We're – there's a lot of interest in this study, so we're getting, you know, good enrollment. We obviously have to go through the dose escalation, which is going to vary by drug combination as well as by disease. Once we get to the right dosing, of course, we'll go into dose expansion. We think there's a real promise, because when you look at, just to start with glofitamab, which is approved in DLBCL, since mosunetuzumab isn't, and ZYNLONTA, these are the two most potent, single-agent drugs approved in DLBCL. So if you look at, you know, the bispecific class plus ZYNLONTA, and there's a lot of synergy across the different targets between CD19 and CD20, CD3. They're synergistic mechanism of action. The toxicity, at least when you look on paper, are non-overlapping toxicity, so we think it's really promising. I mean, our goal is actually to combine across all bispecific agents, and so we think LOTIS-7 is a good start to that. There's been a lot of interest in this study as well as beyond. I can tell you from investigators to keep studying with these bispecifics, but also with, with others as well. We think the promise can be, you know, if you can dose these agents in a way, potentially, to start with ZYNLONTA first, debulk the tumor, add on the bispecific and get the, the very fast action of ZYNLONTA combined with the very durable response of a bispecific. You know, if you can get to highly durable CRs, you know, it's potential to have an off-the-shelf combination that can work really well, both in the academic and the community setting. What should we look for in the initial data next year? Yeah, so we are going to go through dose escalation, so traditional 3-by-3 dosing. But as I said, it's complicated that we're looking at two different dosing regimens, two different drug combinations, plus three different diseases. So we certainly will get through dose escalation and then potentially be into dose expansion as well. Okay. The first hurdle is, of course, toxic safety, getting to the right dose, and then, of course, moving on to do dose expansion and really look at the efficacy in more detail. Great. Next year, you'll have data from multiple earlier stage programs reading out. Maybe if you can talk about each program and what we should expect to see from the phase I next year. So maybe let's start with ADCT-602. Sure. Yeah, so ADCT-602 is an anti-CD22. Anti-CD22 are well established within ALL, and that's where we're studying the drug. We've presented... well, MD Anderson, who's the partner that we have on this program, presented some encouraging early data last year at ASH, where there are four different patients which had CRs, many which had MRD-negative disease. And that was encouraging to see because many of these patients were six or seven line after, in some cases, multiple ALL transplants, even prior CD22 therapy. So these were heavily pretreated patients. To sort of see CRs and even MRD-negative responses was significantly thought in that patient population. We continued to dose expand, so MD Anderson and City of Hope are both in a trial. It's expanding to other sites, but we're also going to dose escalate because we're not sure that we've even hit the dose. The tolerability is very good. Importantly, I think the unmet need here is to have a highly potent CD22 that doesn't have VOD, and we haven't seen any VOD, which I think is really important differentiation in this market. But we're going to dose escalate. The protocol is being amended and finalized right now to be able to dose escalate to the next dosing level. And so we expect to share data in the first half of next year, you know, from the dose expansion as well as some of the dose escalation. Okay, and then how about ADCT-901? Yeah, so ADCT-901 is targeting KAAG1, which is a novel target. This is, I would say, I would call it a more high-risk, high-reward program because it's a very novel target where there's a lot less understood about the biology. Nonetheless, we've seen that there's overexpression on a number of different solid tumors like cholangiocarcinoma, triple negative, and others. And so we're studying it right now in an unselected population to try to get to the right dosing level. We're looking at different dosing combinations also, just informed by the PK/PD data, as well as just Project Optimus, where we know we need to get the dosing levels right. And then, you know, once we get to the right dosing level, the plan would be, if we see good data, to expand. We'll be sharing, depending on what we get through dose escalation, whatever data we have by the first half of next year. Okay, and then maybe lastly, ADCT-601. Yeah. So ADCT-601 is targeting AXL. This is one where we think the potency of our payload is gonna be differentiating and potentially have a higher therapeutic index, and so we're excited about this program. We're currently looking at two different monotherapy cohorts, both in sarcoma as well as non-small cell lung cancer in an unselected patient population to get to the right dosing level. The idea would be once we get to the dose, our biomarkers being in under the final stages of validation, and then we would go to our selected population when we do the dose expansion. So, you know, we've gone through multiple dose cohorts. You know, once we get to the right dosing, again, and the biomarker has been validated, we'll move to a selected patient population and dose expansion. Again, we'll share the data that we have in the first half of the year next year. You recently amended the study to focus only on non-small cell lung cancer and sarcomas, is that right? Yeah, which was the focus before as well. I think what the focus is first, is to start with monotherapy to get the right dosing level, then to move into expansion with monotherapy in a selected population. Ultimately, we will move to combination. Before, we were doing combination data in parallel, but we want to get single agent activity first, move to a selected patient population, and then likely across different tumors, potentially even beyond sarcoma and lung cancer, move to combinations as well. Okay. And then for both 601 and 901, can you just give us an update on the biomarker assay? You know, what have you been able to show with it, and what is the promise for the biomarker assay? Yeah. So starting with 601, the biomarker is well underway, so it'll be ready in time to do the dose expansion, and that's going to be part of how we select patients going forward for our dose expansion and also 901's well under development in the final stages of validation. Okay. Then can you talk about Cami? Any updates on potential partnership discussions? Yeah, we continue to have discussions, so no, no update right now. But, as you know, we announced last year the focus to externalize the program and not to continue to do that as a preference. But we've continued activities with the program, and there were a number of calls from the FDA, obviously, so we've continued along with that activity, but the preference is to partner that program, and we're in discussions right now. Okay. And can you just remind us of the IP for ZYNLONTA? Sure. Yeah. So we have a pretty robust IP portfolio, including a composition of matter patent that runs until 2035 in the U.S. So yeah, pretty healthy runway. Okay. Anything we missed or, or what do you think that the street most misunderstands about ADC Therapeutics? Yeah, I think it's, you know, one, that you have ZYNLONTA, which is an approved product, and as we move into the second line setting, if we get to the $250 million-$300 million peak range, it's a break-even company. So there's a path towards break-even to profitability with an asset that's already approved. Then when you add in the combination with bispecifics, if they work, this has the potential to take ZYNLONTA to over $500 million drug potential. Three clinical phase I assets that are going to start reading out next year, and then a research platform which is diversified well beyond our current payload into multiple different payloads and targets, and then we're a company—we're one of only a handful of companies that's actually taken a product all the way from research to approval, and that's no small feat, I can tell you, in the ADC space. Beyond just the research and development capabilities, the CMC and manufacturing capabilities that you need to actually get something over the finish line is, is not trivial in the ADC space. So I think, you know, we're a fairly de-risked story with still a good cash runway. As I said, we ended Q2 with $348 million, which takes us, being able to fund all these programs through mid-2025. Great. Well, looks like we'll have to leave it there. Thanks so much for your time. Thank you so much. Appreciate it.