Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Achieved commercial profitability with ZYNLONTA in 2024, generating $34.9 million in revenue year-to-date.
- Positive interim results from the LOTIS-5 Phase III study, with full enrollment expected by the end of 2024.
- Strong progress in solid tumor programs, including ADCT-601 targeting AXL, with initial updates expected in the second half of 2024.
- Disciplined capital allocation strategy, reducing operating expenses by 23% year-over-year on a non-GAAP basis.
- Extended cash runway into mid-2026 due to recent financing of $105 million, providing a stronger balance sheet.
Negative Points
- Quarter-over-quarter revenue decrease, with second quarter revenues of $17 million compared to $19.2 million in the same period in 2023.
- Continued competition in the third-line plus DLBCL space, impacting market share.
- Variability in ZYNLONTA sales due to ordering patterns and competition from bispecifics.
- Net loss of $36.5 million for the quarter on a GAAP basis, indicating ongoing financial challenges.
- Uncertainty around the timing and outcome of regulatory approvals and inclusion in treatment guidelines for new indications.
Q & A Highlights
Q: Congrats on the progress. Maybe first for Ameet on the LOTIS-5 interim look. Was there any other statistical consideration given other than a potential futility analysis? Could there have been, say, a trial will beside same or any other outcome other than halting the study?
A: Yeah. Thanks, Eric. That was a great question. So the independent data monitoring committee reviewed the unbounded efficacy and safety data and recommended to continue the trial without any modifications. So in terms of what they looked at, this was an interim analysis for futility with prespecified efficacy boundaries based on PFS, which, as you know, is the primary efficacy endpoint, and that pass per IDMC review. The IDMC obviously also was looking at unblinded safety data and directly noted that the treatment-emergent AEs were as expected in this very, as you can imagine, vulnerable and pretreated population. So their recommendation was to continue the study without any modifications. And certainly, for us, just increases our confidence around the study.
Q: And you haven't disclosed what those PFS boundaries are, I assume?
A: Yeah, we haven't disclosed.
Q: In terms of some of the upcoming milestones for the second half of the year, you've got several lined up. Can you be a little bit more specific about what form it can take place which might be at medical meetings, which might be at corporate events or press releases?
A: Yeah. So most of them will be at the end of the year. Well, it will be a combination, but I would say specifically, if you look at LOTIS-7, which is probably one of the big ones, this would be likely through a corporate disclosure simply because as we've disclosed in the past, we want to enroll 40 patients in our trial by the end of the year. The data we're going to have available, we'll make available for any patients that have cleaned at least 12 weeks scan so that any responses have been confirmed. So basically, once you get to late August, you kind of get to the cut-off of what's going to be shown. We want to make sure that we can show as much data as possible. We expect to have the full data from that trial in the first half of next year. Similar with AXL, where we're currently doing -- dosing a number of patients in pancreatic cancer as well as in sarcoma and have just begun screening patients in non-small cell lung cancer, we want to make sure that we can share the data that we have. And so as you can imagine, cut-offs for congresses like ASH and others have already happened actually in August. So that will be again a company disclosure. So those are probably two of the biggest disclosures. What I would say is in terms of indolent lymphomas, whether it's this year or next year, the next set of updates will be at medical meetings.
Q: Congrats on the progress. Maybe in terms of the variability in ordering pattern for ZYNLONTA, you commented in press release. Could you provide more color on this front. Is this a variability in terms of the academic and community split in prescription and also maybe comment on distribution inventory channel and also gross-to-net?
A: Okay. So I'll comment on the order -- the variability that we see by quarter. And then I'll turn it to Pepe to talk about gross-to-net in the quarter and how that's evolved. So if you look at quarter-by-quarter variability, a lot I would say is just month by month. So I'll just give you some examples. We may have a large iconic institution. I'll give you a real example of that order, for example, in January, but they order a significant amount of quantity because as you can imagine, we're a relatively rare disease. And our -- the number of cycles on average is about four. So you don't need a lot of vials per patient. So they may order for 5, 10 patients. And for the next 5 to 10 patients and then not need to order for 3 or 4 months. And so that happens a lot also with some smaller accounts where need to see order pattern. So we see certain months, which are much higher in certain months, which are much lower. And depending on how the quarters get cut off, that can affect performance. And we've seen this in the past, since the launch where you see some up and down fluctuation. What I would say is that despite an increasingly competitive environment, we're still seeing a strong place for ZYNLONTA in the academic settings. We're seeing a lot of use either where bispecific can't be used or post bispecifics. And I think really, especially in academic setting, there's a clear understanding of how and when to use. For ZYNLONTA, you see much more stability in that setting. In the community, there's variability because you've seen some adoption of bispecifics in very large community counts. But of course, the majority of the accounts have not yet adopted bispecifics. And the variability comes with just when they see patients or not see patients, an average community physician may only see a patient every couple of months. So in any quarter, if you look at accounts, depending on what patients they show up and if they're suitable for ZYNLONTA, you can get more or less. That's why we do see typically month-to-month and even quarter-to-quarter variability.
Jose Carmona: From the gross -- the gross-to-net side, Kelly, we saw a favorable prior period adjustment this quarter. I would expect that to be just a one-off. In general, if you look at the year-to-date or even the Q1, that's when you should expect as we go for the balance of the year.
Q: I have a follow-up regarding the solid tumor program 601 targeting AXL. So what is the relative proportion of sarcoma versus pancreatic cancer patients will be enrolled and to be shown like data by the end of the year? And also, like any particular sub taps you're going to focus -- sarcoma enrollment?
A: Yeah. So for sarcoma, we're focused on soft tissue sarcoma. And then in terms of enrollment, actually, both are enrolling at a pretty good pace, to be honest. As you know, there's very high AXL expression. So we don't even need to select patients for sarcoma. So although it's rare, that -- none in this for autopsy and helps to drive up the numbers. And given the early signals that we saw, there's a lot of awareness within the community when you get to the late-line setting. There's not a lot of options for these patients. So we see continued good enrollment and similarly with pancreatic. Again, it tend to be very late line patients, right, that have already failed multiple prior therapies. And the prognosis for these patients isn't great. So there we're doing an enrich strategy. We're looking at different levels of expression to understand where the
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
