- ADC Therapeutics on Friday announced a deal with Swedish drugmaker Sobi to develop and commercialize its cancer medicine Zynlonta in Europe and other regions outside the U.S.
- Under the agreement, Sobi will pay ADC $55 million upfront and another $50 million once the drug is approved in Europe. ADC could also receive up to $330 million in additional milestone payments, as well as royalties net sales of Zynlonta.
- Zynlonta was approved in the U.S. in April 2021 to treat large B-cell lymphoma and is ADC’s only drug on the market. An approval decision by European regulators is expected in the first quarter of 2023.
ADC Therapeutics raised $268 million in one of 2020’s largest initial public offerings in 2020. But like many other biotech companies to go public over the last couple years, the company is feeling the effects of the sector’s downturn and is trading far below its debut price.
Since going public, the company was able to bring its first product, Zynlonta, to market. The treatment is one of several so-called antibody drug conjugates to be cleared by regulators in recent years, and is approved for large B-cell lymphoma patients whose disease hasn’t responded to at least two treatments.
Sales haven’t taken off so far, however. The drug generated $16.5 million last quarter, for instance, less than it sold in the prior quarter and missing consensus analysts’ estimates of $18.4 million, according to a May research note from Morgan Stanley analyst Matthew Harrison. ADC cited a surge in coronavirus infections from omicron along with fewer patient visits, among other factors, for the lower numbers. But shares nonetheless fell more than 20% on the news.
ADC is aiming to boost its launch under new leadership. In May, Ameet Mallik, the former head of Novartis’ oncology division, joined ADC as its CEO, replacing co-founder Chris Martin. The company is preparing to sell the drug in Europe, a commercial effort that’ll now be led by Sobi. ADC is also testing it in earlier treatment lines as well as different B-cell malignancies.
In the meantime, however, ADC is trying to grab market share away from CAR-T therapies, which are powerfully effective against lymphoma but come with significant side effects and are limited to large academic centers.
ADC, then, is focusing on community oncologists to broaden the drug’s reach.
The company believes that its drug offers an alternative for those “hoping to stay in community setting instead of going to CAR-T centers,” Harrison wrote in May. Zynlonta also doesn’t trigger the potentially serious neurological or immune-related side effects associated with CAR-T, which should “serve as [a] commercial advantage,” according to Jefferies analyst Kelly Shi.
ADC shares climbed 16%, to roughly $11 apiece, in trading on Friday. The company went public at $19 per share in May 2021.