ADC Therapeutics SA 6-K, filed Aug 9, 2022

ADC Therapeutics SA (ADCT)

6-K 2022-08-09 For: 2022-06-30

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Added on April 07, 2026

About this 6-K

ADC Therapeutics SA filed this 6-K on August 9, 2022.

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	ADC Therapeutics SA


	By:	/s/ Jennifer Creel
	Name:	Jennifer Creel
	Title:	Chief Financial Officer

Date: August 9, 2022


Exhibit Number			Description
99.1			Unaudited IFRS Condensed Consolidated Interim Financial Statements as of and for the three and six months ended June 30, 2022
99.2			Management’s Discussion and Analysis of Financial Condition and Results of Operations
99.3			Press Release dated August 9 , 2022

101.SCH			XBRL Taxonomy Extension Schema Document
101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF			XBRL Taxonomy Extension Definition Linkbase Document
101.LAB			XBRL Taxonomy Extension Label Linkbase Document
101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


Condensed Consolidated Interim Statement of Operations			2
Condensed Consolidated Interim Statement of Comprehensive Loss			3
Condensed Consolidated Interim Balance Sheet			4
Condensed Consolidated Interim Statement of Changes in Equity			5
Condensed Consolidated Interim Statement of Cash Flows			7
Notes to the Condensed Consolidated Interim Financial Statements			8


		For the Three Months Ended June 30,		For the Six Months Ended June 30,
	Note	2022	2021	2022	2021
Product revenues, net	5	17,291	3,760	33,789	3,760
License revenue	3, 5	—	—	30,000	—
Total revenue		17,291	3,760	63,789	3,760

Operating expense
Cost of product sales	7	(2,266)	(121)	(2,795)	(121)
Research and development expenses	7	(48,537)	(39,533)	(97,489)	(78,705)
Selling and marketing expenses	7	(17,659)	(15,221)	(36,029)	(29,132)
General and administrative expenses	7	(18,240)	(19,367)	(37,251)	(36,949)
Total operating expense		(86,702)	(74,242)	(173,564)	(144,907)
Loss from operations		(69,411)	(70,482)	(109,775)	(141,147)

Other income (expense)

Financial income	16	16	15	18,324	30
Financial expense	13, 14, 16	(8,801)	(2,555)	(18,018)	(4,555)
Non-operating income	8	12,875	693	26,317	21,923
Total other income (expense)		4,090	(1,847)	26,623	17,398
Loss before taxes		(65,321)	(72,329)	(83,152)	(123,749)
Income tax benefit (expense)		947	(240)	2,117	(347)
Net loss		(64,374)	(72,569)	(81,035)	(124,096)

Net loss attributable to:
Owners of the parent		(64,374)	(72,569)	(81,035)	(124,096)

Net loss per share, basic and diluted	18	(0.84)	(0.95)	(1.05)	(1.62)


		For the Three Months Ended June 30,		For the Six Months Ended June 30,
	Note	2022	2021	2022	2021
Net Loss		(64,374)	(72,569)	(81,035)	(124,096)

Other comprehensive (loss) income
Items that will not be reclassified to profit and loss
Remeasurement of defined benefit pension liability	2	3,618	—	3,618	—
Total items that will not be reclassified to profit and loss		3,618	—	3,618	—

Items that may be reclassified to profit and loss
Currency translation differences		(383)	20	(541)	56
Total items that may be reclassified to profit and loss		(383)	20	(541)	56
Other comprehensive income for the period		3,235	20	3,077	56
Total comprehensive loss for the period		(61,139)	(72,549)	(77,958)	(124,040)

Total comprehensive loss attributable to:
Owners of the parent		(61,139)	(72,549)	(77,958)	(124,040)


	Note	June 30, 2022	December 31, 2021
ASSETS
Current assets
Cash and cash equivalents	9	376,778	466,544
Accounts receivable, net		20,863	30,218
Inventory	10	14,650	11,122
Other current assets		12,151	17,298
Total current assets		424,442	525,182
Non-current assets
Property, plant and equipment		3,596	4,066
Right-of-use assets	13	6,094	7,164
Intangible assets	11	14,575	13,582
Interest in joint venture	12	36,817	41,236
Deferred tax asset		34,040	26,049
Other long-term assets		899	693
Total non-current assets		96,021	92,790

Total assets		520,463	617,972

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable		13,019	12,080
Other current liabilities		52,384	50,497
Lease liabilities, short-term	13	909	1,029
Current income tax payable		799	3,754
Convertible loans, short-term	14	6,573	6,575
Total current liabilities		73,684	73,935
Non-current liabilities
Convertible loans, long-term	14	89,844	87,153
Convertible loans, derivatives	14	7,637	37,947
Deferred royalty obligation, long-term	16	204,423	218,664
Deferred gain of joint venture	12	23,539	23,539
Lease liabilities, long-term	13	5,990	6,994
Defined benefit pension liabilities	2	—	3,652

Total non-current liabilities		331,433	377,949

Total liabilities		405,117	451,884

Equity attributable to owners of the parent
Share capital		6,445	6,445
Share premium		981,818	981,827
Treasury shares		(119)	(128)
Other reserves	2, 15	133,480	102,646
Cumulative translation adjustments		(358)	183
Accumulated losses		(1,005,920)	(924,885)
Total equity attributable to owners of the parent		115,346	166,088

Total liabilities and equity		520,463	617,972


	Note	Share Capital	Share Premium	Other Reserves	Treasury Shares	Cumulative Translation Adjustments	Accumulated Losses	Total Equity
April 1, 2022		6,445	981,818	116,044	(119)	25	(941,546)	162,667

Loss for the period		—	—	—	—	—	(64,374)	(64,374)

Remeasurement of defined benefit pension liability	2	—	—	3,618	—	—	—	3,618
Translation adjustment		—	—	—	—	(383)	—	(383)

Total other comprehensive income (loss)		—	—	3,618	—	(383)	—	3,235

Total comprehensive income (loss) for the period		—	—	3,618	—	(383)	(64,374)	(61,139)



Share-based compensation expense	15	—	—	13,818	—	—	—	13,818
Total transactions with owners		—	—	13,818	—	—	—	13,818

June 30, 2022		6,445	981,818	133,480	(119)	(358)	(1,005,920)	115,346


	Six Months Ended June 30,
	2022	2021
USD / GBP
Closing rate, GBP 1	1.21470	1.38358
Weighted average exchange rate, GBP 1	1.20080	1.39134



	Three months ended June 30,		Six months ended June 30,
(in KUSD)	2022	2021	2022	2021
Beginning balance	4,126	—	2,590	—
GTN sales adjustments for current year sales	3,206	752	6,697	752
GTN sales adjustments for prior year sales	87	—	(105)	—
Credits, payments and reclassifications to Accounts payable	(3,955)	(22)	(5,718)	(22)
Ending balance as of June 30,	3,464	730	3,464	730


(in KUSD)	As of June 30, 2022	As of December 31, 2021
Accounts receivable, net	1,533	1,204
Other current liabilities	1,931	1,386
	3,464	2,590


(in KUSD)	Indefinite lived		Definite lived
Cost	Licenses	Internal development costs	Licenses	Software	Total
January 1, 2022	12,985	631	1,052	176	14,844
Additions	695	263	—	97	1,055

Exchange differences	—	—	—	(7)	(7)
June 30, 2022	13,680	894	1,052	266	15,892

Accumulated Amortization
January 1, 2022	(1,069)	—	(50)	(143)	(1,262)
Amortization charge	—	—	(37)	(20)	(57)
Exchange differences	—		—	2	2
June 30, 2022	(1,069)	—	(87)	(161)	(1,317)

Net book amount as of June 30, 2022	12,611	894	965	105	14,575

Cost
January 1, 2021	11,144	—	—	168	11,312
Additions	1,300	—	600	—	1,900
Transfers	(452)	—	452	(6)	(6)

June 30, 2021	11,992	—	1,052	162	13,206

Accumulated Amortization
January 1, 2021	(1,069)	—	—	(64)	(1,133)
Amortization charge	—	—	(13)	(50)	(63)


June 30, 2021	(1,069)	—	(13)	(114)	(1,196)

Net book amount as of June 30, 2021	10,923	—	1,039	48	12,010


(in KUSD)	As of
Summarized Balance Sheet	June 30, 2022	December 31, 2021
Cash and cash equivalents	28,450	39,318
Prepaid and other current assets	372	15
Intangible assets	48,039	48,040
Total liabilities	2,208	2,828
Net assets	74,653	84,545

Summarized Statement of Comprehensive Loss	Three months ended June 30,		Six months ended June 30,
	2022	2021	2022	2021
Operating expenses	4,576	2,493	9,367	3,655

Net loss	3,914	2,387	8,663	3,461


(in KUSD)
Right-of-Use Assets	Properties (Offices)	Vehicles	Total
Cost
January 1, 2022	9,005	134	9,139


Exchange difference	(523)	—	(523)
June 30, 2022	8,482	134	8,616

Accumulated depreciation
January 1, 2022	(1,925)	(50)	(1,975)
Depreciation charge	(589)	(17)	(606)

Exchange difference	59	—	59
June 30, 2022	(2,455)	(67)	(2,522)

Net book amount as of June 30, 2022	6,027	67	6,094

Cost
January 1, 2021	5,324	78	5,402
Additions	5,662	56	5,718
Lease termination	(864)	—	(864)
Exchange difference	40	—	40
June 30, 2021	10,162	134	10,296

Accumulated depreciation
January 1, 2021	(2,253)	(20)	(2,273)
Depreciation charge	(786)	(13)	(799)
Lease termination	864	—	864
Exchange difference	(11)	—	(11)
June 30, 2021	(2,186)	(33)	(2,219)

Net book amount as of June 30, 2021	7,976	101	8,077


(in KUSD)
Lease liabilities	Properties (Offices)	Vehicles	Total
January 1, 2022	7,898	125	8,023


Cash outflow (including interest)	(593)	(18)	(611)
Interest	100	1	101
Exchange difference	(575)	(39)	(614)
June 30, 2022	6,830	69	6,899

January 1, 2021	3,402	65	3,467
Additions	5,662	56	5,718

Cash outflow (including interest)	(616)	(15)	(631)
Interest	112	2	114
Exchange difference	(66)	(2)	(68)
June 30, 2021	8,494	106	8,600

June 30, 2022
Lease liabilities (short-term)	875	34	909
Lease liabilities (long-term)	5,955	35	5,990
Total lease liabilities	6,830	69	6,899

June 30, 2021
Lease liabilities (short-term)	954	34	988
Lease liabilities (long-term)	7,540	72	7,612
Total lease liabilities	8,494	106	8,600


	As of
	April 23, 2021
Exercise price at 150% of the IPO of 19.00, in USD (1)	28.50
Forced conversion price, in USD (2)	78.38
Share price in USD (3)	24.85
Risk-free interest rate	0.6	%
Expected volatility (4)	90	%
Expected term	1 month
Dividend yield	—
Recovery rate	5	%
Implied bond yield	7.7	%


		For the Six Months Ended June 30,
	Note	2022	2021
Cash used in operating activities
Loss for the period		(81,035)	(124,096)
Adjustments for non-monetary items:
Share-based compensation expense	15	27,216	32,218
Impairments of Assets	7	1,937	—
Depreciation of property, plant and equipment		517	351
Amortization of intangible assets	11	57	63
Depreciation of right-of-use assets	13	606	799
Gain from reversal of inventory impairment charges	10	—	(6,752)
Share of results in joint venture	8, 12	4,419	1,696
Deferred income taxes		(7,991)	—
Change in defined benefit pension liability		132	165
Convertible loans, derivatives, decrease in fair value	8, 14	(30,310)	(23,222)
Financial income	16	(18,324)	(30)
Financial expense	14, 16	17,917	4,441
Exchange differences		(272)	(251)
Operating loss before working capital changes		(85,131)	(114,618)

Decrease (increase) in accounts receivable, net		9,355	(2,079)
Increase in inventory		(4,282)	(966)
Decrease (increase) in other current assets		3,797	(1,636)

Increase in accounts payable		970	8,982
Increase in income taxes		5,874	347
Decrease in other liabilities and other payables		(791)	(1,156)
Cash used in operating activities		(70,208)	(111,126)

Interest paid		(3,562)	(2,070)
Interest received		36	22
Interest expense on lease obligations	13	101	114
Interest paid under royalty financing transaction	16	(4,446)	—
Taxes paid		(8,813)	(99)
Net cash used in operating activities		(86,892)	(113,159)

Cash used in investing activities
Payment for purchase of property, plant and equipment		(279)	(1,605)
Payment for purchase of intangible assets	11	(1,648)	(1,900)


(in KUSD)	Three months ended June 30,		Six months ended June 30,
	2022	2021	2022	2021
Cost of product sales	2,266	121	2,795	121

R&D
External costs (1)	30,175	21,983	59,343	46,289
Employee expense (2)	18,362	17,550	38,146	32,416
R&D expenses	48,537	39,533	97,489	78,705

S&M
External costs (3)	9,259	5,726	18,170	11,016
Employee expense (2)	8,400	9,495	17,859	18,116
S&M expenses	17,659	15,221	36,029	29,132

G&A
External costs (1)	5,880	5,872	13,519	10,605
Employee expense (2)	12,360	13,495	23,732	26,344
G&A expenses	18,240	19,367	37,251	36,949
Total operating expense	86,702	74,242	173,564	144,907


	Average strike price per share in USD	Number of awards	Weighted average remaining life in years
December 31, 2021	27.23	6,640,200	8.70
Granted	13.11	3,243,719	9.59
Forfeited	27.12	(586,875)	N/A


June 30, 2022	22.31	9,297,044	8.65


	Number of awards	Weighted average grant date fair value
December 31, 2021	663,055	30.95
Granted	2,121,371	9.37
Vested	(137,908)	28.70
Forfeited	(86,572)	23.27
June 30, 2022	2,559,946	13.44


	Three Months Ended	Six Months Ended
	June 30, 2022	June 30, 2022
Share price, in USD	6.55 - 14.83	6.55 - 19.69
Strike price, in USD	6.55 - 14.83	6.55 - 19.69
Expected volatility	70% to 75%	70% to 75%
Award life	6.08	6.08
Expected dividends	—	—
Risk-free interest rate	2.49% - 3.05%	1.46% - 3.05%


(in KUSD)
January 1, 2022						225,477
Less: royalty payments						4,446
Plus: interest expense						11,687
Less: cumulative catch-up adjustment, Financial income (expense), net						18,208
June 30, 2022						214,510

January 1, 2021						—
Proceeds from the sale of future royalties						225,000
Less: transaction costs						6,998
Less: royalty payments						213
Plus: interest expense						6,752
Plus: cumulative catch-up adjustment, Financial expense						936
December 31, 2021						225,477


	Three Months Ended June 30,		Six Months Ended June 30,
(in KUSD, except per share amounts)	2022	2021	2022	2021
Loss attributable to owners	(64,374)	(72,569)	(81,035)	(124,096)
Weighted average number of shares outstanding	76,911,713	76,728,714	76,866,968	76,725,210
Basic and diluted loss per share	(0.84)	(0.95)	(1.05)	(1.62)


	Three Months Ended June 30,
in KUSD	2022	2021	Change
Product revenues, net	17,291	3,760	13,531

Total revenue	17,291	3,760	13,531

Operating expense
Cost of product sales	(2,266)	(121)	(2,145)
Research and development expenses	(48,537)	(39,533)	(9,004)
Selling and marketing expenses	(17,659)	(15,221)	(2,438)
General and administrative expenses	(18,240)	(19,367)	1,127
Total operating expense	(86,702)	(74,242)	(12,460)
Loss from operations	(69,411)	(70,482)	1,071

Other income (expense)



Financial income	16	15	1
Financial expense	(8,801)	(2,555)	(6,246)
Non-operating income (1)	12,875	693	12,182

Total other (expense) income	4,090	(1,847)	5,937
Loss before taxes	(65,321)	(72,329)	7,008
Income tax benefit (expense)	947	(240)	1,187
Net loss	(64,374)	(72,569)	8,195


		Three Months Ended June 30,
in KUSD	P&L Classification	2022	2021	Change
Impairment of assets	Cost of product sales	1,862	—	1,862
Share-based compensation	Research and development (“R&D”) expenses	4,844	5,687	(843)
Share-based compensation	Selling and marketing (“S&M”) expenses	1,671	2,721	(1,050)
Share-based compensation	General and administrative (“G&A”) expenses	7,303	9,859	(2,556)
Fair value adjustment of Facility Agreement derivatives	Non-operating income	14,455	2,053	12,402

Share of Overland ADCT BioPharma net loss	Non-operating income	1,917	1,169	748
Effective interest on the first and second tranche convertible loans	Financial expense	3,126	2,450	676

Accretion expense of deferred royalty obligation	Financial expense	5,545	—	5,545


(in KUSD)	Six months ended June 30,
Net cash (used in) provided by:	2022	2021	Change
Operating activities	(86,892)	(113,159)	26,267
Investing activities	(2,137)	(3,505)	1,368
Financing activities	(510)	49,308	(49,818)
Net change in cash and cash equivalents	(89,539)	(67,356)	(22,183)


	Three Months Ended June 30,		Six Months Ended June 30,
in KUSD (except for share and per share data)	2022	2021	2022	2021
Net loss	(64,374)	(72,569)	(81,035)	(124,096)
Adjustments:
Share-based compensation expense (i)	13,818	18,267	27,728	32,218
Convertible loans, derivatives, change in fair value income (ii)	(14,455)	(2,053)	(30,310)	(23,222)
Convertible loans, first and second tranche, derivatives, transaction costs (iii)	—	148	—	148
Effective interest expense on convertible loans (iv)	3,126	2,450	6,148	4,432
Deferred royalty obligation interest expense (v)	5,545	—	11,687	—
Deferred royalty obligation cumulative catch-up adjustment income (v)	—	—	(18,288)	—
Adjusted net loss	(56,340)	(53,757)	(84,070)	(110,520)

Net loss per share, basic and diluted	(0.84)	(0.95)	(1.05)	(1.62)
Adjustment to net loss per share, basic and diluted	0.11	0.25	(0.04)	0.18
Adjusted net loss per share, basic and diluted	(0.73)	(0.70)	(1.09)	(1.44)
Weighted average shares outstanding, basic and diluted	76,911,713	76,728,714	76,866,968	76,725,210