ADC Therapeutics SA 6-K, filed Aug 18, 2020

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORTOF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2020

---

CommissionFile Number: 001-39071

ADC Therapeutics SA

(Exact name of registrant as specifiedin its charter)

Biopôle

Route de la Corniche 3B

1066 Epalinges

Switzerland

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F	☒	Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ADC Therapeutics SA
By:	/s/ Jennifer Creel
	Name:	Jennnifer Creel
	Title:	Chief Financial Officer

Date: August 18, 2020

EXHIBIT INDEX

Exhibit Number	Description
99.1	Unaudited IFRS Condensed Consolidated Interim Financial Statements as of and for the three and six months ended June 30, 2020
99.2	Management’s Discussion and Analysis of Financial Condition and Results of Operations
99.3	Press Release dated August 18, 2020

Exhibit 99.1

---

Unaudited IFRS Condensed Consolidated Interim Financial Statements as of and for the three and six months ended June 30, 2020

Condensed Consolidated Interim Statement of Income	2
Condensed Consolidated Interim Statement of Comprehensive Income	3
Condensed Consolidated Interim Balance Sheet	4
Condensed Consolidated Interim Statement of Changes in Equity	5-6
Condensed Consolidated Interim Statement of Cash Flows	7
Notes to the Condensed Consolidated Interim Financial Statements	8-23

1

ADC Therapeutics SA

Condensed Consolidated Interim Statementof Income

(in KUSD except for share and per sharedata)

		For the Three Months Ended June<br> 30,						For the Six Months Ended June 30,
	Note	2020			2019			2020			2019
Contract revenue	6		-			1,962			-			2,340
Operating expense
Research and development	7		(25,950	)		(21,760	)		(61,325	)		(46,572	)
General and administrative	8		(18,999	)		(4,089	)		(27,509	)		(6,592	)
Total operating expense			(44,949	)		(25,849	)		(88,834	)		(53,164	)
Loss from operations			(44,949	)		(23,887	)		(88,834	)		(50,824	)
Other income (expense)
Other income			130			-			278			-
Convertible loans, derivatives, increase in fair value	11		(79,261	)		-			(79,261	)		-
Convertible loans, first tranche, derivative, transaction costs	11		(1,571	)		-			(1,571	)		-
Financial income			195			659			569			1,306
Financial expense			(897	)		(36	)		(939	)		(73	)
Exchange differences			(100	)		10			(71	)		(68	)
Total other income (expense)			(81,504	)		633			(80,995	)		1,165
Loss before taxes			(126,453	)		(23,254	)		(169,829	)		(49,659	)
Income tax expense			(104	)		(94	)		(204	)		(199	)
Net loss			(126,557	)		(23,348	)		(170,033	)		(49,858	)
Net loss attributable to:
Owners of the parent			(126,557	)		(23,348	)		(170,033	)		(49,858	)
Net loss per share, basic and diluted	15		(2.01	)		(0.49	)		(2.97	)		(1.05	)

The accompanying notes form an integral part of these condensedconsolidated interim financial statements (Unaudited)

2

ADC Therapeutics SA

Condensed Consolidated Interim Statementof Comprehensive Income(in KUSD)

	For the Three Months Ended<br><br> <br>June 30,						For the Six Months Ended<br><br> <br>June 30,
	2020			2019			2020			2019
Net Loss		(126,557	)		(23,348	)		(170,033	)		(49,858	)
Other comprehensive income
Items that will not be reclassified to profit and loss
Remeasurements of defined benefit plan		-			(16	)		-			(7	)
Total items that will not be reclassified to profit and loss		-			(16	)		-			(7	)
Items that may be reclassified to profit and loss
Currency translation differences		(13	)		(42	)		(215	)		(8	)
Total items that may be reclassified to profit and loss		(13	)		(42	)		(215	)		(8	)
Other comprehensive loss for the period		(13	)		(58	)		(215	)		(15	)
Total comprehensive loss for the period		(126,570	)		(23,406	)		(170,248	)		(49,873	)
Total comprehensive loss attributable to:
Owners of the parent		(126,570	)		(23,406	)		(170,248	)		(49,873	)

The accompanying notes form an integral part of these condensedconsolidated interim financial statements (Unaudited)

3

ADC Therapeutics SA

Condensed Consolidated Interim BalanceSheet(in KUSD)

		June 30,			December 31,
	Note	2020			2019
ASSETS
Current assets
Cash and cash equivalents	9		348,593			115,551
Other current assets			10,532			7,055
Total current assets			359,125			122,606
Non-current assets
Property, plant and equipment			1,260			1,376
Right-of-use assets			4,248			4,898
Intangible assets	10		8,825			8,434
Other long-term assets			384			368
Total non-current assets			14,717			15,076
Total assets			373,842			137,682
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable			6,797			3,329
Other current liabilities			20,211			15,430
Lease liabilities, short-term			1,099			1,132
Current income tax payable			148			52
Convertible loans, short-term	11		3,113			-
Total current liabilities			31,368			19,943
Non-current liabilities
Convertible loans, long-term	11		32,855			-
Convertible loans, derivatives	11		107,058			-
Lease liabilities, long-term			3,334			3,899
Defined benefit pension liabilities			2,925			2,684
Total non-current liabilities			146,172			6,583
Total liabilities			177,540			26,526
Equity attributable to owners of the parent
Share capital	13		5,795			4,361
Share premium	13		792,605			549,922
Treasury shares	13		(4	)		(100	)
Other reserves			16,654			5,473
Cummulative translation adjustment			(146	)		69
Accumulated losses			(618,602	)		(448,569	)
Total equity attributable to owners of the parent			196,302			111,156
Total liabilities and equity			373,842			137,682

The accompanying notes form an integral part of these condensedconsolidated interim financial statements (Unaudited)

4

ADC Therapeutics SA

Condensed Consolidated Interim Statementof Changes in Equity(in KUSD)

For the three and six months ended June 30, 2019
			Share		Share			Other			Shares to			Cummulative Translation			Accumulated			Total
	Note		Capital		Premium			Reserves			be issued			Adjustments			Losses			Equity
January 1, 2019				401		452,268			5,702			-			(43	)		(332,085	)		126,243
Loss for the period				-		-			-			-			-			(26,510	)		(26,510	)
Translation adjustment				-		-			-			-			34			-			34
Remeasurement of defined benefit pension liability				-		-			9			-			-			-			9
Total other comprehensive income / (loss)				-		-			9			-			34			-			43
Total comprehensive income / (loss) for the period				-		-			9			-			34			(26,510	)		(26,467	)
Issuance of share capital		13		1		-			-			-			-			-			1
Transaction costs		13		-		(19	)		-			-			-			-			(19	)
Share-based compensation expense		12		-		-			84			-			-			-			84
Total transactions with owners				1		(19	)		84			-			-			-			66
March 31, 2019				402		452,249			5,795			-			(9	)		(358,595	)		99,842
Loss for the period				-		-			-			-			-			(23,348	)		(23,348	)
Translation adjustment				-		-			-			-			(42	)		-			(42	)
Remeasurement of defined benefit pension liability				-		-			(16	)		-			-			-			(16	)
Total other comprehensive loss				-		-			(16	)		-			(42	)		-			(58	)
Total comprehensive loss for the period				-		-			(16	)		-			(42	)		(23,348	)		(23,406	)
Issuance of share capital		13		22		76,277			-			26,950			-			-			103,249
Transaction costs		13		-		(1,443	)		-			(309	)		-			-			(1,752	)
Share-based compensation expense		12		-		-			56			-			-			-			56
Total transactions with owners				22		74,834			56			26,641			-			-			101,553
June 30, 2019				424		527,083			5,835			26,641			(51	)		(381,943	)		177,989

The accompanying notes form an integral part of these condensedconsolidated interim financial statements (Unaudited)

5

ADC Therapeutics SA

Condensed Consolidated Interim Statementof Changes in Equity(in KUSD)

For the three and six months ended June 30, 2020
			Share		Share			Other		Treasury			Cummulative Translation			Accumulated			Total
	Note		Capital		Premium			Reserves		Shares			Adjustments			Losses			Equity
January 1, 2020				4,361		549,922			5,473		(100	)		69			(448,569	)		111,156
Loss for the period				-		-			-		-			-			(43,476	)		(43,476	)
Translation adjustment				-		-			-		-			(202	)		-			(202	)
Total other comprehensive loss				-		-			-		-			(202	)		-			(202	)
Total comprehensive loss for the period				-		-			-		-			(202	)		(43,476	)		(43,678	)
Share-based compensation expense		12		-		-			3,790		-			-			-			3,790
Total transactions with owners				-		-			3,790		-			-			-			3,790
March 31, 2020				4,361		549,922			9,263		(100	)		(133	)		(492,045	)		71,268
Loss for the period				-		-			-		-			-			(126,557	)		(126,557	)
Translation adjustment				-		-			-		-			(13	)		-			(13	)
Total other comprehensive loss				-		-			-		-			(13	)		-			(13	)
Total comprehensive loss for the period				-		-			-		-			(13	)		(126,557	)		(126,570	)
Shares surrended to redeem share purchase plan promissory notes		13		-		11,208			-		(11,208	)		-			-			-
Issuance of shares through capitalization of reserves		13		393		(393	)		-		-			-			-			-
Issuance of shares to be held as treasury shares		13		34		-			-		(34	)		-			-			-
Grant of shares to settle 2014 incentive plan awards		13		-		(29	)		-		29			-			-			-
Issuance of shares at initial public offering		13		1,007		231,661			-		-			-			-			232,668
Sale of shares under greenshoe option		13		-		23,591			-		11,309			-			-			34,900
Transaction costs, initial public offering and greenshoe option		13		-		(23,355	)		-		-			-			-			(23,355	)
Share-based compensation expense		12		-		-			7,391		-			-			-			7,391
Total transactions with owners				1,434		242,683			7,391		96			-			-			251,604
June 30, 2020				5,795		792,605			16,654		(4	)		(146	)		(618,602	)		196,302

The accompanying notes form an integral part of these condensedconsolidated interim financial statements (Unaudited)

6

ADC Therapeutics SA

Condensed Consolidated Interim Statementof Cash Flows(in KUSD)

			For the Six Months Ended June 30,
	Note		2020			2019
Cash used in operating activities
Loss for the period				(170,033	)		(49,858	)
Adjustments for non-monetary items:
Share-based compensation expense		12		11,181			140
Depreciation of property, plant and equipment				294			269
Amortization of intangible assets				17			13
Depreciation of right-of-use assets				569			513
Change in defined benefit pension liability				189			158
Convertible loans, derivatives, increase in fair value		11		79,261			-
Financial income				(569	)		(852	)
Interest expense on convertible loans		11		868			-
Exchange differences				-			(2	)
Income taxes				204			199
Changes in assets and liabilities:
Decrease in trade accounts receivable				-			182
(Increase) in other current assets				(3,569	)		(277	)
(Decrease) in contract liability		6		-			(2,340	)
Increase / (Decrease) in accounts payable				3,468			(5,579	)
Increase in other liabilities				4,781			906
Cash used in operating activities				(73,339	)		(56,528	)
Interest received				588			970
Interest expense on lease obligations				61			73
Tax refunded (paid)				2			(203	)
Net cash used in operating activities				(72,688	)		(55,688	)
Cash used in investing activities
Payment for purchase of property, plant and equipment				(226	)		(150	)
Payment for purchase of intangible assets		10		(408	)		(1,757	)
Net cash used in investing activities				(634	)		(1,907	)
Cash from financing activities
Proceeds from capital contributions, net of transaction costs				-			74,838
Proceeds from public offering of common shares, net of underwriting fees and other transaction costs		13		244,213			-
Proceeds from convertible loans, net		11		62,896			-
Proceeds from shares to be issued, net of transaction costs				-			26,641
Principal payments of lease obligations				(615	)		(548	)
Net cash from financing activities				306,494			100,931
Net increase in cash and cash equivalents				233,172			43,336
Exchange gain / (losses) on cash and cash equivalents				(130	)		13
Cash and cash equivalents at beginning of the period				115,551			138,807
Cash and cash equivalents at end of the period				348,593			182,156

The accompanying notes form an integral part of these condensedconsolidated interim financial statements (Unaudited)

7

ADC Therapeutics SA

---

Notes to the Condensed Consolidated Interim Financial Statements(Unaudited) – in KUSD except for share and per share data

1.	Corporate information

ADC Therapeutics SA (the “Company” or “ADCT”) was incorporated on June 6, 2011 under the laws of Switzerland. The registered office of the Company is located at Route de la Corniche 3B, 1066 Epalinges, Switzerland. The Company controls two wholly-owned subsidiaries: ADC Therapeutics America, Inc. (“ADCT America”), which was incorporated in Delaware, USA on December 10, 2014, and ADC Therapeutics (UK) Ltd (“ADCT UK”), which was incorporated in England on December 12, 2014. The Company and its two subsidiaries form the ADCT Group (the “Group”).

The Group is focused on the development of antibody drug conjugates, including research, development, human clinical trials, regulatory approval and commercialization. Antibody drug conjugates (“ADCs”) are drug constructs which combine monoclonal antibodies specific to particular types of cells with cytotoxic molecules or warheads which seek to kill any cancer cell to which the ADC attaches. ADCs have extensive potential therapeutic applications in cancer.

These unaudited condensed consolidated interim financial statements were authorized for issue by the Board of Directors on August 12, 2020.

Initial Public Offering(IPO)

On May 19, 2020, the Company completed an IPO on the New York Stock Exchange in which it issued and sold an aggregate of 14,082,475 common shares at USD 19.00 per share, which included 1,836,844 common shares issued and sold pursuant to the underwriters’ exercise in full of their option to purchase additional common shares. The gross proceeds from the IPO were USD 267.6 million, and net proceeds were USD 248.9 million after deducting underwriting discounts and commissions and before deducting fees and expenses payable by the Company. The IPO resulted in a gross increase of USD 255.3 million in the Company’s share premium account prior to transaction costs associated with the IPO share issuance of USD 4.7 million and underwriting discounts and commissions of USD 18.7 million, both of which were charged directly against the Company’s share premium account. Further details are contained in note 13, “Share capital, share premium and treasury shares”.

Going concern basis

ADC Therapeutics SA is a late-clinical-stage company developing innovative therapeutics. The Group is exposed to all risks inherent in establishing and developing its business, including the substantial uncertainty that current projects will succeed. The Group’s success may also depend on its ability to:

·	establish and maintain a strong patent position and protection;
·	enter into collaborations with partners in the pharmaceutical industry;
---	---
·	acquire and retain key personnel; and
---	---
·	acquire additional funding to support its operations.
---	---

Since its incorporation, the Group has primarily funded its growth through capital increases and additional funds provided by research collaborations and, in the most recent quarter, by a public offering and the issuance of convertible loans (see note 11, “Convertible loans”). The Group does not have recourse to bank loans. As a result, the Group is not exposed to liquidity risk through requests for early repayment of loans, other than, pursuant to the convertible loans, it must maintain a balance of at least USD 50 million in cash and cash equivalents at the end of each quarter.

As at June 30, 2020, the Group’s cash and cash equivalents amounted to USD 348.6 million (December 31, 2019: USD 115.6 million).

8

The Board of Directors believes that the Group has sufficient financial resources to cover its operating costs for at least the next 12 months from the date of issuance of these unaudited condensed consolidated interim financial statements and, as a result, is presenting these unaudited condensed consolidated interim financial statements of the Group on a going concern basis.

COVID – 19

On March 11, 2020, the World Health Organization declared the outbreak of the coronavirus disease (“COVID-19”) caused by a novel strain of coronavirus as a pandemic, which continues to spread throughout the United States, the European Union, Switzerland, the United Kingdom and around the world. Since then, COVID-19 has continued to spread, impacting the economies of most countries around the world. The Company’s operations, similar to those of other life sciences companies, have been impacted by the COVID-19 pandemic. As the Company advances its clinical programs, it is in close contact with its principal investigators and clinical sites, which are located in jurisdictions affected by the COVID-19 pandemic, and is assessing the impact of the COVID-19 pandemic on its clinical trials, expected timelines and costs on an ongoing basis. In light of recent developments relating to the COVID-19 pandemic, the primary focus of healthcare providers and hospitals is currently on fighting the novel coronavirus. In addition, in response to the spread of COVID-19, the Company has modified its business practices, including restricting employee travel, developing social distancing plans for its employees and cancelling physical participation in meetings, events and conferences. In addition, certain of the Company’s clinical trials have experienced delays or suspensions in patient enrollment as a result of the COVID-19 pandemic. This partial disruption, even temporary, may severely impact the Company’s operations and overall business by delaying the progress of its clinical trials and preclinical studies. As the COVID-19 pandemic continues to evolve, the Company believes the extent of the impact to its operations, operating results, cash flows, liquidity and financial condition will be primarily driven by the severity and duration of the pandemic, the pandemic’s impact on the U.S. and global economies and the timing, scope and effectiveness of national and local governmental responses to the pandemic, especially in areas where the conditions have recently worsened. Those primary drivers are beyond the Company’s knowledge and control, and as a result, at this time the ultimate impact on the Company's results of operations, cash-flows and financial position in 2020 and thereafter cannot be reasonably predicted. Furthermore, the impact to the Company’s businesses, operating results, cash flows, liquidity and financial condition may be further impacted if the current circumstances continue to exist for a prolonged period of time. However, on the basis of the risk mitigation measures undertaken, the Company has concluded that there is no material uncertainty that may cast a significant doubt upon the Company’s ability to continue as a going concern.

2.	Basis of preparation

Statement of Compliance

These unaudited condensed consolidated interim financial statements as of June 30, 2020 and December 31, 2019 and for the three and six months ended June 30, 2020 have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting (“IAS 34”) and should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2019.

Functional and reportingcurrency

These unaudited condensed consolidated interim financial statements are presented in United States Dollars (“USD”), which is the Company’s functional currency and the Group’s reporting currency.

A subsidiary of the Company, ADCT UK, has a functional currency of the British Pound (“GBP”). The following exchange rates have been used for the translation of the financial statements of ADCT UK:

		2019
/
Closing rate, 1	1.23272		1.26898
Weighted average exchange rate, 1	1.23277		1.29507

All values are in US Dollars.

9

Basis of Consolidation

The unaudited condensed consolidated interim financial statements incorporate the financial statements of the Company and entities controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The consolidated entities include:

	Ownership Interest
	June 30, 2020			June 30, 2019
ADC Therapeutics America, Inc. (“ADCT America”)		100	%		100	%
ADC Therapeutics (UK) Ltd (“ADCT UK”)		100	%		100	%

Use of estimates and judgements

The preparation of the unaudited condensed consolidated interim financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

Estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

In preparing these unaudited condensed consolidated interim financial statements, the significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty included those that applied to the consolidated financial statements for the year ended December 31, 2019.

In addition, significant judgements were required in implementing the Company’s accounting policy for the convertible loans, as set out in note 3, “Significant accounting policies”. In particular, significant judgement was required in deciding whether the conversion option derivative embedded in the notes was of a liability or equity nature, in selecting the appropriate models to value the derivatives arising from the first and second tranches of the convertible notes and in identifying the appropriate key assumptions as inputs to the selected models. Details of the models and assumptions are set out in note 11, “Convertible loans”.

Share split and share consolidation

As explained in note 13, “Share capital, share premium and treasury shares”, on September 19, 2019, the Company effected a one to 15,625 share split of its outstanding shares and, on April 24, 2020, the Company effected a five to four share consolidation of its outstanding shares. Accordingly, all share and per share amounts for all periods presented in these unaudited condensed consolidated interim financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the share split and share consolidation.

3.	Significant accounting policies

The accounting policies applied by the Company in these unaudited condensed consolidated interim financial statements are the same as those applied by the Company in its audited consolidated financial statements as of and for the year ended December 31, 2019 and have been applied consistently to all periods presented in these unaudited condensed consolidated interim financial statements, except as disclosed below.

Convertible loans

The Company entered into a USD 115 million Facility Agreement (see note 11, “Convertible loans”) on April 24, 2020, pursuant to which the counterparty agreed to extend senior secured convertible term loans to the Company in two separate disbursements:

10

(i)	an initial disbursement of convertible loans in the<br>amount of USD 65 million upon the completion of the IPO, and satisfaction of certain other conditions (the “first tranche”)<br>and
(ii)	a subsequent disbursement of convertible loans amounting<br>to USD 50 million upon the receipt of regulatory approval for a specified product candidate, and satisfaction of certain other<br>conditions (the “second tranche”).
---	---

Accounting for the firsttranche

On May 19, 2020 ADCT received convertible loans in the amount of USD 65 million upon completion of the IPO. These convertible loans have been recognized as a hybrid financial instrument and accounted for as two separate components: (i) a loan and (ii) an embedded conversion option derivative.

(i)	The embedded conversion option derivative has been initially measured at fair value and is subsequently<br>remeasured to fair value at each reporting date. Under IAS 32, this derivative could have been classified as a component of equity<br>only if in all cases the contract would be settled by the Company delivering a fixed number of its own equity instruments in exchange<br>for a fixed amount of cash or debt redemption. However, the agreement foresees, in the event of a major transaction, the payment<br>of “make-whole” amounts that would have to be computed in the light of the circumstances and are therefore not fixed.<br>As a result, the derivative is presented in the balance sheet as a liability and classified as non-equity in accordance with IFRS<br>9. Changes in the fair value (gains or losses) of the derivative at the end of each period are recorded in the consolidated statement<br>of income.
(ii)	The convertible loan’s initial fair value is the residual amount of the consideration received,<br>net of attributable costs, after separating out the fair value of the embedded conversion option derivative. The loan is subsequently<br>measured at its amortized cost in accordance with IFRS 9. It is presented in the unaudited condensed consolidated interim balance<br>sheet as a financial liability.
---	---

Expenses and fees payable upon the issuance of the convertible loans have been allocated pro rata to the above two components. The share of expenses allocated to the embedded conversion option derivative has been charged directly to the unaudited condensed consolidated interim statement of income, while the share of expenses allocated to the residual convertible loan has been deducted from the loan.

Accounting for the secondtranche

The Company is obligated to draw down the second tranche in the amount of USD 50 million upon receipt of regulatory approval for a specified drug candidate. This obligation has been accounted for as a derivative, and presented in the unaudited condensed consolidated interim balance sheet as a financial liability with changes in its fair value being recorded directly in the unaudited condensed consolidated interim statement of income at the end of each accounting period.

Newand amended IFRS standards

There are no new IFRS standards, amendments to standards or interpretations that are mandatory for the financial year beginning on January 1, 2020, that are relevant to the Group and that have had any impact in the interim periods. New standards, amendments to standards and interpretations that are not yet effective, which have been deemed by the Group as currently not relevant, are not listed here.

Income tax expense

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss.

11

4.	Financial risk management
4.1	Financial risk factors
---	---

The Group’s activities are exposed to a variety of financial risks: market risk (including currency risk and interest rate risk), credit risk and liquidity risk.

The unaudited condensed consolidated interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the Group’s consolidated financial statements as at December 31, 2019.

There have been no changes in financial risk management since year-end, except with regard to the issuance of the convertible loans, as set out in note 11, “Convertible loans”, in connection with liquidity risk. Under the related agreement, the Company is subject to a covenant that requires it to maintain a balance of at least USD 50 million in cash and cash equivalents at the end of each quarter.

4.2	Fair value estimation

At June 30, 2020, the carrying amount is a reasonable approximation of fair value for the following financial assets and liabilities:

·	Cash and cash equivalents
·	Trade accounts payable
---	---

In the six months ended June 30, 2020, there were no significant changes in the business or economic circumstances that affected the fair value of the Group’s financial assets and financial liabilities.

Fair values have to be estimated on an ongoing basis with regard to awards under the ADC Therapeutics SA 2019 Equity Incentive Plan (the “Equity Incentive Plan 2019”), with regard to the convertible loan conversion option derivative related to the first tranche of the convertible loans and with regard to the derivative arising from the obligation related to the second tranche of the convertible loans. The approach to valuation and the key input factors are described for the share-based compensation awards in note 12, “Share-based compensation” and for the convertible loan derivatives in note 11, “Convertible loans”.

Commonly accepted pricing models (Hull and Goldman Sachs) have been used to calculate the fair value of the convertible loan derivatives. The valuation of the embedded derivative in the first tranche is classified as pertaining to level 2 of the valuation hierarchy set out below and the valuation of the derivative relating to the second tranche is classified as pertaining to level 3 of the valuation hierarchy set out below.

The different levels of the valuation hierarchy have been defined as follows:

(a) Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

(b) Level 2: inputs other than quoted prices that are observable for the asset or liability, either directly (for example, as prices) or indirectly (for example, derived from prices);

(c) Level 3: inputs for the asset or liability that are not based on observable market data.

There were no transfers between the respective levels during the period.

5.	Segment information

Management considers the Group to have only a single segment: R&D. This is consistent with the way that information is reported internally within the Group for the purpose of allocating resources and assessing performance.

12

6.	Contract Revenue

Contract revenue represents the amortization of upfront payments received under license and collaboration contracts in order to finance the research and development that is the subject of those contracts as well as associated milestone payments. In 2013, the Company entered into a license and joint collaboration agreement which was subsequently discontinued in June 2019. As a result of the discontinuance of this joint development program, the remaining balance of the non-refundable upfront payment (consisting of deferred revenue and presented as a contract liability) received under the related license and collaboration agreement was recognized in the first half of 2019 as contract revenue and no additional contracts giving rise to current contract revenue have been entered into by the Company.

The movement in deferred contract revenue, for the three months ended June 30, 2020 and 2019, previously presented under current liabilities, is shown below:

	Three months ended
in KUSD	2020		2019
April 1,		-		1,962
Recognized as contract revenue		-		(1,962	)
June 30,		-		-

The movement in deferred contract revenue, for the six months ended June 30, 2020 and 2019, previously presented under current liabilities, is shown below:

	Six months ended
in KUSD	2020		2019
January 1,		-		2,340
Recognized as contract revenue		-		(2,340	)
June 30,		-		-
7.	Research and development expense
---	---

The following table summarizes research and development expense for the three months ended June 30, 2020 and 2019:

	Three months ended June 30,
in KUSD	2020		2019
External costs ^1^		16,161		16,415
Employee expense ^2^		9,789		5,345
Research and development expense		25,950		21,760
^1^ Includes depreciation expense
---
^2^ Includes share-based compensation expense

The following table summarizes research and development expense for the six months ended June 30, 2020 and 2019:

	Six months ended June 30,
in KUSD	2020		2019
External costs ^1^		42,300		36,041
Employee expense ^2^		19,025		10,531
Research and development expense		61,325		46,572
^1^ Includes depreciation expense
---
^2^ Includes share-based compensation expense

13

The increases in employee expense in the three and six months ended June 30, 2020 are due to an increased number of research and development employees and to increased share-based compensation expense.

8.	General and administrative expense

The following table summarizes general and administrative expense for the three months ended June 30, 2020 and 2019:

	Three months ended June 30,
in KUSD	2020		2019
External costs ^1^		4,421		2,843
Employee expense ^2^		14,578		1,246
General and administrative expense		18,999		4,089
^1^ Includes depreciation expense
^2^ Includes share-based compensation expense

The following table summarizes general and administrative expense for the six months ended June 30, 2020 and 2019:

	Six months ended June 30,
in KUSD	2020		2019
External costs ^1^		8,401		4,062
Employee expense ^2^		19,108		2,530
General and administrative expense		27,509		6,592
^1^ Includes depreciation expense
^2^ Includes share-based compensation expense

The increase in external costs was due in particular to pre-launch commercial activities and to costs and professional fees, partially offset by savings in travel costs due to COVID-19.

The increase in employee expense was primarily due to increased share-based compensation expense and an increased number of general and administrative employees, reflecting principally the recruitment of employees for the Company’s commercial organization.

Employee expense for the three and six months ended June 30, 2020 includes share-based compensation expense relating to the ADC Therapeutics Incentive Plan dated May 1, 2014 and Amended and Restated as of October 1, 2015 (the “Incentive Plan 2014”) and the ADC Therapeutics Ltd 2016 Share Purchase Plan (the “Share Purchase Plan 2016”), both of which terminated upon the effectiveness of the registration statement for the IPO, with all awards vesting as of that date and with all outstanding charges relating to those plans, which were being amortized over the vesting period, being recognized at that moment. The amounts of expense recognized for these plans in the three and six months ended June 30, 2020 were KUSD 6,490 (2019: KUSD 56) and KUSD 7,548 (2019: KUSD 140).

9.	Cash and cash equivalents

Pursuant to the Facility Agreement entered into on April 24, 2020 (see note 11, “Convertible loans”), the Company is subject to a covenant that requires it to maintain a balance of at least USD 50 million in cash and cash equivalents at the end of each quarter, and such amounts are included in cash and cash equivalents on the unaudited condensed consolidated interim balance sheet.

14

10.	Intangible Assets

Licenses are amortized over their useful lives, which are determined on the basis of the expected pattern of consumption of the expected future economic benefits embodied in the licenses and which therefore commence only once the necessary regulatory and marketing approval has been received for the product candidates to which they relate. To date, the Group has not received any regulatory and marketing approval for any of its product candidates. Consequently, the Group did not recognize any amortization expense of licenses.

During the six months ended June 30, 2020, the Company capitalized the following license payments:

·	An amount of KUSD 250 relating to a license agreement with a third party to acquire an antibody<br>to be used in research, development, manufacturing and commercialization was capitalized as intangible assets.
·	An amount of KUSD 125 relating to a license agreement with a third party to use their technology<br>to generate antibody-drug conjugates for up to five antibodies was capitalized as intangible assets.
---	---
11.	Convertible Loans
---	---

Facility agreement

On April 24, 2020, ADCT entered into a USD 115 million Facility Agreement with Deerfield Partners, L.P. and certain of its affiliates (“Deerfield”). Pursuant to such agreement, Deerfield agreed to extend senior secured convertible term loans to the Company in two separate disbursements:

(i)	an initial disbursement of convertible loans in the amount of USD 65 million upon the completion<br>of the IPO, and satisfaction of certain other conditions (the “first tranche”) and
(ii)	a subsequent disbursement of convertible loans amounting to USD 50 million upon the receipt of<br>regulatory approval for a specified product candidate, loncastuximab tesirine (“Lonca” and previously known as ADCT-402),<br>and satisfaction of certain other conditions (the “second tranche”).
---	---

The outstanding principal amount of the convertible loans is due to be repaid in full on the fifth anniversary of the date on which the first tranche was funded being May 19, 2020. However, any conversion of the convertible loans into common shares shall be deemed a repayment of the principal amount of the convertible loans so converted.

The convertible loans bear interest at a rate of 5.95% per annum, based on a 360-day year, with interest payable quarterly in arrears commencing July 1, 2020.

Upon any payment of the convertible loans or conversion of the convertible notes, whether upon redemption or at maturity or at any other time, the Company will be required to pay an exit charge equal to 2.0% of the amount of the loans so paid or converted.

The Company’s obligations under the Facility Agreement are guaranteed by the Company’s wholly-owned subsidiaries and secured by a perfected, first-priority security interest in substantially all of the Company’s and its wholly-owned subsidiaries’ personal property, including its intellectual property and the equity ownership interests directly and indirectly held by the Company in its wholly-owned subsidiaries.

Each convertible loan extended under the Facility Agreement is evidenced by a convertible note. The holder of each of the first tranche of convertible notes is entitled to convert the principal amount of convertible loans evidenced thereby, at its option, into the Company’s common shares at any time at a conversion price per share equal to 130% of the IPO share price, which was USD 19.

The conversion price for the second tranche of convertible notes is the lesser of (i) 150% of the IPO price and (ii) 120% of the average of the volume-weighted average prices of the Company’s common shares on each of the 15 trading days immediately prior to the disbursement date of the second tranche of convertible

15

loans, but in no event less than a floor equal to 81% of the IPO price. If the conversion price of the second tranche of convertible notes is less than the floor price but for the application of the floor, the counterparty will not be obligated to extend the second tranche of convertible loans.

Upon the occurrence of a major transaction, as defined below, the holders of the convertible notes may elect to require the Company to redeem all or any portion of the notes for an amount equal to the principal amount thereof (in addition to accrued and unpaid interest, the make-whole amount and the exit charge) or alternatively the holder may elect to require the Company to convert the unredeemed portion and, in addition, receive a number of additional common shares determined as set forth in the convertible notes (in addition to accrued and unpaid interest and the exit charge). In the case of a successor major transaction, as defined below, the Company may elect to require redemption of any portion of the convertible notes that the holder does not elect to convert in connection with such transaction.

Major transactions include (i) mergers and similar transactions as a result of which the holders of common shares before the transaction no longer hold a majority of the common shares after the transaction or the common shares are changed into the securities of another entity, (ii) sales of assets exceeding 50% of the Company’s enterprise value, (iii) any person or group acquiring beneficial ownership of more than 50% of the Company’s common shares or (iv) the delisting of the Company’s common shares, subject in each case to the more detailed provisions contained in the convertible notes. Successor major transactions include any major transaction in which the Company’s common shares are converted into the right to receive cash, securities of another entity and/or other assets, and any asset sale major transaction in which the Company distributes assets to its shareholders.

The Company will have the right to force conversions of the convertible notes on and after the one-year anniversary of the date on which it has received regulatory approval of Lonca if each of the following is greater than 275% of the conversion price (among other conditions specified in the convertible notes): (1) the volume weighted average price of the common shares on at least 20 trading days during any period of 30 consecutive trading days, (2) the volume weighted average price of the common shares on the last trading day of such period and (3) the closing price of the common shares on the last trading day of such period. The Company will have the right to force conversions of the convertible notes on and after the three-year anniversary of the date on which it has received regulatory approval of Lonca if the same conditions above are satisfied, except that the applicable price described in the preceding sentence need only be greater than 175% of the conversion price.

The Company is obligated to draw down the second tranche upon receipt of regulatory approval for Lonca. If the Company has not received the regulatory approval on or prior to December 31, 2021, the second tranche will automatically terminate on such date.

The Facility Agreement contains various covenants, including a requirement to retain USD 50 million in cash and cash equivalents as of the end of each fiscal quarter.

Bifurcation of first tranche

The first tranche of convertible loans amounting to USD 65 million issued on May 19, 2020 has been accounted for as comprising two components: an embedded conversion option derivative and a loan, as explained in note 3, “Significant accounting policies”.

Valuation of derivative embedded in first tranche

The Company has used an independent valuation firm to assist in calculating the fair value of the embedded conversion option derivative, which is based on the mean of values derived from application of the Hull and Goldman Sachs convertible bond pricing models. Key inputs for the valuations as of June 30, 2020 and April 24, 2020 were as follows:

16

			April 24, 2020
Exercise price, in	24.70			22.10
Forced conversion price, in	67.93			60.78
Share price in	46.81			17.00
Risk-free interest rate	0.3	%		0.4	%
Expected volatility	75	%		82	%
Expected term	58 months			61 months
Dividend yield	-			-
Recovery rate	5	%		5	%
Implied bond yield	17.1	%		21.0	%

All values are in US Dollars.

On the basis of the valuation of the conversion option derivative at April 24, 2020, the USD 65 million amount of the convertible loans was accounted for on inception as follows:

in KUSD	Embedded derivative			Residual<br> loan			Total
Gross proceeds		27,797			37,203			65,000
Less: transaction costs		(1,571	)		(2,102	)		(3,673	)
Net		26,226			35,101			61,327

The transaction costs of the embedded derivative were charged directly to the unaudited condensed consolidated interim statement of income.

On the basis of the valuation of the conversion feature at June 30, 2020, the movement in the value of the embedded derivative was:

in K
Liability related to embedded derivative as of April 24, 2020
Increase in fair value of embedded derivative
Liability related to embedded derivative as of June 30, 2020

All values are in US Dollars.

The increase in fair value of the embedded derivative is primarily due to the increase in the fair value of the underlying shares from April 24, 2020 to June 30, 2020.

Accounting for residual loan of first tranche

As illustrated in the table above and in accordance with IFRS 9, the transaction costs of the residual convertible loan (net of the value of the embedded derivative) were deducted from the loan to arrive at the deemed net present value as of May 19, 2020 of all future cash outflows associated with the loan. The implied effective interest rate that would be needed to increase the book value of the loan to cover all future outflows, taking into account the deduction of transaction costs from the initial loan balance and based on a 365 day year, was computed at inception at 23% and will be applied over the life of the loan.

For both the three and six months ended June 30, 2020, the Company recorded interest expense related to the interest payable on the residual convertible loan (net of the value of the embedded conversion option derivative) in the amount of KUSD 868, based on the implied effective interest rate.

The amount at which the convertible loan is presented as a liability in the unaudited condensed consolidated interim balance sheet represents the net present value of all future cash outflows associated with the loan discounted at the implied effective interest rate. The net present value of those cash outflows occurring within twelve months of the balance sheet date discounted at the same rate is presented as a short-term liability. The remainder of the amount is presented as a long-term liability.

17

Accounting for secondtranche

The obligation to draw down the second tranche under the terms specified in the Facility Agreement has been accounted for as a derivative. The Company has used an independent valuation firm to assist in calculating the fair value of the derivative, which is based on the mean of values derived from application of the Hull and Goldman Sachs convertible bond pricing models. Key inputs for the valuation as of June 30, 2020 were as follows:

Exercise price, in	28.50
Forced conversion price, in	78.38
Share price in	46.81
Risk-free interest rate	0.3	%
Expected volatility	75	%
Expected term	11 months
Dividend yield	-
Recovery rate	5	%
Implied bond yield	9.9	%

All values are in US Dollars.

In addition to the key inputs disclosed above for the second tranche, the Company estimated the probability of achieving regulatory approval for Lonca. For purposes of its June 30, 2020 valuation, the Company estimated it was highly probable that it would receive regulatory approval for Lonca. Significant changes which increase or decrease the probabilities of achieving the related regulatory events, or shorten or lengthen the time required to achieve such events would result in a corresponding increase or decrease in the fair value of this derivative liability. On this basis, the fair value of the derivative has been calculated as of June 30, 2020 at an amount of KUSD 21,811 and has been presented in the unaudited condensed consolidated interim balance sheet as a financial liability.

The value of the derivative is directly correlated with the estimate of probability. An increase or decrease of 10% in the estimated probability would have resulted in an increase or decrease in the value of the derivative of KUSD 2,181.

The increase in fair value of the derivative is primarily due to the increase in the fair value of the Company’s common shares from April 24, 2020 to June 30, 2020 and has been charged directly to the unaudited condensed consolidated interim statement of income.

Convertible loans, derivatives

The convertible loan derivative liabilities presented in the unaudited condensed consolidated interim balance sheet comprise:

	As of
in KUSD	June 30,<br>  2020		December 31, 2019
First tranche, embedded derivative		85,247		-
Second tranche, derivative		21,811		-
		107,058		-

Convertible loans, derivatives,increase in fair value

The increase in fair value of the convertible loan derivatives presented in the unaudited condensed consolidated interim statement of income for the three and six months ended June 30 comprises:

18

	Three and six months ended
in KUSD	June 30,<br>  2020		June 30,<br>  2019
First tranche, embedded derivative		57,450		-
Second tranche, derivative		21,811		-
		79,261		-
12.	Share-based compensation
---	---

Share data have been revised to give effect to the share split and share consolidation as explained in note 2, “Share split and share consolidation”.

Share Purchase Plan 2013 and Share PurchasePlan 2016

Under the terms of the 2013 and 2016 promissory notes issued in connection with the share purchase plans, in the case of an IPO the relevant plan participants were required to repay the outstanding amounts under the promissory notes prior to the IPO by delivering such number of shares of equivalent value to cover the amount to be repaid. In anticipation of the IPO, each of the plan participants holding promissory notes entered into loan settlement agreements with the Company dated as of April 15, 2020 pursuant to which they repaid all amounts outstanding under the promissory notes, including accrued interest, by delivering such number of shares of equivalent value to cover the amount outstanding under the promissory notes.

After consideration of all relevant factors, the Board of Directors determined the value of such shares delivered pursuant to the loan settlement agreements as of the settlement date to be USD 18.75 per share, resulting in the delivery of an aggregate of 597,774 common shares by all plan participants for the settlement of the promissory notes. These shares were held by the Company as treasury shares.

These transactions resulted in the termination of both plans on May 15, 2020. All compensation expense relating to the ADC Therapeutics Ltd 2013 Share Purchase Plan (the “Share Purchase Plan 2013”) was recognized in prior periods. Unrecognized expense relating to the Share Purchase Plan 2016 amounting to KUSD 6,425 was charged to the unaudited condensed consolidated interim statement of income and credited to “Other reserves” on completion of these transactions.

Incentive Plan 2014

All existing awards under the Incentive Plan 2014 vested and were settled in shares upon the completion of the IPO. The Company calculated for each participant the gain arising from the difference between the exercise price and the USD 19 IPO price, undertook to settle in cash on behalf of the participant any associated tax and social charges liability, and transferred to the participant the remaining balance in treasury shares, valued at USD 19 per share. A total of 356,144 shares were transferred to participants and an amount of KUSD 5,343 was withheld for tax and social charges.

For participants whose awards had an exercise price greater than USD 19 — i.e., were “out-of-the-money” — the Company made an equal number of new awards under the Equity Incentive Plan 2019 (see below) with an exercise price of USD 19 and with a vesting period of only three years instead of the usual four years. These new awards have been accounted for as a modification of the previous awards under the Incentive Plan 2014. Accordingly, the original compensation expense calculated for the old awards that were “out-of-the-money” will continue to be recognized over their remaining vesting period while the expense to be recognized for the new awards under the Equity Incentive Plan 2019 will be limited to the incremental fair value of the new awards over the fair value, as of May 15, 2020, of the old awards.

Equity Incentive Plan 2019

The cumulative amount credited to “Other reserves” in respect of the Equity Incentive Plan 2019 is KUSD 9,094 as of June 30, 2020. The amounts of expense recognized for services received during the three and six months ended June 30, 2020 are KUSD 6,130 and KUSD 8,746, respectively.

19

The following table summarizes the awards outstanding as of June 30, 2020:

	Average strike price per share in	Number of awards			Weighted average remaining life in years
December 31, 2019			1,020,434			9.96
Granted			2,247,074			9.76
Forfeited			(19,985	)		-
June 30, 2020			3,247,523			9.69

All values are in US Dollars.

The awards granted during the six months ended June 30, 2020 include 388,333 awards that were made to compensate holders of “out-of-the-money” awards under the Incentive Plan 2014 that expired on May 15, 2020. Awards outstanding as of June 30, 2020 and December 31, 2019, expire in 2029. There were no awards exercised during the six months ended June 30, 2020.

The fair values of the options granted during the three and six months ended June 30, 2020 and 2019 were determined on the date of the grant using the Black-Scholes option-pricing model with the following assumptions:

	Three Months Ended				Six Months Ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
Weighted average share price		15.95 - 34.99		-		15.95 - 34.99		-
Strike price		18.75 - 34.99		-		18.75 - 34.99		-
Expected volatility		85% - 206		-		85% - 206		-
Award life		5.02 - 5.85		-		5.02 - 5.85		-
Expected dividends		0		-		0		-
Risk-free interest rate		0.36% - 0.47		-		0.36% - 0.70		-

All values are in US Dollars.

The Company has used an independent valuation firm to assist in calculating the fair value of the award grants per participant.

The expected volatility was based on historical volatility and selected volatility was based on median values observed among comparable public companies.

The award life is based on the time interval between the date of grant and the date during the ten-year life after which, when making the grant, the Company expected on average that participants would exercise their options.

Share-based Compensation Reserves

The movement in the Share-based Compensation Reserves (included in “Other reserves”) is as follows:

	Three months ended					Six months ended
in KUSD	June 30, 2020			June 30, 2019		June 30, 2020			June 30, 2019
Share Purchase Plan 2013		-			-		-			-
Incentive Plan 2014		179			10		361			23
Share Purchase Plan 2016		6,425			46		7,417			117
Equity Incentive Plan 2019		6,130			-		8,746			-
Tax and social charge deductions - Incentive Plan 2014		(5,343	)		-		(5,343	)		-
Total		7,391			56		11,181			140
13.	Share Capital, share premium and treasury shares
---	---

Share data have been revised to give effect to the share split and share consolidation as explained in note 2, “Share split and share consolidation”.

20

The movements in the Company’s share capital, share premium and treasury shares accounts in the six months ended June 30, 2020 are set out in the following table:

		Issued<br> share capital	Share<br> premium			Treasury<br> shares			Increase<br> / (Decrease) in net assets			Price per share		Treasury<br> shares			Outstanding<br> share capital
		In<br> K												Number<br> of shares (held or received) / delivered			Number<br> of shares outstanding
April 15, 2020	Shares surrendered by Share Purchase Plan 2013 and Share<br> Purchase Plan 2016 participants to settle share purchase plan promissory notes (see note 12)			11,208			(11,208	)		-		18.75	-		(597,774	)		(597,774	)
April 16, 2020	Issuance of shares per shareholders' agreement addendum through<br> capitalization of reserves			(393	)		-			-		CHF 0.08	4,777,996		-			4,777,996
April 24, 2020	Elimination of fractional shareholdings			-			-			-		CHF 0.08	-		51			51
May 15, 2020	Issuance of shares to be held as treasury shares			-			(34	)		-		CHF 0.08	408,873		(408,873	)		-
May 15, 2020	Grant of shares to settle Incentive Plan 2014 awards, net (see note<br> 12)			(29	)		29			-		CHF 0.08	-		356,144			356,144
May 15, 2020	Issuance of shares at IPO			231,661			-			232,668		19.00	12,245,631		-			12,245,631
May 15, 2020	Sale of shares under greenshoe option			23,591			11,309			34,900		19.00	-		1,836,844			1,836,844
May 15, 2020	Transaction costs, IPO and greenshoe option			(23,355	)		-			(23,355	)		-		-			-
	Movements in the period			242,683			96			244,213			17,432,500		1,186,392			18,618,892
December 31, 2019	Balances reported at December 31, 2019, revised for share consolidation			549,922			(100	)					53,337,500		(1,240,540	)		52,096,960
	Balance at June 30, 2020			792,605			(4	)					70,770,000		(54,148	)		70,715,852

All values are in US Dollars.

Upon the completion of the IPO, all of the Company’s issued Class B, C, D and E preferred shares were converted into common shares on a one-to-one basis.

14.	Related parties

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions.

A.T. Holdings II Sàrl (“AT Holdings II”) is a shareholder in the Company. AT Holdings II is in turn ultimately wholly owned by Auven Therapeutics Holdings, L.P. (“ATH”), a limited partnership registered in the British Virgin Islands. ATH’s General Partner is Auven Therapeutics General L.P., which itself is a limited partnership whose General Partner is Auven Therapeutics GP Ltd. The manager of ATH is Auven Therapeutics Management L.L.L.P. (“ATM”).

Services provided by theCompany

The Company provides registered office and other simple administrative services to four subsidiaries of ATH. The amounts invoiced for the three months and six months ended June 30, 2020, recognized as general and administrative expense, amounted to KUSD 1 and KUSD 2 respectively (three and six months ended June 30, 2019: KUSD 1 and KUSD 2).

21

Other transactions with related parties

Of the 597,774 shares surrendered by Share Purchase Plan 2013 and Share Purchase Plan 2016 participants to settle share purchase plan promissory notes on April 15, 2020 (see note 13, “Share capital, share premium and treasury shares”), 556,799 were surrendered by related parties.

Of the 4,777,996 shares issued by way of capitalization of reserves on April 16, 2020 (see note 13, “Share capital, share premium and treasury shares”), 1,222,966 shares were issued to related parties.

Chairman’s equityawards

The Company granted the Chairman, Mr. Squarer, options to acquire 1,125,545 common shares at $18.75 per share in connection with his election to the Board of Directors, representing approximately 2% of our then-outstanding share capital. These options are scheduled to vest upon Mr. Squarer’s continued service through designated dates over a three year period, or immediately upon a change in control. In accordance with its agreement with Mr. Squarer, the Company provided Mr. Squarer with an additional grant of 341,403 options on June 4, 2020 with an exercise price equal to the fair market value of the Company’s shares on that date, to bring Mr. Squarer’s total rights to acquire the Company’s shares to 2% of the then-outstanding share capital (measured without consideration of the shares underlying these grants).

Key management compensation

The compensation of key management is shown below:

	Three months ended				Six months ended
in KUSD	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
Salaries and other short-term employee costs		1,666		1,242		3,254		2,477
Pension costs		107		98		256		183
Share-based compensation expense		6,025		42		7,599		107
Other compensation		22		-		83		-
Total		7,820		1,382		11,192		2,767
15.	Loss per share
---	---
	Three Months Ended						Six Months Ended
---	---	---	---	---	---	---	---	---	---	---	---	---
(in KUSD, except per share amounts)	June 30, 2020			June 30, 2019			June 30, 2020			June 30, 2019
Loss attributable to owners		(126,557	)		(23,348	)		(170,033	)		(49,858	)
Weighted average number of shares outstanding ^1^		62,863,866			47,654,258			57,225,939			47,297,859
Basic and diluted loss per share		(2.01	)		(0.49	)		(2.97	)		(1.05	)
^1^	Share data have been revised to give effect to the share split and share consolidation as explained<br>in note 2, “Share split and share consolidation”.
---	---

As all Class B, C, D and E preferred shares were converted into common shares upon the completion of the IPO, loss per share data are presented on that basis for all periods.

For the three and six months ended June 30, 2020 and 2019, basic and diluted loss per share are calculated on the weighted average number of shares issued and outstanding and exclude shares to be issued under the Equity Incentive Plan 2019, as the effect of including those shares would be anti-dilutive.

Potentially dilutive securities that were not included in the diluted per share calculations because the effect of including them would be anti-dilutive were as follows:

22

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Share options under the Incentive Plan 2014		-		2,137,437		-		2,130,967
Shares under the Share Purchase Plan 2016		-		962,500		-		962,500
Share options under the Equity Incentive Plan 2019		2,784,467		-		1,999,022		-
Conversion of the principal amount of convertible loans into the Company’s common shares		1,766,917		-		888,340		-
		4,551,384		3,099,937		2,887,362		3,093,467
16.	Events after the reporting date
---	---

The Company has evaluated its subsequent events through August 12, 2020, the date the unaudited condensed consolidated interim financial statements were available to be issued, and has concluded that there are no subsequent events requiring disclosure in these unaudited condensed consolidated interim financial statements.

23

Exhibit 99.2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT’S DISCUSSION AND ANALYSISOF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This management’s discussion and analysis is designed to provide you with a narrative explanation of our financial condition and results of operations. You should read this discussion and analysis in conjunction with our unaudited condensed consolidated interim financial statements, including the notes thereto, as of and for the three and six months ended June 30, 2020 included as Exhibit 99.1 to the Report on Form 6-K to which this discussion and analysis is included as Exhibit 99.2. You should also read this discussion and analysis in conjunction with our audited consolidated financial statements, including the notes thereto, included in our Registration Statement on Form F-1, as amended (Registration No. 333-237841) (the “Registration Statement”).

Our unaudited condensed consolidated interim financial statements were prepared in accordance with International Accounting Standard 34, Interim FinancialReporting. Our audited consolidated financial statements were prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). None of our financial statements were prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The terms “dollar,” “USD” or “$” refer to U.S. dollars and the term “Swiss franc” and “CHF” refer to the legal currency of Switzerland, unless otherwise indicated. We have made rounding adjustments to some of the figures included in this discussion. Accordingly, any numerical discrepancies in any table between totals and sums of the amounts listed are due to rounding.

Unless otherwise indicated or the context otherwise requires, all references in this discussion and analysis to “ADC Therapeutics” or “ADCT,” the “Company,” “we,” “our,” “ours,” “us” or similar terms refer to ADC Therapeutics SA and its consolidated subsidiaries.

Overview

We are a late clinical-stage oncology-focused biotechnology company evolving into a commercial-stage company as we prepare for the launch of our lead product candidate, if approved. We are a pioneer in the development of highly potent and targeted antibody drug conjugates (“ADCs”) for patients suffering from hematological malignancies and solid tumors. We develop our ADCs by applying our decades of experience in this field and using next-generation pyrrolobenzodiazepine (“PBD”) technology to which we have proprietary rights for our targets. We are leveraging our R&D strengths, our disciplined approach to target selection and our preclinical and clinical development strategy to generate a diverse and balanced portfolio and research pipeline. Our hematology franchise comprises three clinical-stage product candidates, loncastuximab tesirine (“Lonca” and previously known as ADCT-402), camidanlumab tesirine (“Cami” and previously known as ADCT-301) and ADCT-602. Our solid tumor franchise comprises two clinical-stage product candidates, Cami and ADCT-601, and two preclinical product candidates, ADCT-901 and ADCT-701. We retain exclusive worldwide development and commercialization rights to all of our product candidates, other than Cami for which we have a collaboration and license agreement with Genmab A/S. Our commercial organization has initiated pre-launch market activities and is leveraging our team’s deep industry experience to maximize the commercial potential of any approved products.

Our two lead product candidates, Lonca and Cami, have demonstrated significant clinical activity across a broad population of heavily pre-treated patients, while maintaining tolerability profiles that we believe are manageable. We have evaluated Lonca in a 145-patient pivotal Phase 2 clinical trial for the treatment of relapsed or refractory diffuse large B-cell lymphoma (“DLBCL”) that showed a 48.3% overall response rate (“ORR”) and 24.1% complete response rate (“CRR”) with a manageable toxicity profile, as of April 2020. We intend to submit a biologics license application (“BLA”) to the U.S. Food and Drug Administration (“FDA”) in the second half of 2020 for Lonca for the treatment of relapsed or refractory DLBCL and to concurrently commence a confirmatory Phase 3 clinical trial of Lonca in combination with rituximab that, if successful, may serve as the basis for a supplemental BLA of Lonca for the treatment of relapsed or refractory DLBCL. We are also conducting a Phase 1/2 clinical trial of Lonca in combination with ibrutinib for the treatment of relapsed or refractory DLBCL and mantle cell lymphoma (“MCL”) that showed a 75.0% ORR and a 58.3% CRR with a manageable toxicity profile as of April 6, 2020 at the dose that will be used in the pivotal Phase 2 part of the clinical trial. In July 2020, we dosed the first patient in the Phase 2 portion of this clinical trial. We also had an end-of-Phase 1 meeting with the FDA in the second quarter of 2020 to discuss a potential pivotal Phase 2 clinical trial of Lonca for the treatment of relapsed or refractory follicular lymphoma (“FL”) that we expect to commence in the first half of 2021.

In addition, we are evaluating Cami in a 100-patient pivotal Phase 2 clinical trial for the treatment of relapsed or refractory Hodgkin lymphoma (“HL”) and have enrolled 47 patients as of June 30, 2020. We have completed

enrollment of a 133-patient Phase 1 clinical trial of Cami for the treatment of relapsed or refractory HL and non-Hodgkin lymphoma (“NHL”) that has shown an 86.5% ORR in patients with HL at the initial dose for our pivotal Phase 2 clinical trial and a 44.0% ORR in a subset of patients with T-cell lymphoma as April 2019. We believe that our pivotal Phase 2 clinical trial of Cami for the treatment of HL, if successful, will support a BLA submission. We are also evaluating Cami in a Phase 1b clinical trial as a novel immuno-oncology approach for the treatment of various advanced solid tumors.

Recent Developments

Impact of the COVID-19Pandemic

On March 11, 2020, the World Health Organization declared the outbreak of the coronavirus disease (“COVID-19”) caused by a novel strain of coronavirus as a pandemic, which continues to spread throughout the United States, the European Union, Switzerland, the United Kingdom and around the world. Since then, COVD-19 has continued to spread, impacting the economies of most countries around the world. Our operations, similar to those of other life sciences companies, have been impacted by the COVID-19 pandemic. As the COVID-19 pandemic continues to evolve, we believe the extent of the impact to our operations, operating results, cash flows, liquidity and financial condition will be primarily driven by the severity and duration of the pandemic, the pandemic’s impact on the U.S. and global economies and the timing, scope and effectiveness of national and local governmental responses to the pandemic, especially in areas where the conditions have recently worsened. Those primary drives are beyond our knowledge and control, and as a result, at this time the ultimate impact on our results of operations, cash-flows and financial position in 2020 and thereafter cannot be reasonably predicted. We are continuously assessing and adapting our working practices and business operations to ensure compliance with official guidance and containment measures related to the pandemic, and we are working proactively with our partners and other stakeholders to take steps to mitigate and minimize any negative impact of the COVID-19 pandemic on our research and development programs, clinical trials, regulatory submissions, commercialization preparations and other business operations. With respect to our clinical-stage product candidates:

·	Pivotal Phase 2 Clinical Trial of Lonca in Relapsed or Refractory DLBCL: This clinical trial<br>has completed recruitment. Patients continue in follow-up, and data are being collected. We anticipate submitting a BLA in the<br>second half of 2020, and we do not expect the COVID-19 pandemic to have a material impact on the submission.
·	Other Clinical Programs: We are not currently aware of any material impact of the COVID-19<br>pandemic on our clinical trial enrollment, timelines or expenses. However, the ultimate impact of the COVID-19 pandemic is highly<br>uncertain and subject to change.
---	---

Pivotal Phase 2Clinical Trial of Lonca in Relapsed or Refractory Diffuse Large B-Cell Lymphoma

At the European Hematology Association meeting in June 2020, we reported additional data from our 145-patient pivotal Phase 2 clinical trial of Lonca for the treatment of relapsed or refractory DLBCL.

As of April 2020, the main observed efficacy findings were as follows:

·	The ORR was 48.3%, with 24.1% of patients achieving a complete response and another 24.1% of patients<br>achieving a partial response.
·	Lonca’s significant clinical activity was observed across a broad patient population in this<br>clinical trial, including transplant eligible and ineligible patients, patients who have not responded to first-line therapy or<br>any prior therapy, patients with bulky disease, double-hit and triple-hit disease and transformed disease and patients who have<br>received prior CD19 therapies and SCT.
---	---
·	The median duration of response (“DoR”) was 10.25 months for responding patients.
---	---

As of April 2020, the main observed safety and tolerability findings were as follows:

·	Grade ≥3 treatment emerging adverse events (“TEAEs”) were reported in 72.4% of patients.<br>The most common Grade ≥3 TEAEs that were reported in more than 10% of patients included neutropenia (25.5% of

patients), thrombocytopenia (17.9% of patients), gamma-glutamyltransferase increase (16.6% of patients) and anemia (10.3% of patients).

We intend to submit a BLA to the FDA in the second half of 2020 for Lonca for the treatment of relapsed or refractory DLBCL. In addition, we intend to commence a Phase 3 randomized confirmatory clinical trial of Lonca in combination with rituximab for the treatment of relapsed or refractory DLBCL concurrently with the BLA submission. We believe that this clinical trial, if successful, will support a supplemental BLA for Lonca to be used as a second-line therapy for the treatment of relapsed or refractory DLBCL.

Pivotal Phase 1/2Clinical Trial of Lonca in Combination with Ibrutinib in Relapsed or Refractory Diffuse Large B-Cell Lymphoma and Mantle Cell Lymphoma

At the European Hematology Association meeting in June 2020, we reported interim results from 25 patients of the Phase 1/2 clinical trial of Lonca combined with ibrutinib in relapsed or refractory DLBCL and MCL.

The main observed efficacy findings for 12 evaluable patients (11 non-germinal center B-cell like (“non-GCB”) DLBCL patients and 1 MCL patient) at the recommended Phase 2 dose of 60 µg/kg were as follows:

·	The ORR was 75.0%, with 58.3% of patients achieving a complete response.
·	The encouraging efficacy of the combination of Lonca and ibrutinib was observed across a broad<br>population of patients with poor prognosis, including patients who have not responded to first-line therapy or any prior therapy,<br>patients with bulky disease, double-hit and triple-hit disease and transformed disease.
---	---

The main observed safety and tolerability findings were as follows:

·	Grade ≥3 TEAEs were reported in 56% of patients. The most common Grade ≥3 TEAEs that were<br>reported in more than 10% of patients were thrombocytopenia (20.0% of patients) and anemia (12.0% of patients).
·	Lonca 60 µg/kg with ibrutinib 560 mg/day was identified as the maximum tolerated dose (“MTD”).
---	---

In July 2020, we dosed the first patient in the Phase 2 portion of this clinical trial. The Phase 2 portion of the clinical trial will enroll three cohorts: non-germinal center B-cell like DLBCL, germinal center B-cell-like DLBCL and MCL.

Pivotal Phase 2Clinical Trial of Cami in Relapsed or Refractory Hodgkin Lymphoma

In July 2020, we announced that the FDA has lifted the partial clinical hold that was placed on our pivotal Phase 2 clinical trial of Cami for the treatment of relapsed or refractory HL. We have resumed patient enrollment for this clinical trial.

Results of Operations

Comparison of the Three Months EndedJune 30, 2020 and 2019

The following table summarizes our results of operations for the three months ended June 30, 2020 and 2019:

	For the Three Months Ended June 30,
in KUSD	2020			2019			Change
Contract revenue		-			1,962			(1,962	)
Operating expense
Research and development		(25,950	)		(21,760	)		(4,190	)
General and administrative		(18,999	)		(4,089	)		(14,910	)
Total operating expense		(44,949	)		(25,849	)		(19,100	)
Loss from operations		(44,949	)		(23,887	)		(21,062	)
Other income (expense)
Other income		130			-			130
Convertible loans, derivatives, increase in fair value		(79,261	)		-			(79,261	)
Convertible loans, first tranche, derivative, transaction costs		(1,571	)		-			(1,571	)
Financial income		195			659			(464	)
Financial expense		(897	)		(36	)		(861	)
Exchange differences		(100	)		10			(110	)
Total other income (expense)		(81,504	)		633			(82,137	)
Loss before taxes		(126,453	)		(23,254	)		(103,199	)
Income tax expense		(104	)		(94	)		(10	)
Net loss		(126,557	)		(23,348	)		(103,209	)

Notable items impacting the results for the three monthsended June 30 included:

	Three months ended June 30,
in KUSD	2020		2019		Change
Research and development - share-based compensation		2,189		37		2,152
General and administrative - share-based compensation		10,545		19		10,526
Convertible loans, derivatives, increase in fair value		79,261		-		79,261
Convertible loans, first tranche, derivative, transaction costs		1,571		-		1,571

Contract revenue

Contract revenue decreased to nil for the three months ended June 30, 2020 from $2.0 million for the three months ended June 30, 2019, a decrease of $2.0 million, or 100.0%. The decrease was due to the discontinuance of the joint clinical development of MEDI3726 and the recognition during the three months ended June 30, 2019 of the remaining non-refundable upfront payment (consisting of deferred revenue and presented as a contract liability in our consolidated balance sheet) of $2.3 million that existed as of December 31, 2018.

Research and development expense

The following table summarizes our research and development expense for the three months ended June 30, 2020 and 2019:

	Three months ended June 30,
in KUSD	2020		2019		Change
External costs ^1^		16,161		16,415		(254	)
Employee expense ^2^		9,789		5,345		4,444
Research and development expense		25,950		21,760		4,190

^1^ Includes depreciation expense

^2^ Includes share-based compensation expense

Our research and development expense increased to $26.0 million for the three months ended June 30, 2020 from $21.8 million for the three months ended June 30, 2019, an increase of $4.2 million, or 19.3%. The increase was primarily due to increased employee expense associated with an increased number of research and development employees and increased share-based compensation expense.

The following table summarizes our research and development expense for our major development programs for the three months ended June 30, 2020 and 2019:

	Three months ended June 30,
in KUSD	2020		2019		Change
Lonca		12,261		9,143		3,118
Cami		7,365		5,277		2,088
ADCT-602		758		328		430
ADCT-601		740		1,013		(273	)
Preclinical product candidates, research pipeline		3,465		5,722		(2,257	)
Not allocated to specific programs		1,361		277		1,084
Research and development expense		25,950		21,760		4,190

The increase in research and development expense related to Lonca was due to ongoing activities for the pivotal Phase 2 trial of Lonca for the treatment of relapsed or refractory DLBCL, increased activities in support of the BLA submission for Lonca, including chemistry manufacturing & controls (“CMC”), and combination clinical trials for Lonca.

The increase in research and development expense related to Cami was due to an increase in CMC activities, as well as the ramp-up related to the Phase 1b clinical trial of Cami for the treatment of selected advanced solid tumors.

The decrease in research and development expense related to preclinical product candidates and research pipeline was due to the impact of COVID-19 and the closing of our laboratories in the UK. The UK laboratories have since reopened.

General and administrative expense

The following table summarizes our general and administrative expense for the three months ended June 30, 2020 and 2019:

	Three months ended June 30,
in KUSD	2020		2019		Change
External costs ^1^		4,421		2,843		1,578
Employee expense ^2^		14,578		1,246		13,332
General and administrative expense		18,999		4,089		14,910

^1^ Includes depreciation expense

^2^ Includes share-based compensation expense

Our general and administrative expense increased to $19.0 million for the three months ended June 30, 2020 from $4.1 million for the three months ended June 30, 2019, an increase of $14.9 million, or 364.6%. The increase was primarily due to higher employee expense associated with increased share-based compensation expense of $10.5 million. General and administrative expense also increased as a result of additional employee headcount primarily

relating to the recruitment of commercial employees as we prepare for the anticipated launch of Lonca in 2021, which resulted in employee expense of $1.3 million.

Employee expense for the three months ended June 30, 2020 includes share-based compensation expense relating to the ADC Therapeutics Incentive Plan dated May 1, 2014 and Amended and Restated as of October 1, 2015 (the “2014 Incentive Plan”) and the ADC Therapeutics Ltd 2016 Share Purchase Plan (the “2016 Share Purchase Plan”), both of which terminated upon the effectiveness of the registration statement for our initial public offering, with all awards vesting as of that date and with all outstanding charges relating to those plans, which were being amortized over the vesting period, having to be recognized at that time. The amount of expense recognized for these plans in the three months ended June 30, 2020 was $6.5 million, which is included in the share-based compensation expense noted above. Share-based compensation expense under the ADC Therapeutics SA 2019 Equity Incentive Plan (the “2019 Equity Incentive Plan”) was also recognized in the three months ended June 30, 2020 and will continue to arise in the future.

Other income and expense

The following table summarizes our other income and expense for the three months ended June 30, 2020 and 2019:

	For the Three Months Ended June 30,
in KUSD	2020			2019			Change
Other income		130			-			130
Convertible loans, derivatives, increase in fair value		(79,261	)		-			(79,261	)
Convertible loans, first tranche, derivative, transaction costs		(1,571	)		-			(1,571	)
Financial income		195			659			(464	)
Financial expense		(897	)		(36	)		(861	)
Exchange differences		(100	)		10			(110	)
Total other income (expense)		(81,504	)		633			(82,137	)

Other income

We recognize as other income amounts received and receivable by our subsidiary, ADC Therapeutics (UK) Limited, under the United Kingdom’s Research and Development Expenditure Credit scheme. For the three months ended June 30, 2020, we recognized $0.1 million in respect of fiscal year 2020 in other income. For the three months ended June 30, 2019, we did not recognize any such income.

Convertible loans, derivatives, increasein fair value

This charge is explained in note 11, “Convertible loans”, to the unaudited condensed consolidated interim financial statements. Pursuant to the Facility Agreement, dated April 24, 2020 (the “Facility Agreement”), with Deerfield Partners, L.P. and certain of its affiliates (collectively, “Deerfield”), the Company has drawn down the first tranche of the convertible loans amounting to $65 million on May 19, 2020 and is obligated to draw down the second tranche amounting to $50 million upon the receipt of regulatory approval for Lonca. The conversion option derivative embedded in the first tranche is remeasured at fair value at the end of each accounting period. The obligation arising from the second tranche is accounted for as a derivative and is also remeasured at fair value at the end of each accounting period. Any movement in these fair values is recognized in the unaudited condensed consolidated interim statement of income. The significant increase in the fair values in the period is due to the increase in the price of our common shares since our initial public offering.

Convertible loans, first tranche,derivative, transaction costs

As explained in note 11, “Convertible loans”, to the unaudited condensed consolidated interim financial statements, transaction costs incurred on the issuance of the first tranche of the convertible notes have been allocated pro rata to the embedded conversion option derivative and to the residual convertible loan. The costs allocated to the loan have been deducted from the initial book value of the loan and will therefore be recognized over the life of the loan as part of the effective interest cost (see “Financial Expense” below). The costs allocated to the embedded derivative feature of the first tranche have been recognized directly in the unaudited condensed consolidated interim statement of income.

Financial income

Our financial income decreased to $0.2 million for the three months ended June 30, 2020 from $0.7 million for the three months ended June 30, 2019. The decrease was primarily due to decreases in amounts placed on short-term deposit and in interest rates.

Financial expense

Our financial expense increased to $0.9 million for the three months ended June 30, 2020 from $0.04 million for the three months ended June 30, 2019. The increase was primarily due to interest on the convertible loans, calculated at the implied effective interest rate, from May 19, 2020.

Income tax expense

Our income tax expense is primarily due to our internal arrangements to reimburse our foreign subsidiaries in the United States and the United Kingdom for the services they render on a cost-plus-margin basis. The net profit at each subsidiary is subject to local income tax and gives rise to minimal amounts of tax expense.

Comparison of the Six Months EndedJune 30, 2020 and 2019

The following table summarizes our results of operations for the six months ended June 30, 2020 and 2019:

	For the Six Months Ended June 30,
in KUSD	2020			2019			Change
Contract revenue		-			2,340			(2,340	)
Operating expense
Research and development		(61,325	)		(46,572	)		(14,753	)
General and administrative		(27,509	)		(6,592	)		(20,917	)
Total operating expense		(88,834	)		(53,164	)		(35,670	)
Loss from operations		(88,834	)		(50,824	)		(38,010	)
Other income (expense)
Other income		278			-			278
Convertible loans, derivatives, increase in fair value		(79,261	)		-			(79,261	)
Convertible loans, first tranche, derivative, transaction costs		(1,571	)		-			(1,571	)
Financial income		569			1,306			(737	)
Financial expense		(939	)		(73	)		(866	)
Exchange differences		(71	)		(68	)		(3	)
Total other income (expense)		(80,995	)		1,165			(82,160	)
Loss before taxes		(169,829	)		(49,659	)		(120,170	)
Income tax expense		(204	)		(199	)		(5	)
Net loss		(170,033	)		(49,858	)		(120,175	)

Notable items impacting the results for the six months ended June 30 included:

	Six months ended June 30,
in KUSD	2020		2019		Change
Research and development - share-based compensation		3,974		93		3,881
General and administrative - share-based compensation		12,550		47		12,503
Convertible loans, derivatives, increase in fair value		79,261		-		79,261
Convertible loans, first tranche, derivative, transaction costs		1,571		-		1,571

Contract revenue

Contract revenue decreased to nil for the six months ended June 30, 2020 from $2.3 million for the six months ended June 30, 2019, a decrease of $2.3 million, or 100.0%. The decrease was due to the discontinuance of the joint clinical development of MEDI3726 and the recognition during the six months ended June 30, 2019 of the remaining non-refundable upfront payment (consisting of deferred revenue and presented as a contract liability in our consolidated balance sheet) of $2.3 million that existed as of December 31, 2018.

Research and development expense

The following table summarizes our research and development expense for the six months ended June 30, 2020 and 2019:

	Six months ended June 30,
in KUSD	2020		2019		Change
External costs ^1^		42,300		36,041		6,259
Employee expense ^2^		19,025		10,531		8,494
Research and development expense		61,325		46,572		14,753

^1^ Includes depreciation expense

^2^ Includes share-based compensation expense

Our research and development expense increased to $61.3 million for the six months ended June 30, 2020 from $46.6 million for the six months ended June 30, 2019, an increase of $14.7 million, or 31.7%. The increase was primarily due to increased external costs associated with our lead product candidates as clinical trials advanced and increased employee expense associated with an increased number of research and development employees as a result of our expanding level of research and development activity and increased share-based compensation expense.

The following table summarizes our research and development expense for our major development programs for the six months ended June 30, 2020 and 2019:

	Six months ended June 30,
in KUSD	2020		2019		Change
Lonca		27,753		18,820		8,933
Cami		19,655		13,880		5,775
ADCT-602		1,471		563		908
ADCT-601		2,400		2,937		(537	)
Preclinical product candidates, research pipeline		7,979		9,177		(1,198	)
Not allocated to specific programs		2,067		1,195		872
Research and development expense		61,325		46,572		14,753

The increase in research and development expense related to Lonca was due to ongoing activities for the pivotal Phase 2 trial of Lonca for the treatment of relapsed or refractory DLBCL, increased activities in support of the BLA submission for Lonca, including CMC, and combination clinical trials for Lonca.

The increase in research and development expense related to Cami was due to an increase in CMC activities, as well as the ramp-up related to the Phase 1b clinical trial of Cami for the treatment of selected advanced solid tumors.

The decrease in research and development expense related to preclinical product candidates and research pipeline was due to the impact of COVID-19 and the closing of our laboratories in the UK. The UK laboratories have since reopened.

General and administrative expense

The following table summarizes our general and administrative expense for the six months ended June 30, 2020 and 2019:

	Six months ended June 30,
in KUSD	2020		2019		Change
External costs ^1^		8,401		4,062		4,339
Employee expense ^2^		19,108		2,530		16,578
General and administrative expense		27,509		6,592		20,917

^1^ Includes depreciation expense

^2^ Includes share-based compensation expense

Our general and administrative expense increased to $27.5 million for the six months ended June 30, 2020 from USD 6.6 million for the six months ended June 30, 2019, an increase of $20.9 million, or 317.3%. The increase was primarily due to higher external costs associated with pre-launch commercial activities and higher employee expense associated with increased share-based compensation expense of $12.5 million. General and administrative expense also increased as a result of additional employee headcount, primarily relating to the recruitment of commercial employees as we prepare for the anticipated launch of Lonca in 2021, which resulted in employee expense of $1.8 million.

Employee expense for the six months ended June 30, 2020 includes share-based compensation expense relating to the 2014 Incentive Plan and the 2016 Share Purchase Plan, both of which terminated upon the effectiveness of the registration statement for our initial public offering, with all awards vesting as of that date and with all outstanding charges relating to those plans, which were being amortized over the vesting period, having to be recognized at that time. The amount of expense recognized for these plans in the six months ended June 30, 2020 was $7.5 million, which is included in the share-based compensation expense noted above. Share-based compensation expense under

the 2019 Equity Incentive Plan was also recognized in the six months ended June 30, 2020 and will continue to arise in future.

Other income and expense

The following table summarizes our other income and expense for the six months ended June 30, 2020 and 2019:

	For the Six Months Ended June 30,
in KUSD	2020			2019			Change
Other income		278			-			278
Convertible loans, derivatives, increase in fair value		(79,261	)		-			(79,261	)
Convertible loans, first tranche, derivative, transaction costs		(1,571	)		-			(1,571	)
Financial income		569			1,306			(737	)
Financial expense		(939	)		(73	)		(866	)
Exchange differences		(71	)		(68	)		(3	)
Total other income (expense)		(80,995	)		1,165			(82,160	)

Other income

We recognize as other income amounts received and receivable by our subsidiary, ADC Therapeutics (UK) Limited, under the United Kingdom’s Research and Development Expenditure Credit scheme. For the six months ended June 30, 2020, we recognized $0.3 million in respect of fiscal year 2020 in other income. For the six months ended June 30, 2019, we did not recognize any such income.

Convertible loans, derivatives, increasein fair value

This charge is explained in note 11 “Convertible loans” to the unaudited condensed consolidated interim financial statements. Pursuant to the Facility Agreement, dated April 24, 2020 (the “Facility Agreement”), with Deerfield Partners, L.P. and certain of its affiliates (collectively, “Deerfield”), the Company has drawn down the first tranche of the convertible loans amounting to $65 million on May 19, 2020 and is obligated to draw down the second tranche amounting to $50 million upon the receipt of regulatory approval for Lonca. The conversion option derivative embedded in the first tranche is remeasured at fair value at the end of each accounting period. The obligation arising from the second tranche is accounted for as a derivative and is also remeasured at fair value at the end of each accounting period. Any movement in these fair values is recognized in the unaudited condensed consolidated interim statement of income. The significant increase in the fair values in the period is due to the increase in the price of our common shares since our initial public offering.

Convertible loans, first tranche,derivative, transaction costs

As explained in note 11, “Convertible loans”, to the unaudited condensed consolidated interim financial statements, transaction costs incurred on the issuance of the first tranche of the convertible loans have been allocated pro rata to the embedded conversion option derivative and to the residual convertible loan. The costs allocated to the loan have been deducted from the initial book value of the loan and will therefore be recognized over the life of the loan as part of the effective interest cost (see “Financial Expense” below). The costs allocated to the embedded derivative of the first tranche have been recognized directly in the unaudited condensed consolidated interim statement of income.

Financial income

Our financial income decreased to $0.6 million for the six months ended June 30, 2020 from $1.3 million for the six months ended June 30, 2019. The decrease was primarily due to decreases in amounts placed on short-term deposit and in interest rates.

Financial expense

Our financial expense increased to $0.9 million for the six months ended June 30, 2020 from $0.1 million for the six months ended June 30, 2019. The increase was primarily due to interest on the convertible loans, calculated at the implied effective interest rate from May 19, 2020.

Income tax expense

Our income tax expense is primarily due to our internal arrangements to reimburse our foreign subsidiaries in the United States and the United Kingdom for the services they render on a cost-plus-margin basis. The net profit at each subsidiary is subject to local income tax and gives rise to minimal amounts of tax expense.

Liquidity and Capital Resources

Since inception, we have incurred significant net losses. To date, we have not generated any product revenue and we have financed our operations through equity financings, including our initial public offering, convertible debt financings and additional funds provided by collaborations. As of June 30, 2020, we had cash and cash equivalents of $348.6 million.

In May 2020, we completed our initial public offering, in which we issued and sold an aggregate of 14,082,475 common shares, including those issued and sold pursuant to the exercise in full of the underwriters’ option to purchase additional common shares. We received net proceeds of $244.2 million from the IPO, after deducting underwriting discounts and commissions and offering expenses payable by us.

In addition, in May 2020, we received net proceeds of $61.3 million, after deducting fees and expenses payable by us, of the first disbursement of convertible loans to us in the amount of $65.0 million under our Facility Agreement. Pursuant to the Facility Agreement, Deerfield agreed to extend a subsequent disbursement of convertible loans to us in the amount of $50.0 million upon receipt of regulatory approval for Lonca and satisfaction of certain other conditions. If we have not received the regulatory approval on or prior to December 31, 2021, the second tranche will automatically terminate on such date.

Our primary uses of capital are, and we expect will continue to be, research and development expenses, expenses associated with commercial launch preparations, compensation and related expenses and other operating expenses, including rent. Cash used to fund operating expenses is impacted by the timing of when we pay expenses, as reflected in the change in our outstanding accounts payable and accrued expenses. We expect to incur substantial expenses in connection with the advancement of clinical trials, including our pivotal clinical trials, and BLA preparations for our lead product candidates, Lonca and Cami, and the development of our other product candidates and our research pipeline. In addition, as we prepare for the potential approval of Lonca, we expect to incur substantial expense for commercial launch preparations.

We plan to continue to fund our operating needs through the net proceeds of our initial public offering, the Deerfield Facility Agreement, additional equity financings and/or other forms of financing. We may also pursue strategic collaborations for clinical development and commercialization of our product candidates in various geographical markets. The sale of additional equity and the issuance of senior secured convertible notes under the Facility Agreement and the conversion of such notes into common shares would result in additional dilution to our shareholders.

Cash Flows

Comparison of the Six Months EndedJune 30, 2020 and 2019

The following table summarizes our cash flows for the six months ended June 30, 2020 and 2019:

	Six months ended June 30,
Net cash provided by (used in) in KUSD:	2020			2019			Change
Operating activities		(72,688	)		(55,688	)		(17,000	)
Investing activities		(634	)		(1,907	)		1,273
Financing activities		306,494			100,931			205,563
Net change in cash and cash equivalents		233,172			43,336			189,836

Net cash used in operating activities

Net cash used in operating activities increased to $72.7 million for the six months ended June 30, 2020 from $55.7 million for the six months ended June 30, 2019, an increase of $17.0 million, or 30.5%. The increase was primarily due to increased cash expenditure in the period on research and development, general and administrative costs and preparing for the commercial launch of Lonca.

Net cash used in investing activities

Net cash used in investing activities decreased to $0.6 million for the six months ended June 30, 2020 from $1.9 million for the six months ended June 30, 2019, a decrease of $1.3 million, or 66.8%. The decrease was primarily due to a reduction in amounts paid for intangible assets.

Net cash provided by financing activities

Net cash provided by financing activities increased to $306.5 million for the six months ended June 30, 2020 from $100.9 million for the six months ended June 30, 2019, an increase of $205.6 million, or 203.7%. The increase was primarily due to the completion of our initial public offering and the receipt of the first tranche of the convertible loans under the Facility Agreement.

Operating Capital Requirements

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the research and development of, continue or commence clinical trials of, and seek regulatory approval for, our product candidates, including confirmatory clinical trials following any conditional or accelerated approval that our product candidates may receive, and engage in commercial launch preparations. In addition, if we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to sales, marketing, manufacturing and distribution. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts. Our future capital requirements will depend on many factors, which are outlined in our Registration Statement and this discussion and analysis.

JOBS Act

In April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards applicable to public companies. This provision allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. This transition period is only applicable under U.S. GAAP. As a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required or permitted by the International Accounting Standards Board.

We are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements under the JOBS Act. Subject to certain conditions, as an emerging growth company, we intend to rely on certain of these exemptions, including without limitation, (i) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (ii) complying with any requirement that may be adopted by the Public Company Accounting Oversight Board, regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an emerging growth company until the

earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of the fiscal year following the fifth anniversary of the date of the completion of our initial public offering; (iii) the date on which we have issued more than $1.0 billion in non-convertible debt during the previous three years; and (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC, which means the market value of our common shares that are held by non-affiliates exceeds $700.0 million as of the prior June 30th.

Contractual Obligations and Other Commitments

As of June 30, 2020 and during the periods presented, we did not have, and we do not currently have, any contractual obligations and other commitments, other than those described in the section in the Registration Statement titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations and Other Commitments.”

Off-Balance Sheet Arrangements

As of June 30, 2020 and during the periods presented, we did not have, and we do not currently have, any off-balance sheet arrangements, other than those described in the section in the Registration Statement titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Off-Balance Sheet Arrangements.”

Quantitative and Qualitative Disclosuresabout Market Risk

During the periods presented, there were no significant changes to our quantitative and qualitative disclosures about market risk from those described in the section in the Registration Statement titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures about Market Risk.”

Critical Accounting Policies and SignificantJudgments and Estimates

There have been no material changes to the significant accounting policies and significant judgments and estimates from those described in the section in the Registration Statement titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates.”

Recent Accounting Pronouncements

See note 3, “Significant accounting policies”, to our unaudited condensed consolidated interim financial statements for a description of recent accounting pronouncements applicable to our unaudited condensed consolidated interim financial statements.

Cautionary Statement Regarding Forward-LookingStatements

This discussion contains statements that constitute forward-looking statements. All statements other than statements of historical facts contained in this discussion, including statements regarding our future results of operations and financial position, business strategy, product candidates, research pipeline, ongoing and planned preclinical studies and clinical trials, regulatory submissions and approvals, research and development costs, timing and likelihood of success, as well as plans and objectives of management for future operations are forward-looking statements. Many of the forward-looking statements contained in this discussion can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate,” “will” and “potential,” among others.

Forward-looking statements appear in a number of places in this discussion and include, but are not limited to, statements regarding our intent, belief or current expectations. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified under the section in the Registration Statement titled “Risk Factors.” These forward-looking statements include, among others:

•	the commencement, timing, progress and results of our research and development programs, preclinical<br>studies and clinical trials;
•	the timing of IND, BLA, MAA and other regulatory submissions with the FDA, EMA or comparable regulatory<br>authorities in other jurisdictions;
---	---
•	the proposed clinical development pathway for our lead product candidates, Lonca and Cami, and<br>our other product candidates, and the acceptability of the results of clinical trials for regulatory approval of such product candidates<br>by the FDA, EMA or comparable regulatory authorities in other jurisdictions;
---	---
•	assumptions relating to the identification of serious adverse, undesirable or unacceptable side<br>effects related to our product candidates;
---	---
•	the timing of and our ability to obtain and maintain regulatory approval for our product candidates;
---	---
•	our plan for the commercialization of Lonca and, subject to our collaboration and license agreement<br>with Genmab, of Cami, if approved;
---	---
•	our expectations regarding the size of the patient populations amenable to treatment with our product<br>candidates, if approved, as well as the treatment landscape of the indications that we are targeting with our product candidates;
---	---
•	assumptions relating to the rate and degree of market acceptance of any approved product candidates;
---	---
•	the pricing and reimbursement of our product candidates;
---	---
•	our ability to identify and develop additional product candidates;
---	---
•	the ability of our competitors to discover, develop or commercialize competing products before<br>or more successfully than we do;
---	---
•	our competitive position and the development of and projections relating to our competitors or<br>our industry;
---	---
•	our estimates of our expenses, ongoing losses, future revenue, capital requirements and our needs<br>for or ability to obtain additional financing;
---	---
•	our ability to raise capital when needed in order to continue our research and development programs<br>or commercialization efforts;
---	---
•	assumptions regarding the receipt of the disbursements under the Facility Agreement;
---	---
•	our ability to identify and successfully enter into strategic collaborations in the future, and<br>our assumptions regarding any potential revenue that we may generate thereunder;
---	---
•	our ability to obtain, maintain, protect and enforce intellectual property protection for our product<br>candidates, and the scope of such protection;
---	---
•	our ability to operate our business without infringing, misappropriating or otherwise violating<br>the intellectual property rights of third parties;
---	---
•	our expectations regarding the impact of the COVID-19 pandemic;
---	---
•	our ability to attract and retain qualified key management and technical personnel; and
---	---
•	our expectations regarding the time during which we will be an emerging growth company under the<br>JOBS Act and a foreign private issuer.
---	---

These forward-looking statements speak only as of the date of this discussion and are subject to a number of risks, uncertainties and assumptions described under the section in the Registration Statement titled “Risk Factors” and elsewhere in this discussion. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this discussion, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

Exhibit 99.3

---

---

---

---

ADC TherapeuticsReports Second Quarter 2020 Financial Results and Provides Recent Business Highlights

-  On track to file BLA for Lonca for relapsed or refractory DLBCL later this year with commercial launch preparations ongoing
-  Completed upsized $268 million initial public offering and received first tranche of $115 million Convertible Credit Facility from Deerfield
---
-  Company to host conference call today at 8:30 a.m. EDT
---

Lausanne, Switzerland, August18, 2020 – ADC Therapeutics SA (NYSE: ADCT), a late clinical-stage oncology-focused biotechnology company pioneering the development and commercialization of highly potent and targeted antibody drug conjugates (ADCs) for patients with hematological malignancies and solid tumors, today reported financial results for the second quarter ended June 30, 2020 and provided recent business highlights.

“ADC Therapeutics progressed rapidly this past quarter, and we are continuing to evolve towards becoming a commercial-stage company, as we prepare to submit a Biologics License Application to the U.S. Food and Drug Administration for Lonca, our lead product candidate, for the treatment of relapsed or refractory diffuse large B-cell lymphoma, later this year and have already submitted the Chemistry, Manufacturing and Controls (CMC) modules to the FDA. To that end, we’re focused on executing a successful launch and growing our talented and experienced commercial, market access, and medical affairs teams. We also presented data at the European Hematology Association Congress in June that demonstrated the potential of Lonca to be a key part of the treatment paradigm for patients with non-Hodgkin lymphoma, both as a single-agent and in combination with other therapies, deepening our conviction in the potential promise of this program and the hope it may bring to patients and their families," said Chris Martin, Chief Executive Officer of ADC Therapeutics. "We also completed an upsized IPO and expanded our leadership team. With these new resources and expertise in place, we are well-positioned for our next stage of growth.”

Dr. Martin continued, “With regard to Cami, our second lead product candidate, we are pleased to have patient enrollment open in our ongoing pivotal Phase 2 trial in relapsed or refractory Hodgkin lymphoma and remain on track to announce interim results in the first half of 2021. We look forward to providing further updates across our pipeline as our programs continue to progress.”

Recent Business and ClinicalHighlights

·	Announced first patient dosed in Phase 2 portion of LOTIS 3 clinical trial of Lonca in combination with ibrutinib: In July 2020, the Company announced that the first patient was dosed in the Phase 2 portion<br> of LOTIS 3, a 161-patient Phase 1/2 clinical trial of loncastuximab tesirine (Lonca, formerly ADCT-402) in combination with<br> ibrutinub, which is being evaluated in patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) or mantle<br> cell lymphoma (MCL).The clinical trial is intended to support the submission of a supplemental Biologics License Application<br> (sBLA) to the U.S. Food and Drug Administration (FDA).
·	Announced FDA lifted partial clinical hold on pivotal Phase 2 trial of Cami for relapsed or refractory Hodgkin lymphoma: In July 2020, the Company announced that the FDA had lifted the<br> partial clinical hold on its pivotal Phase 2 clinical trial of camidanlumab tesirine<br> (Cami, formerly ADCT-301) in patients with relapsed or refractory Hodgkin lymphoma (HL).<br> The Company continued to treat those patients who could benefit from ongoing treatment<br> during the partial clinical hold, and the clinical trial is now open for enrollment.<br> Interim results from the clinical trial are expected in the first half of 2021, subject<br> to any impact by COVID-19. The clinical trial is intended to support the submission of<br> a BLA to the FDA.
---	---
·	Presented positive data from LOTIS 2 and LOTIS 3 trials of Lonca at the virtual 25th Annual Congress of the European Hematology Association (EHA25): In June 2020, the Company presented<br> interim data from two clinical trials of Lonca in an oral presentation and e-poster session<br> at EHA25. Data from the pivotal Phase 2 single-agent LOTIS 2 trial showed Lonca demonstrated<br> an overall response rate (ORR) of 48.3% and complete response rate (CRR) of 24.1% in<br> a broad relapsed or refractory DLBCL patient population, while upholding a manageable<br> safety profile. The most common grade ≥3 treatment-emergent adverse events in ≥10%<br> of patients were: neutropenia (25.5%) with low incidence of febrile neutropenia (3.4%),<br> thrombocytopenia (17.9%), GGT increased (16.6%) and anaemia (10.3%). The Company is on<br> track to submit a BLA to the FDA later this year based on these data. Interim data from<br> the Phase 1 portion of the Phase 1/2 LOTIS 3 trial of Lonca in combination with ibrutinib<br> showed an encouraging ORR of 75% and CRR of 58.3% at the Lonca dose of 60 μg/kg, which<br> is the selected dose for the Phase 2 portion of the trial, in combination with ibrutinib<br> (560 mg/day), in patients with relapsed or refractory DLBCL or MCL. The combination has<br> had a manageable toxicity profile, with the most common grade ≥3 treatment-emergent<br> adverse events in ≥10% of patients being thrombocytopenia (20%) and anaemia (12%).<br> These interim data highlight the potential of Lonca in earlier lines of therapy and in<br> combination.
---	---
·	Completed upsized initial public offering (IPO) and received first tranche of $115 Convertible Credit Facility with Deerfield: In May 2020, the Company completed its upsized IPO<br> of 14,082,475 common shares at a public offering price of $19.00 per share, which included<br> the full exercise of the underwriters’ option to purchase 1,836,844 additional<br> common shares. The total gross proceeds from the offering, before deducting underwriting<br> discounts and commissions and offering expenses, were approximately $267.6 million. In<br> tandem with the closing of the IPO, the Company also received an initial $65.0 million<br> disbursement of senior secured convertible term loans under its previously announced<br> Convertible Credit Facility with Deerfield Partners, L.P. and certain of its affiliates.<br> Under the Convertible Credit Facility, the Company will receive an additional $50.0 million<br> disbursement upon receipt of U.S. regulatory approval for Lonca.
---	---
·	Appointed Jenn Creel as Chief Financial Officer and Victor Sandor, M.D., to its Board of Directors: In April 2020, the Company appointed Jenn Creel as Chief Financial Officer and Victor<br> Sandor, M.D., to its Board of Directors. Ms. Creel joined ADC Therapeutics from Celgene<br> Corporation, where she served as franchise chief financial officer and corporate vice<br> president of global finance and business planning prior to its acquisition by Bristol<br> Myers Squibb. Dr. Sandor most recently served as Chief Medical Officer of Array BioPharma,<br> which was acquired by Pfizer, where he supported the approval of Braftovi® (encorafenib)<br> and Mektovi® (binimetinib) for the treatment of melanoma. Prior to his role at Array<br> BioPharma, Dr. Sandor was Senior Vice President for Global Clinical Development at Incyte<br> Corporation and held positions of increasing responsibility in oncology product development<br> at AstraZeneca.
---	---

Anticipated Upcoming Milestones

·	File<br> a BLA with the FDA for Lonca for the treatment of relapsed or refractory DLBCL in the<br> second half of 2020.
·	Present<br> data from the Phase 1b trial of Cami in selected advanced solid tumors at a scientific<br> meeting in the second half of 2020.
---	---
·	Initiate<br> a pivotal Phase 2 trial of Lonca in follicular lymphoma (FL) in the first half of 2021.
---	---
·	Report<br> interim results from the pivotal Phase 2 trial of Cami in HL in the first half of 2021.
---	---
·	Continue<br> to accelerate the Company’s pipeline of ADC product candidates for the treatment<br> of hematological cancers and solid tumors, including presenting Phase 1 data for ADCT-602<br> in acute lymphoblastic leukemia and ADCT-601 in solid tumors. Continue to advance our<br> earlier-stage programs, ADCT-901 and ADCT-701, with IND-enabling studies.
---	---

Second Quarter 2020 FinancialResults

Cash and Cash Equivalents

Cash and cash equivalents were $348.6 million as of June 30, 2020 compared to $115.6 million as of December 31, 2019.

Research and Development (R&D)Expenses

R&D expenses were $26.0 million for the quarter ended June 30, 2020, compared to $21.8 million for the same quarter in 2019. The increase was primarily due to an increased number of research and development employees and increased share-based compensation expense.

General and Administrative(G&A) Expenses

G&A expenses were $19.0 million for the quarter ended June 30, 2020, compared to $4.1 million for the same quarter in 2019. The increase was primarily due to increased share-based compensation expense, an increased number of commercial employees, and increased costs due to new commercial activities and the completion of our initial public offering.

Net Loss and Adjusted Net Loss

Net loss was $126.6 million, or a net loss of $2.01 per basic and diluted share, for the quarter ended June 30, 2020, compared to $23.3 million, or a net loss of $0.49 per basic and diluted share, for the same quarter in 2019. The net loss for the quarter ended June 30, 2020 includes a $79.3 million non-cash charge related to the changes in fair value of derivatives associated with the convertible loans under the Convertible Credit Facility with Deerfield. The significant increase in fair value was driven by the increase in the Company’s share price during the quarter. In addition, net loss included share-based compensation expense of $12.7 million for the quarter ended June 30, 2020, compared to $0.1 million for the same quarter in 2019.

Adjusted net loss was $32.1 million, or an adjusted net loss of $0.51 per basic and diluted share, for the quarter ended June 30, 2020, compared to $23.3 million, or an adjusted net loss of $0.49 per basic and diluted share, for the same quarter in 2019.

Conference Call Details

To access the call, please dial 646-787-0157 (domestic) or +41 22 5017540 (international) and enter pin code: 773478. A live webcast of the presentation will be available on the Investors section of the ADC Therapeutics website at www.adctherapeutics.com. The archived webcast will be available after the completion of the event and for 30 days following the call.

About ADC Therapeutics

ADC Therapeutics SA (NYSE:ADCT) is a late clinical-stage oncology-focused biotechnology company pioneering the development and commercialization of highly potent and targeted antibody drug conjugates (ADCs) for patients with hematological malignancies and solid tumors. The Company develops ADCs by applying its decades of experience in this field and using next-generation pyrrolobenzodiazepine (PBD) technology to which ADC Therapeutics has proprietary rights for its targets. Strategic target selection for PBD-based ADCs and substantial investment in early clinical development have enabled ADC Therapeutics to build a deep clinical and research pipeline of therapies for the treatment of hematological and solid tumor cancers. The Company has multiple PBD-based ADCs in ongoing clinical trials, ranging from first in human to pivotal Phase 2 clinical trials, in the USA and Europe, and numerous preclinical ADCs in development.

Loncastuximab tesirine (Lonca, formerly ADCT-402), the Company’s lead product candidate, has been evaluated in a 145-patient pivotal Phase 2 clinical trial for the treatment of relapsed or refractory diffuse large B-cell lymphoma (DLBCL) that showed a 48.3% interim overall response rate (ORR), which exceeded the target primary endpoint. Camidanlumab tesirine (Cami, formerly ADCT-301), the Company’s second lead product candidate, is being evaluated in a 100-patient pivotal Phase 2 clinical trial for the treatment of relapsed or refractory Hodgkin lymphoma (HL) after having shown an 86.5% ORR in HL patients in a Phase 1 clinical trial. The Company is also evaluating Cami as a novel immuno-oncology approach for the treatment of various advanced solid tumors.

ADC Therapeutics is based in Lausanne (Biopôle), Switzerland and has operations in London, the San Francisco Bay Area and New Jersey. For more information, please visit https://adctherapeutics.com/ and follow the Company on Twitter and LinkedIn.

Use of Non-IFRS Financial Measures

In addition to financial information prepared in accordance with IFRS, this document also contains certain non-IFRS financial measures based on management’s view of performance including:

·	Adjusted<br> net loss
·	Adjusted<br> net loss per share
---	---

Management uses such measures internally when monitoring and evaluating our operational performance, generating future operating plans and making strategic decisions regarding the allocation of capital. We believe that these adjusted financial measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and facilitate operating performance comparability across both past and future reporting periods. These non-IFRS measures have limitations as financial measures and should be considered in addition to, and not in isolation or as a substitute for, the information prepared in accordance with IFRS. When preparing these supplemental non-IFRS measures, management typically excludes certain IFRS items that management does not believe are indicative of our ongoing operating performance. Furthermore, management does not consider these IFRS items to be normal, recurring cash or non-cash operating expenses; however, these items may not meet the IFRS definition of unusual or non-recurring items. Since non-IFRS financial measures do not have standardized definitions and meanings, they may differ from the non-IFRS financial measures used by other companies, which reduces their usefulness as comparative financial measures. Because of these limitations, you should consider these adjusted financial measures alongside other IFRS financial measures.

The following items are excluded from adjusted net loss and adjusted net loss per share:

Shared-BasedCompensation Expense: We exclude share-based compensation from our adjusted financial measures because share-based compensation expense, which is non-cash, fluctuates from period to period based on factors that are not within our control, such as our stock price on the dates share-based grants are issued. Share-based compensation has been, and will continue to be for the foreseeable future, a recurring expense in our business and an important part of our compensation strategy.

CertainOther Items: We exclude certain other significant items that may occur occasionally and are not normal, recurring operating expenses, cash or non-cash, from our adjusted financial measures. Such items are evaluated by management on an individual basis based on both quantitative and qualitative aspects of their nature and generally represent items that, either as a result of their nature or significance, management would not anticipate occurring as part of our normal business on a regular basis. While not all-inclusive, examples of certain other significant items excluded from our adjusted financial measures would be: changes in the fair value of derivatives, and the effective interest expense, associated with the Convertible Credit Facility with Deerfield, as well as transaction costs associated with debt or equity issuances that are expensed pursuant to IFRS.

See the attached Reconciliation of IFRS Measures to Non-IFRS Measures for explanations of the amounts excluded and included to arrive at the non-IFRS financial measures for the three- and six-month periods ended June 30, 2020 and 2019.

Forward-LookingStatements

This press release contains statements that constitute forward-looking statements. All statements other than statements of historical facts contained in this press release, including statements regarding our future results of operations and financial position, business strategy, product candidates, research pipeline, ongoing and planned preclinical studies and clinical trials, regulatory submissions and approvals, research and development costs, timing and likelihood of success, as well as plans and objectives of management for future operations are forward-looking statements. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including those described in our filings with the U.S. Securities and Exchange Commission. No assurance can be given that such future results will be

achieved. Such forward-looking statements contained in this document speak only as of the date of this press release. We expressly disclaim any obligation or undertaking to update these forward-looking statements contained in this press release to reflect any change in our expectations or any change in events, conditions, or circumstances on which such statements are based unless required to do so by applicable law. No representations or warranties (expressed or implied) are made about the accuracy of any such forward-looking statements.

CONTACTS:

Investors

Amanda Hamilton

ADC Therapeutics

amanda.hamilton@adctherapeutics.com

Tel.: +1 917-288-7023

EU Media

Alexandre Müller

Dynamics Group

amu@dynamicsgroup.ch

Tel: +41 (0) 43 268 3231

USA Media

Annie Starr

6 Degrees

astarr@6degreespr.com

Tel.: +1 973-415-8838

ADC TherapeuticsSA

CondensedConsolidated Interim Statement of Income (Unaudited)

(in KUSDexcept for share and per share data)

	For the Three Months Ended<br><br> June<br> 30,						For the Six Months Ended<br><br> June<br> 30,
	2020			2019			2020			2019
Contract revenue		—			1,962			—			2,340
Operating expense
Research and development		(25,950	)		(21,760	)		(61,325	)		(46,572	)
General and administrative		(18,999	)		(4,089	)		(27,509	)		(6,592	)
Total operating expense		(44,949	)		(25,849	)		(88,834	)		(53,164	)
Loss from operations		(44,949	)		(23,887	)		(88,834	)		(50,824	)
Other income (expense)
Other income		130			—			278			—
Convertible loans, derivatives, increase in fair value		(79,261	)		—			(79,261	)		—
Convertible loans, first tranche, derivative, transaction costs		(1,571	)		—			(1,571	)		—
Financial income		195			659			569			1,306
Financial expense		(897	)		(36	)		(939	)		(73	)
Exchange differences		(100	)		10			(71	)		(68	)
Total other income (expense)		(81,504	)		633			(80,995	)		1,165
Loss before taxes		(126,453	)		(23,254	)		(169,829	)		(49,659	)
Income tax expense		(104	)		(94	)		(204	)		(199	)
Net loss		(126,557	)		(23,348	)		(170,033	)		(49,858	)
Net loss attributable to:
Owners of the parent		(126,557	)		(23,348	)		(170,033	)		(49,858	)
Net loss per share, basic and diluted		(2.01	)		(0.49	)		(2.97	)		(1.05	)

ADC TherapeuticsSA

CondensedConsolidated Interim Balance Sheet (Unaudited)(in KUSD)

	June 30,			December 31,
	2020			2019
ASSETS
Current assets
Cash and cash equivalents		348,593			115,551
Other current assets		10,532			7,055
Total current assets		359,125			122,606
Non-current assets
Property, plant and equipment		1,260			1,376
Right-of-use assets		4,248			4,898
Intangible assets		8,825			8,434
Other long-term assets		384			368
Total non-current assets		14,717			15,076
Total assets		373,842			137,682
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable		6,797			3,329
Other current liabilities		20,211			15,430
Lease liabilities, short-term		1,099			1,132
Current income tax payable		148			52
Convertible loans, short-term		3,113			—
Total current liabilities		31,368			19,943
Non-current liabilities
Convertible loans, long-term		32,855			—
Convertible loans, derivatives		107,058			—
Lease liabilities, long-term		3,334			3,899
Defined benefit pension liabilities		2,925			2,684
Total non-current liabilities		146,172			6,583
Total liabilities		177,540			26,526
Equity attributable to owners of the parent
Share capital		5,795			4,361
Share premium		792,605			549,922
Treasury shares		(4	)		(100	)
Other reserves		16,654			5,473
Cummulative translation adjustment		(146	)		69
Accumulated losses		(618,602	)		(448,569	)
Total equity attributable to owners of the parent		196,302			111,156
Total liabilities and equity		373,842			137,682

ADC TherapeuticsSA

Reconciliationof IFRS Measures to Non-IFRS Measures (Unaudited)

(in KUSDexcept for share and per share data)

	Three months ended June 30,						Six months ended June 30,
in KUSD (except for share and per share data)	2020			2019			2020			2019
Net loss		(126,557	)		(23,348	)		(170,033	)		(49,858	)
Adjustments:
Share-based compensation expense (i)		12,734			56			16,524			140
Change in fair value of the convertible loans, derivatives (ii)		79,261			—			79,261			—
Convertible loans, first tranche, derivative, transaction costs (iii)		1,571			—			1,571			—
Effective interest expense (iv)		868			—			868			—
Adjusted net loss		(32,123	)		(23,292	)		(71,809	)		(49,718	)
Net loss per share, basic and diluted		(2.01	)		(0.49	)		(2.97	)		(1.05	)
Adjustment to net loss per share, basic and diluted		1.50			—			1.72			—
Adjusted net loss per share, basic and diluted		(0.51	)		(0.49	)		(1.25	)		(1.05	)
Weighted average shares outstanding, basic and diluted		62,863,866			47,654,258			57,225,939			47,297,859

(i) Share-based compensation expense represents the cost of equity awards issued to our directors, management and employees. The fair value of awards is computed at the time the award is granted and is recognized over the vesting period of the award by a charge to the income statement and a corresponding increase in other reserves within equity. These accounting entries have no cash impact.

(ii) Change in the fair value of the convertible loan derivatives results from the valuation at the end of each accounting period of the derivatives associated with the convertible loans, as explained in note 11 “Convertible notes” to the unaudited condensed consolidated interim financial statements. There are several inputs to these valuations, but those most likely to provoke significant changes in the valuations are changes in the value of the underlying instrument (i.e., changes in the price of our common shares) and changes in expected volatility in that price. Any change in the estimated probability of the regulatory approval of Lonca would directly affect the valuation related to the second tranche. These accounting entries have no cash impact.

(iii) The transaction costs allocated to the convertible loan first tranche derivative represent actual costs. These are not expected to recur on an ongoing basis.

(iv) Effective interest expense relates to the increase in the value of our convertible loan in accordance with the effective interest method. As the initial value of the loan is recorded net of the value of the embedded derivative, the increase in the loan value necessary to attain the amount necessary to fund the cash outflows of interest payments, repayment of capital and exit fee is considerably higher than the payments of interest at coupon rate and of the exit fee.