ADC Therapeutics (NYSE: ADCT) posts Q1 2026 loss $33M, cash $231M
Filing Impact
Filing Sentiment
Form Type
10-Q
Rhea-AI Filing Summary
ADC Therapeutics reported Q1 2026 net revenue of $20.9 million, down 9.5% year over year as prior-year milestone revenue dropped, while U.S. ZYNLONTA product sales rose to $20.0 million, up 15.1% on higher volume and pricing.
The company posted a net loss of $33.0 million, improved from $38.6 million, as research and development expense fell 31.3% to $19.9 million following its 2025 restructuring, partly offset by higher selling and marketing costs of $12.7 million.
ADC Therapeutics ended the quarter with $231.0 million in cash and cash equivalents. Long-term obligations remain significant, including a $319.6 million deferred royalty obligation and $115.7 million of senior secured term loans, plus HCR warrants for 9.8 million shares issued in a February 2026 amendment to its royalty agreement.
Positive
- None.
Negative
- None.
Insights
Q1 shows ZYNLONTA growth, lower R&D spend, but leverage remains high.
ADC Therapeutics grew U.S. ZYNLONTA net product revenue to $20.0M, while total revenue slipped to $20.9M because last year included a $5.0M one-time milestone. Operationally, loss from operations narrowed to $25.2M as R&D spending dropped after the 2025 restructuring.
The balance sheet mixes solid liquidity with heavy obligations: cash of $231.0M versus a $319.6M deferred royalty obligation and $115.7M of senior secured term loans as of March 31, 2026. Interest expense of $12.3M this quarter highlights the ongoing cost of that capital structure.
The amended HCR royalty agreement and associated HCR Warrants (9.8 million shares at $3.81) change future change-of-control and buyout economics while introducing warrant overhang. Future filings and ZYNLONTA sales trends, particularly in LOTIS-5 and LOTIS-7-related indications, will clarify how quickly operating performance can offset financing burdens.
Key Figures
Total revenue, net: $20.9M
ZYNLONTA product revenues, net: $20.0M
Net loss: $33.0M
+5 more
8 metrics
Total revenue, net
$20.9M
Three months ended March 31, 2026
ZYNLONTA product revenues, net
$20.0M
U.S. sales, Q1 2026
Net loss
$33.0M
Three months ended March 31, 2026
Cash and cash equivalents
$231.0M
As of March 31, 2026
Deferred royalty obligation balance
$319.6M
As of March 31, 2026
Senior secured term loans carrying value
$115.7M
As of March 31, 2026
Research and development expense
$19.9M
Three months ended March 31, 2026
Weighted average shares outstanding
154.1M shares
Basic and diluted, Q1 2026
Key Terms
deferred royalty obligation, HCR Warrants, LOTIS-5 confirmatory Phase 3 clinical trial, LOTIS-7 Phase 1b clinical trial, +2 more
6 terms
deferred royalty obligation financial
"The carrying value of our deferred royalty obligation approximates fair value as the loan is recorded using the amortized cost method"
HCR Warrants financial
"In connection with the HCR Amendment, the Company issued to HCR warrants (the “HCR Warrants”) to purchase 9,834,776 common shares."
LOTIS-5 confirmatory Phase 3 clinical trial medical
"through our LOTIS-5 confirmatory Phase 3 clinical trial (rituximab combination)"
LOTIS-7 Phase 1b clinical trial medical
"LOTIS-7 Phase 1b clinical trial (bispecific combination) as well as into indolent lymphomas"
gross-to-net sales adjustments financial
"which includes reductions for gross-to-net (“GTN”) sales adjustments such as government rebates, chargebacks"
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended | |||||
| OR | |||||
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
| For the transition period from to | |||||
Commission File Number:
(Exact name of registrant as specified in its charter)
| Not Applicable | |||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices) (Zip code) | + (Registrant’s telephone number) | ||||
N/A
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||||||||
| ☒ | Smaller reporting company | |||||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of common shares outstanding was 127,191,158 as of April 27, 2026.
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PART I: FINANCIAL INFORMATION | 1 | ||||
Condensed Consolidated Balance Sheets (Unaudited) - March 31, 2026 and December 31, 2025 | 1 | ||||
Condensed Consolidated Statements of Operations (Unaudited) - Three months ended March 31, 2026 and 2025 | 2 | ||||
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - Three months ended March 31, 2026 and 2025 | 3 | ||||
Condensed Consolidated Statements of Changes in Shareholders’ (Deficit) Equity (Unaudited) - Three months ended March 31, 2026 and 2025 | 4 | ||||
Condensed Consolidated Statements of Cash Flows (Unaudited) - Three months ended March 31, 2026 and 2025 | 5 | ||||
Notes to the Condensed Consolidated Financial Statements (Unaudited) | 6 | ||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 19 | ||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 24 | ||||
Item 4. Controls and Procedures | 24 | ||||
PART II: OTHER INFORMATION | 25 | ||||
Item 1. Legal Proceedings | 25 | ||||
Item 1A. Risk Factors | 25 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 25 | ||||
Item 3. Defaults Upon Senior Securities | 25 | ||||
Item 4. Mine Safety Disclosures | 25 | ||||
Item 5. Other Information | 25 | ||||
Item 6. Exhibits | 25 | ||||
Signatures | 27 | ||||
Unless otherwise indicated or the context otherwise requires, all references in this Quarterly Report to “ADC Therapeutics,” “ADCT,” the “Company,” “we,” “our,” “ours,” “us” or similar terms refer to ADC Therapeutics SA and its consolidated subsidiaries.
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FORWARD-LOOKING STATEMENTS
This Quarterly Report contains statements that constitute forward-looking statements. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future catalysts, results of operations and financial position, business and commercial strategy, market opportunities, products and product candidates, research pipeline, ongoing and planned preclinical studies and clinical trials, regulatory submissions and approvals, research and development costs, projected revenues and expenses and the timing of revenues and expenses, 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 Quarterly Report 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 are based on our management’s beliefs and assumptions and on information available to our management at the time such statements are made. Such statements are subject to known and unknown 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:
•the substantial net losses that we have incurred since our inception, our expectation to continue to incur losses for the foreseeable future and our need to raise additional capital to fund our operations and execute our business plan, which will depend on financial, economic and market conditions, the number of authorized shares, and other factors, over which we may have no or limited control;
•our indebtedness under the loan agreement and guaranty (the “Loan Agreement”) with certain affiliates and/or funds managed by each of Oaktree Capital Management, L.P. and Owl Rock Capital Advisors LLC, as lenders, and Blue Owl Opportunistic Master Fund I, L.P., as administrative agent, and the associated restrictive covenants thereunder;
•the purchase and sale agreement (the “Amended HCR Agreement”) with certain entities managed by HealthCare Royalty Management, LLC (“HCR”) and its negative effect on the amount of cash that we are able to generate from sales of, and licensing agreements involving, ZYNLONTA and on our attractiveness as an acquisition target;
•the uncertainties of international trade policies, including tariffs, sanctions, trade barriers and most favored nation drug pricing;
•our ability to complete clinical trials on expected timelines, if at all;
•the timing, outcome and results of ongoing or planned clinical trials and the sufficiency of such results;
•undesirable side effects or adverse events of our products and product candidates;
•our and our partners’ ability to obtain and maintain regulatory approval for our product and product candidates;
•our and our partners’ ability to successfully commercialize our products;
•the availability and scope of coverage and reimbursement for our products;
•the complexity and difficulty of manufacturing our products and product candidates;
•the substantial competition in our industry, including new technologies and therapies;
•our ability to continue to fund, or enter into collaborative or partnership arrangements for our research programs, and the timing, results and future clinical outcomes of such research programs;
•our reliance on third parties for preclinical studies and clinical trials and for the manufacture, production, storage and distribution of our products and product candidates and certain commercialization activities for our products;
•our ability to obtain, maintain and protect our intellectual property rights and our ability to operate our business without infringing on the intellectual property rights of others;
•our estimates regarding future revenue, expenses, liquidity, capital resources and needs for additional financing;
•the size and growth potential of the markets for our products and product candidates;
•potential product liability lawsuits and product recalls for our products;
•and those identified in the “Item 1A. Risk Factors” of our Annual Report on Form 10-K, and in our other reports filed with the U.S. Securities and Exchange Commission (the “SEC”), from time to time thereafter.
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. 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, 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 Quarterly Report, and while we believe
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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.
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PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share amounts)
| March 31, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable, net | |||||||||||
| Inventory | |||||||||||
| Prepaid expenses | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
| Inventory, long-term | |||||||||||
Operating lease right-of-use assets | |||||||||||
Other long-term assets | |||||||||||
Total assets | $ | $ | |||||||||
| LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY | |||||||||||
| Current liabilities | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued expenses and other current liabilities | |||||||||||
| Senior secured term loans, current portion | |||||||||||
Total current liabilities | |||||||||||
| Deferred royalty obligation, long-term | |||||||||||
| Senior secured term loans, long-term | |||||||||||
| Warrant obligations | |||||||||||
Operating lease liabilities, long-term | |||||||||||
| Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (See Note 9) | |||||||||||
| Shareholders’ (deficit) equity | |||||||||||
Common shares, at CHF | |||||||||||
Issued shares: | |||||||||||
Additional paid-in capital | |||||||||||
Treasury shares | ( | ( | |||||||||
At March 31, 2026: | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Accumulated deficit | ( | ( | |||||||||
Total shareholders’ (deficit) equity | ( | ( | |||||||||
Total liabilities and shareholders’ (deficit) equity | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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| ADC Therapeutics SA | ||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except share and per share amounts)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Revenue | |||||||||||
| Product revenues, net | $ | $ | |||||||||
| License revenues and royalties | |||||||||||
| Total revenue, net | |||||||||||
| Operating expense | |||||||||||
| Cost of product sales | ( | ( | |||||||||
| Research and development | ( | ( | |||||||||
| Selling and marketing | ( | ( | |||||||||
| General and administrative | ( | ( | |||||||||
| Total operating expense | ( | ( | |||||||||
| Loss from operations | ( | ( | |||||||||
| Other income (expense) | |||||||||||
| Interest income | |||||||||||
| Interest expense | ( | ( | |||||||||
| Other, net | |||||||||||
| Total other expense, net | ( | ( | |||||||||
Loss before income taxes | ( | ( | |||||||||
| Income tax expense | ( | ||||||||||
| Net loss | $ | ( | $ | ( | |||||||
Net loss per share | |||||||||||
Net loss per share, basic and diluted | $ | ( | $ | ( | |||||||
Weighted average shares outstanding, basic and diluted | |||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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| ADC Therapeutics SA | ||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
(in thousands)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
Net loss | $ | ( | $ | ( | |||||||
| Other comprehensive (loss) income: | |||||||||||
| Remeasurement of defined benefit pension liability | ( | ( | |||||||||
Foreign currency translation adjustment | ( | ||||||||||
| Other comprehensive (loss) income | ( | ||||||||||
| Total comprehensive loss | $ | ( | $ | ( | |||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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| ADC Therapeutics SA | ||
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ (DEFICIT) EQUITY
(Unaudited)
Three Months Ended March 31, 2026
| (in thousands, except share amounts) | Number of shares | Common shares, par value | Additional paid-in capital | Number of shares (held or received)/delivered | Treasury shares | Accumulated other comprehensive (loss) income | Accumulated deficit | Total | ||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||
| Loss for the period | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Vestings of RSUs | ( | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2026 | $ | $ | ( | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2025
| (in thousands, except share amounts) | Number of shares | Common shares, par value | Additional paid-in capital | Number of shares (held or received)/delivered | Treasury shares | Accumulated other comprehensive (loss) income | Accumulated deficit | Total | ||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||
| Loss for the period | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Vestings of RSUs | ( | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares, 2022 Employee Stock Purchase Plan | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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| ADC Therapeutics SA | ||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to net cash used in operations: | |||||||||||
| Share-based compensation expense | |||||||||||
| Accretion expense of deferred royalty obligation | |||||||||||
| Write-downs of inventory | |||||||||||
| Amortization of operating lease right-of-use assets | |||||||||||
| Warrant obligations, decrease in fair value | ( | ||||||||||
| Amortization of debt discount, senior secured term loan | |||||||||||
| Other | ( | ||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable, net | ( | ( | |||||||||
| Inventory | ( | ||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Accounts payable | ( | ( | |||||||||
| Accrued expenses and other current liabilities | ( | ( | |||||||||
| Operating lease liabilities | ( | ( | |||||||||
| Other long-term liabilities | |||||||||||
| Net cash used in operating activities | ( | ( | |||||||||
| Cash flows from investing activities | |||||||||||
| Payment for purchases of property and equipment | ( | ( | |||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities | |||||||||||
| Proceeds from the sale of common shares, net of transaction costs | ( | ||||||||||
| Proceeds from share issuance under stock purchase plan | |||||||||||
| Proceeds from the exercise of stock options | |||||||||||
| Taxes paid related to net settled equity awards | ( | ||||||||||
| Net cash (used in)/ provided by financing activities | ( | ||||||||||
| Net decrease in cash and cash equivalents | ( | ( | |||||||||
| Exchange (losses)/gains on cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents at beginning of period | |||||||||||
| Cash and cash equivalents at end of period | $ | $ | |||||||||
| Supplemental cash flow information: | |||||||||||
| Interest paid | $ | $ | |||||||||
| Interest received | |||||||||||
| Payments made under royalty financing transaction | |||||||||||
| Supplemental non-cash investing and financing activities: | |||||||||||
| Capitalized share-based compensation | |||||||||||
| Transaction costs recorded in accounts payable and other current liabilities and other long-term liabilities | |||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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| ADC Therapeutics SA | ||
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (Unaudited) | ||
| (in thousands, except per share amounts) | ||
1.Description of Business and Organization
ADC Therapeutics is a commercial-stage global pioneer in the field of antibody drug conjugates (“ADCs”), transforming treatment for patients through our focused portfolio with ZYNLONTA ® (loncastuximab tesirine-lpyl), a CD19-directed ADC.
The Company generates sales from its flagship product, ZYNLONTA which received accelerated approval from the U.S. Food and Drug Administration (“FDA”), conditional approval from the European Commission, the China National Medical Products Administration (“NMPA”) and Health Canada, as well as approvals in other key global markets for the treatment of relapsed or refractory diffuse large B-cell lymphoma (“DLBCL”) after two or more lines of systemic therapy. Additionally, the Company is pursuing expansion into earlier lines of therapies and indolent lymphomas through Company sponsored trials and investigator initiated studies.
The Company was incorporated on June 6, 2011 under the laws of Switzerland, with its registered office located at Route de la Corniche 3B, 1066 Epalinges, Switzerland. The Company has 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”), incorporated in England on December 12, 2014. The Company and its two subsidiaries form the ADCT Group (the “Group”).
2.Summary of Significant Accounting Policies
Basis of preparation and principles of consolidation
These accompanying unaudited condensed consolidated financial statements, which include the accounts of the Company and its wholly-owned subsidiaries, have been prepared following the requirements of the U.S. Securities and Exchange Commission for interim reporting. As permitted under those rules, certain footnotes and other financial information that are normally required by U.S. generally accepted accounting principles, or U.S. GAAP, can be condensed or omitted. All intercompany transactions and balances have been eliminated in consolidation. The information included in this Quarterly Report on Form 10‑Q should be read in conjunction with our annual audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2025.
In the opinion of management, these condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments, considered necessary for the fair statement of our financial position and operating results. The results for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026, for any other interim period or for any future period.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.
Restructuring Charges
On June 11, 2025, the Board of Directors approved the 2025 Restructuring to focus resources on ZYNLONTA® (loncastuximab tesirine-lpyl) expansion opportunities and the advancement of its PSMA-targeting ADC. The Company has discontinued early development efforts for the remaining preclinical programs in solid tumors. In
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Loan Modifications and Extinguishments
Cost of product sales
Cost of product sales includes costs directly and indirectly relating to the manufacture of ZYNLONTA commercial drug substance and drug product, including the third-party manufacture costs of our contract manufacturing organizations (“CMOs”), as well as internal personnel costs, including share-based compensation, associated with the production of ZYNLONTA. Cost of product sales also includes royalties payable to a collaboration partner based on net product sales of ZYNLONTA, idle capacity costs, and inventory write-downs for changes in reserves for excess inventory or write-offs of inventory that fail to meet specification. We expect that cost of product sales will continue to increase over time as we sell through pre-approval inventory that was previously expensed prior to commercialization under U.S. GAAP. Factors such as inflation, tariffs and other external factors may also increase our cost of product sales.
Recent Accounting Pronouncements
New accounting pronouncements which have been adopted
We adopted FASB ASU-2025-05, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets to simplify the estimation of credit losses on current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, effective for fiscal years beginning in January 2026, including interim periods within those fiscal years. The ASU provides a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current classified accounts receivable and contract assets. We adopted the practical expedient on a prospective basis for the quarterly and annual reports for the fiscal year beginning on January 1, 2026. Adoption of this standard did not have a material impact on our financial statements or disclosures.
Issued but not yet adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses Disclosure. The ASU requires disaggregation, in the notes to the financial statements, of certain cost and expense captions presented on the face of the Company’s interim and annual financial statements. ASU 2023-09 is effective for fiscal years beginning in January 2027 and interim periods beginning January 2028, with early adoption permitted. Adoption may be applied prospectively or retrospectively. The Company does not anticipate that the adoption of this standard will have a material impact on our financial statements but may result in enhanced or expanded disclosures.
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In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The ASU clarifies interim disclosure requirements, the applicability of ASC 270 and the form and content of interim financial statements in accordance with U.S. GAAP. The objective of the amendments is to provide further clarity about the current interim disclosure requirements. The ASU is effective for interim reporting periods within fiscal years beginning in January 2028. Adoption of this ASU may be applied prospectively or retrospectively. The Company is currently evaluating the impact of the ASU, but does not anticipate the adoption of this standard to have a material impact on our financial statements.
3.Fair value measurements
The carrying amount of cash and cash equivalents, accounts receivable, net and accounts payable is a reasonable approximation of fair value due to the short-term nature of these assets and liabilities. Financial liabilities that are not measured at fair value on a recurring basis include our senior secured term loan and deferred royalty financing obligation. The carrying value of our senior secured term loan approximates fair value as these borrowings are based on variable market rates. The carrying value of our deferred royalty obligation approximates fair value as the loan is recorded using the amortized cost method and considers our current estimates of future royalties expected to be paid over the estimated life of the royalty purchase agreement which are level 3 inputs, adjusted for accretion and royalty payments made by the Company during the three months ended March 31, 2026. The carrying value of the liability is updated periodically for material changes to the expected payments to HCR based on its underlying revenue projections.
On February 18, 2026 the Company issued warrants to HCR to purchase 9,834,776 common shares. The HCR warrants are measured at fair value on a recurring basis and are classified as Level 2. As of March 31, 2026 the value of the HCR warrants were $18.5 million. Fair values are estimated at the end of each reporting period with regard to the HCR warrants. The approach to the valuation follows the fair value principle, and the key input factors are described for the HCR warrants in Note 7, “Deferred royalty obligation and warrants.” A Black-Scholes model was used to calculate the fair values.
There were no transfers between the respective levels during the period.
4.Inventory
As of March 31, 2026 and December 31, 2025 inventory consisted of the following:
| (in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Work in progress | $ | $ | ||||||||||||
| Finished goods | ||||||||||||||
| Total inventory, net | $ | $ | ||||||||||||
Less long-term portion (1) | ||||||||||||||
| Total inventory, current | $ | $ | ||||||||||||
(1) Inventory expected to be sold beyond the Company’s 12-month operating cycle is classified as non-current inventory and recorded in inventory, long-term.
Inventory write-downs of $1,473 and $1,246 were recognized for the three months ended March 31, 2026 and 2025, respectively, and charged to cost of product sales in the Company’s unaudited condensed consolidated statements of operations.
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5.Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consist of the following:
| (in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
Accrued R&D costs | $ | $ | ||||||||||||
Accrued payroll and benefits | ||||||||||||||
| Accrued restructuring costs | ||||||||||||||
| Deferred royalty obligation, short-term | ||||||||||||||
| Gross-to-net sales adjustments, short-term | ||||||||||||||
Other | ||||||||||||||
| $ | $ | |||||||||||||
6.Senior secured term loan facility and warrants
On August 15, 2022, the Company, ADCT UK and ADCT America entered into the Loan Agreement with certain affiliates and/or funds managed by each of Oaktree Capital Management, L.P. and Owl Rock Capital Advisors LLC, as lenders, and Owl Rock Opportunistic Master Fund I, L.P., as administrative agent and collateral agent, pursuant to which the Company may borrow up to $175.0 million principal amount of secured term loans, including (i) a First Tranche and (ii) Future Tranches. On August 15, 2022, the Company drew down $120.0 million principal amount of term loans under the Loan Agreement.
On August 15, 2022, the Company also issued to the lenders under the Loan Agreement warrants to purchase an aggregate of 527,295 common shares, which warrants have an exercise price of $8.30 per share. Each warrant is exercisable, on a cash or a cashless basis, at the option of the holder at any time on or prior to August 15, 2032. The warrants are freestanding financial instruments that are indexed to the Company’s common stock and meet all other conditions for equity classification under ASC 480 and ASC 815. Accordingly, these warrants are recognized in equity and accounted for as a component of additional paid-in capital at the time of issuance.
On August 15, 2022, the Company also entered into the Share Purchase Agreement with the lenders under the Loan Agreement to purchase 733,568 common shares of the Company.
For the three months ended March 31, 2026 and 2025, the Company recorded interest expense on the senior secured term loan in the amount of $3,622 and $3,785 , respectively, which was recorded in interest expense in the unaudited condensed consolidated statements of operations. The effective interest rate (“EIR”) at March 31, 2026 was 15.87 %.
The following table provides a summary of the interest expense for the Company’s senior secured term loan for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Contractual interest expense | $ | $ | ||||||||||||
| Amortization of debt discount | ||||||||||||||
| Total | $ | $ | ||||||||||||
The amount at which the senior secured term loan is presented as a liability in the unaudited condensed consolidated balance sheets represents the net present value of all future cash outflows associated with the loan discounted at the EIR. The carrying value of the senior secured term loan is $115.7 million and $115.5 million as of March 31, 2026 and December 31, 2025, respectively. Principal payments on the senior secured term loan begin in 2026, with $4.6 million and $3.0 million due within 12 months classified as a current liability within the "Senior secured term loans, current portion” line item on the unaudited consolidated balance sheets as of March 31, 2026 and December 31, 2025, respectively.
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Contractual payments due under our senior secured term loans, including exit fees are as follows (in thousands):
| 2026 (commencing third quarter) | ||||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| Total | $ | |||||||
7.Deferred royalty obligation and warrants
On August 25, 2021, the Company entered into a royalty purchase agreement with certain entities managed by HCR for up to $325.0 million. Under the terms of the agreement, the Company received gross proceeds of $225.0 million upon closing (the “First Investment Amount”) and received an additional $75.0 million during the year ended December 31, 2023 upon the first commercial sale of ZYNLONTA in the United Kingdom or any European Union country (the “Second Investment Amount”) and together with the First Investment Amount, the “Investment Amount”).
On February 18, 2026, the Company entered into an amendment (the “HCR Amendment”) to the Purchase and Sale Agreement, dated August 25, 2021 (the “Original HCR Agreement” and, as amended by the HCR Amendment, the “Amended HCR Agreement”). Under the Original Agreement, upon the occurrence of a change of control event, the Company is obligated to pay HCR $750 million (or $675 million if HCR receives royalty payments exceeding a mid-nine-digit amount on or prior to March 31, 2029), less the amount of royalties previously paid to HCR. Under the Amended HCR Agreement, upon the occurrence of a change of control event, the Company is obligated to pay HCR $150 million (if the change of control event occurs on or before December 31, 2027) or $200 million (if the change of control event occurs on or after January 1, 2028), which amount is not reduced by the amount of royalties previously paid to HCR. In addition, following such change of control event, the royalty obligations under the Amended HCR Agreement will continue until the Royalty Cap (as defined in the Original HCR Agreement), unless the Company (or its successor in interest) buys out the remaining royalty obligations by paying HCR $525 million (if the buyout occurs on or prior to December 31, 2029) or $750 million (if the buyout occurs on or after January 1, 2030), less the amount of royalties previously paid to HCR and the change of control payment described above.
In connection with the HCR Amendment, the Company issued to HCR warrants (the “HCR Warrants”) to purchase 9,834,776 common shares. The HCR Warrants are exercisable at any time after their original issuance until December 31, 2030. The exercise price per common share purchasable upon the exercise of the HCR Warrants is $3.81 per share, subject to customary adjustments. The HCR Warrants have certain limitations on exercise, including (i) any exercise must be for at least 50,000 common shares (or, if less, the remaining common shares available for purchase under the HCR Warrants) and (ii) cashless exercise is not available in certain circumstances as specified in the HCR Warrants. The HCR Warrants contain customary anti-dilution adjustments and will entitle holders to receive any dividends or other distributions paid on the underlying common shares prior to their expiration on an as-exercised basis. The HCR Warrants and any common shares issuable upon exercise of the warrants are not transferable on or prior to December 31, 2027, except, with respect to common shares issued upon exercise of the warrants, in connection with the consummation of certain fundamental transactions.
Accounting for the HCR Amendment
The Company assessed the HCR amendment for a debt extinguishment or modification in accordance with ASC-470-50. The fair value of the warrants issued was determined to be $20.8 million at the time of issuance. The HCR amendment was accounted for as a debt modification as the present value of future cashflows of the modified agreement compared to that of the original agreement resulted in a less than 10% change. As a result, the Company did not incur any gain or loss relating to the modification. The fair value of the warrants is presented as a direct reduction to the carrying value of the debt. The Company will continue to account for the value of the debt at amortized cost.
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The Company determined the fair value of the warrants at issuance on February 18, 2026 by using the Black-Scholes model with the following key assumptions:
| As of | |||||
| February 18, 2026 | |||||
| Exercise price in $ | |||||
| Share price in $ | |||||
| Risk-free interest rate | % | ||||
| Expected volatility | % | ||||
| Expected term (years) | |||||
| Dividend yield | |||||
| Discount for lack of marketability | % | ||||
| Black-Scholes value in $ | |||||
The table below provides a rollforward of the Company’s debt obligation relating to the royalty purchase agreement.
| (in thousands) | ||||||||
| Balance as of December 31, 2024 | $ | |||||||
| Less: royalty payments | ( | |||||||
| Plus: interest expense | ||||||||
| Less: cumulative catch-up adjustment, Other, net | ( | |||||||
| Balance as of December 31, 2025 | ||||||||
| Less: Fair value of HCR warrants at time of issuance | ( | |||||||
| Less: royalty payments | ( | |||||||
| Plus: interest expense | ||||||||
| Less: cumulative catch-up adjustment, Other, net | ( | |||||||
| Balance as of March 31, 2026 | $ | |||||||
Accounting for the HCR Warrants
The HCR warrants are recognized as a warrant obligation and presented in the unaudited condensed consolidated balance sheet as a liability given the existence of a net settlement feature under which the holder may settle in cash equal to the par value, with the amount payable indexed to the CHF/USD exchange rate, and receive the underlying shares on a net basis. The warrant obligation was recorded at its initial fair value of $20.8 million at the time of issuance as described further above. Subsequent to issuance, the warrant obligation is remeasured to fair value at the end of each reporting period. Changes in the fair value (gains or losses) of the warrant obligation at the end of each period is recorded in the unaudited condensed consolidated statement of operations.
During the three months ended March 31, 2026, the Company recognized income of $2.2 million, respectively, as a result of changes in the fair value of the warrant obligation. This amount was recorded to Other, net in the unaudited condensed consolidated statement of operations. The fair value of the warrant obligation as of March 31, 2026 was $18.5 million. See Note 12, "Other income (expense)" for further information.
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The Company calculated the fair value of the HCR warrant obligation as of March 31, 2026, using the Black-Scholes model. Key inputs for the valuation of the warrant obligation were as follows:
| As of | |||||
| March 31, 2026 | |||||
| Exercise price in $ | |||||
| Share price in $ | |||||
| Risk-free interest rate | % | ||||
| Expected volatility | % | ||||
| Expected term (years) | |||||
| Dividend yield | |||||
| Discount for lack of marketability | % | ||||
| Black-Scholes value in $ | |||||
8.Pension and post-retirement benefit obligations
The Swiss employee pension plan is a defined benefit scheme that fully reinsures disability, death, and longevity risks while guaranteeing 100% of capital and interest through vested capital investment. The assets are invested by the pension plan of the collective foundation, to which many companies contribute, in a diversified portfolio that respects the requirements of the Swiss BVG.
Although, as is the case with many Swiss pension plans, the amount of ultimate pension benefit is not defined, certain legal obligations of the plan create constructive obligations on the employer to pay further contributions to fund an eventual deficit; this results in the plan nevertheless being accounted for as a defined benefit plan.
The net periodic benefit cost for the three months ended March 31, 2026 and 2025 is as follows:
| Three Months Ended March 31, | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Net periodic benefit cost: | ||||||||||||||
| Service cost | $ | $ | ||||||||||||
| Interest cost | ||||||||||||||
| Expected return on plan assets | ( | ( | ||||||||||||
| Amortization of prior service cost | ( | ( | ||||||||||||
| Amortization of actuarial losses | ||||||||||||||
| Net periodic benefit cost | $ | $ | ||||||||||||
The components of net periodic benefit cost are included in operating expense on the unaudited condensed consolidated statements of operations.
9.Commitments and contingencies
Manufacturing Commitments
Some of our inventory components require long lead times to manufacture. Therefore, we make long-term investments in our supply chain in order to ensure we have enough drug product to meet current and future revenue forecasts. Third party manufacturing agreements include non-cancelable obligations related to the supply of ZYNLONTA. There have been no material changes related to our non-cancelable obligations under these arrangements as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Contingent liabilities
From time to time, we may be involved in various legal matters generally incidental to our business. Although the results of litigation and claims cannot be predicted with certainty, after discussion with legal counsel, we are not aware
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10.Revenue
The table below provides a disaggregation of revenues by type and customer location for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Types of goods and services | ||||||||||||||
| Product revenues, net | $ | $ | ||||||||||||
| License revenues | ||||||||||||||
| Royalties | ||||||||||||||
| Total revenue | $ | $ | ||||||||||||
| Customer Location | ||||||||||||||
| U.S. | $ | $ | ||||||||||||
EMEA(1) | ||||||||||||||
| Total revenue | $ | $ | ||||||||||||
(1) Europe, the Middle East and Africa
Product revenues, net
The table below provides a rollforward of the Company’s accruals related to the gross-to-net (“GTN”) sales adjustments for the three months ended March 31, 2026:
| (in thousands) | Discarded Drug Rebate | Other Adjustments | Total | |||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | |||||||||||||||||
| GTN accruals for current period | ||||||||||||||||||||
| Prior period adjustments | ( | ( | ||||||||||||||||||
| Credits, payments and reclassifications | ( | ( | ||||||||||||||||||
| Balance as of March 31, 2026 | $ | $ | $ | |||||||||||||||||
The table below provides a rollforward of the Company’s accruals related to the gross-to-net (“GTN”) sales adjustments for the three months ended March 31, 2025:
| (in thousands) | Discarded Drug Rebate | Other Adjustments | Total | |||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | |||||||||||||||||
| GTN accruals for current period | ||||||||||||||||||||
| Prior period adjustments | ( | ( | ( | |||||||||||||||||
| Credits, payments and reclassifications | ( | ( | ( | |||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | |||||||||||||||||
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The table below provides the classification of the accruals related to the GTN sales adjustment included in the Company’s unaudited condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025.
| (in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Accounts receivable, net | $ | $ | ||||||||||||
| Other current and non-current liabilities | ||||||||||||||
| $ | $ | |||||||||||||
Customers from which we derive more than 10% of our total product revenues for the three months ended March 31, 2026 and 2025 are as follows:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
AmerisourceBergen Corporation(1) | % | % | ||||||||||||
| McKesson | % | % | ||||||||||||
| Cardinal Health | % | % | ||||||||||||
(1) AmerisourceBergen also operates under the name Cencora.
11.Other income (expense)
Interest Expense
The components of interest expense for the three months ended March 31, 2026 and 2025 are as follows:
| Three Months Ended March 31, | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Deferred royalty obligation interest expense | $ | $ | ||||||||||||
| Effective interest expense on senior secured term loan facility | ||||||||||||||
| Interest expense | $ | $ | ||||||||||||
Other, net
The components of Other, net for the three months ended March 31, 2026 and 2025 are as follows:
| Three Months Ended March 31, | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| HCR warrant obligation, change in fair value income | $ | $ | ||||||||||||
| Cumulative catch-up adjustment, deferred royalty obligation | ||||||||||||||
| Exchange differences gain (loss) | ( | |||||||||||||
| R&D tax credit | ||||||||||||||
| Other, net | $ | $ | ||||||||||||
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12.Share-based compensation
The Company has adopted various share-based compensation incentive plans. Under these plans the Company may at its discretion grant to the plan participants, such as directors, certain employees, and service providers awards in the form of restricted shares and restricted share units (“RSUs”), share options, share appreciation rights, performance awards and other share-based awards. The 2019 Equity Incentive Plan was adopted in November 2019 while the Conditional Share Capital Plan and the Inducement Plan were adopted in December 2023. The amounts of costs recognized for all awards for services received during the three months ended March 31, 2026 and 2025 was $3,273 and $2,421 of which $64 and nil was capitalized to inventory costs, respectively.
2019 Equity Incentive Plan
In November 2019, the Company adopted the 2019 Equity Incentive Plan. Under the 2019 Equity Incentive Plan, the Company may at its discretion grant to plan participants, such as directors, certain employees and service providers, awards in the form of restricted shares and RSUs, share options, share appreciation rights, performance awards and other share-based awards. The Company has reserved 22,591,355 common shares for future issuance under the 2019 Equity Incentive Plan (including share-based equity awards granted to date less awards forfeited). As of March 31, 2026, the Company has 1,144,225 common shares available for the future issuance of share-based equity awards.
As of March 31, 2026 and December 31, 2025, the cumulative amount recorded as a net increase to additional paid-in capital within equity on the unaudited condensed consolidated balance sheets in respect of the 2019 Equity Incentive Plan was $168,488 and $165,768 , respectively. The amounts of costs recognized for all awards for services received during the three months ended March 31, 2026 and 2025 was $2,720 and $1,609 , respectively.
Conditional Share Capital Plan
In December 2023, the Company adopted the Conditional Share Capital Plan. Under the Conditional Share Capital Plan, the Company may at its discretion grant to plan participants, such as directors, certain employees and service providers, awards in the form of restricted shares and RSUs, share options, share appreciation rights, performance awards and other share-based awards. The Company has reserved 8,000,000 common shares for future issuance under this plan. On February 13, 2026 the Company issued 6,232,465 RSUs under the Conditional Share Capital Plan for the 2026 annual equity award, which was approved by the Compensation Committee and by the Board of Directors for the senior management team. No share options were issued in connection with this award. As of March 31, 2026, the Company has 2,460,927 common shares available for the future issuance of share-based equity awards.
As of March 31, 2026 and December 31, 2025, the cumulative amount recorded as a net increase to additional paid-in capital within equity on the unaudited condensed consolidated balance sheet in respect of the Conditional Share Capital Plan was $4,498 and $4,267 . The amounts of costs for all awards recognized for services received during the three months ended March 31, 2026 and 2025 was $231 and $548 , respectively.
Inducement Plan
In December 2023, the Company adopted the Inducement Plan. Under the Inducement Plan, the Company may at its discretion grant to any employee who is eligible to receive an employment inducement grant in accordance with NYSE Listed Company Manual 303A.08. The maximum number of common shares in respect of which awards may be granted under the Inducement Plan is 2,000,000 common shares (including share-based equity awards granted to date, less awards forfeited), subject to adjustment in the event of certain corporate transactions or events if necessary to prevent dilution or enlargement of the benefits made available under the plan. Equity incentive awards under the Inducement Plan may be granted in the form of options, share appreciation rights, restricted shares, restricted share units, performance awards or other share-based awards but not “incentive stock options” for purposes of U.S. tax laws. As of March 31, 2026, the Company has 657,212 common shares available for the future issuance of share-based equity awards under this plan.
As of March 31, 2026 and December 31, 2025, the cumulative amount recorded as a net increase to additional paid-in capital within equity on the unaudited condensed consolidated balance sheet in respect of the Inducement Plan was $1,612 and $1,332 . The amounts of costs for all awards recognized for services received during the three months ended March 31, 2026 and 2025 was $280 and $263 , respectively.
Share Options
Pursuant to the 2019 Equity Incentive Plan, the Conditional Share Capital Plan and Inducement Plan (the “Share-based Compensation Plans”), the Company may grant share options to its directors, certain employees and service providers
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working for the benefit of the Company at the time. The exercise price per share option is set by the Company at the fair market value of the underlying common shares on the date of grant, as determined by the Company, which is generally the closing share price of the Company’s common shares traded on the NYSE. The awards generally vest 25 % on the first anniversary of the date of grant, and thereafter evenly on a monthly basis over the subsequent three years . The contractual term of each share option award granted is ten years . Under the grant, the options may be settled only in common shares of the Company. Therefore, the grants of share options under the 2019 Equity Incentive Plan and Inducement Plan have been accounted for as equity-settled under U.S. GAAP. As such, the Company records a charge for the vested portion of award grants and for partially earned but non-vested portions of award grants. This results in a front-loaded charge to the Company’s unaudited condensed consolidated statements of operations and a corresponding increase to additional paid-in capital within equity on the unaudited condensed consolidated balance sheets.
The costs recognized for services received during the three months ended March 31, 2026 and 2025 was $492 and $1,129 , respectively.
A summary of our stock option award activity for the three months ended March 31, 2026 is as follows:
| Weighted average strike price per share (in $ per share) | Number of awards | Weighted average remaining life in years | Aggregate Intrinsic Value (in $ thousands) | |||||||||||||||||||||||
Outstanding as of December 31, 2025 | $ | $ | ||||||||||||||||||||||||
| Granted | ||||||||||||||||||||||||||
| Forfeited | ( | |||||||||||||||||||||||||
| Expired | ( | |||||||||||||||||||||||||
| Exercised | ( | |||||||||||||||||||||||||
Outstanding as of March 31, 2026 | $ | $ | ||||||||||||||||||||||||
Exercisable as of March 31, 2026 | $ | $ | ||||||||||||||||||||||||
Awards outstanding as of March 31, 2026 have expiration dates through 2036. The weighted average grant date fair value of the awards granted during the three months ended March 31, 2026 was $3.21 . As of March 31, 2026, the unrecognized compensation cost related to 2,844,519 unvested share options expected to vest was $6.5 million. This unrecognized cost will be recognized over an estimated weighted-average amortization period of 1.80 years.
The exercise price of stock options granted is equal to the closing price of the common stock on the date of grant. The fair values of the options granted under the 2019 Equity Incentive Plan and the Inducement Plan were estimated on the date of the grant using the Black-Scholes option-pricing model. Expected volatility is historical volatility of our common stock. The award life for options granted was 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. The assumptions used were as follows:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
Expected volatility | ||||||||||||||
Expected life, (years) | ||||||||||||||
Risk-free interest rate | ||||||||||||||
Expected dividend yield | ||||||||||||||
RSUs
Pursuant to the Share-based Compensation Plans, the Company may grant RSUs to its directors, certain employees and service providers working for the benefit of the Company at the time. The awards generally vest annually over a period of to three years commencing on the first anniversary of the date of grant. The RSUs may be settled only in common shares of the Company. Therefore, the grant of RSUs under both the 2019 Equity Incentive Plan and Conditional Share Capital Plan have been accounted for as equity-settled under U.S. GAAP. As such, the Company records a charge for the vested portion of award grants and for partially earned but non-vested portions of award grants. This results in a front-loaded charge to the Company’s unaudited condensed consolidated statements of operations and a corresponding increase to additional paid-in capital within equity on the unaudited condensed consolidated balance sheets. The costs recognized for services received during the three months ended March 31, 2026
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and 2025 was $2,739 and $1,291 , respectively. An amount of $768 was withheld for tax withholding obligations during the three months ended March 31, 2026.
The following table summarizes the RSU awards outstanding as of March 31, 2026:
| Number of awards | Weighted average grant date fair value (in $ per share) | ||||||||||
| December 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
Vested (1) | ( | ||||||||||
| Forfeited | ( | ||||||||||
| March 31, 2026 | $ | ||||||||||
The total fair value of RSU awards vested (as measured on the date of vesting) during the three months ended March 31, 2026 was $5,916 .
Employee Stock Purchase Plan
In June 2022, the Company adopted the 2022 Employee Stock Purchase Plan (“ESPP”), which allows eligible employees to purchase designated shares of the Company's common shares at a discount, over a series of offering periods through accumulated payroll deductions. The Company offers the ESPP to employees twice a year with each having a six-month offering period. The first offering period is generally from January 1st through June 30th and the second offering period is from July 1st through December 31st. The grant date is the first day of each offering period.
The costs recognized related to the ESPP during the three months ended March 31, 2026 and 2025 was $42 and nil respectively.
13.Loss per share
The basic loss per share is calculated by dividing the net loss attributable to shareholders by the weighted average number of shares in issue during the period, excluding common shares owned by the Company and held as treasury shares, as follows:
| Three Months Ended March 31, | ||||||||||||||
| (in thousands, except share and per share amounts) | 2026 | 2025 | ||||||||||||
Net loss | $ | ( | $ | ( | ||||||||||
Weighted average number of shares outstanding | ||||||||||||||
Basic and diluted loss per share | $ | ( | $ | ( | ||||||||||
For the three months ended March 31, 2026 and 2025, basic and diluted loss per share are calculated on the weighted average number of shares issued and outstanding, and also considers in the calculation the Company’s outstanding Pre-funded warrants, which were 27,743,685 and 8,163,265 as of March 31, 2026 and 2025, respectively. The calculation excludes shares to be issued under the Share-based Compensation Plans, the Company’s warrants issued in connection with the senior secured term loan facility and the Company’s HCR warrants and shares to be issued under the 2022 ESPP as the effect of including those shares would be anti-dilutive. See Note 6, “Senior secured term loan facility and warrants,” Note 7, “Deferred royalty obligation and warrants” and Note 12, “Share-based compensation,” for further information.
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:
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| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| 2019 Equity Incentive Plan - Share Options | ||||||||||||||
| Inducement Plan - Share Options | ||||||||||||||
| 2019 Equity Incentive Plan - RSUs | ||||||||||||||
| Conditional Share Capital Plan - RSUs | ||||||||||||||
| Outstanding warrants | ||||||||||||||
14.Segment reporting
The Company is managed and operated as one reportable segment, which includes all global activities related to the development and commercialization of targeted ADC cancer therapies. The determination of a single reportable segment is consistent with the consolidated financial information regularly provided to the Company’s CODM, which is its chief executive officer. The CODM uses loss from operations and consolidated net loss for purposes of assessing performance, making operating decisions, allocating resources and planning and forecasting for future periods. The CODM allocates resources and plans for the long-term growth of the Company based on the Company's available cash resources, forecasted cash flow, and expenditures on a consolidated basis, as well as an assessment of the probability of success of its research and development activities. Resource allocation and long-term growth decisions are informed by budgeted and forecasted expense information, along with actual expenses incurred to date. The measure of segment assets is reported on the consolidated balance sheets as total assets.
The following table is the summary of the segment profit or loss information, including the significant expense categories for the three months ended March 31, 2026 and 2025, respectively:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Total revenues, net | $ | $ | ||||||||||||
| Significant operating expenses: | ||||||||||||||
Cost of product sales(1) | ( | ( | ||||||||||||
Research and development(1) | ( | ( | ||||||||||||
Selling and marketing(1) | ( | ( | ||||||||||||
General and administrative(1) | ( | ( | ||||||||||||
| Share-based compensation | ( | ( | ||||||||||||
| Total operating expenses | ( | ( | ||||||||||||
| Loss from operations | ( | ( | ||||||||||||
Other segment items(2) | ( | ( | ||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
(1)Excludes share-based compensation.
(2)Includes Other expense, net, and Income tax expense.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements, including the notes thereto, included in this Quarterly Report, as well as our audited consolidated financial statements, including the notes thereto, included in our Annual Report on Form 10-K. The following discussion includes forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements. See “Forward-Looking Statements.”
Business Overview
ADC Therapeutics is a commercial-stage global pioneer in the field of antibody drug conjugates (“ADCs”), transforming treatment for patients through our focused portfolio with ZYNLONTA ® (loncastuximab tesirine-lpyl), a CD19-directed ADC. ZYNLONTA received accelerated approval from the U.S. Food and Drug Administration (“FDA”), conditional approval from the European Commission, the China National Medical Products Administration (“NMPA”) and Health Canada, as well as approvals in other key global markets for the treatment of relapsed or refractory diffuse large B-cell lymphoma (“DLBCL”) after two or more lines of systemic therapy. Our goal is to be a leading ADC company bringing meaningful therapies to patients in need by leveraging our decade-long experience in the ADC field, with multiple INDs, and a proven track record of success. We are pursing expansion of ZYNLONTA internationally, and into earlier lines of DLBCL through our LOTIS-5 confirmatory Phase 3 clinical trial (rituximab combination) and LOTIS-7 Phase 1b clinical trial (bispecific combination) as well as into indolent lymphomas, including marginal zone lymphoma (“MZL”) and follicular lymphoma (”FL”), through investigator-initiated trials (“IITs”) at leading institutions.
Results of Operations
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands, except percentages and per share) | 2026 | 2025 | Change | % Change | |||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Product revenues, net | $ | 20,033 | $ | 17,404 | $ | 2,629 | 15.1 | % | |||||||||||||||
| License revenues and royalties | 818 | 5,629 | (4,811) | (85.5) | % | ||||||||||||||||||
| Total revenue, net | 20,851 | 23,033 | (2,182) | (9.5) | % | ||||||||||||||||||
| Operating expense | |||||||||||||||||||||||
| Cost of product sales | (3,615) | (2,061) | (1,554) | 75.4 | % | ||||||||||||||||||
| Research and development | (19,877) | (28,928) | 9,051 | (31.3) | % | ||||||||||||||||||
| Selling and marketing | (12,708) | (10,553) | (2,155) | 20.4 | % | ||||||||||||||||||
| General and administrative | (9,896) | (9,955) | 59 | (0.6) | % | ||||||||||||||||||
| Total operating expense | (46,096) | (51,497) | 5,401 | (10.5) | % | ||||||||||||||||||
| Loss from operations | (25,245) | (28,464) | 3,219 | (11.3) | % | ||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Interest income | 1,994 | 2,054 | (60) | (2.9) | % | ||||||||||||||||||
| Interest expense | (12,349) | (12,230) | (119) | 1.0 | % | ||||||||||||||||||
| Other, net | 2,632 | 203 | 2,429 | 1196.6 | % | ||||||||||||||||||
| Total other expense, net | (7,723) | (9,973) | 2,250 | (22.6) | % | ||||||||||||||||||
| Loss before income taxes | (32,968) | (38,437) | 5,469 | (14.2) | % | ||||||||||||||||||
| Income tax expense | — | (165) | 165 | (100.0) | % | ||||||||||||||||||
| Net loss | $ | (32,968) | $ | (38,602) | $ | 5,634 | (14.6) | % | |||||||||||||||
| Net loss per share, basic and diluted | $ | (0.21) | $ | (0.36) | $ | 0.15 | (41.7) | % | |||||||||||||||
Revenue
Product Revenues, net
We generate product revenue through the sale of ZYNLONTA in the United States. Revenue is recognized when control is transferred to the customer at the net selling price, which includes reductions for gross-to-net (“GTN”) sales adjustments
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such as government rebates, chargebacks, distributor service fees, other rebates and administrative fees, sales returns and allowances and sales discounts. Our product revenue may fluctuate from period to period based on a number of factors, including patient demand, as well as the timing, dose and duration of patient therapy and customers’ ordering patterns, pricing and GTN deductions. We expect a relatively consistent level of GTN sales adjustments as a percentage of gross sales, but may also experience variability in GTN sales adjustments due to additional information and actual experience such as actual rebate and return rates.
Product revenues, net, were $20.0 million for the three months ended March 31, 2026 as compared to $17.4 million for the three months ended March 31, 2025, an increase of $2.6 million, or 15.1%. The increase is primarily attributable to higher sales volume and a higher price.
License Revenues and Royalties
We generate license revenue and royalties from our strategic agreements for the development and commercialization of ZYNLONTA outside of the United States. Under these agreements, we receive upfront payments and are eligible for certain milestone payments and royalties. See “Item 1. Business—Material Contracts” in our Annual Report on Form 10-K. We are unable to predict the timing and amounts of license revenue and royalties as meeting milestones is subject to many factors outside of our control and we have limited control over our partners’ commercialization efforts.
License revenues and royalties were $0.8 million for the three months ended March 31, 2026 as compared to $5.6 million for the three months ended March 31, 2025. The decrease of $4.8 million was driven by a one-time $5.0 million milestone recognized during the prior year, partially offset with an increase in royalty revenue from Sobi. We received the $5.0 million milestone in connection with the conditional approval by Health Canada for the treatment of relapsed or refractory DLBCL after two or more lines of systemic therapy under our exclusive license agreement with Sobi.
Operating Expenses
Cost of Product Sales
Cost of product sales includes costs directly and indirectly relating to the manufacture of ZYNLONTA commercial drug substance and drug product, including the third-party manufacture costs of our contract manufacturing organizations (“CMOs”), as well as internal personnel costs, including share-based compensation, associated with the production of ZYNLONTA. Cost of product sales also includes royalties payable to a collaboration partner based on net product sales of ZYNLONTA, idle capacity costs, and inventory write-downs for changes in reserves for excess inventory or write-offs of inventory that fail to meet specification. We expect that cost of product sales will continue to increase over time as we sell through pre-approval inventory that was previously expensed prior to commercialization under U.S. GAAP. Factors such as inflation, tariffs and other external factors may also increase our cost of product sales.
Cost of product sales were $3.6 million for the three months ended March 31, 2026 as compared to cost of product sales of $2.1 million for the three months ended March 31, 2025, an increase of $1.6 million, or 75.4%. The increase in cost of product sales was primarily attributable to a $1.2 million increase in certain personnel costs, reflecting a change in focus of these personnel from research and development clinical supply activities to commercial manufacturing activities. Cost of product sales was also higher due to $0.2 million in higher shipping and storage charges for the three months ended March 31, 2026. Additionally, both periods included charges of $1.4 million and $1.2 million, respectively, related to the manufacturing of batches that did not meet our specifications.
Research and Development Expenses
The following table summarizes our research and development expenses for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | |||||||||||||||||
| (in thousands) | 2026 | 2025 | Change | ||||||||||||||
| External costs and overhead | $ | 9,138 | $ | 15,257 | $ | (6,119) | |||||||||||
Employee expenses(1) | 9,857 | 12,679 | (2,822) | ||||||||||||||
| Share-based compensation expense | 882 | 992 | (110) | ||||||||||||||
| Research and development expenses | $ | 19,877 | $ | 28,928 | $ | (9,051) | |||||||||||
(1) Excludes share-based compensation expense.
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Research and development expense consists primarily of costs for production of preclinical and clinical-stage product candidates by CMOs; fees and other costs paid to contract research organizations in connection with the performance of preclinical studies and clinical trials; costs of related facilities, materials and equipment; external costs associated with obtaining intellectual property; depreciation; upfront fees and achieved milestone payments associated with R&D collaboration arrangements; and employee related expenses, including share-based compensation expense.
We expect our research and development expense to decrease for fiscal year 2026, as compared to 2025, primarily driven by an expected reduction in spending on discontinued programs and our preclinical product candidates and research pipeline as a result of the 2025 Restructuring, as well as reduced spend on ZYNLONTA due to the timing, progress and stage of clinical trials. Thereafter, our research and development expense may fluctuate from period to period based on a number of factors, including the timing, progress and stage of clinical trials, costs associated with regulatory approval processes and manufacturing costs associated with commercialization activities prior to the receipt of regulatory approval.
Our R&D expenses were $19.9 million for the three months ended March 31, 2026 as compared to $28.9 million for the three months ended March 31, 2025, a decrease of $9.1 million, or 31.3%.
The decrease in external costs and overhead of $6.1 million was driven primarily by discontinued programs and our preclinical product candidates and research pipeline as a result of the 2025 Restructuring and completion of IND-enabling activities for our PSMA-targeting ADC. These decreases were partially offset by an increase in ZYNLONTA spend due to the timing and enrollment of our ZYNLONTA clinical trials and related costs incurred in connection with the LOTIS-5 and LOTIS-7 trials.
The decrease in employee and share-based compensation expenses were primarily driven by a $2.1 million shift in certain personnel costs to cost of product sales ($1.2 million), inventory capitalization ($0.6 million) and selling and marketing expense ($0.3 million), reflecting a change in focus of these personnel from research and development activities to commercial manufacturing and fulfillment activities. The decrease was also attributable to lower wages and benefits of $2.3 million due to the 2025 Restructuring, partially offset by higher temporary project help of $1.3 million.
Selling and Marketing Expenses
The following table summarizes our selling and marketing expenses for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | |||||||||||||||||
| (in thousands) | 2026 | 2025 | Change | ||||||||||||||
| External costs and overhead | $ | 5,305 | $ | 4,627 | $ | 678 | |||||||||||
Employee expenses(1) | 6,685 | 5,690 | 995 | ||||||||||||||
| Share-based compensation expense | 718 | 236 | 482 | ||||||||||||||
| Selling and marketing expenses | $ | 12,708 | $ | 10,553 | $ | 2,155 | |||||||||||
(1) Excludes share-based compensation expense.
Selling and marketing costs (“S&M”) are expensed as incurred and are primarily attributable to commercialization of ZYNLONTA in the United States. S&M includes employee costs and share-based compensation expense for commercial employees and external costs related to commercialization (including professional fees, communication costs and IT costs, travel expenses and depreciation of property and equipment).
Selling and marketing expenses were $12.7 million for the three months ended March 31, 2026 as compared to $10.6 million for the three months ended March 31, 2025, an increase of $2.2 million, or 20.4%. The increase in external costs and overhead of $0.7 million was primarily attributable to higher spend on marketing and advertising expenses, training initiatives and related travel costs. The increase in employee and share-based compensation expenses were primarily due to an increase in wages and benefits of $0.8 million and a $0.3 million increase in certain personnel costs, reflecting an increase in commercial fulfillment activities. The increase in share-based compensation expense was also driven by higher grant date fair values of RSU awards issued during the period, driven by both an increased number of awards and stock price appreciation at the time of grant.
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General and Administrative Expenses
The following table summarizes our general and administrative expenses for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | |||||||||||||||||
| (in thousands) | 2026 | 2025 | Change | ||||||||||||||
| External costs and overhead | $ | 4,232 | $ | 3,712 | $ | 520 | |||||||||||
Employee expenses(1) | 4,203 | 5,050 | (847) | ||||||||||||||
| Share-based compensation expense | 1,461 | 1,193 | 268 | ||||||||||||||
| General and administrative expenses | $ | 9,896 | $ | 9,955 | $ | (59) | |||||||||||
(1) Excludes share-based compensation expense.
General and administrative expense includes employee related costs (including wages, benefits and share-based compensation expense) for general and administrative employees, external costs (including, in particular, professional fees, legal fees and costs associated with maintaining patents and other intellectual property, communications costs and IT costs, facility expenses and travel expenses) and depreciation of property and equipment and right-of-use assets.
General and administrative expenses were $9.9 million for the three months ended March 31, 2026 as compared to $10.0 million for the three months ended March 31, 2025, an decrease of $0.1 million, or 0.6%. The increase in external costs and overhead of $0.5 million was primarily related to higher IT expenses of $0.4 million, as well as a one-time VAT recovery of $0.3 million recognized in the prior year, partially offset by $0.2 million in lower legal expenses. The decrease in employee expenses of $0.8 million was primarily due to lower wages and benefits. The increase in share-based compensation expense of $0.3 million was primarily due to higher grant date fair values of RSU awards issued during the period, driven by both an increased number of awards and stock price appreciation at the time of grant.
Other Income (Expense)
Interest Income
Interest income was $2.0 million for the three months ended March 31, 2026 as compared to $2.1 million for the three months ended March 31, 2025, a decrease of $0.1 million, or 2.9%. The decrease was primarily due to lower yields received on our cash deposits.
Interest Expense
Interest expense is primarily related to the accretion of our deferred royalty obligation with HCR and the senior secured term loan facility. Interest expense was $12.3 million for the three months ended March 31, 2026 as compared to $12.2 million for the three months ended March 31, 2025, an increase of $0.1 million, or 1.0%. The increase was primarily related to higher accretion of our deferred royalty obligation with HCR of $0.3 million as a result of higher total revenue, net, as well as a higher effective interest rate as a result of the HCR Amendment, partially offset by lower interest on our senior secured term loan facility of $0.2 million as a result of a lower effective interest rate.
Other, net
Other, net consists primarily of the change in the fair value of the HCR warrant obligation, cumulative catch-up adjustments related to our deferred royalty obligation and the R&D tax credit from our UK operations. Other, net as of March 31, 2026 and 2025 included the following:
| Three Months Ended March 31, | |||||||||||||||||
| (in thousands) | 2026 | 2025 | Change | ||||||||||||||
| HCR warrant obligation, change in fair value income | $ | 2,227 | $ | — | $ | 2,227 | |||||||||||
| Cumulative catch-up adjustment, deferred royalty obligation | 72 | 12 | 60 | ||||||||||||||
| Exchange differences gain (loss) | 333 | (90) | 423 | ||||||||||||||
| R&D tax credit gain | — | 281 | (281) | ||||||||||||||
| Total | $ | 2,632 | $ | 203 | $ | 2,429 | |||||||||||
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HCR Warrants
On February 18, 2026, we entered into an amendment (the “HCR Amendment”) to the Purchase and Sale Agreement, dated August 25, 2021 (the “Original HCR Agreement” and, as amended by the HCR Amendment, the “Amended HCR Agreement”). In connection with the HCR Amendment, the Company issued to HCR warrants to purchase 9,834,776 common shares. The HCR warrant obligation has been recorded at its initial fair value at the time the agreement was entered into on February 18, 2026 and is remeasured to fair value at the end of each reporting period. The fair value of the warrant obligation as of March 31, 2026 was $18.5 million. The income of $2.2 million for the three months ended March 31, 2026 was primarily due to the decrease in fair value of the underlying shares during the respective period.
Income Tax Expense
We are subject to corporate income taxation in Switzerland and in other jurisdictions in which we operate, including the United States and the United Kingdom, where our two wholly-owned subsidiaries are incorporated. Under Swiss law, we are permitted to carry forward net operating losses for up to seven years, which may be used to offset future taxable income. Under U.S. tax law, research and development tax credits may generally be carried forward for up to 20 years and used to offset future tax liabilities, subject to statutory requirements. We recorded an income tax expense of nil for the three months ended March 31, 2026 as compared to $0.2 million for the three months ended March 31, 2025.
Liquidity and Capital Resources
As of March 31, 2026, we had cash and cash equivalents of $231.0 million and believe that our current cash position and capital resources are sufficient to fund our operation and meet capital requirements for at least the next twelve months from the date of this report.
We plan to continue to fund our operating needs through our existing cash and cash equivalents, revenues from sales of ZYNLONTA, potential milestone and royalty payments under our licensing agreements and additional equity financings, debt financings and/or other forms of financing, as well as potential funds provided by collaborations. We are continuously exploring strategic collaborations, business combinations, licensing opportunities or similar strategies for clinical development and commercialization of ZYNLONTA and/or our PSMA-targeting ADC. However, we may be unable to obtain such future financing, licensing and collaboration arrangements on favorable terms, if at all.
Sources of Liquidity and Capital Resources
To date, we have financed our operations primarily through equity financings, convertible debt and senior secured term loan financings, and additional funds provided by collaborations and royalty financings and sales of ZYNLONTA in the United States. For a description of the Loan Agreement, Amended HCR Agreement and other license and collaboration agreements, see “Item 1. Business - Material Contracts” in our Annual Report.
Uses of Capital Resources
Our primary uses of capital are, and we expect will continue to be, research and development expenses, selling and marketing expenses, compensation and related expenses, interest and principal payments on debt obligations and other operating expenses. We expect to incur substantial expenses as we continue to devote substantial resources to research and development and marketing and commercialization efforts, in particular to grow ZYNLONTA in the 3L+ DLBCL setting, continue to study and advance ZYNLONTA in earlier lines of therapy and in combinations to potentially expand our market opportunity. 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, as well as the timing of collecting receivables from the sale of ZYNLONTA and paying royalties related to our deferred royalty obligation.
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Cash Flows
The following table summarizes our cash flows for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | |||||||||||||||||
| (in thousands) | 2026 | 2025 | Change | ||||||||||||||
| Net cash (used in) provided by: | |||||||||||||||||
| Operating activities | $ | (29,710) | $ | (56,334) | $ | 26,624 | |||||||||||
| Investing activities | (32) | (264) | 232 | ||||||||||||||
| Financing activities | (583) | 271 | (854) | ||||||||||||||
| Net change in cash and cash equivalents | $ | (30,325) | $ | (56,327) | $ | 26,002 | |||||||||||
Operating Activities
Net cash used in operating activities was $29.7 million for the three months ended March 31, 2026 as compared to $56.3 million for the three months ended March 31, 2025, a decrease of $26.6 million. The decrease was primarily due to the prior year payment of the 2023 discarded drug rebate of $7.2 million, a $7.1 million period over period increase in the collection of accounts receivable, a $2.1 million period over period increase in partner collection and overall reduction in net loss and operating costs in connection with the 2025 Restructuring Plan.
Investing Activities
Net cash used in investing activities was nil for the three months ended March 31, 2026 as compared to $0.3 million for the three months ended March 31, 2025, a decrease of $0.2 million. The decrease in net cash used in investing activities relates to timing of purchases of property and equipment.
Financing Activities
Net cash used in financing activities was $0.6 million for the three months ended March 31, 2026. Net cash provided by financing activities was $0.3 million for the three months ended March 31, 2025. The decrease related to taxes paid related to net settled equity awards for the three months ended March 31, 2026.
Off-Balance Sheet Arrangements
During the periods presented, we did not have, and we do not currently have, any off-balance sheet arrangements.
Contractual Obligations and Commitments
There have been no material changes from the contractual obligations and commitments previously disclosed in our Annual Report.
Critical Accounting Estimates
The preparation of our unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our unaudited condensed consolidated financial statements. There have been no material changes to the critical accounting estimates previously disclosed in our Annual Report.
Recently Issued and Adopted Accounting Pronouncements
Refer to Note 2 to our unaudited condensed consolidated financial statements for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this Quarterly Report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are not required to provide the information required by this Item 3 as we are a smaller reporting company.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has performed an evaluation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the
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Exchange Act) as of the end of the period covered by this report, as required by Rule 13a-15(b) under the Exchange Act. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer, has concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective in ensuring that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes to internal control over financial reporting during the quarter ended March 31, 2026, that would have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be subject to various legal proceedings and claims that arise in the ordinary course of our business activities. The results of litigation and claims cannot be predicted with certainty. As of the date of this Quarterly Report, we do not believe that we are party to any claim or litigation, the outcome of which would, individually or in the aggregate, be reasonably expected to have a material adverse effect on our business.
Item 1A. Risk Factors
There have been no material changes to the risk factors previously disclosed in our Annual Report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Securities
The information required to be reported under this item has been disclosed on Form 8-K filed on February 23, 2026 and is incorporated herein by reference.
Issuer Purchases of Equity Securities
There were no purchases of our equity securities by or on behalf of us or any affiliated purchaser during the period covered by this report.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosure
Not applicable.
Item 5. Other Information
Insider Trading Arrangements
None of our directors or officers adopted terminated
Item 6. Exhibits
Exhibits
The exhibits listed below are filed with or incorporated by reference into this Quarterly Report.
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| Incorporation by Reference | ||||||||||||||||||||
| Exhibit No. | Description | Form | File No. | Exhibit No. | Filing Date | |||||||||||||||
| 3.1 | Articles of Association of ADC Therapeutics SA | 10-K | 001-39071 | 3.1 | March 10, 2026 | |||||||||||||||
10.1 | Amendment No.1 to Purchase and Sale Agreement between ADC Therapeutics SA and entities managed by HealthCare Royalty Management, LLC, dated February 23, 2026 | 8-K | 001-39071 | 10.1 | February 23, 2026 | |||||||||||||||
10.2 | Form of Warrant | 8-K | 001-39071 | 10.2 | February 23, 2026 | |||||||||||||||
| 31.1* | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||||||||||||||
| 31.2* | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||||||||||||||
| 32.1* | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||||||||||||||||
| 32.2* | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||||||||||||||||
| 101.INS | XBRL Taxonomy Instance Document | |||||||||||||||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | |||||||||||||||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||||||||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||||||||||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||||||||||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||||||||||||
| 104 | Cover Page Interactive Data File (embedded with the Inline XBRL document and contained in Exhibit 101) | |||||||||||||||||||
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SIGNATURES
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 | |||||||||||
| /s/ Ameet Mallik | |||||||||||
Date: May 4, 2026 | By: | Ameet Mallik | |||||||||
| Chief Executive Officer | |||||||||||
| (Principal Executive Officer) | |||||||||||
| /s/ Jose Carmona | |||||||||||
Date: May 4, 2026 | By: | Jose Carmona | |||||||||
| Chief Financial Officer | |||||||||||
| (Principal Financial Officer) | |||||||||||
| /s/ Lisa Kallebo | |||||||||||
Date: May 4, 2026 | By: | Lisa Kallebo | |||||||||
| Corporate Controller and Chief Accounting Officer | |||||||||||
| (Principal Accounting Officer) | |||||||||||
27
FAQ
How did ADC Therapeutics (ADCT) perform financially in Q1 2026?
ADC Therapeutics reported Q1 2026 net revenue of $20.9 million and a net loss of $33.0 million. Revenue declined 9.5% year over year as prior-year milestone revenue fell away, while operating loss narrowed due to lower research and development spending after the 2025 restructuring.
What were ADC Therapeutics’ ZYNLONTA sales in Q1 2026?
ZYNLONTA U.S. net product revenue reached $20.0 million in Q1 2026, up from $17.4 million a year earlier. The 15.1% increase was driven by higher sales volume and pricing, partially offsetting the absence of a prior-year $5.0 million milestone in total revenue.
How much cash and debt does ADC Therapeutics (ADCT) have?
ADC Therapeutics ended March 31, 2026 with $231.0 million in cash and cash equivalents. Key obligations include a $319.6 million deferred royalty obligation and $115.7 million of senior secured term loans, reflecting a leveraged capital structure alongside its cash balance.
How did ADC Therapeutics’ research and development expenses change?
Research and development expenses fell to $19.9 million in Q1 2026 from $28.9 million a year earlier. The 31.3% decrease was mainly due to discontinued programs, reduced preclinical work after the 2025 restructuring, and shifting some personnel costs toward commercial manufacturing and fulfillment activities.
What is the amended HCR royalty agreement and new warrants for ADCT?
In February 2026, ADC Therapeutics amended its royalty agreement with HCR and issued 9,834,776 HCR Warrants with a $3.81 exercise price. The amendment adjusts change-of-control and royalty buyout terms, while the warrants, valued at $18.5 million at quarter-end, add potential future share dilution.
Did ADC Therapeutics reduce its net loss compared to last year?
Yes. Net loss improved to $33.0 million in Q1 2026 from $38.6 million in Q1 2025. The 14.6% reduction reflects lower research and development expenses, partially offset by higher selling and marketing costs and slightly higher interest expense on royalty and loan obligations.