ADC Therapeutics (ADCT) AI Stock Analysis

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ADC Therapeutics

(NYSE:ADCT)

41Neutral

ADC Therapeutics's stock is rated at 41, reflecting significant financial instability and bearish technicals. Despite some positive developments in earnings guidance and cost management, the company's high leverage and poor profitability metrics weigh heavily on its overall score. The biotechnology sector's inherent volatility adds further risk.

Positive Factors

Clinical Trials

Treatment with ZYNLONTA + glofitamab generated a 94% overall response rate (ORR) with a 72% complete response (CR) rate.

Financial Performance

ADC Therapeutics recorded a net loss of $0.29 per share—narrower than previously estimated net loss of $0.41 per share.

Pipeline Progress

ADC Therapeutics recently announced that it has completed enrollment in LOTIS-5, the Phase 3 confirmatory trial evaluating ZYNLONTA in combination with rituximab in patients with relapsed or refractory diffuse large B-cell lymphoma.

Negative Factors

Dilution Risks

Possible medium- to long-term dilution risk is identified as a concern.

Regulatory Risks

Risks include the inability to obtain timely approval for ADCT-402 in DLBCL and slower than anticipated market uptake for ADCT-402.

Sales Performance

ZYNLONTA's 4Q24 sales fall relative to 3Q24.

ADC Therapeutics (ADCT) vs. S&P 500 (SPY)

Market Cap

$121.00M

Dividend YieldN/A

Average Volume (3M)374.02K

Price to Earnings (P/E)―

Beta (1Y)1.83

Revenue Growth1.84%

EPS Growth43.40%

CountryUS

Employees263

SectorHealthcare

Sector Strength69

IndustryBiotechnology

Share Statistics

EPS (TTM)-1.66

Shares Outstanding99,178,280

10 Day Avg. Volume425,192

30 Day Avg. Volume374,018

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)2.89

Price to Cash Flow (P/CF)-1.60

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$8.20

Price Target Upside572.13% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering5

ADC Therapeutics Business Overview & Revenue Model

Company DescriptionADC Therapeutics SA, a commercial-stage biotechnology company, develops antibody drug conjugates (ADC) for patients suffering from hematological malignancies and solid tumors. Its flagship product ZYNLONTA that is in Phase II clinical trial for the treatment of relapsed or refractory diffuse large B-cell lymphoma (DLBCL) and follicular lymphoma; Phase III clinical trial in combination with rituximab to treat relapsed or refractory DLBCL in second-line transplant-ineligible patients; and Phase I clinical trial for treatment of relapsed or refractory non-hodgkin lymphoma (NHL). The company is also developing camidanlumab tesirine, an ADC that has completed Phase I clinical trial to treat relapsed or refractory NHL; in Phase II clinical trial in relapsed or refractory hodgkin lymphoma; and in Phase Ib clinical trial for selected advanced solid tumors. In addition, it develops ADCT-602, which is in Phase Ia clinical trial for treatment of acute lymphoblastic leukemia; ADCT-601 and ADCT-901 that are in Phase Ia clinical trial for treatment of various solid tumors; and preclinical product candidates, including ADCT-701 and ADCT-901 for the treatment of solid tumors. It has a collaboration and license agreement with Genmab A/S, Bergenbio AS, Synaffix B.V., Mitsubishi Tanabe Pharma Corporation, Overland Pharmaceuticals, and MedImmune Limited. ADC Therapeutics SA was incorporated in 2011 and is headquartered in Epalinges, Switzerland.

How the Company Makes MoneyADC Therapeutics generates revenue through the commercialization of its antibody-drug conjugates, primarily through product sales. The company's revenue model includes income from licensing agreements, partnerships, and collaborations with other pharmaceutical companies, which may involve upfront payments, milestone payments, and royalties based on the successful development and sales of its ADCs. Additionally, ADC Therapeutics may engage in research and development collaborations to expand its product pipeline and leverage its proprietary technology.

ADC Therapeutics Financial Statement Overview

Summary

ADC Therapeutics faces significant financial challenges, marked by consistent operating losses, negative equity, and poor cash flow generation. High leverage and insolvency concerns further underscore the need for strategic restructuring.

Income Statement

Negative

ADC Therapeutics has faced significant challenges in its income statement. The company shows a consistent pattern of operating losses and negative net income, with substantial EBIT and EBITDA losses. Revenue has been volatile, with a sharp decline in recent years. Gross profit margin is positive, indicating some ability to cover the cost of goods sold, but overall profitability metrics are weak with negative net profit margins. This suggests the company is struggling to convert revenue into profit.

Balance Sheet

Negative

The balance sheet of ADC Therapeutics reveals high leverage, with a negative stockholders' equity indicating insolvency concerns. The debt-to-equity ratio is not applicable due to negative equity, and the company's equity ratio is negative, highlighting financial instability. Total liabilities exceed total assets, posing a risk of financial distress. There is a significant decline in stockholders' equity over the years, which could impact the company's future financing capabilities.

Cash Flow

Negative

Cash flow analysis shows negative free cash flow consistently, which indicates challenges in generating cash from operations. Operating cash flow is negative, suggesting the company relies on external financing to support its operations. The free cash flow to net income ratio is not favorable, and the company's cash flow position highlights the need for strategic changes to improve liquidity and financial health.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
70.72M	69.28M	69.56M	209.91M	33.92M	0.00
	Gross Profit
63.24M	63.33M	67.03M	205.33M	32.52M	-1.97M
	EBIT
-138.20M	-130.65M	-165.99M	-123.63M	-261.72M	-219.26M
	EBITDA
-111.84M	-130.65M	-146.76M	-108.06M	-223.72M	-219.26M
	Net Income Common Stockholders
-212.15M	-157.85M	-240.05M	-155.80M	-230.03M	-246.29M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
262.75M	250.87M	278.60M	326.44M	466.54M	439.19M
	Total Assets
0.00	321.98M	354.78M	529.17M	617.97M	513.69M
	Total Debt
0.00	328.09M	124.38M	117.38M	101.75M	41.87M
	Net Debt
262.75M	77.22M	-154.22M	-209.07M	-364.79M	-397.32M
	Total Liabilities
0.00	524.62M	503.03M	440.44M	451.88M	178.19M
	Stockholders Equity
249.17M	-202.64M	-148.25M	88.73M	166.09M	335.50M
Cash Flow		Free Cash Flow
-134.89M	-124.70M	-121.90M	-139.09M	-239.75M	-171.54M
	Operating Cash Flow
-133.79M	-123.83M	-118.69M	-136.79M	-233.38M	-168.73M
	Investing Cash Flow
-1.29M	-867.00K	-3.22M	-2.51M	-6.67M	-2.83M
	Financing Cash Flow
98.19M	97.05M	73.88M	-593.00K	267.39M	494.97M

ADC Therapeutics Technical Analysis

Technical Analysis Sentiment

Negative

Last Price1.22

Price Trends

50DMA

1.57

Negative

100DMA

1.81

Negative

200DMA

2.45

Negative

Market Momentum

MACD

-0.07

Positive

RSI

33.91

Neutral

STOCH

18.14

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADCT, the sentiment is Negative. The current price of 1.22 is below the 20-day moving average (MA) of 1.44, below the 50-day MA of 1.57, and below the 200-day MA of 2.45, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 33.91 is Neutral, neither overbought nor oversold. The STOCH value of 18.14 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ADCT.

ADC Therapeutics Risk Analysis

ADC Therapeutics disclosed 57 risk factors in its most recent earnings report. ADC Therapeutics reported the most risks in the “Tech & Innovation” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

ADC Therapeutics Peers Comparison

Overall Rating

UnderperformOutperform

Sector (48)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	48 Neutral	$6.35B	1.19	-46.26%	2.67%	19.24%	1.75%
SLN	47 Neutral	$119.92M	―	-99.23%	―	-40.10%	-16.60%
RAPT	46 Neutral	$113.99M	―	-77.09%	―	―	-2.29%
ADCT	41 Neutral	$121.00M	―	123.38%	―	1.84%	43.40%
KLRS	41 Neutral	$121.01M	―	-45.37%	―	―	72.12%
HURA	34 Underperform	$184.33M	―	-203.07%	―	―	77.15%
LRMR	30 Underperform	$115.89M	―	-63.58%	―	―	-55.32%

* Healthcare Sector Average

Performance Comparison

ADCT

ADC Therapeutics

1.22

-3.15

-72.08%

LRMR

Larimar Therapeutics

1.81

-5.49

-75.21%

HURA

TuHURA Biosciences

4.22

0.37

9.61%

RAPT

RAPT Therapeutics

0.86

-7.68

-89.93%

KLRS

Kalaris Therapeutics

7.23

-9.93

-57.87%

SLN

Silence Therapeutics

2.57

-18.09

-87.56%

ADC Therapeutics Earnings Call Summary

Earnings Call Date: Mar 27, 2025 | % Change Since: -22.78% | Next Earnings Date: May 12, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant achievements in clinical trials, financial strengthening, and potential revenue growth for ZYNLONTA. However, it also acknowledged challenges such as competition in the DLBCL market and flat revenue growth. Despite these challenges, the company remains optimistic about its future prospects.

Highlights

ZYNLONTA Commercial Brand Profitability

ZYNLONTA reached commercial brand profitability, maintaining its position in the competitive third-line-plus DLBCL space with sales of $69.3 million, consistent with the previous year.

Advancements in Clinical Trials

Completion of enrollment in pivotal Phase 3 LOTIS-5 trial and initial efficacy and safety update on Phase 1b LOTIS-7 trial. Initial data showed promising response rates.

Reduction in Operating Expenses

Achieved a double-digit reduction in operating expenses for the second consecutive year, with a 13% year-over-year decrease on a non-GAAP basis.

Strengthened Financial Position

Strengthened balance sheet through equity financing, providing a cash runway into the second half of 2026, with $251 million in cash and equivalents.

Promising Data Presentation

Promising Phase 2 data presented for indolent lymphomas at ASH, with strong response rates in high-risk relapsed/refractory FL and MZL patients.

Potential Revenue Growth

Potential peak revenue of $600 million to $1 billion in the US for ZYNLONTA, assuming regulatory approval and compendia listing.

Lowlights

Competitive Market Challenges

Facing competition in the third-line-plus DLBCL market, particularly from bispecifics and new entrants like ADCETRIS plus R2.

Flat Revenue Growth

Net product revenues for ZYNLONTA were flat for both the fourth quarter and the full year 2024 compared to 2023.

Net Losses

Reported a net loss of $30.7 million for the fourth quarter and $157.8 million for the full year, despite reductions in operating expenses.

Company Guidance

During ADC Therapeutics' fourth-quarter fiscal year 2024 earnings call, the company provided comprehensive guidance on its financial performance and strategic advancements. CEO Ameet Mallik highlighted key milestones, including achieving commercial brand profitability with ZYNLONTA, reporting sales of $69.3 million, and completing enrollment for the pivotal Phase 3 LOTIS-5 trial, aiming to expand ZYNLONTA's use in earlier lines of DLBCL therapy. The company also achieved a double-digit reduction in operating expenses for the second consecutive year and strengthened its balance sheet through equity financing, ensuring a cash runway into the second half of 2026. CFO Pepe Carmona reported a GAAP net loss of $30.7 million for the quarter, a significant improvement from the previous year's $85 million, driven by reduced operating expenses and lower income tax expenses. ADC Therapeutics anticipates reaching peak revenues of $600 million to $1 billion in the U.S., contingent on regulatory approvals and compendia listings.

ADC Therapeutics Corporate Events

Business Operations and StrategyFinancial Disclosures

ADC Therapeutics Achieves Profitability with ZYNLONTA

Positive

Jan 13, 2025

ADC Therapeutics announced preliminary information on ZYNLONTA’s net sales and expenses for 2024, showcasing stabilized sales despite increased competition and achieving profitability for the brand. The company has implemented a disciplined portfolio management strategy, resulting in a double-digit cost reduction for the second consecutive year, and anticipates a cash runway into mid-2026, positioning itself strongly in the ADC market.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.