Welcome to the ADC Therapeutics Fourth Quarter and Year End 2021 Financial Results Conference Call. My name is Josh and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session.

[Operator Instructions] I will now turn the call over to Amanda Hamilton, Investor Relations Manager. Amanda, you may begin..

Thank you, operator. This morning, we issued a press release announcing our fourth quarter and year end 2021 financial results and business update. This release is available on the ADCT website at ir.adctherapeutics.com under the Press Releases section.

On today's call, Chris Martin, Chief Executive Officer; Jennifer Herron, Chief Commercial Officer; Joe Camardo, Chief Medical Officer; and Jenn Creel, Chief Financial Officer, will discuss recent business highlights and review our fourth quarter and full year 2021 financial results before opening the call for questions.

As a reminder, this conference call may contain forward-looking statements. Such statements are subject to risks and uncertainties. For additional information concerning forward-looking statements and factors that could cause actual results to differ materially from those expressed or implied in these statements.

We refer you to the section titled Cautionary Statement Regarding Forward-looking statements and Exhibit 99.3 of our report on Form 6-K filed with the U.S. Securities and Exchange Commission earlier today.

Such statements speak only as of the date of this conference call and we expressly disclaim any obligation or undertaking to update these forward-looking statements unless required to do so by applicable law. Today's presentation also includes non-IFRS financial measures.

These non-IFRS measures have limitations as financial measures and should be considered in addition to and not in isolation or as a substitute for the information prepared in accordance with IFRS.

You should refer to the information contained in the company's fourth quarter earnings release for definitional information and reconciliations of historical non-IFRS measures to the comparable IFRS financial measures. It is now my pleasure to pass the call over to our CEO, Chris Martin.

Chris?.

Thanks, Amanda and thank you, everyone, for joining us today. I'm very pleased to share our fourth quarter and full year results as we executed on our key objectives and closed out a pivotal year for ADC Therapeutics. I'm also looking forward to sharing our 2022 milestones with you.

The ZYNLONTA launch remains a top priority and we're very encouraged by what we have been able to accomplish so far. In addition, we have advanced our clinical development portfolio and research pipeline and we are entering the year with a healthy cash balance. Starting with the launch.

We delivered $17 million in net sales during the fourth quarter and approximately $34 million for the eight months of sales in 2021. The differentiated product profile of ZYNLONTA continues to serve an unmet need in the third line plus DLBCL market.

And is resonating with physicians, both at major academic centers and in the community as they consider treatment options for their patients. The positive launch dynamics are also a testament to our experienced commercial team which has been able to navigate the challenges of the evolving COVID landscape.

Jennifer Herron, our Chief Commercial Officer, will share more details on our Q4 and 2021 performance a little later in this call. Next, we remain committed to expanding worldwide access for any relapsed/refractory DLBCL patients who may benefit from ZYNLONTA and we are working to expand our geographic footprint.

During the fourth quarter, the EMA validated our marketing authorization application. And in January, we announced an exclusive license with Mitsubishi Tanabe for the development and commercialization of ZYNLONTA in Japan.

The Overland ADCT biopharm joint venture continues to enroll patients in the pivotal Phase II bridging study in China which is intended to serve as the basis for regulatory filing. The joint venture is making rapid progress towards bringing ZYNLONTA to patients in China.

We will continue to focus on moving ZYNLONTA into first and second-line DLBCL therapy with promising combinations that may offer a path to registration, including our ongoing confirmatory Phase III study of ZYNLONTA in combination with rituximab as well as our frontline study in the same combination in unfit or frail patients.

We have refined our ZYNLONTA development strategy, prioritizing areas where we can bring the most differentiated benefits to patients and health care providers which would also result in increased value for all stakeholders. Joe Camardo, our Chief Medical Officer, will elaborate on this in a moment.

In addition to ZYNLONTA, we continue to advance the programs in our robust clinical development and research pipeline which will ensure long-term growth and value creation for the company.

For Cami, we have completed the 12-month follow-up of the pivotal Phase II trial in relapsed/refractory Hodgkin's lymphoma and we have submitted the data to an upcoming meeting.

As we highlighted on our solid tumor pipeline webcast in February, we see significant potential for our pipeline of solid tumor programs which includes three clinical programs in Cami, ADCT-901 targeting KAAG1 and ADCT-601, targeting AXL. We also have two preclinical programs with ADCT-701, targeting DLK1 and ADCT-212, targeting PSMA.

This exciting pipeline demonstrates the impact of our expanding ADC platform and the productivity of our experienced team of industry experts. Joe will tell you more about our solid tumor program shortly.

I would now like to turn the call over to Jennifer to report on the launch and provide insights on our progress in establishing ZYNLONTA as a third line plus standard of care in DLBCL.

Jennifer?.

Thank you, Chris and good morning, everyone. With our second full quarter into the ZYNLONTA launch, I'm very happy to share an update on our progress.

As Chris mentioned, we are pleased to report ZYNLONTA net sales of $17 million in the fourth quarter of 2021, representing quarter-over-quarter growth of 30% and 2021 total net sales of $34 million for the first eight months of launch. This steady progress has been driven by a seasoned and focused U.S.

commercial and medical organization, supported by all of ADC Therapeutics. This effort ensures that U.S. health care providers appreciate ZYNLONTA's differentiated product profile, it’s robust single-agent efficacy, tolerability and ease of administration across all patients and it’s broad flexibility in the third line plus DLBCL market.

Through 2021, the commercial and medical teams have been successful in driving their respective initiatives resulting in both key account depth and breadth in terms of demand.

We have seen significant increases in ZYNLONTA awareness, familiarity and share of voice with an increasing proportion of ZYNLONTA use in the third-line setting as compared to later lines. As Chris mentioned in his initial remarks, the differentiated ZYNLONTA product profile continues to resonate with both academic and community-based physicians.

During the fourth quarter, academic centers still represented over 50% of total volume with an equal proportion of ordering accounts coming from academia and the community. In terms of patient access, our payer and medical teams have achieved broad access for patients with no significant barriers encountered so far.

As we examine ordering patterns in Q4, we believe there was some modest year end inventory build in both the community and academic settings, reflective of future prescribing intent in anticipation of early 2022 infusions. In the fourth quarter, COVID impacted our launch landscape with some restrictions on face-to-face interactions.

We will continue to carefully monitor the changing landscape and be ready to pivot to maximize our efforts just as we have done since our approval last year.

With our strong ZYNLONTA launch in 2021, this year, we have the opportunity to establish ZYNLONTA as the third line plus standard of care through increases in account breadth and depth, new commercial initiatives and increased effectiveness as we sharpen even further our multichannel execution.

We continue to ensure patient access through our patient hub, advancing patient support which importantly helps patients and physicians' offices during the benefit reverification process and with co-pay support.

And even as we have seen increasing volume to date coming from the community, we expect community demands to increase even more once we receive our permanent J code which is expected in April of 2022.

In summary, we are encouraged by the end market performance of ZYNLONTA's differentiated product profile, the anecdotal feedback from our customers and patients and the resulting launch trajectory to date.

While we recognize there are uncertainties associated with the progression of the pandemic, we believe in our ability to establish ZYNLONTA as a third line plus standard of care. In addition, we are optimistic about ZYNLONTA's long-term potential as a cornerstone of DLBCL therapy in first and second line.

We look forward to keeping you updated on our launch progress. Now, I'll turn the call over to Joe to provide an update on our clinical development portfolio and research pipeline.

Joe?.

Thank you, Jennifer. First, I'd like to share some updates for our ZYNLONTA development program and then I will provide a progress report on the pipeline. We continue to see a great opportunity with ZYNLONTA in combinations in earlier lines of therapy in DLBCL.

Based on emerging ZYNLONTA data, we have refined our strategy to execute a highly focused program for clinical trials where ZYNLONTA can deliver the most value for patients in first and second line. First, we are focused on the combination with ZYNLONTA and rituximab.

We are encouraged by the results from the safety meeting of the LOTIS-5 Phase III confirmatory trial of ZYNLONTA combined with rituximab. This trial includes second and later-line patients who are not eligible for stem cell transplant. Safety running is complete and the randomized portion of the trial is enrolling.

The combination of ZYNLONTA and rituximab is well tolerated. There are no new safety events and the initial data suggests the combination is additive. Another combination in development was LOTIS-3, the Phase II trial of ZYNLONTA in combination with ibrutinib in relapsed refractory DLBCL.

With the latest results of the LOTIS-5 safety run-in, we have decided to discontinue LOTIS-3. We will focus our efforts on the LOTIS-5 trial which is potentially a fast and direct potential path to market in second line. In the frontline setting, a significant area of high unmet medical need is with unfit and frail patients.

This patient subgroup is addressed by our LOTIS-9 trial, a study to evaluate ZYNLONTA in combination with rituximab in the first line. Unfit and frail means patients who are either because of age or other concurrent illness cannot be given a full course of the R-CHOP regimen or even the low dose R-mini-CHOP due to toxicity.

These patients are often excluded from first-line studies or new combinations and some studies exclude patients over 80 regardless of medical status. These patients represent a meaningful and growing subset of frontline patients for whom new treatments are lacking.

So the LOTIS-9 protocol serves a significant unmet medical need and also leverages the differentiated profile of ZYNLONTA, that is the single agent efficacy and the tolerability and safety.

Moreover, with the LOTIS-5 safety run-in showing the tolerability of the ZYNLONTA-rituximab combination, we now have the data needed to initiate the study in the second half of this year.

We will focus our frontline program on LOTIS-9 and therefore, we will not initiate LOTIS-8 which was the dose finding trial of ZYNLONTA in combination with R-CHOP in frontline DLBCL. Beyond rituximab, we will also explore other novel combinations in the LOTIS-7 trial.

With regard to the Phase II LOTIS-6 trial in relapsed or refractory follicular lymphoma, the comparator Idelalisib was withdrawn from the follicular lymphoma market. Therefore, we have paused the LOTIS-6 study while we work with our advisers and the FDA on potential next steps. We will update you in the future on our plans in follicular lymphoma.

We remain highly positive about the opportunity to expand the potential of ZYNLONTA in first and second lines and look forward to keeping you updated on our progress. Moving on to Cami in Hodgkin lymphoma. We plan to report results for the Phase II trial at a medical meeting in the first half of 2022.

The one year follow-up is now complete and we are in the process of compiling data in advance of our meeting with the FDA. We will share our plans for the regulatory submission later this year. As we recently highlighted in our solid tumor and pipeline webcast, our solid tumor portfolio includes three clinical and two preclinical programs.

Our ongoing Cami Phase Ib dose escalation trial in combination with pembrolizumab in patients with advanced solid tumors shows the combination to be safe and tolerable so far. This has allowed for continued dose escalation of Cami to assure the optimal dose for evaluation of antitumor activity.

The protocol allows for small dose expansions, if warranted by the scan results if there is stable disease or tumor regression. And we have done so at the 60 micrograms per kilogram dosing level. In parallel, dose escalation continues and we are now at 80 micrograms per kilogram combined with usual dose of pembrolizumab.

The combination of pembro and Cami is highly synergistic in models and our trials are designed to take advantage of this in cancers that are not highly responsive to pembrolizumab alone. ADCT-901 targeting KAAG1 is a novel first-in-class candidate for the treatment of patients with advanced solid tumors.

This includes platinum-resistant ovarian cancer, fallopian tube cancer, prostate cancer, cholangiocarcinoma, renal cell carcinoma and triple-negative breast cancer. In our labs, we have shown that KAAG1 is differentially expressed on these cancers. The dose escalation of the Phase I study is ongoing. ADCT-601, Mipasetamab-uzoptirine targets AXL.

This protein is overexpressed in many solid tumors such as lung, breast, prostate, pancreas, glioma and esophageal cancers and is highly prevalent in sarcoma. We expect to initiate the Phase Ib in the first half of this year.

The planned study will include a dose escalation followed by dose expansion in sarcoma patients in combination with gemcitabine and ADCT-601 monotherapy in patients in whom AXL gene amplification is detected. In addition to our clinical programs, we have two advanced preclinical solid tumor programs. ADCT-701 targets DLK 1.

We are developing this in neuroendocrine malignancies in collaboration with the National Cancer Institute. Our recently announced ADCT-212 program is our optimized second-generation PBD-based ADC. This targets PSMA, a validated target in metastatic prostate cancer. We are currently completing IND-enabling work for both of these programs.

With that, I will turn the call over to Jenn to give a financial update..

Thank you, Joe and good morning, everyone. As we reported in the press release issued earlier today, ZYNLONTA net sales were $17 million for the fourth quarter and approximately $34 million for eight months in 2021. As of December 31, we had cash and cash equivalents of $467 million, as compared to $530 million as of September 30, 2021.

We used approximately $62 million in net cash for operating activities in the fourth quarter and $233 million in net cash for the full year 2021. R&D expenses were $42 million for the fourth quarter and $158 million for the full year 2021 compared to $49 million and $142 million for the same quarter and full year 2020.

R&D expense decreased for the quarter ended December 31, 2021, as compared to the same quarter in 2020, as a result of lower CMC activities following the ZYNLONTA BLA submission and subsequent approval.

R&D expenses increased for the full year 2021 as compared to the same period in 2020 due to investments in ZYNLONTA trials in earlier lines of treatment and advancing our broad portfolio. As a result of these initiatives, employee headcount and share-based compensation expense increased.

Selling and marketing expenses were $19 million for the fourth quarter and $65 million for the full year 2021, compared to $9 million and $22 million for the same quarter and full year 2020. The increase in selling and marketing for the quarter and for the full year reflects the expenses for the ZYNLONTA launch and ongoing commercial efforts.

G&A expenses were $18 million for the quarter and $71 million for the full year 2021 compared to $20 million and $55 million for the same quarter and full year 2020.

G&A expenses decreased for the fourth quarter of 2021 as compared to the same quarter in 2020, primarily due to a decrease in share-based compensation expense that was partially offset by higher costs of being a public company.

G&A expenses for the full year 2021 as compared to full year 2020 increased due to higher costs of being a commercial stage public company. Net loss was $34 million for the fourth quarter and $230 million for the full year 2021 compared to a net loss of $56 million and $246 million for the same quarter and full year 2020.

Our diluted net loss per share was $0.45 in the fourth quarter and $3 for the full year 2021 compared to a net loss of $0.73 for the same quarter and $3.77 for the full year 2020.

Finally, adjusted net loss, a measure that excludes certain items as described in our press release issued earlier today, was $30 million for the fourth quarter and $186 million for the full year 2021 compared to an adjusted net loss of $63 million and $176 million in the same quarter and full year 2020.

The decrease in adjusted net loss for the fourth quarter of 2021 as compared to the same quarter 2020 was primarily due to the recognition of an income tax benefit as a result of recording a deferred tax asset, primarily related to U.S., R&D tax credits.

The increase in adjusted net loss for full year 2021 over full year 2020 was primarily driven by the investment in the ZYNLONTA launch and our broad clinical portfolio.

The adjusted diluted net loss per share was $0.39 for the fourth quarter and $2.42 for the full year 2021 compared to a loss of $0.82 and $2.69 for the same quarter and full year 2020. With that, I will turn the call back to Chris for closing remarks.

Chris?.

Thank you, Jenn, Joe and Jennifer. To conclude, in the fourth quarter, we made significant progress in all areas of our business and we are well positioned to execute on our key objectives in the year ahead.

This includes driving the ZYNLONTA launch forward, working to develop ZYNLONTA in earlier lines of therapy, continuing to expand our geographic reach and advancing our pipeline of differentiated hematological and solid tumor programs. I'm pleased now to open the call for your questions.

Operator?.

[Operator Instructions] Our first question comes from Brian Cheng with Cantor. You may proceed with your question..

Hey guys, thanks for taking my questions. First for Jennifer, on the sales number, can you talk about how much of an inventory build is there? And can you talk about how benefit reauthorization is a factor on 1Q sales? And I have a couple of follow-ups..

Yes. Sure, Brian. So in terms of the inventory build, as I mentioned, we did see some modest inventory build towards the end of the year, both in the academic institutions and the communities. The issue is or I should say, it's hard to further characterize that because we don't have access to patient-level data.

But when we took a look at the ordering patterns for some of our key accounts, we did see greater-than-expected orders. So it's not possible at this point to quantify it but we do believe there was some modest build towards the end of the year.

In terms of benefit reverification, we think that oftentimes with Part B drugs that sometimes the benefit verification that happens for all patients, government patients can sometimes result in a delay in getting treatment.

We're watching it carefully, particularly in the context of COVID and some of the health care worker shortage but that -- we'll have to report on that when we put down Q1..

Okay. And then on pricing, we noticed that you took a 1.1% increase last month. Just curious, any guidance on how we should think about your price increase moving forward? Is that the number that we should be projecting for out years? And then I have one more follow-up for Joe..

Sure. So when you think about new product pricing and price increase recommendations, there are a lot of considerations, as I'm sure you're aware of. We take into account the overall political and policy environment, the competitive context and also the impacts on reimbursement and physician cost recovery.

So as we come into the year, we've been considering carefully all of these factors, each of them and altogether and all of the downstream implications. And as well as the fact we just launched in May of 2021, so it's been less than a year and felt that a modest price increase was most appropriate at this time..

Okay. And then a quick question for Joe. On the discontinuation for LOTIS-8.

I'm just curious, are you still looking into frontline combination potential? And is the decision partly based on the Polaris data and from your conversation with doctors, how important is it to have R-CHOP backbone in the front line?.

Brian, the decision is partly related to the landscape but it's also partly related to the data we have from our lead-in on LOTIS-5. I hesitate to use the term but some of our advisers are telling us that the Christmas tree approach, adding new drugs to R-CHOP is probably not what you would consider a modern approach. It could be incremental.

And we're looking for a transformative approach to frontline. We're still looking for a way to try to use the strength of Lonca in combination with rituximab to really change the landscape for first-line, get rid of many of these old toxic drugs that have been around since I was an intern.

And provide new ways to get a long-term remission in patients when they have their first chance at a long-term remission. So it's really a difference between adding something and trying to get a small benefit which is what I think you've seen with Polaris [ph] versus trying to have a transformative approach to the first line.

I really prefer the later, that's how you make advances in medicine. And we have a lot of support from our advisers who are doing that. And we actually -- we're able to find a patient population that just about exactly suits what are the strengths of ZYNLONTA which is the tolerability and the activity.

And with the combination data that we now have from our lead in, we're really confident that this could be a big improvement for a group of patients who really don't get quite the kinds of treatments that they deserve..

Great. Thanks, Joe..

You're welcome, Brian..

Our next question comes from Boris Peaker with Cowen. You may proceed with your question..

Hi, I'd just like to continue from the same line of questioning. So in the frail DLBCL patients that you're targeting LOTIS-9.

Can you comment on how big this patient population is today to where it's projected to be in the next several years and kind of what the standard of care is for these specific patients?.

Jennifer, can you take that first part -- sorry. Go for it, Joe..

No, no, I was going to answer the last part of it which there really is not a standard of care. That's one of the things we learned, that the doctors sometimes give nothing, sometimes they give rituximab, sometimes they give a course or two or something and they have to stop. Sorry but I have to answer that part of it.

So we're really in a place where we can have a transformative outcome. Sorry, Chris, I guess, Jennifer, I'd like to defer to Jennifer on the others, as you said..

Yes, certainly. So, Boris, the frail and unfit opportunity, I've been really impressed with the enthusiasm from our thought leaders about this. And largely because as Joe said, there aren't a lot of clinical trials that include this population.

As we've engaged them in really optimizing the program, they've anecdotally reported a range of anywhere between 15% and 30% of the first-line population which could be considered frail or unfit and not eligible for R-CHOP or R-Mini-CHOP just based on comorbidities potentially.

And recall the first-line population is approximately 60,000 patients in the U.S. and EU5. So at this point, we're engaging with the thought leaders from a commercial perspective, I'm very excited about it.

And mostly for the patients, because this is going to address an area of unmet medical need, where I think ZYNLONTA is uniquely positioned to support our patients..

Great. And my last question is on the ZYNLONTA European strategy.

Can you comment how you're thinking of approaching that?.

Yes. As you know, we're committed to developing Lonca into the global markets. And we were very pleased to do the agreement with Mitsubishi Tanabe in Japan. In Europe, we're progressing well on the regulatory pathway. And we're still looking at our alternative options for commercialization in Europe. So as those develop, we will keep you updated..

Great. Thanks for taking my questions..

Our next question comes from Kelly Shi with Jefferies. You may proceed with your question..

Thank you for taking my questions. There has been [indiscernible] quarters since ZYNLONTA launch. I wonder if you're able to share some color on the patient profile across the ZYNLONTA spectrum.

Specifically, what is the split of the patients taking ZYNLONTA in [indiscernible] beyond it also? What percentage of patients treated with ZYNLONTA primary refractory and post CD19 CAR-T? And lastly, any feedback regarding the safety profile from physicians regarding their real-world experience?.

Jennifer, do you want to take the first part of that and then maybe Joe can answer just the safety protocol part?.

Yes, certainly. Thanks, Chris. So we're pleased with now, I guess we're now 10 months into the market with how the real-world profile is consistent with the LOTIS-2 pivotal data and we're hearing that through market research through advisory boards through engagements with our customers.

And we are seeing broad use of ZYNLONTA across the entire spectrum of it’s indication in third-line plus supported by the NCCN guidelines. In the early days of the launch and not unexpected, we did see ZYNLONTA use predominantly in the later-line setting.

But importantly, since launch now, we have seen a nice evolution in the business with an increasing proportion of third-line patients receiving ZYNLONTA versus later lines. And we believe that's important for the patients because earlier line use will likely translate into even more benefit for our patients.

So again, we're very excited about the opportunity and how the business is evolving and continue to believe that this is our year for establishing ZYNLONTA as the third line plus standard of care.

Your question specifically with regard to subsets is very difficult to answer because, as I mentioned earlier, we don't necessarily have patient-level data and the data that we do receive does not rarely has complete demographic. So it's hard for me to say that.

I mean what I am thrilled about, though, that based on the LOTIS-2 data, we do see consistent benefit across the subset and that has held up as we've gotten into the market..

And with regards to safety profile?.

The safety profile is for me to answer. Our surveillance is showing reports consistent with what we already knew. And that's nothing new, nothing unexpected, nothing more severe in general, based on what we know from LOTIS-2. We don't have quantitative data on how every doctor is treating and using the -- managing the side effect profile.

But in general, when we talk to our advisers or here's the advice we're giving in the label is working and we're not seeing more dose delays or discontinuations than we anticipated from the LOTIS-2 profile. So far, what we're seeing in the clinical practice is consistent with what we saw in the clinical trial database..

Great. Thank you..

You're welcome..

Thank you. Our next question comes from Matthew Harrison of Morgan Stanley. You may proceed with your question..

Hi, thanks for taking my question. This is Steve Eisen [ph] for Matthew Harrison. I have a question for Lonca. I want to ask about your view on the penetration into the key centers.

And what is the opportunity in community centers?.

Jennifer?.

Yes. No, I can take that. So as I reported, our volume to date or at least through 2021, is predominantly driven by the academic institutions but we've also had some early community uptake. As we think about the evolution of the business and with our permanent J code which we now have confirmation, we'll be receiving -- will be effective on April 1.

We're excited about the opportunity to move into the community. As you may be aware, in the community, the permanent J code can be a point of pivot for physicians being willing to try a new product because it does provide greater confidence around their timing to reimbursement which is important for their practices.

So in terms of penetration, we've seen an equal number of -- equal proportion, I should say, of accounts on the community and the academic setting ordering ZYNLONTA with a greater volume coming from the academic institutions but we do believe that, that will evolve as we have that opportunity with a permanent J code..

Thanks. That's helpful..

[Operator Instructions] Our next question comes from Kennen MacKay with RBC. You may proceed with your question..

Hi, congrats on the progress and thanks for taking the questions. Maybe thinking about your ZYNLONTA strategy, can you help us with the size of the newly incident frontline DLBCL market if it's unfit for R-CHOP? Just thinking about the potential market that can be indicated by the LOTIS-9 trial.

I'm curious what percent of newly incident patients that could represent? And then second for Dr. Camardo.

Could you speak a little bit more to the LOTIS-3 trial and what a to the decision-making to refocus on rituximab combos versus the ibrutinib combo? Was there some overlapping toxicity concern or other safety events in that combination with ibrutinib? Or was the decision more just related to lack of sufficiently additive efficacy?.

Kennen.

Jennifer, do you want to take the first part?.

Yes, certainly. Ken, so qualitatively, we've had a lot of enthusiasm from thought leaders, as I mentioned, because this is an under -- maybe underserved population by current clinical trials. And anecdotally, they have given us a range.

It really depends on the treatment setting, quite frankly, what the percentage of frail and unfit patients that they may have but it does range somewhere between 15% and 30%. We're going to be doing some more work to really understand the footprint of these patients.

But if you think about the first line opportunity is approximately 60,000 patients for the U.S. and EU5, it is a significant commercial opportunity.

And given the fact that it would be an area of high unmet medical need and leveraging the strength of our single agent profile then in combination with rituximab, I'm excited about the opportunity from a commercial perspective for sure..

And the answer to your question is no. This was not a decision based on observation of overlapping toxicity.

Rather, it was a decision based on the observation that this combination might provide a modest additional benefit, perhaps in later line treatments using a drug ibrutinib which does not have an indication for large cell and isn't very widely used versus a transformation for first-line indication using a drug that is widely used.

And I mentioned in a population that in our view, is underserved. And allowing us a chance to have an impact in patients at their first possible chance of cure. And also as a corollary, the Lonca-rituximab combination is also helpful as a baseline for us to add some new drugs once we can prove benefit with that combination in the first line.

That becomes a way of improving, changing, transforming the first-line treatment, eliminating the old drugs and adding some of the new ones.

Does that answer your question, I hope?.

Yes, definitely. And maybe just going back to your comments around the additive -- I'm sorry, the additive efficacy of rituximab.

Can you maybe help sort of set some goalposts there, how -- is that truly additive? Should we be thinking about the potential front line rituximab efficacy there with some of the maybe response rates we've seen from ZYNLONTA in the third line? Or how should we think about that?.

Yes. Think about it as better than what we're seeing in the -- what we were seeing in the third line which is actually very good. I mean, our 25% complete response rate in third line is actually very good as a single agent and that's not just third line, that's fourth line, fifth line. We're adding rituximab and seeing an improvement.

I can't exactly tell you what it is because we -- at this point in time, we have a pretty small sample. But there's also evidence from our labs on this combination. And it's interesting, there's a large body of evidence that shows rituximab, in general, will add to the effectiveness of most of the cytotoxic drugs.

So we're sort of building on something that's almost a biologic principle here. And we're seeing pretty good confirmation in our early LOTIS-5. But I just -- a number just doesn't at this point.

It's a little too early to come out with a number but we are seeing what looks like it's -- the combination is an improvement over what we're seeing in the third line, as I said which is pretty good, actually at 25%, very good. So, okay..

Got it. Thanks, Joe..

You're welcome. Okay..

Thank you. And I'm not showing any further questions at this time. I would now like to turn the call back over to Chris Martin for any further remarks..

Thank you, operator and thank you very much for joining our call today, everyone. We look forward to keeping you updated on our progress. And with that, I wish you all a good day. Thank you. Bye..

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect..