ADC Therapeutics SA (ADCT)

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.

Recent Developments

On June 24, 2026, we announced a strategic reorganization to focus resources behind key value-driving initiatives in support of ZYNLONTA. As part of the reorganization, we are reducing our global workforce by approximately 17%, which is expected to be substantially completed by September 30, 2026 (“2026 Restructuring”). The reduction is driven by the expected completion of the LOTIS-5 and LOTIS-7 trials this year, as well as operational efficiencies. To ensure continuity during this transition, on June 30, 2026, our Board of Directors, with the advice of its independent compensation consultant, approved a one-time retention award to certain of our employees, including our named executive officers.

LOTIS-5 Clinical Trial Update

In June 2026 we announced topline data from our Phase 3 LOTIS-5 confirmatory trial evaluating ZYNLONTA in combination with rituximab in patients with relapsed or refractory diffuse large B-cell lymphoma (“r/r DLBCL”). ZYNLONTA plus rituximab achieved statistical significance on the trial’s primary endpoint of progression-free survival (“PFS”) and demonstrated no detrimental effect on the key secondary efficacy endpoint of overall survival (“OS”). In addition, a higher complete response (“CR”) rate and duration of CRs (“DoCR”) were observed with ZYNLONTA plus rituximab. Overall, treatment emergent adverse event (“TEAE”) rates were similar between arms. Similar rates of overall Grade ≥3 TEAEs greater than 5% were observed across both arms, with hematologic TEAEs higher in the control arm and infection, hepatotoxicity (primarily increased Gamma-glutamyltransferase increased (GGT), and edema/effusion higher in the test arm. Serious adverse events (“SAEs”), TEAEs leading to study drug withdrawal, and Grade 5 events were higher in the test arm, with the majority of Grade 5 TEAEs in the test arm occurring in patients aged 75 years or older. We submitted full data to the 68th American Society of Hematology (“ASH”) Annual Meeting and Exposition.

The LOTIS-5 trial is a randomized, open‐label, two‐arm, multicenter study evaluating ZYNLONTA plus rituximab versus the standard immunochemotherapy rituximab gemcitabine‐oxaliplatin (R‐GemOx), for the treatment of r/r DLBCL after one or more lines of systemic therapy. The study met the primary endpoint of PFS (per independent review committee) with statistical significance (HR = 0.73; p-value = 0.008 two sided), with a median PFS of 6.1 months for ZYNLONTA plus rituximab vs 4.7 months for R-GemOx. Overall survival showed no detrimental effect with ZYNLONTA plus rituximab compared to the control arm (HR = 0.96, impacted by the earlier use and a higher rate of new anti-lymphoma treatment switching in the control arm). Overall response rate (“ORR”) was 58.1% vs. 45.2%, CR rate was 39.5% vs. 26.7%, median duration of response (DOR) was 9.2 months vs. 7.7 months, and median DoCR was 16.8 months vs. 12.3 months for ZYNLONTA plus rituximab compared to R-GemOx, respectively. Of patients achieving CR, 48.5% vs. 16.7% remained in CR at 24 months in favor of ZYNLONTA plus rituximab. Of note, results in North America were consistent with the overall study results.

Overall, TEAE rates were similar between arms (98.5% vs. 97.5%). Higher rates of SAEs were seen in the test arm (49.0% vs. 34.5%). Grade ≥3 TEAEs observed in 5% of patients were hematologic (40.7% vs. 59.4%), followed by infection/

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infestations (24.5% vs. 15.7%), then hepatotoxicity (primarily increased GGT) (17.2% vs. 8.1%) and oedema/effusion (7.4% vs. 0.5%) when comparing ZYNLONTA plus rituximab to R-GemOx. A higher rate of Grade 5 TEAEs was observed in the ZYNLONTA plus rituximab arm (27 pts/13.2%) vs. R-GemOx (9 pts/4.6%). Of note, the majority of Grade 5 TEAEs in the test arm occurred in patients aged 75 years or older. Higher rates of TEAEs leading to any drug withdrawal occurred in the ZYNLONTA plus rituximab arm (25.5% vs. 9.1%). In this study, the TEAE reporting window was defined as 105 days after the last dose of study treatment or the start of new anticancer therapy, whichever is earlier. The rates of TEAEs in this study were impacted by the longer overall TEAE observation time in the test vs. control arm (median 3.9 vs. 2.5 months). This difference is primarily driven by shorter treatment duration, a higher rate of and earlier switching to subsequent therapies and a higher rate of early withdrawal in the control arm.

We recently held a pre-sBLA meeting with the FDA. During this meeting, the FDA noted substantial concerns regarding the benefit-risk or verification of clinical benefit observed in this trial based on the imbalance in Grade 5 events, when assessed in the context of a marginal treatment benefit. Following this meeting, we are assessing the best regulatory path forward and plans to provide an update on regulatory strategy and timing in the future. ZYNLONTA remains under accelerated approval as a monotherapy in 3L+ DLBCL and we plan to continue to commercialize in this setting.

LOTIS-7 Clinical Trial Update

In June 2026 we announced the completion of enrollment in the LOTIS-7 Phase 1b open-label clinical trial evaluating the safety and efficacy of ZYNLONTA in combination with the bispecific antibody glofitamab (COLUMVI®) in 100 patients with r/r DLBCL. Of note, consistent with other glofitamab trials, the protocol for LOTIS-7 recommends prophylaxis (including vaccinations) for viral, fungal, and bacterial infections (including PJP and herpesvirus), which was not a part of the LOTIS-5 protocol.

Enrollment occurred in 30 total sites with 70% of patients in the U.S. and 30% in the EU. The study enrolled patients with baseline characteristics similar to other bispecific combination studies in this space and included 46% relapsed and 54% primary refractory patients with a median age of 66 years.

Primary endpoints of the study include safety and tolerability. Secondary endpoints include ORR, duration of response, CRR, relapse free survival, PFS, and OS, as well as pharmacokinetics and immunogenicity. As part of the study protocol, anti-infective prophylaxis, intravenous immunoglobulin (in patients experiencing B-cell loss with an increased risk of infection) and vaccination are strongly recommended.

Previously reported data from this study demonstrated an 89.8% ORR and 77.6% CR and a manageable safety profile across the 49 efficacy-evaluable patients with a minimum of 6 months of follow-up. We submitted LOTIS-7 data to ASH. We are preparing to submit the complete trial results for publication, which will then be submitted to compendia. We are also evaluating a regulatory pathway for this combination and plan to submit for Breakthrough Therapy designation (“BTD”) this year.

Phase 2 Investigator Initiated Trials (IITs) Update

The University of Miami Sylvester Comprehensive Cancer Center-led multi-center trials of ZYNLONTA in combination with rituximab to treat r/r follicular lymphoma (“FL”) and ZYNLONTA as a monotherapy to treat marginal zone lymphoma (“MZL”) are ongoing. Updated MZL data were submitted to ASH and we anticipate presentation of this data before the end of the year with publication and compendia submission to follow. We also anticipate presentation of updated FL data in Q2 2027. We intend to assess potential regulatory pathways and plan to submit for BTD for MZL.

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Results of Operations

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

The following table summarizes our results of operations for the three months ended June 30, 2026 and 2025:

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 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

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Item 7. 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 audited consolidated financial statements, including the notes thereto, included in this Annual Report. 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.”

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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”) and conditional approval from the European Commission, China National Medical Products Administration (“NMPA”) and Health Canada for the treatment of relapsed or refractory DLBCL after two or more lines of systemic therapy. We are pursuing expansion of ZYNLONTA internationally, and into earlier lines of diffuse large B-cell lymphoma (“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.

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 focused on maximizing the ZYNLONTA opportunity through expansion into earlier lines of therapies of DLBCL and indolent lymphomas.

On June 11, 2025, the Board of Directors approved a strategic reprioritization and restructuring plan (the “2025 Restructuring”) to focus resources on ZYNLONTA expansion opportunities and the advancement of its preclinical exatecan-based PSMA-targeting ADC. The Company closed down its UK facility, and has reduced its global workforce across functions by approximately 30%.

Results of Operations

The following table summarizes our results of operations for the years ended December 31, 2025 and 2024:

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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 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 $73.6 million for the year ended December 31, 2025 as compared to $69.3 million for the year ended December 31, 2024, an increase of $4.3 million, or 6.2%. The increase is principally attributable to a higher sales price, with consistent sales volume on a period over period basis.

License Revenue 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.” 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 $7.8 million for the year ended December 31, 2025 as compared to $1.6 million for the year ended December 31, 2024, an increase of $6.2 million attributable to our exclusive license agreement with Sobi to develop and commercialize ZYNLONTA in all territories other than the United States, greater China, Singapore and Japan. In March 2025, the Company recognized $5.0 million in license revenue in connection with a milestone due upon ZYNLONTA’s conditional approval by Health Canada for the treatment of relapsed or refractory DLBCL after two or more lines of systemic therapy, which was paid to us by Sobi in the second quarter of 2025. The increase was also attributable to increased royalty revenue from Sobi.

Operating Expenses

Cost of Product Sales

Cost of product sales primarily includes direct and indirect costs relating to the third-party manufacture and distribution of ZYNLONTA, royalties payable to a collaboration partner based on net product sales of ZYNLONTA and inventory write-downs. We expect that cost of product sales will 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 as a percentage of product revenue if we are not able to increase the price at which we sell ZYNLONTA to offset such increases in our cost of product sales.

Cost of product sales were $5.8 million for the year ended December 31, 2025 as compared to $5.9 million for the year ended December 31, 2024, a decrease of $0.1 million, or 2.5%. The decrease in cost of product sales was primarily driven by a $1.1 million batch cancellation fee recognized during the year ended December 31, 2024, partially offset by higher inventory write-downs of $0.8 million during the year ended December 31, 2025 primarily attributable to the manufacturing of a batch that did not meet our specifications.

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Research and Development Expenses

The following table summarizes our research and development expenses for our major development programs for the years ended December 31, 2025 and 2024:

(1) Excludes share-based compensation expense.

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 $104.0 million for the year ended December 31, 2025 as compared to $109.6 million for the year ended December 31, 2024, a decrease of $5.6 million, or 5.1%. The decrease in external costs and overhead of $6.9 million was driven primarily by a reduction in spending on discontinued programs, including ADCT-601 that was discontinued in November 2024, and our preclinical product candidates and research pipeline as a result of the 2025 Restructuring. These decreases were partially offset by an increase in spending on our PSMA-targeting ADC program due to the timing of costs incurred in connection with IND-enabling activities and 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 trials.

The increase in employee expenses of $0.6 million was primarily driven by higher temporary project help of $4.0 million, partially offset by lower wages and benefits of $3.4 million due to headcount reduction as a result of the 2025 Restructuring. The increase in share-based compensation expense of $0.7 million was primarily driven by the forfeitures of awards in connection with employee terminations in the prior year.

Selling and Marketing Expenses

The following table summarizes our selling and marketing expenses for the year ended December 31, 2025 and 2024:

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