ADC Therapeutics SA
NYSE:ADCT
Earnings Call Analysis
Q4-2023 Analysis
ADC Therapeutics SA
The company's focus is on demonstrating ZYNLONTA's superior efficacy over bispecifics alone, emphasizing its potential to expand use, increase accessibility, and transform treatment paradigms in cancer care. This ambitious program aims to make a significant impact on both patient outcomes and commercial opportunities for ZYNLONTA.
Despite an unforeseen need to increase enrollment in the LOTIS-5 Phase III study, there are no safety concerns, and the study is on track to complete enrollment in 2024. The LOTIS-7 Phase Ib study is showing promise, with antitumor activity observed, and further data will be shared as it matures. If positive, regulatory discussions are anticipated to propel the development forward.
The ADCT-601 targeting AXL is showing encouraging signs in a Phase I trial with different cancers, and detailed data are set to be presented soon. Sarcoma's high AXL expression allows it to serve as a proof of concept for this novel approach.
As of the end of 2022, the company reported healthy cash reserves of approximately $278.6 million, with a $32 million decrease from the previous quarter. ZYNLONTA's net sales saw a 16% year-on-year decline due to market pressures, but total non-GAAP operating expenses were reduced by 24%. The company experienced a net loss of $85 million or $1.03 per share for the quarter.
Revenues from ZYNLONTA in the U.S. are expected to cover all commercialization-related expenses, positioning it as a source of funds to finance the company's pipeline. As for 2024, a similar gross-to-net ratio is anticipated as in the latter half of 2023, with the expectation of a decrease in R&D expenses, particularly with LOTIS-5 study costs expected to wind down in 2025.
Investors can expect crucial updates on LOTIS-7, ZYNLONTA's single-agent use in lymphoma, and new data at the AACR before the next investor event. This proactive communication approach demonstrates the company's commitment to keeping the investor community informed and engaged with its progress.
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Welcome to the ADC Therapeutics Fourth Quarter and Full Year 2023 Financial Results Conference Call. My name is [ Norma, ] and I'll be your operator for today's call. [Operator Instructions] I will now turn the call over to [ Nicole Riley, ] Head of Communications. Nicole, you may begin.
Thank you, operator. This morning, we issued a press release announcing our fourth quarter and full year 2023 financial results and business updates. This release is available on the ADCT website at ir.adctherapeutics.com under the Press Releases section.
On today's call, Ameet Mallik, Chief Executive Officer; Kristen Harrington-Smith; Chief Commercial Officer; Mohamed Zaki, Chief Medical Officer; Patrick van Berkel, Chief Scientific Officer; and Pepe Carmona, Chief Financial Officer will discuss recent business highlights and review our fourth quarter and full year 2023 financial results before opening the call for questions. Before we begin, I would like to remind listeners that some of the statements made during this conference call will contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain known and unknown risks and uncertainties, and actual results, performance and achievements could differ materially. They are identified and described in today's press release and the accompanying slide presentation on Slide 2 and in the company's filings with the SEC, including Form 10-K, 10-Q and 8-K.
ADCT is providing this information as of the date of today's conference call and does not undertake any obligation to update any forward-looking statements contained in this conference call as a result of new information, future events or circumstances after the date hereof, except as required by law or otherwise. The company cautions investors not to place undue reliance on these forward-looking statements.
Today's presentation also includes non-GAAP financial measures. These non-GAAP measures have limitations of financial measures and should be considered in addition to and not in isolation or as a substitute for the information prepared in accordance with GAAP. You should refer to the information contained in the company's fourth quarter earnings release for definitional information and reconciliations of historical non-GAAP measures to the comparable GAAP financial measures.
It is now my pleasure to pass the call over to our CEO, Ameet Mallik. Ameet?
Thanks, Nicole, and thank you all for joining us today. 2023 was a year of prioritization and focus for the company. We made some tough decisions and firmly believe we are well positioned for success in 2024 and beyond.
With enhanced talent in place, we implemented a new corporate and capital allocation strategy, focusing our resources and energy on our most advanced and highest potential clinical value drivers. As you can see here, we enhanced commercialization efforts, prioritize our pipeline, expanded our research platform and reduced organizational costs. This reset in 2023 was critical to enable our strategy moving forward.
There are 2 core pillars to the strategy, which we believe will unlock the tremendous value we see in this company. Our first pillar and primary focus is hematology. Within this, we have a derisked asset in ZYNLONTA, the key product in our prioritized portfolio, which we expect to carry the company through to profitability.
We are deploying the majority of our capital to the ZYNLONTA franchise to commercialize our existing third line and third line plus sale BCL indication, and to pursue the substantially larger potential opportunity in earlier lines of DLBCL therapy and indolent lymphoma. We believe these potential opportunities will help expand the ZYNLONTA franchise and have the potential to generate annual peak sales in excess of $0.5 billion.
The second pillar of our strategy is grounded in our emerging solid tumor pipeline. Our most advanced asset is ADCT-601, and behind this, we have a number of exciting next-generation antibody drug conjugates, which potentially address significant unmet patient needs.
Driven by our novel platform, we see the potential to advance a broad portfolio of differentiated ADCs against solid tumor targets of interest. To capture this opportunity, our ambition is to progress multiple assets in parallel, internally and externally, supported by nondilutive funding from partners.
Across each of our presenters today, you will hear about how we are putting this strategy into action, whether through enhancing our commercial execution, prioritizing and accelerating our most promising pipeline assets, advancing high potential early-stage research programs or through our capital allocation strategy.
Now I'd like to expand briefly on the substantially larger potential opportunity that I just mentioned for ZYNLONTA and earlier lines of DLBCL therapy and indolent lymphoma.
Pending the results of the LOTIS-5 and LOTIS-7 studies, our goal is to expand usage of ZYNLONTA into second line and second line plus DLBCL. Furthermore, its data supports expansion into the second line and second line plus setting of follicular lymphoma and marginal zone lymphoma, we believe this would further increase the potential for this product.
Now I'd like to share a snapshot of the business update you'll hear about today. I'm pleased to confirm that ZYNLONTA achieved double-digit sequential sales growth in the fourth quarter, with revenues of $16.6 million. Importantly, we saw a resumption of growth, both in the community and in academic centers.
We are also delighted to share positive pipeline news at the start of this year. For our LOTIS-7 study of ZYNLONTA in combination with bispecifics, we shared early data from the first dosing cohort. Since that time, we have successfully cleared the second dosing cohort in both arms with no dose-limiting toxicities.
We are encouraged by what we have observed with ADCT-601, our novel axle targeting ADC, in sarcoma and have recently initiated screening in pancreatic cancer patients.
Lastly, we disclosed that we are advancing an early-stage portfolio of investigational ADCs, which utilize a novel [indiscernible] based platform.
Turning to our financial position. We ended 2023 with close to $280 million of cash. Together with our business plans and strict cost discipline, this provides us with an expected cash runway into Q4 2025, which will support us through multiple value-generating catalyst this year and next.
So taken together, we entered 2024 with great confidence, having repositioned and refocused the company and with some encouraging early data emerging from our pipeline.
With that, I would like to turn the call over to Kristen for a commercial update. Kristen?
Thanks, Ameet. Today, our strategy is to grow ZYNLONTA in the community, where the third line, third line plus DLBCL setting continues to be fragmented with no standard of care, and to maintain our position in the academic centers for patients who are not eligible for CAR-T or bispecifics or who have progressed following treatment with these complex therapies.
Our strategy is supported by real-world data as presented at the recent [indiscernible] meeting, which demonstrated ZYNLONTA's efficacy pre and post CAR-T. Execution against our strategy was the fundamental driver for our commercial restructuring, and resulted in higher in loss of demand in November and December, similar to the levels in the first half of 2023.
We delivered a 17% increase in net revenue in Q4 compared to Q3, with growth in both the community and academic setting. I am especially proud of our performance, given the competitive dynamic with the recent approvals of 2 bispecifics in the same third line, third line plus setting as ZYNLONTA. We are confident we have the right team and the right strategy to maximize ZYNLONTA in the current approved indication.
Now I want to turn to the future market landscape and the important role we expect ZYNLONTA to play. Within the DLBCL market, a true standard of care only exists in the front line, with R-CHOP and recently [ Pola R chip ], as well as in the academic setting in the second line was CAR T and autologous stem cell transplant.
However, accessibility in most patients treated in the community remains the challenge. The market is evolving towards highly effective combination with off-the-shelf agents as a cornerstone. As [ polatuzumab ] moves to the front line, we expect this will create an unmet need in the market, as retreatment in the relapsed/refractory setting is unlikely.
With our confirmatory Phase III trial LOTIS-5, our plan is to expand the ZYNLONTA label to the second line, second line plus. We have a tremendous opportunity to build share in this broader patient population, if this study continues to deliver the competitive efficacy that we have already observed with ZYNLONTA in combination with [ rituximab ] in the 20 patient safety running.
These data, coupled with the potential advantages of accessibility, ease of use, and manageable tolerability, lead us to believe the results from LOTIS-5 will help to cement ZYNLONTA as a standard of care in the second line, second line plus among community centers, where R-based regimens are commonly used across all lines of therapy.
In addition, these data have the potential to expand the use of ZYNLONTA in both the second line and third line, third line plus academic setting, when an alternative to CAR T and/or bispecifics is needed.
Moving to LOTIS-7, our Phase Ib trial evaluating ZYNLONTA in combination with bispecifics. As we progress this development program forward, our objective is to demonstrate that the combination can deliver enhanced efficacy compared to bispecifics alone, which could significantly expand ZYNLONTA use.
In addition, we hope to demonstrate that ZYNLONTA, when compared with bispecifics, can reduce levels of CRF and eliminate the need for hospitalization, expanding accessibility in the community.
Ultimately, if successful, this combination has the potential to transform the treatment paradigm in the second line across both settings, and substantially enhancing the patient and commercial opportunity for ZYNLONTA.
And now I would like to turn the call over to Mohamed for a clinical update.
Thanks, Kristen. It's my pleasure to provide an update on our clinical stage pipeline. Starting with LOTIS-5, our Phase III confirmatory trial with ZYNLONTA and rituximab, we significant [indiscernible] enrollment in 2023, and we reported encouraging [indiscernible] results in September.
While we have been pleased with the increased addition enrollment, our clinical team recently observed higher-than-expected sensory in the trial, which was confirmed with the IDMC. As a result, with a need to expand enrollment beyond the plan of 350 patients to achieve the required number of specified progression-free survival events.
Based on the current pace of enrollment, we do not expect this to affect our target to complete enrollment in 2024. Importantly, the IDMC noted no safety concerns and recommended the study to proceed at its most recent meeting held on the 16th of January 2024.
Moving to LOTIS-7, this is our Phase Ib study to explore ZYNLONTA in novel combinations. We are focusing on the combination in 2 bispecific arm, [indiscernible] blucitumab and [indiscernible].
Enrollment started in each arm in July 2023. Part 1 is a 3+3 dose escalation in third-line plus heavily pretreated patients with ZYNLONTA doses starting at 90-microgram per kilogram and then proceeding to 120 and 150-micrograms.
As we discussed in January, we dosed the first 3 patients in each arm with the 90-microgram dose and cleared the dose limit toxicity period. Since that time, we have cleared the 120-microgram dose for both arms with no DLTs, and we are currently enrolling the 150-microgram dose. Once those escalation is complete, we plan to expand at the appropriate dose levels.
After the first investigator assessment, we have seen evidence of antitumor activity among the majority of patients dosed at the first 2 levels with mixed histologies, including DLBCL follicular lymphoma and marginal [indiscernible] lymphoma. We expect to share additional data, once a larger and more mature deficit is available.
While we are excited by what we have seen, we recognize that it is early. And once those expansion in second line is complete and assuming data are promising, we plan to approach the [indiscernible] agency to discuss our strategy and potential path forward.
Beyond our own studies, there is a significant amount of interest from investigators to explore ZYNLONTA in additional indications and combinations. As [indiscernible] December 2023, there was an oral presentation from the University of Miami on their investigator [indiscernible] Phase II study of ZYNLONTA and rituximab in patients with high-risk relapsed or refractory follicular lymphoma. This is a unique population not served well by the current standard of care.
Initial results from the 33 patients were very encouraging, including a best overall response rate of 96% and a complete response rate of 85%. In terms of safety, the majority of adverse events were primarily Grade 1 and manageable. The presentation was extremely well received by the physician community and the trial is now being expanded to other centers, with a target enrollment of 100 patients.
The University of Miami is also conducting another investigated [indiscernible] Phase II study of ZYNLONTA in relapse or [indiscernible] lymphoma, an indication with significant unmet need. The study is designed to enroll 50 patients and a futility analysis is expected to be conducted in the second quarter of this year.
We anticipate investigators will present the data from both studies at upcoming medical meetings. If these initiate trials are positive, we would move quickly to determine gradatory and/or [indiscernible] path forward.
I want to turn now to our solid tumor candidate, ADCT-601 parking AXL, which we are investigating in a Phase I study in sarcoma, pancreatic cancer and [indiscernible] cell lung cancer.
While others have explored AXL as a therapeutic target, we are especially excited by the potential [indiscernible] profile we see with the 601 [ D2 ], its innovative design of incorporating a PBD box.
As expressed in multiple tumor types, and it has been shown that high expression of accent is correlated to [indiscernible] patients' overall survival across many cancer types, including [indiscernible] lung cancer, pancreatic and sarcoma.
Our Phase I trial includes monotherapy as well as combination arms, with [indiscernible] in sarcoma and pancreatic cancer. Given the high level of AXL expression, sarcoma is serving as the proof of concept.
In January, we disclosed that we reached the recommended dose of 30 milligrams. In addition, we also shared that ADCT-601, was well [indiscernible] at the doses tested, and we have been encouraged by the early size of antitumor activity in both monotherapy and combination. The study is currently in Part 2, which includes dose optimization and expansion. We plan to share additional data from the trial in the presentation at ECR next month, for which abstract is now available online.
With regard to the other indications, I am pleased to report that we have initiated screening in the pancreatic cancer monotherapy are built on a [indiscernible] patient population. We also plan to initiate dosing in the non-small cell lung cancer preselected patients, once we have optimized the assay for [indiscernible].
I have am encouraged by the progress we are making with our pipeline and look forward to sharing more in the future. I would now like to hand over to Patrick.
Thanks, Mohamed. It's a pleasure to update you all on our research activities. As we disclosed at the start of this year, as part of our broad toolbox, we're now developing ADCs, utilizing a differentiated payload, based on the [indiscernible] raise [ 1 ] in the exatecan, together with a novel hydrophilic linker.
Compared to commercially available toxins, such as the DXC platform, our innovative and proprietary approach has shown evidence of preclinical studies or greater potency, stronger biocentrictivity and excellent tolerability.
Initially, we are conducting research utilizing our exotic and based platform against 4 highly attractive targets and indications with high unmet needs. The first is Claudin-6, which is a novel target that is highly expressed in ovarian endometrial testicular and non-small cell lung cancer.
The second target is NaPi2b, a validated ADC target, which is also highly expressed in ovarian, endometrial and non-small cell lung cancer.
The furthest, PSMA, which is a validated ADC target, highly expressed the metastatic acid-resistant prostate cancer. We intend to select the clinical candidate based on a novel optimized PSMA-specific antibody.
Lastly, we are applying this platform to an undisclosed target. What I can say is that the target is a novel transported protein, which is highly expressed in multiple hematological and solid tumor malignancies.
For Claudin-6, NaPi2b and the undisclosed target, we have completed invivo pharmacology and those range finding studies in [ cynomolgus ] monkeys. In each case, we've seen strong antitumor activity, with an attractive therapeutic index and no evidence of interstitial lung disease.
Based on the encouraging initial data from these 3 investigational candidates, we believe we have a differentiated ADC platform that can be applied to multiple tumor targets of interest.
In terms of next steps, we will share data for Claudin-6 and NaPi2b at AACR next month. The abstracts are available on the AACR website, and I would encourage you to review them. Following AACR, we plan to share additional information on our differentiated research platform at an investor event in the second quarter.
With that, I would like to hand over to Pepe.
Thank you, Patrick. Before I get into the financials and upcoming catalysts, I want to remind everyone of our corporate business development strategy.
Hematology continues to be our primary focus. And within this, our key objective is to drive the value of ZYNLONTA. We will achieve this by fully supporting our commercialization effort in the U.S. directly and through our partnership ex U.S.
In solid tumors, our aim is to pursue multiple ADC candidates in parallel and increase our shots on goal. We will determine on a case-by-case basis, whether we wish to progress candidates externally, or seek to partner in order to share the development and financial risk.
Turning to our fourth quarter performance. We're now reporting our results under U.S. GAAP, as we became a U.S. domestic filer starting January 1, 2024.
Starting with our balance sheet. As of December 31, we had cash and cash equivalents of approximately $278.6 million or a $32 million decrease from the end of Q3.
Moving to the P&L. As you already heard, ZYNLONTA net sales were $16.6 million in the quarter, a decrease of 16% versus prior year, primarily driven by higher gross net due to discover drug rebate and slightly lower volume, partially offset by higher gross price.
Our total operating expenses on a non-GAAP basis, which excludes stock-based compensation, were down 24% compared to the fourth quarter of last year. This mainly reflected our focus on driving operating efficiencies, together with reduced R&D expenditure due to focused investment in our clinical studies and lower selling and marketing expenses.
For 2024, we will continue to take a very disciplined approach to our operating expenses. This is crucial to fund the development of our key pipeline programs and maintaining our expected cash runway into the fourth quarter of 2025. You will find the reconciliation of GAAP measures to non-GAAP measures in the compounding financial tables of the press release issued earlier today and in the appendix of this presentation.
Moving to the bottom of the P&L. On a GAAP basis, we reported a net loss of $85 million for the quarter or $1.03 per basic and diluted share. This took our full year 2023 net loss to $240 million or $2.94 per basic and diluted shares.
My final slide highlights the multiple potential value-driving milestones, which we expect in 2024. With that, I will turn the call back to Ameet.
Thanks, Pepe. To close, we enter 2024 with a clear strategic road map and the capabilities to drive value creation for all our stakeholders. My team and I are excited about the company's prospects and look forward to keeping you updated on our progress.
Now we will be available for questions. Operator?
[Operator Instructions] Our first question will come from the line of Naureen Quibria with Capital One Securities.
Congrats on the progress. So actually, I was just curious about LOTIS-7. Can you talk about the safety data with bispecifics in combination to date and what's been seen with other therapies? And relative to that, can you speak to your expectation for LOTIS-7, your level of confidence for this combination?
And just on the same topic, you mentioned on the press release that you have a larger data set -- you present you have a larger data set. Can you just talk about -- or the size and scope of that data set that you would expect to release or is it after the 120-microgram data? I appreciate [indiscernible].
Thanks, Naureen. I really appreciated it. Maybe I'll turn it over to Mohamed to answer both those questions on the safety profile and what we're hoping for and what we've been seeing as well as on -- Yes. So Mohamed, do you want to take it?
Sure. Thanks, Ameet. Thanks Naureen for the question. With regard to its [indiscernible], as you know, it's a good escalation study of combination of ZYNLONTA plus 2 different bispecific [indiscernible] and [indiscernible] in 3 different disease types, marginal zone, DLBCL and follicular in third line plus. We are very encouraged by the fact that we have cleared the first 2 dose levels, the 90-microgram per [ hec ] and the [ 120 microgram ] [indiscernible], and all we've seen so far is either no CRS or low-grade CRS results very quickly.
We are very encouraged by the antitumor activity we keep seeing in the study to date. [indiscernible] and all the label study, and we see things [indiscernible]. However, it's early days. And we would like to wait until we have more than sure that we be able to share more mature cohorts later this year.
I think that's pretty much answer to your question, I mean [indiscernible] kind of a multiple points for I hope is [indiscernible].
And Naureen, maybe just one thing to add. Thanks, Mohamed. We're now currently dosing the 150-microgram per [indiscernible] dose in both the glofitamab and the mozentuzumab arm. Once those are cleared, we'll move right into the dose expansion in second line plus DLBCL with [ pofitumab. ] And that will be the focus. That's where I think we're going to get a better representation of efficacy when we have a broader number of patients, longer follow-up and in the single histology. And that's really the focus of Part 2 of the study, which we will start as soon as we clear the dose escalation.
Perfect. And I guess I have one for Kristen, and then I'll hop back in the queue. Just curious, in terms of the penetration levels for [indiscernible] with ZYNLONTA in the academic and community settings, what are those -- can you comment on that, number one. And number two, can you talk about what you saw in terms of how were you able to increase growth in academic, just out of curiosity.
Sure. Thanks, Naureen. So we don't share exact numbers of [indiscernible]. What I can tell you is that we had a strong foundation in the first couple of years of launch and within the academic setting.
In 2023, starting in Q2, we really refined our strategy to focus more on the community. Our strategy of driving adoption with the community played out well, and we started to see the impact of that in Q4 2023. So not only did we see more community sites adopt ZYNLONTA, but actually, we also saw an increase in volume in the academic centers as well, post the entrance of 2 bispecifics.
So we see this increased demand in, I would say, in November, and December, we started to see our demand levels come back to what we saw in the first half of 2023, and we look forward to driving progressive growth with ZYNLONTA [indiscernible] refined strategy.
Our next question comes from the line of Brian Cheng with JPMorgan.
Just a couple. On LOTIS-5, can you talk about a little bit more about the censoring that you mentioned on the call? Specifically, what is the reason for the higher-than-expected censoring in LOTIS-5? And how much of that is due to safety-related withdrawal? And I have a couple of questions for [indiscernible].
Thanks, Brian. Appreciate it. So Mohamed, do you want to talk about LOTIS-5 and censoring?
Yes. So thanks for your questions, Brian. And I just want to highlight that it is not uncommon for -- and achieve the need for increased enrollment in a global open-label Phase III. It's also not uncommon to see a little bit higher censoring when you are dealing with a relapsed refractory diseases.
The main reason we believe of the higher than versus the lack of convenience from physicians and patients with relations to control arm possibly. And that's usually because the physicians -- we don't want to be in the active [indiscernible], of course. So you can expect to see a little bit higher than usual. And there was no concerns by the DMC that met in general with regard to any safety issue that is not related to any safety reason or anything related to do.
But it is very important -- this is simply replacing possibly missing events to reach the required number of events [indiscernible] to reach the end of the study. So it's a patient procedure that many [ Phase IIIs ] do in order to make sure they get that in time.
The good news is that even with a possible increase in the [indiscernible] of this trial, we do not anticipate to have a delay on finishing enrollment, which we have communicated to be was in 2024. The reason for that. And recently, we have observed an acceleration of enrollment and we've seen we acquired a high number of [indiscernible] per month compared to a month before.
Great. And then going back to your comment related to commercial branded profitability later this year, what does that actually entail? Can you talk about the growth on [indiscernible] we should expect in our model? And related to SG&A expenses, how should we model that for the rest of the year?
Okay. Yes. Thanks, Brian. Pepe, do you want to take that in terms of gross to net evolution, what brand -- what commercial brand profitability means and the evolution of SG&A?
Yes. Thank you, Brian, for the question. So brand profitability, what we expect this year is that the revenues coming out of ZYNLONTA in the U.S. will be able to pay for all the expenses, say, record related to commercialize in ZYNLONTA, which means all the sales force, marketing team, many of [indiscernible] and all discretionary spending, which would include [indiscernible], cost of goods, IIP and other related expenses.
So basically, the -- from a capital allocation perspective, this is -- the commercial items in ZYNLONTA is not a user of funds. It's more like a source of funds to start funding the pipeline.
For modeling purposes, the gross [indiscernible], if you've heard our message is from -- in 2023 from the first half to the second half of the year, our gross net increased high single digit percentage points. We expect that 2024 will have a similar gross to net ratio that we have in the second half of 2023.
So we don't expect further increases. But as you model it in the first half of 2024, will be spiking over a higher gross net than what we saw in the first half of 2023 by that same percentage point. So high single-digit increase in the first half of 2024 compared to the prior year, but it will be more even in the second half of 2024 compared to the second half of 2023. From an expenses perspective, we will continue to drive productivity measures. We're not providing exact guidance on all OpEx levels. We will keep driving [indiscernible] across the board.
Importantly, this year, the highest investment level that we have is in LOTIS-5 and the cost [indiscernible] is higher for ZYNLONTA, which we expect full enrollment this year. So as the full enrollment happened and then the trial [indiscernible] down into 2025, we expect a decrease of R&D expenses due to [ LOTIS-5 ].
All that depends obviously on the success of the other [indiscernible]. But that's the biggest driver R&D expenses this year, which will decrease as we launch in 2025.
Do you have any other questions, [indiscernible]?
And the next question comes from the line of Gregory Renza with RBC Capital Markets.
Team, congrats on the progress. Thanks for the update and for the questions. Maybe just building on the commercial strategy, it's helpful to hear the color on the pull-through from the fourth quarter. Just curious if the [ CD20 ] bispecific competition was within those expectations? And any factors that we should be thinking about going beyond with Kristen and Pepe indicated on the dynamics of uptake for 2024.
And maybe just related to that, if I may. As we think about the longer-term opportunities for late line, just curious if you have any updated thoughts on the losses positioning just relative to ADC-based combinations in third line, certainly saw the ECHELON-3 [indiscernible] triplet meeting, its OS endpoint improvement regardless of [ CD3 ] expression. So I'm just curious if you had any updated thoughts on those evolving dynamics as well.
Yes, I'll start and then I'll pass it on to Kristen and Mohamed, in case they have additional comments. But I would say overall, bispecifics are definitely gaining ground in that third line setting post CAR T. You saw there was strong growth. While CAR Ts are basically kind of flattening out right now, when you look at out of the sales of all the CAR T agents in Q4 versus Q3 is kind of flattening out. Bispecifics continue to grow dynamically and the uptake, particularly in the academic setting, continues to grow. And the community is setting, while they've been using more sophisticated centers, the uptake there is much more limited.
I think what we count, though, is that there's a clear place for ZYNLONTA, either for patients where a bispecific is not suitable, where a patient may need even fast responses or ones that progress post [indiscernible] because it doesn't work for every patient.
So I think academic physicians have sort of figured out to best use ZYNLONTA around a dynamic, where there is a new competitor and when projects are growing. So we saw a part of that rebound because I think in Q3, where there was a big push to versus [indiscernible]. In Q4, we saw that ZYNLONTA continues to be used with those that progress for those who are not as suitable as doctors sort of figure out the best patients to go to a bispecific [indiscernible] CAR T.
And then in terms of the competitive landscape, I think the whole space is moving towards combinations. And one of the advantages we have is that we're approved as a single agent, and we have strong single-agent activity. Not many drugs that have been approved as a single agent. In fact, the bispecifics in ZYNLONTA are 2 of the only drugs assets that have been approved as single agents.
And so I think our combination strategy with both LOTIS-5 and LOTIS-7 position us really well. I think we'll have competitive profiles with those 2 combinations. But in spite of an evolving landscape, will position us really well for growth, not only in the third line setting where we are today, but also in the second line setting where we will move with those trials.
Kristen and Mohamed, is there anything else that I missed that you would add?
The only thing that I would add, 2 things. One, just to add on to your evolving landscape. We see already with [ polatuzumab ] moving up to the front line, that it is creating a need different mechanism in the second line and third line. So definitely carving out a space for ZYNLONTA, whether it's today or in combination once we get LOTIS-5 and LOTIS-7. The other question was on ECHELON-3. We also saw that. We've been tracking -- we always track our marketplace and the dynamics. And one, it's nice to see a win for an ADC. It reinforces the efficacy of ADCs. But we haven't seen any data on that trial, other than the headline that Pfizer put out in terms of the overall survival win.
[indiscernible] [ squared ] is used, it's pretty uncommon, used primarily in the community, but still we'd love to see the data that Pfizer has on their triplet versus the doublet, and look forward to that so that we could better put it into context and understand any impact in the market.
If I may add Kristen also regarding the [indiscernible] story is that we need to see how the control arm in the trial actually to be able to [indiscernible] the data and understand it better. Specifically, this is in third line plot, if I understand the track correctly.
Our target is for LOTIS-5 and potential facilities to go to second line plus. So it's not directly, but with a very minimal number of patients when you get to see the first line, there may be some [indiscernible]. However, we don't know the data, [indiscernible] of course, to be able to understand it better.
That's really helpful. And then maybe just a follow-up as Patrick has discussed the next-gen platform. I'm just wondering, and we all look forward to an event later this year as you've mentioned. Just wonder if you could elaborate a bit on just the rationale for selecting NaPi2b, [indiscernible] and PSMA just through the next-gen ADCs -- and do you have a sense at this point which targets or target has the strongest rationale for internal versus the external partnerships that Pepe alluded to?
Yes. So maybe, Patrick, do you want to take the first part of the question? And then Pepe, you could take the second part of the question around partnering.
Sure, Ameet. Yes. Thanks, Ryan. So we have selected these targets because we think that they fulfill all the criteria for good ADC targets. If you look at what's known for them, it's clear that for each and every target, there's a very good level of validation for a targeted approach. Of course, they're all expressed in indications with high unmet need. And we also very carefully looked at the competitive landscape for NaPi2b, Claudin-6, PSMA and the undisclosed target. And we believe that in most cases, not all, we're among the first 3 to 4 players studying those targets. But of course, with the differentiated approach is in our novelty-based platform. So to us, that means there are attractive targets to work on.
And let me take the partnership question. So as we disclose the next generation [indiscernible] based [indiscernible] and the target earlier this year in January 4, we did an outreach with solar companies, and we already started some discussions. This compensation and our potential partnership takes few quarters. So it's not something that we would do and add a short turnaround. We do see the interest, and we will continue to advance those conversations with potential partnerships this year.
[Operator Instructions] Our next comes from the line of Kelly Shi with Jefferies.
This is [indiscernible] on for Kelly. So first question, just want to confirm that is safety, the only thing that you need to clear before moving into second line and when would you expect to have any data available from second-line patients?
And then secondly, for AXL study, can you remind us if you enroll patients based on expression? And we have that biomarker data available when the data is presented at AACR.
Thanks for this question. And yes, in terms of the expectation from LOTIS-7 dose escalation is to full year at those levels. And based on that, that [indiscernible], we are allowed to move directly to second line for expansion. We're expecting to share information focused on safety in the second quarter and more on the expansion of second line in DLBCL, specifically, in later in 2024.
In terms of AXL, so far, our enrollment is not with a preselection strategy. However, as of the pancreatic enrollment will be in [indiscernible] and for non-small cell lung cancer will be preselected.
Operator, any other questions?
At this time, I'm showing no further questions. I'd like to hand the conference back over to Mr. Mallik for closing remarks.
[Technical Difficulty]
Sorry, switching to another location, having trouble with connection. Yes. Thanks all for your attention and interest in ADC Therapeutics. Between now and our next earnings call, we expect to share some important updates on LOTIS-7, on the [ PD ] analysis and top line data of ZYNLONTA as a single agent in [indiscernible] lymphoma, and on data being presented at AACR, which we will follow up with our research investor event. As such, we look forward to multiple interactions with you in the coming months. With that, I would like to close the call. Thank you all.
This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.