ADC Therapeutics is making its public markets debut, raising about $233 million six months after the cancer drug developer withdrew its initial IPO plans.
Not only did Épalinges, Switzerland-based ADC go through with the stock offering this time around, it was also able to boost the deal’s size—not once, but three times. On Monday, the company set IPO terms that projected the sale of 7.3 million shares in the range of $16 to $18 apiece. ADC revised those terms upward early Thursday, keeping the price range but increasing the number of shares it planned to sell by nearly 3 million. When the company moved ahead with the IPO Thursday night, the company priced 12.2 million shares at $19 each, topping the targeted price range.
Shares of ADC (NYSE: ADCT) opened on the New York Stock Exchange Friday morning at $30 apiece, up more than 58 percent from the IPO price.
ADC specializes in a type of cancer drug called an antibody drug conjugate, often abbreviated as ADC—hence, the company’s name. These drugs link a tumor-targeting antibody to a payload of cancer-killing compounds. By delivering a targeted strike to tumors, such therapies are meant spare healthy tissue from the toxic effects of the drug.
The company’s lead drug, loncastuximab tesirine, or “Lonca,” is in a pivotal Phase 2 test evaluating it as a treatment for diffuse large B-cell lymphoma (DLBCL), which is a type of non-Hodgkin lymphoma—a cancer of white blood cells called lymphocytes. Lonca targets CD-19, a protein on the surface of these cancerous cells. The drug is being evaluated in a pivotal Phase 2 test that enrolled 145 patients whose DLBCL has relapsed or has been difficult to treat.
In interim results announced last October, the company reported that 45.5 percent of patients showed an overall response to the drug, exceeding the main goal of the study. ADC says in its IPO filing that it plans to submit the drug for FDA review in the second half of this year. But the company cautions that the regulator has not said whether a Phase 2 study is sufficient to support approval.
ADC is also evaluating Lonca in other studies. A Phase 1/2 study is testing the drug in combination with ibrutinib (Imbruvica) as a treatment for relapsed or difficult to treat DLBCL and mantle cell lymphoma. ADC says in its IPO filing that it plans to start of pivotal test of Lonca in follicular lymphoma in the fourth quarter of this year.
A second ADC drug, camidanlumab tesirine, or “Cami,” targets the cancer protein CD-25 using an antibody from Genmab (NASDAQ: GMAB). ADC is testing this drug in a pivotal Phase 2 study enrolling patients with relapsed or difficult to treat Hodgkin lymphoma, a cancer that also affects lymphocytes. The company says in the filing that it believes that positive Phase 2 data would be sufficient for an FDA submission. But this study is currently under a partial clinical hold after two patients were diagnosed with Guillain-Barré syndrome, in which the immune system attacks the nerves. ADC is also evaluating Cami in an early-stage study as a potential treatment for various advanced solid tumors.
ADC is a spinout of UK-based Spirogen, an antibody-drug conjugate developer that was acquired by AstraZeneca (NYSE: AZN) in 2013. AstraZeneca holds a 5.7 percent post-IPO stake in ADC, according to the filing. The biotech’s largest shareholder is Auven Therapeutics, which owned the biggest stakes in both ADC and Spirogen. After ADC’s IPO, Auven’s stake in the company is 34.7 percent, according to the filing.
With the IPO proceeds raised, ADC says $52 million will go toward further clinical development of Lonca. The lion’s share of the new cash will go toward preparation for an expected launch of the drug. The company is setting aside $100 million of the IPO cash for that prep work.
Another $14 million is earmarked for clinical development of Cami. Smaller amounts of the IPO cash will be applied to compounds in earlier stages of development: $2 million for testing ADCT-602 in acute lymphoblastic leukemia; $10 million for early-stage testing of ADCT-601 in solid tumors; and $19 million for preclinical R&D.