ADC Therapeutics closed 2025 with a strong commercial quarter and a materially healthier financial profile. Fourth-quarter ZYNLONTA net product revenue rebounded to $22.3 million (from $16.4 million a year earlier) on new-account activations, lifting full-year revenue to $73.6 million versus $69.3 million, though underlying volume was broadly flat and growth came mostly from net price. GAAP net loss narrowed sharply -- to $6.4 million ($0.04 per share) in the quarter and $142.6 million ($1.12) for the year -- helped by a royalty catch-up gain and reduced R&D, while a roughly 50% reduction in the operating cost structure drove full-year non-GAAP operating expenses down 6% to $181.3 million. Clinically, the December LOTIS-7 update showed a 90% best overall response rate and a 78% complete response rate across 49 patients with at least six months of follow-up, supporting the combination's best-in-class ambitions. The company ended the year with $261.3 million of cash and a runway at least into 2028 after $100 million and $60 million PIPE financings, and it amended its HealthCare Royalty agreement to reduce the change-of-control payment and add strategic flexibility. Management guided to LOTIS-5 top-line data in the second quarter of 2026, an sBLA by year-end, compendia inclusion and publication in the first half of 2027, and confirmatory approval by mid-2027, with 2026 revenue expected broadly in line with recent years and R&D declining thereafter. Analysts probed LOTIS-5 event tracking and top-line content, whether the 2L revenue projection is too conservative, the go-forward R&D run rate, and capital-allocation priorities under the amended royalty agreement.
Thank you, operator. Today we issued a press release announcing our fourth quarter and full year 2025 financial results and business updates. This release and the slides we will use in today's presentation are available on the investor section of the ADC Therapeutics website. I'm joined on today's call by our Chief Executive Officer, Ameet Mallik, who will discuss our operational performance and recent business highlights, followed by our Chief Financial Officer, Jose Carmona, who will review our fourth quarter and full year 2025 financial results. We will then open the call to 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 the accompanying slide presentation and in the company's filings with the SEC, including Form 10-K, 10-Q and 8-K. ADC Therapeutics is providing this information as of today's date 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, except as required by law. The company cautions investors not to place undue reliance on these forward-looking statements. Today's presentation also includes non-GAAP financial reporting. These non-GAAP measures 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 company's fourth quarter full year 2025 earnings release for information and reconciliation of historical non-GAAP measures to the comparable GAAP financial measures. I will now turn the call over to our CEO, Ameet Mallik. Ameet.
Thanks, Nicole, and hello, everyone. Thank you for joining us on today's call. We are pleased to share an update on our achievements in 2025 and our excitement for the future. Before I get into the details, I'd like to take a moment to reflect on the progress we made over the past few years and why we believe this positions us strongly for the future. We have implemented a strategic plan to focus on ZYNLONTA with optimized lifecycle management. This includes advancing LOTIS-5 as well as initiating the bispecific combination study LOTIS-7 and IITs in indolent lymphomas. By focusing the company, we reduced our operating cost structure by approximately 50%. At the same time, we refined our go-to-market model, which resulted in strengthened KOL advocacy and a sustained market position in the third-line plus DLBCL setting despite the entry of the bispecific class.
Central to these achievements, we upgraded leadership and talent across the organization, which resulted in improved execution. Lastly, we strengthened our balance sheet through equity and BD and improved our strategic flexibility with an amended HCR agreement. Having set the strategic course for our company, we see three horizons for potential value creation. These are centered around final data disclosures, approval and compendia inclusion, and ultimately delivering growth. As we advance across these horizons, our vision is to, first, establish ZYNLONTA as a backbone therapy with a differentiated clinical profile across combinations in second-line plus DLBCL. Second, provide significant patient benefit in indolent lymphomas, including follicular lymphoma and marginal zone lymphoma.
Third, achieve potential annual U.S. peak revenue opportunity of $600 million-$1 billion, assuming compendia inclusion and regulatory approval, with a highly leveraged cost structure, providing us with broader opportunities to invest in complementary hematology assets. 2025 was a year of substantial progress for our company. We further de-risked our portfolio with multiple exciting milestones achieved for key ZYNLONTA trials in both second-line plus DLBCL and through the indolent lymphoma IITs. We undertook a strategic reprioritization to focus resources on ZYNLONTA expansion opportunities, positioning the company for long-term growth with significantly reduced operating expenses. We significantly strengthened our balance sheet, providing us with the ability to deliver against our objectives. Among our accomplishments from a commercial perspective, we continue to focus on execution and delivering on our commercial strategy, maintaining ZYNLONTA as a differentiated treatment option for third-line plus DLBCL patients.
Building off an unusually low Q3, performance was strong in Q4, with net product revenues of $22.3 million, primarily driven by variability in customer ordering patterns as well as activation of some new accounts. Sales for the year were $73.6 million and remained roughly stable in line with our expectations in the third-line plus setting. Looking toward the second-line plus setting where we believe the real growth opportunity lies, with LOTIS-5, we expect to share top-line data in the second quarter of 2026, potentially bringing us another step closer to providing this combination treatment to significantly more patients.
With LOTIS-7, we expanded target enrollment to approximately 100 patients at the selected dose level and shared updated safety and efficacy data on 49 efficacy-evaluable patients in December, which we believe continues to support the potential for this regimen to be a best-in-class combination in a highly competitive market. In indolent lymphomas, promising phase II data was also shared in 2025 from the multicenter investigator-initiated trials of ZYNLONTA in combination with rituximab to treat relapsed or refractory follicular lymphoma and of ZYNLONTA as a monotherapy to treat relapsed or refractory marginal lymphoma. With presentations at the International Conference on Malignant Lymphoma and the International Workshop on Non-Hodgkin Lymphoma, we anticipate publication of data across these IITs between the end of 2026 and mid 2027. Most recently, we were pleased to have entered into an amendment to our royalty purchase agreement with HealthCare Royalty.
This update to the terms of our agreement is a reflection of ADC's conviction and the long-term value of ZYNLONTA, and we believe these new terms give us greater strategic flexibility. Finally, from a corporate perspective, through strict capital management in 2025, including a strategic reprioritization and multiple financings, we ended the year with a cash balance of $261 million, with an expected cash runway at least into 2028. With this significant progress, we are confident in our path ahead as we work to make an impact for more patients moving forward. As a single-agent therapy in third line plus DLBCL, ZYNLONTA has a profile of rapid, deep, and durable efficacy as well as manageable safety with simple and convenient administration.
Beyond our current indication, we believe in the potential to reach significantly more patients by expanding use into earlier lines of therapy in DLBCL and into indolent lymphomas. The data we've seen across these settings so far has been consistently encouraging with the potential to be highly differentiating. We continue to believe that through expansion into these settings, ZYNLONTA has the potential to reach peak annual revenues of $600 million-$1 billion in the US. Our current indication, as I noted earlier, has shown relative stability in net revenues over multiple quarters, demonstrating ZYNLONTA has a clear place in the market as a monotherapy. We believe LOTIS-5 has the potential to lift peak annual revenue for ZYNLONTA to $200 million-$300 million as we expand into the second-line setting.
Not only would this double the addressable patient population, but with an improved clinical profile versus our current indication as a monotherapy, we expect to gain share in the second-line plus setting and improve duration of therapy. With LOTIS-7, we estimate we can expand the total opportunity for ZYNLONTA in DLBCL to $500 million-$800 million in peak annual revenue with both regulatory approval and compendia listing. If the data continue to be compelling, we believe ZYNLONTA plus glofitamab has the potential to transform the future lymphoma treatment paradigm by becoming the preferred bispecific combination in the second-line plus DLBCL setting. On top of this, we see additional potential for ZYNLONTA in relapsed or refractory marginal zone lymphoma and relapsed or refractory follicular lymphoma.
If the encouraging initial data in the phase II IITs are maintained in larger patient numbers, we believe these indolent lymphomas could provide additional peak annual revenue for ZYNLONTA of $100 million-$200 million with both regulatory approval and compendia listing, primarily driven by MZL. Let's drill down a little more into the specifics of the DLBCL treatment landscape to explain why we believe ZYNLONTA has the opportunity to play a significant role. In both the second- and third-line plus settings, there are two main segments. The first segment includes complex therapies which require unique infrastructure and expertise to handle logistical requirements and patient management. These are primarily confined to the academic centers and more sophisticated community centers and include therapies like CAR-T, transplant, and bispecifics.
The second segment comprises more broadly accessible therapies which all physicians can administer in the outpatient setting and include ADCs, monoclonal antibodies, and chemotherapy. The launch of bispecifics as monotherapy in the third line plus setting has resulted in an evolution of the treatment landscape, where we estimate there is currently a 60/40 split between complex and broadly accessible segments. In the second-line setting, where bispecifics have not yet been approved but were added last year to NCCN guidelines for use in combination, we expect that they will continue to gain share and grow the use of complex therapies. Through LOTIS-5 and LOTIS-7, we believe ZYNLONTA combinations have the potential to raise the bar on efficacy in second line plus DLBCL in their respective treatment segments, establishing ZYNLONTA as a backbone therapy with a differentiated clinical profile across combinations and offering complementary approaches to addressing unmet needs.
In LOTIS-5, our Phase III confirmatory study, we are combining ZYNLONTA with the most widely used agent rituximab in patients with second-line plus DLBCL. As a reminder, initial data from the safety lead-in portion showed an overall response rate of 80% and a complete response rate of 50% with no new safety signals, demonstrating that this combination has the potential to provide competitive second-line plus efficacy with a favorable safety profile, allowing broad accessibility. In LOTIS-7, our Phase Ib trial, we are combining ZYNLONTA with the highly effective bispecific glofitamab in second-line plus patients. In December, we reported updated data from the trial, which demonstrated a 90% best overall response rate and a 78% complete response rate across 49 efficacy evaluable patients with a minimum of six-month follow-up.
Not only did this support a clinically meaningful benefit for patients, but the data also showed the combination continues to generally be well tolerated with a manageable safety profile. Taken together, we are encouraged by the expanding data set, which we believe demonstrates the potential for ZYNLONTA plus glofitamab to be a best-in-class combination in a highly competitive market. When you look at the CR rates across these two treatment segments, we believe the emerging clinical profile of ZYNLONTA plus glofitamab in LOTIS-7 positions us well among complex therapies. At the same time, the clinical profile of ZYNLONTA plus Rituximab in LOTIS-5 has the potential to differentiate us among broadly accessible therapies.
Thank you, Ameet. On the financial front, ZYNLONTA net product revenues in the fourth quarter of 2025 were $22.3 million as compared to $16.4 million in the same quarter in 2024. On a full year basis, net product revenues were $73.6 million versus $69.3 million in 2024, with an underlying volume broadly flat. Total operating expenses were $41 million and $202.9 million for the fourth quarter and full year ended December 31, 2025, respectively. On a non-GAAP basis, total adjusted operating expenses were $39.4 million and $181.3 million for the quarter and full year ended December 31, 2025, respectively. Total adjusted operating expenses were down over prior year by 15% and 6%, respectively.
The reduction in total adjusted operating expenses for the fourth quarter was primarily driven by lower R&D expenses. The decrease in total adjusted operating expenses for the full year was across all major lines of the income statement. We continue to be disciplined in our capital allocation towards potential value creation while driving efficiencies across the portfolio. On a GAAP basis, we reported a net loss of $6.4 million for the fourth quarter of 2025 or $0.04 per basic and diluted share, as compared to a net loss of $30.7 million or $0.29 per basic and diluted share for the same period in 2024.
Net loss for the full year ended December 31, 2025, was $142.6 million or a net loss of $1.12 per basic and diluted share, as compared to a net loss of $157.8 million or a net loss of $1.62 per basic and diluted share for the full year ended December 31, 2024. The lower net loss over both periods was primarily due to a higher cumulative catch-up adjustment gain associated with our deferred royalty obligation and reduced R&D expenses, partially offset by a restructuring impairment and related costs incurred in connection with the strategic reprioritization and restructuring plan.
You can find the reconciliation of GAAP to non-GAAP measures for the fourth quarter and year to date in the accompanying financial tables of the press release issued earlier today, and in the appendix of this presentation. At the end of the quarter, we had cash and cash equivalents of $261.3 million compared to $250.9 million as of December 31, 2024. We significantly strengthened our balance sheet in 2025 by entering into a $100 million PIPE financing in June 2025 and a $60 million PIPE financing in October 2025, providing an expected cash runway at least into 2028. We expect to have multiple data catalysts in 2026 across the ZYNLONTA program. For LOTIS-5, we expect to provide top-line data in the second quarter of 2026.
We expect to publish full results by the year end. Assuming the results are positive, we'll file a supplemental Biologics License Application submission to the FDA with potential publication and compendia inclusion in the first half of 2027 and confirmatory approval to follow in mid-2027. With LOTIS-7, we plan to share the next update with full data at a medical meeting and through publication by the end of 2026. In addition, assuming positive results, we plan to pursue compendia inclusion as well as assess a regulatory strategy. With indolent lymphomas, we expect additional data to be shared at medical conferences by the lead investigators between the end of 2026 and mid-2027, and we plan to assess regulatory and compendia strategies once sufficient data are available. I will now turn the call back over to Ameet Mallik.
Thank you, Pepe. To close, we achieved meaningful progress across our ZYNLONTA clinical program in DLBCL and through investigator-initiated trials in indolent lymphomas this past year. We believe we have laid the foundation for multiple anticipated value-creating catalysts ahead, as Pepe just highlighted. With our strengthened cash runway, we are confident we will drive significant potential long-term growth beginning in 2027. We can now open the line for questions. Operator?