ADC Therapeutics opened 2026 with steady commercial execution and tight cost control as it approached its most important catalyst. First-quarter ZYNLONTA net product revenue rose about 15% to $20.0 million from $17.4 million a year earlier -- a second straight quarter above $20 million -- though total revenue declined year over year because the prior-year period had included a $5 million licensing milestone, and cost of product sales rose to $3.6 million on a structural reallocation of personnel from R&D to commercial manufacturing. Non-GAAP operating expenses fell 13% to $42.9 million, GAAP net loss narrowed to $33 million ($0.21 per share) and non-GAAP adjusted net loss improved to $19.7 million, leaving cash of $231 million and a runway at least into 2028. The quarter was dominated by the pending LOTIS-5 confirmatory readout, confirmed on track for before the end of June 2026, with management fully blinded and in a quiet period since April 1; a positive result would trigger a supplemental BLA by year-end, compendia inclusion in the first half of 2027 and confirmatory approval around mid-2027, unlocking the lifecycle-management value of ZYNLONTA. LOTIS-7 enrollment of about 100 patients was on track to complete in the second quarter with full data by year-end, and the indolent-lymphoma investigator-initiated trials remained on course for data between end-2026 and mid-2027. Management reiterated that 2026 revenue should be broadly in line with prior years, with a genuine inflection expected only from 2027. Analyst questions focused on the LOTIS-5 database lock and unblinding process, the drivers of revenue growth and what would be disclosed at top-line, overall-survival maturity, the quiet-period mechanics, and the persistence of higher cost of goods.
Thank you, operator. Today, we issued a press release announcing our first quarter 2026 financial results and business updates. This release and the slides we will use in today's presentation are available on the Investors 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, Pepe Carmona, who will review our first quarter 2026 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 first quarter 2026 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.
Thank you, Nicole. We continue to make good progress in the first quarter of 2026 as we advance towards multiple important milestones for ZYNLONTA over the remainder of the year, beginning with the expected LOTIS-5 top-line readout in the second quarter. 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. First quarter net product revenues were $20.0 million as compared to the prior year's first quarter net product revenues of $17.4 million. The increase was driven primarily by normal quarter-to-quarter variability in customer ordering with underlying demand broadly stable.
Looking toward the second-line plus setting where we believe the largest growth opportunity lies, for LOTIS-5, our phase III confirmatory trial of ZYNLONTA plus rituximab, we expect to share top-line data before the end of June, potentially bringing us another step closer to providing this combination to significantly more patients. While this timeline is rapidly approaching, I do wanna highlight that we are currently still blinded to the data. Turning to LOTIS-7, we expect to complete enrollment of approximately 100 patients at the selected dose level of ZYNLONTA plus ofatumumab in the second quarter, with full data anticipated by year-end.
In indolent lymphomas, we continue to anticipate data publication between the end of 2026 and mid-2027 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 zone lymphoma. We continue to pay close attention in the quarter to managing our cost base and optimizing our balance sheet. On a non-GAAP basis, we reduced our total operating expenses by 13% versus Q1 2025, and we ended the first quarter of 2026 with a healthy cash balance of $231 million. This maintains our expected cash runway at least into 2028, enabling us to deliver against our strategy.
We are building off the well-established role of ZYNLONTA as a single-agent therapy in third-line plus DLBCL, where ZYNLONTA has a profile of rapid, deep, and durable efficacy, as well as manageable safety with simple and convenient administration. We believe the relative stability we've seen in net product revenues over multiple quarters demonstrates that ZYNLONTA has a clear place in this market. This is just a starting point as we believe in the potential for ZYNLONTA 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 have been consistently encouraging, with the potential to be highly differentiating.
Through expansion into these settings in DLBCL and into indolent lymphomas, we are confident that ZYNLONTA has the potential to reach peak annual revenues of $600 million-$1 billion in the U.S., assuming both compendia listing and regulatory approval. The upcoming LOTIS-5 trial readout, if positive, will begin to unlock the value of our lifecycle management efforts with ZYNLONTA. Taken together with the upcoming data expected from LOTIS-7 and the indolent lymphoma studies, we expect to accelerate our revenue growth trajectory starting in 2027. I would like to turn the call over to Pepe Carmona, our CFO, who will discuss financial results for the first quarter. Pepe.
Thank you, Ameet. On the financial front, ZYNLONTA net product revenues in the first quarter of 2026 were $20 million as compared to $17.4 million in the same quarter in 2025. Licensing revenues and royalties were lower this year due to a $5 million milestone we received from our partner in the prior year period. Cost product sales increased by $1.6 million to $3.6 million for the three months ended March 31st, 2026. This increase reflects a shift in the allocation of certain personnel costs due to a change in focus from research and development activities to commercial manufacturing activities. Total operating expenses were $46.1 million for the first quarter. On a non-GAAP basis, total adjusted operating expenses were $42.9 million for the quarter.
Total adjusted operating expenses were down by 13% over the prior year period, primarily driven by lower R&D expenses. As Ameet noted, we're managing our costs carefully, and we remain disciplined in our capital allocation towards potential value creation while driving efficiencies. On a GAAP basis, we reported a net loss of $33 million for the first quarter of 2026, or $0.21 per basic and diluted share, as compared to a net loss of $38.6 million or $0.36 per basic and diluted share for the same period in 2025. On a non-GAAP basis, the adjusted net loss was $19.7 million for the first quarter of 2026, as compared to a net loss of $24 million for the same period in 2025.
The lower net loss on both GAAP and non-GAAP basis was primarily due to reduced R&D expenses. The year-over-year reductions on a per-share basis were additionally impacted by the higher number of weighted average shares outstanding. You can find the reconciliation of GAAP to non-GAAP measures for the first quarter in the accompanying financial tables of the press release issued earlier today and in the appendix of this presentation. At the end of the first quarter, we had cash and cash equivalents of $231 million, as compared to $261.3 million as of December 31st, 2025. This provide us with an expected cash runway at least into 2028. Turning to upcoming milestones, we expect to have multiple data catalysts during the remainder of 2026 across the ZYNLONTA program.
First, we expect to share the top-line data for LOTIS-5 before the end of June, with publication of full results anticipated by the year-end. As Ameet noted, we're currently blinded to the data. Until the top-line data has been presented, we will remain in a blackout period, which means we may need to cancel our participation in any conferences as well as meetings with investors and analysts. Assuming the results are positive, we plan to submit a supplemental Biologics License Application to the FDA by year-end, with potential publication and Compendia inclusion in the first half of 2027 and confirmatory approval to follow thereafter. With LOTIS-7, we're on track to complete enrollment in the second quarter. We plan to share the next update with full data at a medical meeting 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 the lead investigator to share additional data at medical conferences 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.
Thank you, Pepe. To close, I am pleased with our start to 2026. We have achieved solid commercial performance while maintaining our strict capital discipline as we look forward to multiple anticipated value-creating catalysts, beginning with the expected LOTIS-5 readout. We are excited about delivering on our strategy and confident we can drive significant potential long-term growth starting in 2027. We can now open the line for questions. Operator?