ADC Therapeutics Reports Undisclosed Material Agreement

TL;DR

**ADC Therapeutics signed a big deal, but they're not telling us what it is yet.**

AI Summary

ADC Therapeutics SA filed an 8-K on January 19, 2024, reporting an "Entry into a Material Definitive Agreement" that occurred on January 16, 2024. While the filing indicates a significant agreement, it does not disclose the specific details, parties, or financial terms of this agreement. This matters to investors because a material agreement could significantly impact the company's future operations, financial health, or strategic direction, but without details, the impact remains unknown and could introduce uncertainty.

Why It Matters

This filing signals a potentially significant business development for ADC Therapeutics, but the lack of specific details means investors are left in the dark about its nature and potential impact on the company's value.

Risk Assessment

Risk Level: medium — The risk is medium because a material agreement could be very positive or negative, and the lack of disclosure creates uncertainty for investors.

Analyst Insight

A smart investor would monitor subsequent filings or press releases from ADC Therapeutics for more details on this material agreement, as its specifics will determine its true impact on the company's valuation and future prospects.

Key Players & Entities

• ADC Therapeutics SA (company) — the registrant filing the 8-K
• January 16, 2024 (date) — date of the earliest event reported (entry into material definitive agreement)
• January 19, 2024 (date) — date the 8-K was filed
• 001-39071 (other) — Commission File Number for ADC Therapeutics SA
• CHF 0.08 (dollar_amount) — par value per common share of ADC Therapeutics SA

FAQ

Key Financial Figures

• $75 million — t provide gross cash proceeds exceeding $75 million (as compared to $50 million prior to th
• $50 million — s exceeding $75 million (as compared to $50 million prior to the Amendment), the Company wi
• $45.5 million — s, with minimum amounts increasing from $45.5 million for the prior three quarter period endi
• $67.7 million — quarter period ending June 30, 2024 to $67.7 million for the prior four quarter period endin
• $90.0 million — quarter period ending June 30, 2026 to $90.0 million for the prior four quarter period endin
• $94.2 million — quarter period ending June 30, 2028 to $94.2 million for the prior four quarter period endin
• $650 million — erage market capitalization is at least $650 million. In addition, the lenders to the Credit

Filing Documents

• dp205339_8k.htm (8-K) — 26KB
• dp205339_ex1001.htm (EX-10.1) — 108KB
• 0000950103-24-000925.txt ( ) — 328KB
• adct-20240116.xsd (EX-101.SCH) — 3KB
• adct-20240116_lab.xml (EX-101.LAB) — 33KB
• adct-20240116_pre.xml (EX-101.PRE) — 22KB
• dp205339_8k_htm.xml (XML) — 3KB

01. Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement. Amendment to the Loan Agreement On January 16, 2024, the Company and certain of its subsidiaries entered into the First Amendment (the "Amendment") to the loan agreement and guaranty, dated August 15, 2022, among the Company, its subsidiaries party thereto, the lenders party thereto and Blue Owl Opportunistic Master Fund I, L.P., as administrative agent and collateral agent (the "Credit Agreement"). The Amendment, among other things, (i) provides that, with respect to certain out-licensing arrangements for preclinical compounds and certain technologies that provide gross cash proceeds exceeding $75 million (as compared to $50 million prior to the Amendment), the Company will only be required to use 25% (as compared to 30% prior to the Amendment) of gross cash proceeds from such arrangements to repay the outstanding borrowings under the Credit Agreement and (ii) requires the Company achieve minimum levels of ZYNLONTA net sales in the United States (the "Revenue Covenant"), tested on a quarterly basis, with minimum amounts increasing from $45.5 million for the prior three quarter period ending June 30, 2024 to $67.7 million for the prior four quarter period ending June 30, 2026 to $90.0 million for the prior four quarter period ending June 30, 2028 to $94.2 million for the prior four quarter period ending June 30, 2029. The Revenue Covenant is subject to a customary cure right in favor of the Company, which may be exercised by making certain prepayments. The cure right may be exercised up to three times during the term of the Credit Agreement but no more than two cure rights may be exercised in consecutive quarters. The Revenue Covenant does not have to be tested for any quarter where the 30-day average market capitalization is at least $650 million. In addition, the lenders to the Credit Agreement consented to certain potential reorganization transactions to facilitate a change in the Company's jurisdiction o

Forward-Looking Statements

Forward-Looking Statements This Current Report on Form 8-K contains forward-looking statements, including statements regarding the Company's ability to comply with the net sales covenant contained in the Amendment and to enter into out-licensing arrangements. Forward-looking statements are based on our management's beliefs and assumptions and on information available to our management at the time such statements are made. Such statements are subject to known and unknown risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to: the Company's ability to obtain and maintain regulatory approval for ZYNLONTA; the Company's ability to successfully commercialize ZYNLONTA and future revenue; the availability and scope of coverage and reimbursement for ZYNLONTA; the substantial competition in the industry; the outcome and results of ongoing or planned clinical trials or pre-clinical research programs; the Company's ability to identify and execute out-licensing arrangements and the amount of monies received from the same; and those identified in the "Risk Factors" section of the Company's Annual Report on Form 20-F and in the Company's other periodic reports and filings with the Securities and Exchange Commission.

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (d) Exhibits. Exhibit Number Description 10.1 First Amendment to the Loan Agreement and Guaranty, dated January 16, 2024, among ADC Therapeutics SA, ADC Therapeutics (UK) Limited, ADC Therapeutics America, Inc., the lenders party thereto and Blue Owl Opportunistic Master Fund I, L.P., as administrative agent and collateral agent 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) Certain schedules to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule will be furnished supplementally to the SEC upon request; provided, however, that the parties may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any document so furnished.

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ADC Therapeutics SA Date: January 19, 2024 By: /s/ Peter J. Graham Name: Peter J. Graham Title: Chief Legal Officer

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View this 8-K filing on SEC EDGAR