ADC Therapeutics Royalty Agreement Updated
ADC Therapeutics SA has announced an amendment to its existing ADC Therapeutics royalty agreement with entities managed by HealthCare Royalty. The revised terms provide greater strategic flexibility while reflecting both parties’ confidence in the long-term outlook for ZYNLONTA®.
The updated ADC Therapeutics royalty agreement significantly lowers the change of control payment. The obligation has been reduced from $750 million to $150 million through the end of 2027, and to $200 million thereafter. Importantly, this amount will not be reduced by royalties previously paid.
Key Financial Changes Under the Royalty Agreement
Under the amended ADC Therapeutics royalty agreement, HealthCare Royalty will continue to receive royalties on sales following any change of control event until the original royalty cap is reached. However, ADC Therapeutics or its successor may buy out the remaining royalty obligations.
The buyout terms are as follows:
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$525 million if completed on or before December 31, 2029
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$750 million if completed on or after January 1, 2030
These buyout amounts will be reduced by royalties already paid and any change of control payment.
In addition, HealthCare Royalty has received warrants to purchase approximately 9.8 million common shares at an exercise price of $3.81 per share. The warrants remain exercisable until December 31, 2030, and are subject to a lock-up through the end of 2027.
Strategic Flexibility and ZYNLONTA Growth Outlook
The revised ADC Therapeutics royalty agreement aligns with the company’s expectations for ZYNLONTA’s growth trajectory. Management anticipates meaningful expansion beginning in 2027, supported by multiple upcoming clinical data readouts.
Assuming compendia inclusion and regulatory approval, potential peak annual U.S. revenue for ZYNLONTA could range from $600 million to $1 billion. Furthermore, expanding clinical evidence in diffuse large B-cell lymphoma and other indolent lymphomas strengthens long-term confidence in the therapy’s commercial potential.
Overall, the amendment enhances financial flexibility while preserving upside for both ADC Therapeutics and HealthCare Royalty. As a result, the company can focus on advancing its oncology portfolio and driving future growth.
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