ADC Therapeutics Plunges 20% on LOTIS-7 Data: Is This a Buying Opportunity or a Warning Signal?

Summary
• ADC Therapeutics (ADCT) shares nosedived 20% intraday, trading at $3.675 after a $4.60 open.
• LOTIS-7 trial data showed 89.8% ORR and 77.6% CR in DLBCL patients but flagged safety concerns.
• Grade 5 AEs in 4.1% of patients and cytokine release syndrome in 36.7% triggered investor caution.
• Analysts debate whether the data strengthens ZYNLONTA’s commercial potential or highlights unmet risks.

ADC Therapeutics’ stock is in freefall after updated LOTIS-7 trial data revealed a compelling but imperfect safety profile for its ZYNLONTA-glofitamab combo. The 20% intraday drop, from a $4.60 open to $3.675, reflects a volatile market reaction to mixed signals: robust efficacy metrics versus manageable but non-trivial adverse events. With enrollment on track for 1H 2026 and a conference call today, investors are weighing whether this is a short-term correction or a deeper bearish shift.

Positive Efficacy Overshadowed by Safety Concerns
The LOTIS-7 trial update highlighted ZYNLONTA’s 89.8% ORR and 77.6% CR in 49 patients, with durable responses in 2L+ DLBCL. However, safety data dented investor confidence: two patients experienced Grade 5 AEs (one treatment-related), and cytokine release syndrome (CRS) occurred in 36.7% of cases. While CEO Ameet Mallik called the safety profile 'manageable,' the market interpreted these risks as a potential hurdle for regulatory approval and commercial adoption. The 20% drop reflects a recalibration of expectations, with investors prioritizing risk mitigation over short-term efficacy optimism.

Biotech Sector Mixed as AMGN Rises, ADCT Plunges
The biotech sector showed divergent momentum, with Amgen (AMGN) rising 2.26% on positive data, while ADCT’s 20% plunge underscored sector-specific volatility. ADCT’s drop contrasts with peers like AMGN, which benefited from favorable R&D updates. The broader sector’s mixed performance highlights ADCT’s unique exposure to clinical-stage risks, particularly in oncology, where safety profiles often dictate market sentiment more than efficacy alone.

Options Playbook: Capitalizing on Volatility with ADCT20260717C5 and ADCT20260717P2.5
• Technical Indicators: RSI at 76.9 (overbought), MACD 0.074 (bullish), 200D MA at $2.84 (below current price).
• Key Levels: Support at $3.77 (lower Bollinger Band), resistance at $4.49 (upper Bollinger Band).
• Options Focus: ADCT20260717C5 (call) and ADCT20260717P2.5 (put) offer high leverage and volatility.

ADCT20260717C5 (Call Option):
• Code: ADCT20260717C5
• Strike: $5.00
• IV: 69.51% (high volatility)
• Delta: 0.385 (moderate sensitivity)
• Theta: -0.0018 (moderate time decay)
• Gamma: 0.195 (high sensitivity to price swings)
• Turnover: 400 (reasonable liquidity)
• Leverage: 8.94%
• Payoff (5% downside): $0.00 (strike above current price).
This call option is ideal for bullish investors betting on a rebound above $5.00, leveraging high IV and gamma to capitalize on potential volatility from the conference call or enrollment updates.

ADCT20260717P2.5 (Put Option):
• Code: ADCT20260717P2.5
• Strike: $2.50
• IV: 24.46% (moderate volatility)
• Delta: -0.0186 (low sensitivity)
• Theta: -0.000056 (minimal time decay)
• Gamma: 0.066 (modest sensitivity)
• Turnover: 0 (low liquidity)
• Leverage: 715.00%
• Payoff (5% downside): $0.1875 (strike below projected price).
While the put’s low liquidity limits its appeal, its 715% leverage makes it a speculative bet for deep bearish moves, though execution risks are high.

Action Insight: Aggressive bulls should consider ADCT20260717C5 if the stock rebounds above $4.49. Cautious bears may short ADCT20260717P2.5 if the price breaks below $3.77, but liquidity constraints apply.

Backtest ADC Therapeutics Stock Performance
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ADCT at Crossroads: Watch 3.77 Support and Conference Call Catalysts
ADC Therapeutics’ 20% drop reflects a market recalibration of risk-reward dynamics post-LOTIS-7. While the trial’s efficacy data is compelling, safety concerns and regulatory uncertainties weigh on the stock. The 3.77 support level (lower Bollinger Band) is critical; a break below could trigger further selling. Conversely, a rebound above $4.49 (upper Bollinger Band) might reignite bullish momentum. Investors should monitor today’s conference call for clarity on safety management and enrollment progress. Action Step: Watch AMGN’s 2.26% rise as a sector barometer, but prioritize ADCT’s 3.77 support and 4.49 resistance for directional bias.