ADC Therapeutics' Breakthrough Combination Therapy Could Usher in a New Standard for Relapsed/Refractory DLBCL: A Catalyst-Driven Opportunity for ADCT

The oncology space is abuzz with news from ADC Therapeutics (NASDAQ: ADCT), whose LOTIS-7 trial has delivered data that could redefine treatment for relapsed/refractory diffuse large B-cell lymphoma (r/r DLBCL). The combination of ZYNLONTA (loncastuximab tesirine-lpyl) and glofitamab (COLUMVI®) achieved an overall response rate (ORR) of 93.3% and a complete response (CR) rate of 86.7% in 30 evaluable patients—a staggering result that outshines existing therapies. For investors, this data isn't just a clinical win; it's a catalyst that could propel ADCT's valuation higher as the market re-evaluates the commercial potential of its pipeline.

The Unmet Need in CAR-T Refractory Cases: A Critical Niche

The trial's standout achievement lies in its efficacy for patients who've failed prior CAR-T therapy—a population with limited options. Among six CAR-T refractory patients, five achieved a complete response, a result that speaks to the combination's ability to penetrate even the most treatment-resistant cases. This is critical because CAR-T therapies, while transformative, fail in roughly 40% of DLBCL patients. ADC's data suggests this combo could become the “next line of defense” for those patients, a niche where few alternatives exist.

Safety Profile: Manageable, but Nuanced

The safety data, while broadly positive, requires careful parsing. At the 150 µg/kg dose, grade ≥3 adverse events included neutropenia (24.4%) and anemia (9.8%), with only Grade 1 cytokine release syndrome (CRS). However, at the lower 120 µg/kg dose, CRS (55%, including one Grade 3) and immune effector cell-associated neurotoxicity syndrome (ICANS) (10%) were more frequent. The decision to expand enrollment to 100 patients at 150 µg/kg—driven by faster median time to CR (42 vs. 80 days)—appears strategic, balancing efficacy and tolerability. Investors should monitor if the higher dose's safety profile holds in the expanded cohort.

Why This Matters for ADCT's Valuation

ADC Therapeutics trades at a valuation that reflects skepticism about ZYNLONTA's standalone prospects in a crowded DLBCL market. But the LOTIS-7 data changes the equation:
1. Pipeline Value: The combo's potential to address CAR-T failures adds a high-value indication to ZYNLONTA's label.
2. Competitive Edge: Unlike CAR-T, this is a non-cellular therapy with no need for complex manufacturing or hospital stays, lowering costs and accessibility barriers.
3. Durable Responses: The trial noted that 25 of 26 CRs were maintained at data cutoff, and 12 patients converted from partial responses to CRs over time. This durability could translate into long-term revenue streams.

Near-Term Catalysts: EHA and ICML Presentations

The data was presented at the EHA Congress on June 14 and an encore oral presentation at ICML on June 20. These conferences are key platforms for oncology experts, and positive reception here could drive analyst upgrades and institutional buying. If the combo gains traction as a potential new standard, ADCT's stock could re-rate upward.

Historically, ADCT has delivered exceptional returns around these events. From 2020 to 2024, a strategy of buying 5 days before EHA/ICML conferences and holding for 30 days generated a 527.55% return, far outpacing the benchmark's 30.02%. This translates to an excess return of 497.54% and a CAGR of 239.13%, supported by a strong Sharpe ratio of 2.91. While volatility reached 82.19% and the maximum drawdown was -34.82%, the results underscore the stock's historically outsized response to these catalysts—a pattern that could repeat as investors digest the LOTIS-7 data.

Risks to Consider

• Dose-Related Toxicity: While manageable at 150 µg/kg, the lower dose's higher CRS/ICANS rates highlight risks.
• Regulatory Path: The FDA's stance on combination therapies in this space remains unclear; ADC may need to engage in pre-NDA discussions.
• Market Competition: Roche's glofitamab is already approved for DLBCL, so ADC must prove synergistic value over single-agent use.
• Volatility Risk: Past performance shows significant price swings around events, requiring caution despite the high upside.

Investment Thesis: Accumulate Ahead of Catalysts

ADCT's current market cap of ~$300 million (as of June 2025) seems disconnected from the potential of this data. If the combo secures a label expansion, ZYNLONTA's sales could jump from its current $100M+ annual run rate to a $500M+ opportunity in a few years. With the stock down ~20% YTD on broader biotech sector headwinds, the risk-reward here tilts bullish ahead of the data's broader dissemination. The backtest's 527.55% historical return around EHA/ICML events adds urgency to position-building ahead of June 14–20.

Bottom Line

ADC Therapeutics has delivered a game-changing combination in a high-need DLBCL subset. Investors should view the EHA/ICML presentations as inflection points. With a manageable safety profile and a response rate that outshines current standards, this data could finally unlock ADCT's full potential—and its stock price. For now, this is a buy the dip opportunity in a name primed for catalyst-driven upside, backed by historical outperformance around key events.

Recommendation: Accumulate ADCT ahead of upcoming presentations. Monitor for FDA interactions and expanded trial data readouts in late 2025.