Q3 2023 ADC Therapeutics SA Earnings Call

Participants

Eugenia Litz; VP, IR & Corporate Communications; ADC Therapeutics SA

Ameet Mallik; CEO; ADC Therapeutics SA

Kristen Harrington-Smith; Chief Commercial Officer; ADC Therapeutics SA

Mohamed Zaki; Chief Medical Officer; ADC Therapeutics SA

Pepe Carmona; CFO; ADC Therapeutics SA

Gregory Renza; Analyst; RBC Capital Markets

Naureen Quibria; Analyst; Capital One Securities, Inc.

Brian Cheng; Analyst; J.P. Morgan Securities LLC

Presentation

Operator

Welcome to the ADC Therapeutics third-quarter 2023 financial results conference call. My name is Cathy, and I will be your operator for today's call. (Operator Instructions)
I'll now turn the call over to Eugenia Litz, Vice President of Investor Relations and Corporate Communications. Eugenia, you may now begin.

Eugenia Litz

Thank you, operator. This morning, we issued a press release announcing our third-quarter 2023 financial results and business update. This release is available on the ADCT website at ir.adctherapeutics.com under the Press Releases' section.
On today's call, Ameet Mallik, Chief Executive Officer; Kristen Harrington-Smith, Chief Commercial Officer; Mohamed Zaki, Chief Medical Officer; and Pepe Carmona, Chief Financial Officer, will discuss recent business highlights and review our third-quarter 2023 financial results before opening the call for 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 US Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include those related to our future financial and operating results, the impact of our updated strategic path forward, including our commercial field strategy, portfolio prioritization, and capital allocation and restructuring plan, our ability to achieve our guidance for 2023 operating expenses as well as our future cash requirement projections, future revenue growth, market acceptance, competition and volume growth for our products, product launches and market share for our products, either alone or through our foreign partners, timing and results of ongoing and future development programs and clinical trials for our products, either alone or in combination with our partner products, FDA and for regulatory authorities, actions and potential regulatory approval for our products either alone or in combination with our strategic partners' products, future strategic partnerships and business development efforts, our ability to regain and maintain compliance with the New York Stock Exchange listing requirements, our ability to repay our outstanding debt obligations and future access to capital.
These forward looking statements are subject to certain risks and uncertainties, and actual results could differ materially. They are identified and described in today's press release and the accompanying slide presentation on slide 2 and in the company's filings with the SEC on Form 20-F and as updated in ADCT's recent periodic filings on Form 6-K.
ADCT is providing this information as of the date of today's conference call and does not undertake any obligation to update any forward-looking statements contained in the conference call as a result of new information, future events, or circumstances after the date hereof, except as required by law or otherwise. The company cautions investors not to place undue reliance on these forward-looking statements.
Today's presentation also includes non-IFRS financial measures. These non-IFRS measures have limitations as financial measures and should be considered in addition to and not in isolation or as a substitute for the information prepared in accordance with IFRS. You should refer to the information contained in the company's third-quarter earnings release for definitional information and reconciliations of historical non-IFRS measures to the comparable IFRS financial measures.
It is now my pleasure to pass the call over to our CEO, Ameet Mallik. Ameet?

Ameet Mallik

Thank you, Gina, and thank you all for joining us.
Starting with ZYNLONTA, we had a challenging quarter with net sales of $14.3 million, down 33% year over year. The decline was attributable to the extended disruption following the field force restructuring and increasingly competitive environment and higher gross-to-net deductions. We continue to believe that restructuring the commercial model was necessary to fully capture the longer-term value of ZYNLONTA, and we expect to see progressive growth in the coming quarters. Kristen will provide further detail shortly.
Turning to our clinical development program for ZYNLONTA. Enrollment in our ongoing Phase 3 LOTIS-5 confirmatory trial in combination with rituximab in second line plus DLBCL is progressing well. In September, we shared updated safety run-in results from LOTIS-5 at the SoHo Congress, which showed signs of durable responses and importantly, no new safety signals.
In Japan, our partner, Mitsubishi Tanabe, has now joined the LOTIS-5 study to fulfill local regulatory requirements. Enrollment continues to progress as planned in our Phase 2 LOTIS-7 clinical trial of ZYNLONTA in combination with bispecifics for the treatment of DLBCL, follicular lymphoma, marginal zone lymphoma. We now expect to share initial data from this program in the first half of next year.
We also look forward to expanding the clinical evidence base for ZYNLONTA with upcoming data from several ongoing investigator-initiated trials. These include the oral presentation from the University of Miami of a study exploring ZYNLONTA in combination with rituximab in follicular lymphoma at ASH in December. We also expect monotherapy data from an investigator-initiated trial in marginal zone lymphoma next year.
Overall, these anticipated data updates are especially exciting as we see the current approved indication and third line plus DLBCL as a steppingstone to expanding the potential of ZYNLONTA to earlier lines of therapy in combination and DLBCL and across other lymphomas.
Turning to the remainder of our pipeline, we continue to strategically invest in our higher priority portfolio programs. We look forward to several potential value-creating data readouts in the first half of 2024. In particular, we expect to share initial Phase 1 data from ADCT-601 targeting AXL and from ADCT-901 targeting KAAG1. We also expect additional Phase 1 data to be shared from ADCT-602 targeting CD22.
Lastly, I want to highlight our continued progress in increasing operating efficiencies through all of the organization. This resulted in a 23% year-over-year decrease in operating expenses in the quarter.
Going forward, we will continue pursuing a disciplined approach in our capital allocation to ensure that we maintain our expected cash runway to mid-2025.
To summarize, we are confident that we have the right team and strategy in place to progressively drive ZYNLONTA growth. Our pipeline has several potential meaningful catalysts over the next 12 months. And we believe our expected cash runway provides us with the ability to execute our business plan.
The team has a clear roadmap for execution, and I remain confident that we are on track to unlock the tremendous value in the company.
With that, I'd like to turn the call over to Kristen for a commercial update.
Kristen?

Kristen Harrington-Smith

Thanks, Ameet.
Third-quarter net sales of ZYNLONTA decreased by 33% year over year, impacted by disruptions from the field force restructuring and the evolving competitive environment, particularly with the launch of bispecifics.
We also faced gross-to-net headwind from the Medicare Part B Discarded Drug policy. We continue to believe that restructuring our commercial model was critical to fully capture the longer-term value of ZYNLONTA.
In particular, with our realigned field force, I am confident that we are now set up to most effectively reach treaters and the community where increasing awareness and trial is a top priority.
Where there were significant disruptions during this period, as around half of the field force was either entirely new or in new roles; I am happy to report that we are now fully ramped up and seeing strong customer engagement. This is an important component of our strategy to keep ZYNLONTA top of mind in the crowded DLBCL market.
As you see on this chart, call volume has recovered to pre-restructuring levels with an approximate 40% increase in August and September compared to the prior four months. Call volumes are one of the key leading indicators with the commercial impact, typically lagging by a couple of months.
This explains why we felt the brunt of the restructuring in the third quarter and also where we expect to see a return to growth over the coming quarters, particularly as we look into 2024. The pace of that growth will also depend on the evolving competitive dynamics.
Despite the evolving competitive landscape, we believe ZYNLONTA has the clear role to play in the treatment of relapsed refractory DLBCL, today and over the long term. This is a highly fragmented market with no standard of care in the third line, third line plus setting and with different dynamics between the academic setting and the larger community opportunity.
Bispecifics have seen early adoption in the academic setting. However, we are confident that ZYNLONTA will continue to play a role for patients who are either not suitable candidates for bispecifics or CAR T or for patients who have progressed on these complex therapies.
We believe maintaining a strong presence in this setting is vital as the experts in the academic centers are critical and recommending ZYNLONTA to the community treaters who patients are unwilling or unable to access complicated therapies like CAR T and bispecifics.
In addition, we have seen increased use of ZYNLONTA polatuzumab across all lines of DLBCL following their first line approval. However, as it becomes more embedded as a front-line treatment, over time, we believe this should open up further opportunity for ZYNLONTA in the later line.
While it's important we maintain a solid base and influence in the academic setting, we continue to see the majority of the growth opportunity for ZYNLONTA in the community, and we are focusing our resources and efforts accordingly.
For physicians in the community setting, ZYNLONTA represents a highly effective monotherapy with a manageable safety profile that can be administered in the outpatient setting.
One of the major obstacles we face is that prescribing behavior in the community is slow to change due to the entrenchment of older and/or less effective agents. We understand the challenges, and I am confident that we have the right team and the right strategy in place to effectively position ZYNLONTA now as a monotherapy and in the future as we look to move to earlier lines of therapy in combination.
With that, I'll turn the call over to Mohamed.

Mohamed Zaki

Thank you, Kristen. It is my pleasure to share an update on the pipeline. We continue to focus our efforts and resources on the programs, which we believe have the highest potential to drive value.
Enrollment in the Phase 3 LOTIS-5 study is progressing well. As a reminder, this trial examines the combination of ZYNLONTA and rituximab in second line plus DLBCL patients, not eligible for transplant.
At the SoHo Congress in September, updated safety lead in data from LOTIS-5 demonstrated an overall response rate of 80%, a complete response rate of 50% and a median duration response of 8 months with no new safety signals. This study includes patients that are difficult to treat, double-hit, triple-hit, primary refractory, refractory to the last treatment, which represents the real-world patient demographics. While encouraging, we recognize that these data are from 20 patients' cohort out of the total planned 350 patients.
Moving to LOTIS-7, this is our study to explore novel combinations of ZYNLONTA with Roche's glofitamab or mosunetuzumab in relapsed or refractory non-Hodgkin lymphoma, including DLBCL, follicular lymphoma, and marginal zone lymphoma. This is a tremendous amount of interest in this study from physician community. And if successful, we believe this novel combination could change the non-Hodgkin's lymphoma treatment paradigm. We look forward to sharing initial data in the first half of next year.
I would like to highlight that beyond our own clinical studies, we are encouraged to see substantial interest in the investigative community to explore ZYNLONTA in novel combinations and across multiple types of B-cell malignancies. We believe this will be important in identifying new routes to optimizing the potential of ZYNLONTA.
Of note, I would like to highlight an ASH abstract published last week from University of Miami investigator-initiated trial exploring ZYNLONTA in combination with rituximab in high risk relapse or refractory follicular lymphoma. The combination was well tolerated with 95% overall response rate at week 12 and at week 21 and 86% metabolic complete response rate. This is very encouraging, and we look forward to additional details in the oral presentation.
Turning to the rest of the pipeline beyond ZYNLONTA. Starting with ADCT-601 Targeting AXL. Dose escalation is proceeding in patients with non-small cell lung cancer and sarcoma. Importantly, the maximum tolerated dose has not yet been reached. Based on preclinical data, we are adding a pancreatic cancer cohort with an enriched patient population.
In parallel, we are working towards finalizing the immunohistochemistry assay for a possible biomarker approach. We continue to expect to share initial data from this prioritized Phase 1 trial in the first half of 2024.
Turning to the ADCT-901 targeting KAAG1, dose escalation is also proceeding as with 601, we are completing validation of the immunohistochemistry assay and we expect to share initial data in the first half of 2024.
Finally, dose escalation and expansion are proceeding in the Phase 1 trial of ADCT-602 targeting CD22 in patients with relapsed or refractory ALL in collaboration with MD Anderson Cancer Center. New clinical trial sites are being added to help accelerate enrollment. We expect additional data from the trials that we shared in the first half of 2024.
I look forward to providing further updates on the progress of our pipeline over the coming months. And with that, I will turn the call over to Pepe to give a financial update. Pepe?

Pepe Carmona

Thank you, Mohamed.
Before I get into the financials, I would like to reiterate our continued progress in achieving operational efficiencies throughout the business. We're confident in keeping operational expenses in both 2023 and 2024 below 2022 levels. This is crucial to funding the development of our key pipeline programs and maintaining our cash runway into mid-2025.
As for Q3 performance, starting with our balance sheet. As of September 30, we had cash and cash equivalents of $310 million, representing a $37 million decrease from our position at the end of the second quarter.
Moving to the P&L. As you already heard, ZYNLONTA net sales were $14.3 million in the third quarter.
Moving down the P&L. Our combined operating expenses on a non-IFRS basis, which excludes stock-based compensation, were down 23% compared to the same period in 2022. This mainly reflected the operating efficiencies I referred to earlier together with reduced R&D expenditures due to focused investments in our clinical studies and lower selling and marketing expense.
You can find a reconciliation of IFRS measures to non-IFRS measures in the companion financial tables on the press release issued earlier today and in the appendix of this presentation.
Moving to the bottom of the P&L. On an IFRS basis, we reported a net loss of $47.8 million for the third quarter or $0.58 per basic and diluted share.
Finally, this slide highlights the potential value driving milestones, which we expect in 2024. We're looking forward to a catalyst-rich year ahead with the initial data from several key programs in the first half, more mature data in the second half of the year, and completion of LOTIS-5 enrollment during the year.
We're also actively pursuing partnership opportunities, and we'll continue to drive our productivity initiative to enable capital allocation toward the most promising near-term value drivers. The potential catalysts in 2024 will shape the company's future, performance of patients, and be able to create additional value.
With that, I will turn the call back to Ameet for closing remarks.
Ameet?

Ameet Mallik

Thank you, Kristen, Mohamed, and Pepe.
To conclude, we are confident we have a clear roadmap as well as the capabilities to execute on our strategy to drive future value creation for all our stakeholders. We are excited about the future and look forward to keeping you updated on our progress.
Now the team will be available for questions. Operator?

Question and Answer Session

Operator

(Operator Instructions) Gregory Renza, RBC Capital Markets.

Gregory Renza

Hi, thank you so much for taking our questions and support on for Greg. I guess the first question I have is on ZYNLONTA. I noted that you mentioned that you expect growth to return over the next few quarters. Just curious if you can get to more on the granularity, like in terms of the quarters or which point in 2024 you see as a potential inflection and to which point do you anticipate to provide guidance on ZYNLONTA? Again and then I have a follow-up.

Ameet Mallik

Yeah, thanks for the question. Yeah, I think as you can see, there are three reasons for the performance in Q3. One was of course the disruption. As we had mentioned before, the time and depth of which we disrupted the field force to get to the right commercial model, was longer than we expected and saw a disruption happen in Q3. We also saw it at a time of increasing competitiveness from new product entrants.
And then finally, we had higher growth to net. Especially, when you look year over year, there's quite a bit higher growth to net in this quarter versus the prior year. So those are the three factors for the performance.
Also, as you know, we adjusted the commercial model knowing that bispecifics and other new entrants would play a bigger role in the academic setting that the real opportunity of the ZYNLONTA growth was going to be in the community. And so we reoriented the model to be able to win in the community.
The field force is now back up and running. As of August, our call lines have returned back to normal. There's always a lag between activity and getting a new team and a new model up and running, depending on when you see the impact. But we believe we will steadily see the impact and drive growth over the next quarter.
At this time, we're not providing any further guidance.

Gregory Renza

Got it. Got it. Understood. And then my second question is on LOTIS-7. I was wondering if you can remind us in terms of the synergy with bispecifics, do you anticipate to see that more on the response rate or more on the durability side?
And then what's the internal bar for advancing this program? And would we get the clarity, with the data that you will share in the first half of next year? Thank you.

Mohamed Zaki

Yeah. Thanks for your question, Greg. And actually, we see the potential for ZYNLONTA to be the combination of agent of choice, like a backbone therapy. With the combination with bi-specific, each one separately have demonstrated single agent activity.
With distinct mechanism of action and no known overlapping toxicities. The combination seems to be very interesting. The study of LOTIS-7 is progressing very well. We have not seen safety issues for the patient's dose so far. It's a dose escalation, we're continuing to dose escalate. And hopefully, next year, we'll be able, by mid-next year approximately, to share more information on the dose escalation and possible some expansions.
The uniqueness of this is that it could be a transformational combination in the landscape of non-Hodgkin lymphoma as a whole because the study includes three different types of diseases; DLBCL, follicular, and marginal zone lymphoma. So investigators are very excited about it. We receive interest and request to be part of the study almost on weekly basis. In addition, we believe we could make a major change. And of course, as I mentioned, the landscape of DLBCL with this combination.

Ameet Mallik

And then your question on what does good look like? Obviously, the fact that they can combine safely, that's the first and foremost thing that we're testing in the dose escalation, and the known efficacy, you want to see higher response rates than you would see with either agent alone. I think they're both highly active, so they get to see our rates that are higher than with either agent alone, and with durable response.

Operator

(Operator Instructions) Boris Peaker, TD Cohen.

Great. Thanks for taking our question. This is Nick on for Boris. So my first one is, can you provide a little more color on the new commercial strategy and how -- like what changes you've made to focus more on the community setting rather than on the academic setting?
And then the second question is on gross to net, was it a higher gross to net for the year, like the highest gross to net that you've had for the year? And do you expect this gross to net to continue moving on like years to come, quarters to come? Thanks.

Kristen Harrington-Smith

Hi, Nick. Thanks for the question. So I'll start with the changes to the commercial model and like Ameet said, we absolutely believe that changing how we go to market was essential, particularly with the new competitive environment. Some of the key changes that we made were really adapting our model to local health care ecosystems.
One of the key advantages that we have with this new model is that we have one role that is fully dedicated to driving demand in the community. These teams work together at the local level to make sure that they are aligned with how the referral patterns work. We're set up better to enable the leveraging of advocacy from the medical experts and the academic setting to the community treaters, so essentially who these community treaters turn to for advice or where they would generally send their patients. So making sure that we can leverage that advocacy from the academic center to the community treaters is essential in this model. And we also overall improve the collaboration between the teams.
With that, I can hand it over to Pepe.

Pepe Carmona

Yeah. Thanks for the question. So in gross to net, we communicated at the beginning of the year that there were two elements that were going to impact gross to net in 2023. Compared to 2022, one was the GPA contracting. And that would be in the two- to three-percentage points year over year. And the second one is in Medicare Part B Discarded Drug policy, which we said it would be between mid-to-high single digits.
Those two elements are going to impact every quarter and have impacted the year to date numbers as well as Q3 numbers. So there's going to be always fluctuation from quarter to quarter. But those are the key drivers.
I cannot comment on the specific quarter. We don't disclose the data. But that's the main driver of the increase versus prior year.

Ameet Mallik

Yeah, wondering (multiple speakers)

Yeah. Thanks very much.

Ameet Mallik

One thing I'd just add to what Christian said about the commercial model is, before we had people that were working independently. And you have systems of care that cut across territories. And when you're working independently, very tough to penetrate a more rare disease like third line plus DLBCL if you're working in isolation.
Now we have small focus teams that cut across academic and community to do a lot of the pull through that she was talking about. So those teams only got up and running in August. So you don't see the result in the first two months completely. But I believe they're really hitting their stride right now and we'll start seeing the impact over time.

Operator

(Operator Instructions) Naureen Quibria, Capital One Securities.

Naureen Quibria

Hi. Good morning. Thanks for taking my question. I guess the first one that I have is either for Ameet or Mohamed. So you have that ASH presentation, oral presentation from the ISD study of ZYNLONTA with rituximab and follicular lymphoma. So seeing the early results, are you considering a move into that setting now or is it too early?

Mohamed Zaki

Thanks, Naureen. The population of this study I want to highlight that is very difficult to treat patient population and lymphoma, which we call POD24 high-risk patients. So the data we observed in this study is really considered to be outstanding in the field of follicular lymphoma, specifically in RAPs. In fact, you're sitting when you're talking about 95% overall response rate and 86% complete response. It doesn't get any better than that in this patient population.
We are very excited. And we are actually the investigators who are doing this study are very excited about the data and encouraged by it. We will expand the study to confirm the signal, and also we plan to share this information with several investigators, not just the people who did it, others after ASH and during ASH. And based on that, we will determine the plans to move forward, and we will definitely inform the market.
But no matter what the plan is, we will be doing it in the context of the disciplined catapult (sic - capital) allocation strategy. And also want to remind you that this is a step towards LOTIS-7, which actually in combination with another CD20, which about this time, is much more stronger CD20 like a bispecific.
And the follicular lymphoma is also included in LOTIS-7. So it's a good initial strategy to see what the data looks like in combination with rituximab. And then hopefully it will transition into LOTIS-7.

Ameet Mallik

Yeah. And I think if you take a step back, I mean, right now we're playing with ZYNLONTA in almost a small setting. We're playing in third line plus DLBCL. With LOTIS-5 and LOTIS-7, we're expanding to earlier lines in DLBCL. But also with some of these studies, like you saw the follicular study now with IIT, and with LOTIS-7, we're expanding to other indelible lymphomas like follicular and marginal lymphoma.
So we're in the smallest part of this. And we keep getting encouraged by the positive data that we start seeing in combinations in these other settings. And I think that's going to open up the much bigger opportunity that we see for ZYNLONTA.

Naureen Quibria

All right. That's really helpful. Thank you. And I guess one more, and this is probably for Mohamed. This is on the 601 you mentioned today in your prepared remarks that you're now including a pancreatic cohort. So can you just talk about what you've seen that got you excited to include that now?

Mohamed Zaki

Yeah. As you might expect, we continue to develop our bioassay and patient selection strategies. And as we're testing more tissues and more things, we observe that a high expression in pancreatic cancer. And based on our overall strategy to maximize and prioritize areas of potential success, we made the decision to increase the number of cohorts and expand to another therapeutic area, such as pancreatic cancer with a patient enrichment strategy. And hopefully, that's in addition to sarcoma and small cell lung cancer.

Operator

Kelly Shi, Jefferies.

Hi. Good morning. This is Yun for Kelly. Thanks very much for taking the question. So the first question is on the LOTIS-7 data in first half 2024. Is it reasonable to expect that the number of patients, the amount of data will be similar to what you reported from LOTIS-5?
And the second question is, sorry if I missed it, but did you say that the data in first half of 2024 from 601, 901, will potentially have biomarker information included? Thank you.

Mohamed Zaki

Regarding LOTIS-7, as you know, this is a dose escalation. And we, at this point, not sharing specific number of patients. However, when we share the data, we'll be giving context around it and we'll be very well explaining it.
In terms of other earlier programs like AXL and KAAG, we continue to dose escalate. And we are hoping to be able to see maybe a possible retrospective analysis in terms of bioassays or expression. But the validation of the immunohistochemistry assay in both programs is still ongoing. And we are not yet pre-selecting. We're doing retrospective analysis in the current available assay.

Ameet Mallik

Yeah, and then just one thing to add to LOTIS-7, it's Ameet, to give me some context on numbers. If you think about it, each dose cohort, there's three different dose cohorts possibly, assuming again safety thresholds are met. At each dose cohort, we're doing six patients. Because in LOTIS-7, we're studying the combination with both mosun and glofit. So there's three patients in each.
So theoretically, if you get through all three doses, that could be up to 18 patients, right, if we get through all three dose cohorts? We believe we'll be through dose escalation and potentially into expansion in the first half of the year.
So just to give you a context of numbers, obviously as the year goes on, we're going to keep getting more and more patients and more and more follow-up in terms of the data. So we're going to have meaningful data in the first half of the year and probably even more meaningful data as you get into the second half of the year.

Operator

Brian Cheng, J.P. Morgan.

Brian Cheng

Hey, guys. Good morning. Thanks for taking my question. My first one is on just the trajectory of ZYNLONTA. Can you quantify or give us a qualitative view on how much of the disruption is due to competition versus restructuring of the commercial organization? How should we think of the underlying demands of ZYNLONTA? And is the trajectory normalizing? And how do you feel about the next quarter or two? And I have a follow-up. Thank you.

Kristen Harrington-Smith

Sure. So it's difficult to quantify the impact from each. What we do know is that the majority of the decline was due to the prolonged disruption from the field force restructuring. We feel that we felt the brunt of that in Q3. At the same time, the competitive environment intensified, right? And as anticipated, bispecifics are playing a growing role in the academic setting. That is why our strategy is to focus on growing the opportunity in the community.
That being said, ZYNLONTA will continue to play a role in the academic setting. And the good news is we are now set up with our model to capitalize on that opportunity in both settings. We feel that we've got the right strategy and the right team in place, and we'll see the impact of their impact strengthened in the coming quarters.

Brian Cheng

And maybe just on competition, can you talk about how the use of ZYNLONTA has been changed since the entry of bispecific and also the increasing use of CD19 CAR T in the second line?
And then just to follow up on your comments related to academic versus community doctors, how do you see about the split of academic versus community doc change? The ratio between the two change over the next couple of quarters? At what point do you think that you'll be at a good time to -- a good point to guide the street and where -- what's the next year will look like for ZYNLONTA sales? Thank you.

Kristen Harrington-Smith

Sure. So I'm going to break it down just a little bit. So we've seen that bispecifics have had an increasing impact in the academic setting as they're launched progresses. We see them as being used in the post-CAR T patient or, in some cases, where patients won't necessarily get to CAR T. So that's where we've seen their early use. And as anticipated, we've seen the majority of the use really in those academic settings because they are equipped to handle complex therapies like bispecifics.
At the same time, we also know that not every patient will get to that academic center, whether it's -- they don't have access to it or they are unwilling to travel and commit to going to an academic center, whether it's for a CAR T or a bispecific. We see that pattern is very similar.
And that is what opens up the opportunity for a product like ZYNLONTA in the community where it is an off-the-shelf option that is accessible and provides a rapid response for patients who need it.
You had a question around CAR T in the second line. We do see an increase in the utilization of CAR T as it becomes standard of care in the second line. But again, while it is increasing, we also continue to hear from physicians that it is still a challenge for patients to get access to these complex therapies. There are different stats that are shared, whether it's 25%, 35% of patients who will get access to them.
And then, let's see, the last question. When do we feel it will be a good point to give guidance on?

Ameet Mallik

Yeah. I mean, at this point, we're not adding guidance. Brian, one more thing I just want to say about the bispecifics. One is not every patient can tolerate a bispecific after a CAR T. I mean, once you fail a CAR T, especially, you're pretty sick. Those patients are pretty sick at this point.
So for those who can tolerate it, I think they're likely going to get a bispecific in an academic center. But some patients can't. And a treatment like ZYNLONTA with a cleaner safety profile, and also very fast action, very fast time to assess response is critical for those patients.
But also, the majority of patients only progress post the bispecific. So also in the fourth line setting, that starts to open up as well. So there's clearly a place for ZYNLONTA in the academic setting. It's going to be less than what it was before, and we knew that was going to happen, which is why our strategy has been to adjust the model to capitalize on the bigger opportunity, which is growth in the community.

Operator

There are no further questions at this time, and I will now turn the call back to Ameet.

Ameet Mallik

Well, I just want to thank, everyone, for joining. Thanks for your interest in the company, and thanks for joining the quarterly update. We look forward to keeping you updated on our progress, and I hope everyone has a great day. Thank you.

Operator

This concludes our program, and you may now disconnect. Thank you.