ADC Therapeutics (ADCT) risk factors, FY2025 10-K

Risks Related to Our Financial Position, Capital Requirements and Ability to Raise Additional Capital

1. 01Our indebtedness under the Loan Agreement and the associated restrictive covenants thereunder could adversely affect our financial condition
2. 02The HCR Agreement reduces the amount of cash we are able to generate from sales of, and licensing agreements involving, ZYNLONTA and could make us a less attractive acquisition target67% rewritten
3. 03Our consolidated statements of operations are subject to considerable non-cash charges and volatility due to factors that may be beyond our control36% rewritten
4. 04Our ability to use tax loss carryforwards may be limited46% rewritten
5. 05Our inability to maintain our corporate tax structure may adversely impact our results of operations and financial condition
6. 06Exchange rate fluctuations may materially affect our results of operations and financial condition88% rewritten
7. 07Changes in tariffs and trade policies could increase our cost of sales and our operating expensesNew

Risks Related to Research and Development

1. 08We may be unable to complete clinical trials on our expected timelines, if at all
2. 09There can be no assurance regarding the outcome of ongoing or planned clinical trials or the sufficiency of results from such clinical trials42% rewritten
3. 10Our products and product candidates may cause undesirable side effects or adverse events20% rewritten
4. 11We may expend our resources to pursue particular products or product candidates and fail to capitalize on those that may be more profitable or for which there is a greater likelihood of success
5. 12We may not be successful in our efforts to expand the market opportunity of ZYNLONTANew
6. 13We do not control the conduct of current or any potential future investigator-initiated clinical trials, and the data from such trials are not subject to our review or quality control44% rewritten

Risks Related to Regulatory Approval and Government Regulation

1. 14We or our partners may be unable to obtain, or experience delays in obtaining, regulatory approval for our product candidates93% rewritten
2. 15regulatory approval is unpredictable, typically takes many years and significant investment following the commencement of clinical trials and depends upon numerous factorsNew
3. 16We or our partners may be unable to maintain regulatory approval for any approved products34% rewritten
4. 17We may not receive Orphan Drug Designation for our product candidates
5. 18We may not receive the 12 years of data exclusivity from our anticipated Reference Product Exclusivity or data exclusivity in other jurisdictions
6. 19If we are found to have improperly promoted off-label use of our products, we may become subject to significant liability
7. 20Failure to comply with health and data protection laws and regulations could lead to government enforcement actions, private litigation and adverse publicity and could negatively affect our operating results and business28% rewritten
8. 21If we are unable to comply, or do not fully comply, with applicable fraud and abuse, transparency, government price reporting, privacy and security, and other healthcare laws, we could face substantial penalties
9. 22Healthcare reform legislation and other changes in the healthcare industry and in healthcare spending may adversely affect our business model60% rewritten
10. 23In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programsNew
11. 24Disruptions at the FDA and other government agencies could slow the time necessary for new products to be reviewed and/or approved or otherwise prevent those agencies from performing normal business functions on which the operation of our business may relyNew

Risks Related to Commercialization and Manufacturing

1. 25We or our partners may not be able to successfully commercialize our products58% rewritten
2. 26strategy may result in disruptions to and adverse impacts on our commercialization efforts. If we do not successfully commercialize our products, we may not generate significant product revenues and may not receive a satisfactory return on our investment into the research and development of those productsNew
3. 27Coverage and reimbursement may be limited or unavailable for our products20% rewritten
4. 28Our products and product candidates are complex and difficult to manufacture
5. 29The market opportunities for our products and product candidates may be smaller than we estimate and any approval that we obtain may be based on a narrower definition of the patient population than we anticipated
6. 30We face substantial competition, which may result in others discovering, developing or commercializing products, treatment methods or technologies before or more successfully than we do

Risks Related to Our Relationship with Third Parties

1. 31We rely on third parties to conduct preclinical studies and clinical trials and for the manufacture, production, storage and distribution of our products and product candidates and certain commercialization activities for our products
2. 32Our collaborators may not perform as expected, and we may be unable to maintain existing or establish additional collaborations for the development and commercialization of our products and product candidates

Risks Related to Intellectual Property

1. 33We may not be successful in obtaining additional intellectual property rights necessary or required to further develop our products and product candidates
2. 34We may be subject to claims by third parties asserting that we or our employees, consultants or advisors have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property
3. 35Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our products and product candidates
4. 36If we do not obtain patent term extension for any product candidates we may develop, our business may be materially harmed
5. 37We may not be able to protect our intellectual property rights throughout the world
6. 38If we are unable to protect our confidential information and trade secrets, our business and competitive position would be harmed
7. 39If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets and our business may be adversely affected

Risks Related to Our Business and Industry

1. 40We may be unable to attract and retain senior management and qualified scientific personnel
2. 41Our employees, agents, contractors or collaborators may engage in misconduct or other improper activities
3. 42Product liability lawsuits and product recalls could cause us to incur substantial liabilities and to limit development and commercialization of our products
4. 43Our internal computer systems, or those of our partners, third-party CROs or other contractors or consultants, may fail or suffer security incidents, which could result in a material disruption of our research and development and commercialization programs and significant monetary losses
5. 44Our business is subject to economic, political, regulatory and other risks associated with conducting business internationally
6. 45Our business could be adversely affected by the effects of health epidemics, pandemics and natural disasters
7. 46If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations or prevent fraud
8. 47Our corporate compliance program cannot guarantee that we are in compliance with all potentially applicable laws and regulations and we have incurred and will continue to incur costs relating to compliance with applicable laws and regulations

Risks Related to Our Common Shares

1. 48The market price of our common shares has been volatile
2. 49Exercise of outstanding warrants will dilute existing shareholders’ ownership interest36% rewritten
3. 50We have never paid dividends and do not expect to pay any dividends in the foreseeable future
4. 51If securities or industry analysts do not continue to publish research, or publish inaccurate or unfavorable research, about our business, the price of our common shares and our trading volume could decline
5. 52The rights of our shareholders may be different from the rights of shareholders in companies governed by the laws of U.S. jurisdictions
6. 53Our shareholders enjoy certain rights that may limit our flexibility to raise capital, issue dividends and otherwise manage ongoing capital needs
7. 54Our shares are not listed in Switzerland, our home jurisdiction. As a result, our shareholders do not benefit from certain provisions of Swiss law that are designed to protect shareholders in a public takeover offer or a change-of-control transaction
8. 55U.S. shareholders may not be able to obtain judgments or enforce civil liabilities against us or certain of our directors
9. 56Anti-takeover provisions in our articles of association could make an acquisition of us, which may be beneficial to our shareholders, more difficult
10. 57Our articles of association provide that the competent court with jurisdiction over our registered office in Switzerland will be the exclusive forum for shareholder suits against us, members of our board of directors or members of our executive committee
11. 58We are a “smaller reporting company” and the reduced disclosure requirements applicable to us may make our common shares less attractive to investors