ADC Therapeutics SA (ADCT) stock intrinsic value fair value estimate & owner earnings analysis

ADC Therapeutics sells ZYNLONTA, an antibody-drug conjugate for relapsed or refractory diffuse large B-cell lymphoma after two or more prior therapies, directly in the United States. Product revenue was $73.6 million in 2025, up from $69.3 million in 2024; total revenue including licensing was $81.4 million. The company is also running LOTIS-5, the confirmatory Phase 3 trial of ZYNLONTA plus rituximab that must verify clinical benefit for the current conditional approvals, and LOTIS-7, an earlier-stage combination study. The business does not currently earn money for its shareholders. Adding back stock compensation as a real cost and stripping out working-capital timing, we estimate the business consumed about $1.80 per share in 2022, $2.09 in 2023, $1.46 in 2024 and $1.06 in 2025. The improvement in 2025 is partly because the share count rose from about 97 million to about 127 million weighted diluted shares as the company sold stock. In dollars the loss was $141 million of operating cash outflow in 2025 versus $124 million in 2024. In the first half of 2026, operating cash outflow was $41.5 million against $80.4 million a year earlier, which is encouraging but is only two quarters. We keep the level of the estimate based on the multi-year record, which is consistently negative. Base case: value of $0.00 per share. Revenue is modest and has grown about 6% a year in product sales, but nothing named and evidenced in the filings shows the business covering its research, commercial and interest costs. Roughly $261 million of cash at the end of 2025 (which the company says funds operations for at least twelve months from the filing date) is being used up by ongoing losses, and we do not credit positive earnings that have not yet happened. The per-share loss narrowed by about 27% in 2025, and we assume the loss simply holds at that narrower level rather than continuing to shrink, because no filed fact shows it turning positive. Bull case: $0.75 per share. Here the company's own levers work: ZYNLONTA product revenue keeps growing at the recent pace and cost discipline continues as seen in the first half of 2026, narrowing the burn. It still does not reach a proven profit, so value is limited to a small residual. A positive LOTIS-5 result would help but is not yet in hand and is not counted. Bear case: minus $1.00 per share. Cash burn continues near recent levels, LOTIS-5 could fail or be judged unreliable (the company disclosed that it had to add patients because of unexpectedly high early censoring, and the FDA noted this could affect interpretability), and the obligations to lenders and to HealthCare Royalty remain ahead of shareholders. The company borrowed $120.0 million under a senior secured term loan in August 2022, and it owes HealthCare Royalty a share of ZYNLONTA sales, with a fixed payment of $150 million (or $200 million after 2027) on a change of control. In this case the company appears to owe more than the business is worth, by roughly $1 per share, and further dilutive stock sales would be needed. Accounting judgements: the financing arrangements with HealthCare Royalty and the term loan are treated as debt obligations that rank ahead of shareholders, and no separate debt deduction is made from the value. Cash on hand is not added to value, since it is being consumed by the losses. Reported share counts include pre-funded warrants issued in 2025 (about 19.6 million shares), which we treat as outstanding shares. Only four years of annual data (2022-2025) were available. What would make this wrong: a successful LOTIS-5 readout leading to full approval and earlier-line use would raise revenue materially and could make the shares worth much more than we show. Conversely, faster cost cuts would reduce the losses. Neither is something we can credit today.