In a recent transaction, investment firm Redmile Group, LLC, along with its affiliated entities, has bolstered its position in ADC Therapeutics SA (NYSE:ADCT), a company specializing in pharmaceutical preparations. The firm acquired a total of 800,000 shares at a purchase price of $2.81 each, amounting to an investment of approximately $2.25 million.
The transactions, which occurred on July 1, 2024, were reported in a Form 4 filing with the Securities and Exchange Commission on July 3, 2024. Redmile Group, through various investment vehicles, including RedCo II Master Fund, L.P., has been actively managing its holdings in ADC Therapeutics.
The shares were bought indirectly by Redmile Group and directly by RedCo II Master Fund, L.P., as indicated in the footnotes of the filing. These shares are part of a larger portfolio managed by Redmile, which is overseen by Jeremy Green. The footnotes also clarify that while Green and Redmile Group may be deemed to beneficially own the reported securities as investment managers, they disclaim beneficial ownership except to the extent of their respective pecuniary interest.
Following the transaction, the total number of shares owned by Redmile Group's private investment vehicles and sub-advised accounts stands at 15,669,217, and RedCo II Master Fund, L.P.'s direct ownership amounts to 12,995,040 shares of ADC Therapeutics.
The filing also includes a remark that the reported purchases were made within less than six months from deemed sales reported previously. However, it was noted that the transactions were executed at a price higher than some previous purchases, indicating that no additional profits were realized, thereby negating any additional liability under Section 16(b).
Investors and market watchers often scrutinize Form 4 filings to gauge insider sentiment and potential future performance of a company's stock. The purchase by Redmile Group may be seen as a positive indicator of their confidence in ADC Therapeutics' prospects.
In other recent news, ADC Therapeutics, a biotechnology firm specializing in antibody drug conjugates, has been making significant progress. The company is set to be included in the Russell 2000 and Russell 3000 Indexes, a move that reflects the company's focused execution and progress in its hematology and solid tumor portfolios. This inclusion is based on objective market-capitalization rankings and style attributes.
Meanwhile, ADC Therapeutics reported a 7% revenue increase to $17.8 million for the first quarter of 2024, with its ZYNLONTA trials showing promising results. The company also announced plans to raise $105 million through an underwritten offering, which is expected to extend its financial runway into mid-2026.
In terms of analyst coverage, Cantor Fitzgerald initiated coverage on ADC Therapeutics, assigning an Overweight rating and highlighting the company's potential within the antibody-drug conjugate sector. However, H.C. Wainwright lowered its price target for ADC Therapeutics shares while maintaining a Buy rating, reflecting anticipation of key developments for the company within the next year. These are some of the recent developments around ADC Therapeutics.
InvestingPro Insights
Amidst the strategic moves by investment firm Redmile Group, LLC in ADC Therapeutics SA (NYSE:ADCT), recent data and analysis from InvestingPro provide deeper insights into the company's financial health and market performance. With a market capitalization of $292.05 million, ADC Therapeutics is navigating through challenging financial waters, as evidenced by a negative price-to-earnings (P/E) ratio of -1.11, adjusted to -1.3 for the last twelve months as of Q1 2024. This suggests that investors are wary about the company's earnings potential in the near term.
Despite the company's significant return over the last week, with a 1-week price total return of 8.9%, ADC Therapeutics has been grappling with weak gross profit margins, which stood at a staggering -92.65% for the same period. This aligns with one of the InvestingPro Tips indicating that the company suffers from weak gross profit margins. Moreover, the volatility of ADC Therapeutics' stock price is notable, with a six-month price total return of 62.77%, reflecting the company's fluctuating share value in the market.
Investors considering ADC Therapeutics as part of their portfolio should note that the company does not pay a dividend, which might affect those looking for regular income streams from their investments. For those seeking comprehensive analysis and additional insights, InvestingPro offers a range of tips, including the company's cash burn rate and profitability outlook. In fact, there are 9 additional InvestingPro Tips available for ADC Therapeutics at https://www.investing.com/pro/ADCT, which can be accessed with a subscription. Interested readers can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, providing a valuable resource for informed investment decisions.
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