Form 4: Redmile Group Boosts ADCT Stake with Warrant Purchase

Investment firm Redmile Group, LLC, a 10% owner and director, acquired 3,846,153 pre-funded warrants in ADC Therapeutics SA through a private placement.

Summary

• RedCo II Master Fund, L.P., an affiliate of Redmile Group, LLC, acquired 3,846,153 Pre-Funded Warrants to purchase Common Shares of ADC Therapeutics SA.
• The acquisition was part of a private placement pursuant to a securities purchase agreement dated October 12, 2025.
• The purchase price for each Pre-Funded Warrant was $3.90.
• The Pre-Funded Warrants are exercisable at CHF 0.08 per share, which was approximately $0.10 per share based on the October 12, 2025 exchange rate of $1.25 to CHF 1.00.
• The warrants are exercisable for a period of ten years from the closing date of October 27, 2025, subject to a 9.99% beneficial ownership blocker.
• Redmile Group, LLC and Jeremy Green (principal of Redmile) may be deemed beneficial owners of these securities due to their investment management relationship with RedCo II Master Fund, L.P.

Sentiment

Score: 7

Explanation: The acquisition of a significant number of warrants by a 10% owner and director, Redmile Group, LLC, through a private placement is generally a positive signal of institutional confidence and provides capital to the company, despite potential future dilution.

Positives

• The acquisition by a significant institutional investor and 10% owner, Redmile Group, LLC, signals a vote of confidence in ADC Therapeutics SA.
• The private placement provides capital to ADC Therapeutics SA, which can support its operations and strategic initiatives.

Negatives

• The issuance of new warrants, while a capital raise, could lead to future dilution for existing shareholders if and when the warrants are exercised.

Risks

• The value of the Pre-Funded Warrants is subject to the future performance of ADC Therapeutics SA's common shares.
• There is a risk that the warrants may not be exercised if the common share price does not exceed the effective exercise price, or if other conditions are not met.
• The 9.99% beneficial ownership blocker may limit the immediate exercise of all warrants by the holder.

Future Outlook

The Pre-Funded Warrants are exercisable by the holder at any time on or after the closing date of October 27, 2025, until the tenth anniversary of such closing date. Holders also have the option to exchange a Pre-Funded Warrant for a new one with a subsequent ten-year exercise period during the last 90 days of its term.

Management Comments

• Jeremy Green, Managing Member of Redmile Group, LLC, signed the filing, indicating his oversight and involvement in the transaction.

Industry Context

Private placements are a common method for biotechnology companies like ADC Therapeutics SA to raise capital from institutional investors, especially for funding research, development, and commercialization efforts. Such transactions often involve the issuance of warrants or convertible securities to attract investors.

Comparison to Industry Standards

• This Form 4 filing reports an insider transaction and does not contain specific financial or operational results of ADC Therapeutics SA that would allow for a direct comparison to global industry benchmarks, comparable companies, or specific project outcomes.

Related Party Transactions

• Redmile Group, LLC is identified as a 10% owner and has a director relationship with ADC Therapeutics SA. The acquisition of Pre-Funded Warrants by RedCo II Master Fund, L.P., an entity managed by Redmile Group, LLC, constitutes a related party transaction.

Stakeholder Impact

• Shareholders: The transaction indicates continued institutional confidence, but potential future exercise of warrants could lead to dilution.
• Company (ADC Therapeutics SA): Receives capital from the private placement, supporting its financial position and strategic objectives.

Next Steps

• The holder of the Pre-Funded Warrants may exercise them at any time over the next ten years.
• The holder may exchange existing warrants for new ones with a subsequent ten-year exercise period during the last 90 days of the term.

Key Dates

Recommendation

The significant investment by a 10% owner and director, Redmile Group, LLC, through a private placement, suggests continued confidence in ADC Therapeutics SA. While this is a positive signal and provides capital, a Form 4 primarily reports an insider transaction rather than a fundamental change in the company's operational or financial performance. Therefore, it warrants a 'hold' recommendation, acknowledging the positive insider action without implying a strong buy or sell based solely on this filing.

Keywords

ADC Therapeutics, ADCT, Redmile Group, Pre-Funded Warrants, Private Placement, Insider Transaction, SEC Form 4, Biotechnology Investment, Institutional Ownership