Form 4: Redmile Group Boosts Stake in ADC Therapeutics Through Significant Private Placement

Redmile Group, a major institutional investor, has acquired 15,734,267 pre-funded warrants in ADC Therapeutics SA through a private placement, signaling increased confidence.

Summary

• Redmile Group, LLC, a 10% owner and investment manager for certain private investment vehicles (Redmile Clients), including RedCo II Master Fund, L.P., has reported the acquisition of pre-funded warrants in ADC Therapeutics SA.
• On June 11, 2025, the Redmile Clients entered into a securities purchase agreement for a private placement with ADC Therapeutics SA.
• The Redmile Clients will acquire a total of 15,734,267 pre-funded warrants to purchase Common Shares.
• The closing date for this acquisition is set for June 16, 2025.
• The purchase price per pre-funded warrant, excluding the exercise price, is $3.432.
• The exercise price of the pre-funded warrants is CHF 0.08 per share, which was approximately $0.098 in US Dollars as of June 11, 2025, based on an exchange rate of US$1.219 to CHF 1.00.
• These warrants are exercisable at any time on or after the closing date until the tenth anniversary of the closing date, subject to a 9.99% beneficial ownership blocker.
• Jeremy Green, as a principal of Redmile Group and a director of ADC Therapeutics SA, may also be deemed to beneficially own these securities, though he disclaims beneficial ownership except for his pecuniary interest.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. A significant investment from a major institutional holder like Redmile Group, especially through a private placement, typically signals confidence in the company's future. However, the potential for future dilution from warrant exercise introduces a slight negative aspect.

Positives

• The significant investment by Redmile Group, a 10% owner and institutional investor, indicates strong confidence in ADC Therapeutics SA's future prospects.
• The private placement provides ADC Therapeutics SA with capital, which can be used for strategic initiatives, research and development, or general corporate purposes.

Negatives

• The issuance of pre-funded warrants, upon exercise, will lead to dilution for existing shareholders, increasing the total number of outstanding common shares.

Risks

• Potential future dilution of existing shareholders upon the exercise of the pre-funded warrants.
• The value of the warrants and underlying shares is subject to market fluctuations and the company's performance.

Future Outlook

The pre-funded warrants are exercisable by the holder at any time on or after the closing date of the private placement 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

• Redmile Group, LLC and Mr. Green disclaim beneficial ownership of the reported securities except to the extent of its and his respective pecuniary interest therein, if any.
• This report shall not be deemed an admission that Redmile or Mr. Green is the beneficial owner of the securities for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, or for any other purpose.

Industry Context

This private placement is a common method for biotechnology and pharmaceutical companies like ADC Therapeutics SA to raise capital from institutional investors, especially for funding ongoing research, clinical trials, and commercialization efforts. Such investments from established funds like Redmile Group can be seen as a vote of confidence in the company's pipeline and strategic direction within the competitive biotech landscape.

Related Party Transactions

• The transaction involves Redmile Group, LLC, which is a 10% owner of ADC Therapeutics SA, and Jeremy Green, a principal of Redmile Group and a director of ADC Therapeutics SA. This constitutes a related party transaction due to their existing relationships and ownership stakes.

Stakeholder Impact

• Shareholders: Potential future dilution of existing shares when the pre-funded warrants are exercised, but also potential positive sentiment from a major institutional investment.
• Company: Receives significant capital from the private placement, strengthening its financial position for operations and growth initiatives.

Next Steps

• The closing of the private placement is scheduled for June 16, 2025.
• The pre-funded warrants will become exercisable on or after the closing date and can be exercised for up to ten years.
• Holders may exchange pre-funded warrants for new ones with a subsequent ten-year exercise period during the last 90 days of the term.

Key Dates

Keywords

ADC Therapeutics, Redmile Group, Private Placement, Pre-Funded Warrants, SEC Form 4, Beneficial Ownership, Institutional Investment, Capital Raise, Biotechnology, Pharmaceuticals