Form 4: Redmile Group Executes Cross Trades in ADC Therapeutics Shares and Warrants

Redmile Group engaged in cross trades involving ADC Therapeutics common shares and pre-funded warrants, with no change in their aggregate beneficial ownership.

Summary

• Redmile Group, through its managed investment vehicles, conducted cross trades involving 50,672 common shares and 26,656 pre-funded warrants of ADC Therapeutics on December 4, 2024.
• Concurrently, a Redmile client sold an additional 25,352 common shares at the same price.
• The transactions occurred at a price of $2.07 per common share and $1.98 per pre-funded warrant (excluding the exercise price).
• These trades resulted in no profit for Redmile or Jeremy Green and did not alter their overall beneficial ownership.
• Redmile has ceased serving as the investment advisor for an account holding 77,134 ADC Therapeutics shares, and therefore no longer has voting or dispositive power over these shares.
• The pre-funded warrants have an exercise price of CHF 0.08 per share, which is approximately $0.09 based on the exchange rate on December 4, 2024.
• The pre-funded warrants are exercisable at any time until the tenth anniversary of their issuance, with a 9.99% beneficial ownership blocker.

Sentiment

Score: 5

Explanation: The document describes routine trading activity and a change in advisory role, which is neither particularly positive nor negative. The sentiment is neutral.

Positives

• The cross trades were executed at the same price, resulting in no profit for Redmile or Jeremy Green.
• The transactions did not change Redmile's aggregate beneficial ownership.

Negatives

• Redmile has ceased serving as the investment advisor for an account holding 77,134 ADC Therapeutics shares, indicating a reduction in their managed assets.

Risks

• The document indicates a change in Redmile's investment advisory role, which could signal a shift in their investment strategy or confidence in ADC Therapeutics.
• The pre-funded warrants have a 9.99% beneficial ownership blocker, which could limit the potential upside for warrant holders.

Management Comments

• Redmile and Mr. Green disclaim beneficial ownership of the reported securities except to the extent of its and his respective pecuniary interest therein.
• This report shall not be deemed an admission that such Reporting Persons are the beneficial owners 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 filing reflects routine trading activity by a major investment firm in a publicly traded company. Cross trades are common and do not necessarily indicate a change in the firm's long-term outlook on the company.

Comparison to Industry Standards

• Cross trades are a common practice among institutional investors to manage their portfolios and are not unusual in the biotech sector.
• The reported prices are consistent with market prices at the time of the transaction.
• The disclaimer of beneficial ownership is a standard practice in SEC filings to avoid unintended implications of control.

Stakeholder Impact

• The cross trades and sale of shares have a minimal impact on shareholders as they did not affect the overall market price or Redmile's beneficial ownership.
• The change in Redmile's advisory role may be of interest to shareholders, but the impact is not immediately clear.

Key Dates

Keywords

Redmile Group, ADC Therapeutics, cross trades, pre-funded warrants, common shares, beneficial ownership, investment advisor