ADC Therapeutics SA 8-K

What Happened

• On February 18, 2026, ADC Therapeutics SA announced an amendment to its August 25, 2021 Purchase and Sale Agreement with entities managed by HealthCare Royalty Management, LLC (HCR). HCR has provided $300 million of funding to the company to date.
• The amendment materially changes the company’s obligations on a change-of-control and provides for continued royalty payments (or a potential buyout) following such an event. In connection with the amendment, ADC issued warrants to HCR to purchase 9,834,776 common shares.

Key Details

• Change-of-control payment under the Amended Agreement: $150 million if change of control occurs on or before Dec 31, 2027; $200 million if on or after Jan 1, 2028. These amounts are not reduced by royalties previously paid.
• Original change-of-control exposure was up to $750 million (or $675 million in a specific royalty-trigger scenario) less royalties previously paid.
• Post-change-of-control royalty buyout: $525 million if buyout on or before Dec 31, 2029; $750 million if on or after Jan 1, 2030 (reduced by royalties previously paid and the change-of-control payment).
• Warrants: 9,834,776 issued, exercisable until Dec 31, 2030 at $3.8130 per share (subject to adjustment). Minimum exercise 50,000 shares; cashless and partially cashless exercises permitted; transfer restrictions apply until Dec 31, 2027. Company to file registration for resale within 30 business days. Issuance relied on a Section 4(a)(2) exemption.

Why It Matters

• For investors, the amendment reduces the immediate cash obligation ADC would owe HCR on a change-of-control materially (from up to $750M down to $150–200M), which could make potential M&A outcomes less cash-intensive for the company or its acquirers.
• However, royalty obligations remain in place after a change-of-control unless the company (or successor) pays a substantial buyout amount; the economic trade-offs between upfront change-of-control payments and continuing royalty streams are preserved under new terms.
• The warrants represent potential equity dilution (9.83M shares) if exercised and are subject to multi-year restrictions; they also give HCR additional upside participation in ADC’s equity.