ADC Therapeutics (ADCT) cut debt and extended its cash runway, reducing pressure on its balance sheet as it approaches new clinical data for Zynlonta in diffuse large B-cell lymphoma, RBC Capital Markets said Thursday in a report.

The company expects its recent financing to generate about $76.3 million, with $69.6 million used to lower outstanding debt from $120 million to $50 million, RBC said. The move should reduce interest expense and modestly slow cash burn, extending the runway into 2029 from 2028, the report said.

RBC said management remains optimistic heading into the next Zynlonta study, though the analysts are still cautious on the drug's clinical profile and physician willingness to use the regimen. Rising expectations mean weak data could drive as much as 50% downside, the report said.

ADC also announced preliminary Q3 Zynlonta revenue of about $21 million, above RBC's estimate, though sales remain largely rangebound amid competitive pressure, the report said.

RBC maintained its rating of sector perform, speculative risk, on ADC stock with a $2 price target.

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