Medical staff uses a mammogram to check a woman's breast for breast cancer.
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During the four-day event, the biotech and pharmaceutical industries demonstrated their enthusiasm for antibody-drug conjugates (ADCs), which deliver anti-cancer therapy to target and kill cancer cells and minimize damage to healthy cells. Meanwhile, standard chemotherapy is less selective – it can affect both cancer cells and healthy cells.
Johnson & Johnson last week announced a $2 billion acquisition of ADC developer Ambrx Biopharma to bolster its existing ADC pipeline, which some researchers say could usher in a “new era” of cancer treatment. Other drugmakers such as Pfizer and Merck, which secured some of the more than 70 ADC-related contracts last year, said these drugs will be important growth drivers for their businesses.
Interest in the drugs will not continue until this year, some analysts expect Further deals and progress on ADCs currently in development.
The factors driving the recent surge in ADCs will not abate this year, and the fear of missing out on companies that have not yet entered the market will only push more companies to enter the space, Andy said Hsieh, analyst at William Blair & Company CNBC.
These factors include people's increased confidence in ADC technology Companies and researchers, the potential longer market exclusivity of these drugs and the rise of attractive ADCs from drugmakers in Asia.
The drugs also have potential for huge profits: Drug research firm Evaluate estimates that ADCs could account for $31 billion of the $375 billion global cancer market by 2028. According to another report from research firm MarketsandMarkets, the market for these drugs is estimated to be worth around $9.7 billion in 2023.
“It’s a bit like FOMO, right? Everyone wants to be exposed to it.” [ADCs] and basically make it a cornerstone of their overall corporate strategy,” Hsieh told CNBC. “I really don’t see any slowing down and it will be a continuation of the momentum from 2023 in our view.”
ADCs are not new.
About a dozen have received approval from regulators worldwide, the earliest coming in 2000. But dealmaking picked up steam in 2020 and “really took off” in 2022 and 2023, said Daina Graybosch, senior research analyst at Leerink Partners for immune and oncology.
She called the recent rise of ADCs a “multi-year innovation cycle” in which it took several years for the industry to produce “fundamental transformative innovations” that then unlocked more investment and much more potential.
Improvements in ADC technology appeared to have made some newer versions of the drugs safer and more effective, increasing industry confidence in their potential and leading to further investment in the area. The steady increase in approvals and acquisitions in recent years also contributed to this confidence, convincing some companies that ADCs have a “lower-risk development path,” Hsieh said.
A view of an AstraZeneca facility is seen during Prime Minister Scott Morrison's visit in Sydney, Australia on August 19, 2020.
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Graybosch highlighted an ADC co-developed by AstraZeneca and Japanese drugmaker Daiichi Sankyo called Enhertu, which it described as the first “next-generation ADC” that offers a wider range of treatment options compared to older versions of the drugs. Enhertu, for example, was the first ADC to demonstrate the ability to treat breast cancer patients with both high and low levels of a protein called HER2, which controls how breast cells grow, divide and repair damage.
In recent years, drugmakers have refined key components of ADCs, such as the chemical bond that helps these drugs deliver cancer-killing therapy to cancer cells, according to William Blair's Hseih. He said companies are learning how to maximize the effectiveness of these drugs “without having too many side effects.”
ADCs still have their drawbacks – for example, cancer tumors can develop resistance to them over time. And not all newer ADCs in development are successful: Last month, Sanofi scrapped its only experimental ADC after it failed in a late-stage study in lung cancer patients.
Graybosch also noted that companies from Japan and China have emerged as effective ADC developers, quickly making “innovative optimizations” to the drugs and bringing to market ADCs that could be better than older versions of the drugs.
US- and UK-based companies are entering into deals with these international drugmakers, such as two licensing agreements GSK signed late last year with China's Hansoh Pharma for ADCs against various types of cancer.
The complexity of ADC technology has likely become another motivation for companies to invest in and develop the drugs, Hsieh noted. He said it could reduce the likelihood of other companies developing biosimilars, which would allow drugmakers to keep ADC prices high for longer periods.
Gilead's approved breast cancer ADC, Trodelvy, has a list price of more than $2,000 per vial in the United States. But some ADCs on the market have much higher list prices: An advanced ovarian cancer drug from biotech ImmunoGen costs more than $6,000 per vial as of 2022.
List prices are before insurance and other discounts.
Merck now expects to generate $20 billion in new cancer drug sales by the early to mid-2030s, driven in part by its recent investments in ADCs, executives announced during the conference. That's double the estimate the company gave at the same conference last year.
The raised forecast signals Merck's confidence in the future of its cancer drug offering, even as its blockbuster immunotherapy Keytruda is on the verge of losing exclusivity in 2028. This exposes it to generic competition.
Merck executives highlighted the Japanese drugmaker's up to $5.5 billion licensing agreement with Daiichi Sankyo to co-develop three experimental ADCs. This year, the company hopes to receive approval for one of these ADCs to treat non-small cell lung cancer.
“…We now have a leadership position in antibody-drug conjugates, and we've achieved that through what I think are very smart business deals,” said Merck CEO Robert Davis. He added: “What all of this really means is the potential for growth.”
Newly constructed Merck research facility at 213 E Grand Ave in South San Francisco.
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Pfizer hopes ADCs will help turn the company around after a difficult 2023. Shares fell about 40% last year as Pfizer struggled with weakening demand for its Covid products and other commercial missteps.
Pfizer CEO Albert Bourla told reporters that the company's $34 billion acquisition of ADC developer Seagen would help restore investor confidence in Pfizer, especially now that the deal is officially closed.
Bourla noted that antibody-drug conjugates have become the hottest area in oncology, adding that Seagen's expertise in ADCs will give Pfizer a tremendous advantage in advancing these drugs and establishing themselves as a leader in cancer treatment .
Pfizer expects the Seagen acquisition to generate more than $10 billion in risk-adjusted sales by 2030. Notably, Seagen brings four approved cancer drugs, including three ADCs, which will strengthen Pfizer's own ADC portfolio.