Medical personnel use a mammogram to examine a woman's breast for breast cancer.
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SAN FRANCISCO – An established name but the promising group of cancer drugs was a red-hot market in 2023, and more companies could look to the treatments to drive growth in the coming year.
That was a clear conclusion from the JPMorgan Healthcare Conference in San Francisco, the largest gathering of biotech and pharmaceutical executives, analysts and investors in the country.
During the four-day event, the biotech and pharmaceutical industries showed their enthusiasm for antibody-drug conjugates, or ADCs, which deliver a cancer-killing therapy to specifically 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 announced a $2 billion acquisition of developer ADC last week Ambrx Biopharma to boost the existing pipeline of ADCs, which some researchers believe could usher in a “new era” for cancer treatment. Other drug manufacturers such as Pfizer And Merckwhich closed some of the more than 70 ADC-related deals in the past year, says these drugs will be important growth drivers for their businesses.
Interest in the drugs will only continue this year, as some analysts expect more dealmaking and advancement in ADCs currently in development.
The factors driving the recent rise of ADCs will not abate this year, and the fear of missing out among companies that have not yet entered the market will only lead to more companies entering this market, says Andy Hsieh, analyst at William Blair & Company. CNBC.
These factors include increased confidence in ADC technology companies and researchers, the potentially longer market exclusivity of these drugs and the emergence of attractive ADCs from drug manufacturers in Asia.
The drugs also have the potential to generate huge profits: ADCs could account for $31 billion of the $375 billion global cancer market by 2028, according to estimates from drug market research firm Evaluate. The market for these drugs is estimated to be worth about $9.7 billion by 2023, according to another report from research firm MarketsandMarkets.
“It's kind of like FOMO, right? Everyone wants to be known about it [ADCs] and essentially making it a cornerstone of their entire business strategy,” Hsieh told CNBC. “I really don't see any kind of slowdown and it will, in our view, very much be a continuation of the momentum from 2023.”
Why ADCs have become popular
ADCs are not new.
About a dozen have received approval from regulators around the world, the first in 2000. But dealmaking started to pick up in 2020 and will “really take off” in 2022 and 2023, said Daina Graybosch, senior research analyst at Leerink Partners in immunoimmunity. oncology.
She called the recent rise of ADCs a “multi-decade innovation cycle,” where it took several years for the industry to implement “fundamental transformative innovation, which 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, boosting industry confidence in their potential and encouraging more investment in the space. The steady wave of approvals and acquisitions in recent years has also contributed to that 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 on August 19, 2020 in Sydney, Australia.
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Graybosch highlighted an ADC jointly developed by AstraZeneca and Japanese drugmaker Daiichi Sankyo mentioned Enhertu, which it called the first of “the next generation ADC” that had greater treatment options compared to older versions of the drugs. For example, Enhertu became the first ADC to demonstrate the ability to treat breast cancer patients with both high and low levels of a protein called HER2, which regulates how breast cells grow, divide and repair damage.
Drugmakers in recent years have refined key components of ADCs, such as the chemical bond that helps these drugs deliver a cancer-killing therapy to cancer cells, according to William Blair's Hseih. He said companies are learning how to maximize the effectiveness of those drugs “without having too many side effects.”
ADCs still have their drawbacks; for example, cancerous tumors can develop resistance to it over time. And not all newer ADCs in development are successful: last month Sanofi scrapped its only experimental ADC after it fell short 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 modifications” to the drugs and bringing ADCs to market that could be better than older versions of the drugs.
American and British companies enter into agreements with these international drug manufacturers, such as two licensing agreements GSK signed late last year with China-based Hansoh Pharma for ADCs targeting 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 that other companies will make biosimilars, allowing drugmakers to keep ADC prices high for longer periods of time.
Gilead's approved ADC for breast cancer, Trodelvy, has a U.S. list price of more than $2,000 per vial. But some ADCs on the market have much higher list prices: An advanced ovarian cancer drug from biotech company ImmunoGen will cost more than $6,000 per vial as of 2022.
List prices are before insurance and other discounts.
How some drugmakers are betting on ADCs
Merck now expects to sell $20 billion in new cancer drugs between the early and mid-2030s, thanks in part to recent investments in ADCs, executives announced at the conference. That's double the estimate the company gave at the same conference last year.
The increased forecast signals Merck's confidence in the future of its cancer drug offering, even as its blockbuster immunotherapy Keytruda nears a loss of exclusivity in 2028.. That will expose it to generic competition.
Merck executives highlighted the up to $5.5 billion licensing deal with Daiichi Sankyo for the co-development of three of the Japanese drugmaker's experimental ADCs. This year, the company hopes to receive approval for one of those ADCs for the treatment of non-small cell lung cancer.
“…We now have a leading position in antibody-drug conjugates, and we've done that through what I think are very smart deals,” said Merck CEO Robert Davis. He added that “what this all really means is the growth potential.”
Newly constructed Merck research facility located at 213 E Grand Ave in South San Francisco.
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Pfizer hopes ADCs will help the company bounce back from a tough 2023. Shares fell about 40% last year as Pfizer grappled with declining demand for its Covid products and other commercial missteps.
Pfizer CEO Albert Bourla told reporters that the $34 billion acquisition of ADC developer Seagen would help restore investor confidence in Pfizer, especially now that the deal has officially closed.
Bourla noted that antibody-drug conjugates have become the hottest area of oncology, adding that Seagen's expertise in ADCs will give Pfizer a huge advantage as it continues to develop these drugs and establish itself as a leader in the field of cancer treatment.
Pfizer believes the Seagen acquisition will generate more than $10 billion in risk-adjusted revenue by 2030. Specifically, Seagen is commercializing four approved cancer drugs, including three ADCs, that will strengthen Pfizer's own ADC portfolio.