Medical personnel use a mammogram to look at a lady’s breast for breast cancer.
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SAN FRANCISCO — A longtime but promising group of cancer drugs was a red-hot market in 2023, and more firms could look to the treatments to fuel growth in the 12 months ahead.
That was one clear takeaway from the JPMorgan Healthcare Conference in San Francisco, the nation’s largest gathering of biotech and pharmaceutical executives, analysts and investors.
In the course of the four-day event, the biotech and pharmaceutical industry signaled its enthusiasm for antibody-drug conjugates, or ADCs, which deliver a cancer-killing therapy to specifically goal and kill cancer cells and minimize damage to healthy ones. Meanwhile, standard chemotherapy is less selective – it might affect each cancer cells and healthy cells.
Johnson & Johnson last week announced a $2 billion acquisition of ADC-developer Ambrx Biopharma to beef up its existing pipeline of ADCs, which some researchers imagine may very well be heralding a “recent era” for cancer treatment. Other drugmakers equivalent to Pfizer and Merck, which closed among the greater than 70 ADC-related deals during the last 12 months, said those drugs will be key growth drivers for his or her businesses.
Interest in the drugs will only continue this 12 months, as some analysts expect more dealmaking and advancements in ADCs currently in development.
The aspects fueling the recent rise of ADCs will not abate this 12 months, and a fear of missing out amongst businesses which have not entered the market will only push more firms to enter the space, Andy Hsieh, an analyst at William Blair & Company, told CNBC.
Those aspects include increased confidence in ADC technology amongst firms and researchers, the doubtless longer market exclusivity of those drugs and the rise of attractive ADCs from drugmakers in Asia.
The drugs even have potential to attract huge profits: ADCs could account for $31 billion of the $375 billion worldwide cancer market in 2028, in line with a report citing estimates from the drug market research firm Evaluate. The marketplace for those drugs in 2023 was estimated to be value around $9.7 billion, one other report from research firm MarketsandMarkets said.
“It’s type of like FOMO, right? Everyone wants to realize exposure to [ADCs] and principally make it a cornerstone of their entire corporate strategy,” Hsieh told CNBC. “I actually don’t see any form of slowing down and it will very much, in our view, be a continuation of the 2023 momentum.”
Why ADCs have turn into popular
ADCs aren’t recent.
Roughly a dozen have won approvals from regulators worldwide, with the earliest coming in 2000. But dealmaking began to select up in 2020 and “really take off” in 2022 and 2023, in line with Daina Graybosch, senior research analyst at Leerink Partners covering immuno-oncology.
She called the recent rise of ADCs a “multi-decade innovation cycle,” where it took several years for the industry to make some “fundamental transformative innovation, which then unlocked more investment and rather a lot more potential.”
Improvements in ADC technology appeared to have made some newer iterations of the drugs more protected and effective, which boosted the industry’s confidence in their potential and encouraged more investments in the space. The regular surge of approvals and acquisitions during the last several years also contributed to that confidence, convincing some firms 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 called Enhertu, which she called the primary of “the next-generation ADC” that had a greater breadth of treatment in comparison with older versions of the drugs. For instance, Enhertu became the primary ADC to point out the power to treat breast cancer patients with each high and low levels of a protein called HER2, which controls how breast cells grow, divide and repair damage.
Drugmakers have fine-tuned key components of ADCs during the last several years, equivalent to the chemical bond that helps those drugs deliver a cancer-killing therapy to cancer cells, in line with William Blair’s Hseih. He said firms are learning the way to maximize the efficacy of those drugs “without entering into an excessive amount of unwanted side effects.”
ADCs still have their drawbacks — for instance, cancer tumors can develop resistance to them over time. And never all newer ADCs in development are successful: Last month, Sanofi scrapped its only experimental ADC after it fell short in a late-stage trial in lung cancer patients.
Graybosch also noted that firms from Japan and China have emerged as effective ADC developers which might be rapidly “innovating tweaks” to the drugs and bringing ADCs to the market that may very well be higher than older versions of the drugs.
U.S. and U.K.-based firms are inking deals with those international drugmakers, equivalent to two licensing agreements GSK signed late last 12 months with Chinese-based Hansoh Pharma for ADCs targeting several forms of cancer.
The complexity of ADC technology has likely turn into one other motivation for firms to speculate in and develop the drugs, Hsieh noted. He said it could reduce the possibilities that other firms will create biosimilars, allowing drugmakers to maintain ADC prices high for longer periods of time.
Gilead’s approved ADC for breast cancer, Trodelvy, has a U.S. list price of greater than $2,000 per vial. But some ADCs available on the market have far higher list prices: A sophisticated ovarian cancer drug from biotech company ImmunoGen costs greater than $6,000 per vial as of 2022.
List prices are before insurance and other rebates.
How some drugmakers are betting on ADCs
Merck now expects $20 billion in recent cancer drug sales by the early to mid-2030s, thanks in part to its recent investments in ADCs, executives announced through the conference. That is double the estimate the corporate provided through the same conference last 12 months.
The raised forecast signals Merck’s confidence in the longer term of its cancer drug offerings, at the same time as its blockbuster immunotherapy Keytruda nears a lack of exclusivity in 2028. That will expose it to generic competition.
Merck executives highlighted its as much as $5.5 billion licensing agreement with Daiichi Sankyo to jointly develop three of the Japanese drugmaker’s experimental ADCs. This 12 months, the corporate hopes to win an approval for one in all those ADCs for the treatment of non-small cell lung cancer.
“….We’ve got a number one position now in antibody-drug conjugates, and we have done that through what I feel may be very smart deal-making,” Merck CEO Robert Davis said. He added that “what all of that basically translates to is the potential for growth.”
Newly built Merck research facility positioned at 213 E Grand Ave in South San Francisco.
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Pfizer hopes ADCs will help the corporate turn around after a rocky 2023. Shares fell roughly 40% last 12 months as Pfizer grappled with weakening demand for its Covid products and other business missteps.
Pfizer CEO Albert Bourla told reporters that the corporate’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 turn into the most well liked area of oncology, adding that Seagen’s expertise in ADCs will give Pfizer an enormous advantage in developing those drugs further and establishing itself as a pacesetter in cancer treatment.
Pfizer believes the Seagen acquisition will bring in greater than $10 billion in risk-adjusted sales by 2030. Seagen specifically brings 4 approved cancer drugs, including three ADCs, which will beef up Pfizer’s own ADC portfolio.