ADCs flying high amid surge in M&A, licensing, and CDMO investment

Through a string of molecule licensing deals, investments in conjugation tech, and ‘that’ $43 billion Seagen bid, 2023 really has seen an antibody drug conjugate (ADC) renaissance.

As a concept, ADCs are straightforward enough, attaching a cytotoxic small-molecule drug to an antibody raised against a specific molecular receptor, theoretically creating a highly targeted and effective therapy.

Yet while the first – Pfizer’s Mylotarg (gemtuzumab ozogamicin) – won US Food and Drug Administration (FDA) approval in 2000, as of August 2023 there were just 13 ADCs on the market.

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The reasons for this slow crawl are many, but include the complication in developing the modality such as the nature of the linker and the payload, the location and amount the payload conjugated to the drug, as well as unexpected toxicities and resistance to therapy arising in trials.

But despite the difficulties, interest from large pharma and services firms has been off the charts this year:

Licensing

Earlier this month, Bristol Myers Squibb inked a relatively modest $100 million licensing deal with Korea’s Orum Therapeutics, gaining access to the ORM-6151 program: an anti-CD33 antibody-enabled degrader set for Phase I trials for the treatment of acute myeloid leukemia.

The molecule uses Orum’s degrader-based platform GSPT1, a take on conjugation technology, and is the latest play by Bristol Myers to grow its ADC pipeline. In April, the firm inked a potential $1 billion to develop ADCs with Tubulis.

Over the past year, BMS’s dealmaking has been mirrored by its peers. Merck & Co. paid $4 billion upfront to codevelop and market three ADCs with Daiichi Sankyo last month, while GlaxoSmithKline forked out $85 million upfront for the global rights to a gynecology cancer ADC from Hansoh Pharma.

Germany’s BioNTech, with COVID vaccine money in hand, jumped into the space in April through a $170 million deal with Duality Biologics. And on the tech front, Astellas teamed with Sony Corporation to access polymeric material KIRAVIA Backbone as a linker to improve therapeutic efficacy of its ADC pipeline.

M&A

This year, the largest pharma merger since 2019’s BMS-Celgene deal was announced, with ADCs being the key driver. Seagen (previously Seattle Genetics) has been the vanguard of ADC development and commercialization and thus if regulators approve a $43 billion bid from Pfizer first announced in February, the Big Pharma will add approved ADC cancer products Adcetris (brentuximab vedotin), Padcev (enfortumab vedotin), Tivdak (tisotumab vedotin). It will also add around 10 (mostly ADC) candidates to its pipeline.

Meanwhile, on a less spectacular scale, Eli Lilly agreed in October to buy preclinical ADC firm Mablink Bioscience.

CDMOs

And where there is money, there is a service sector ready to follow suit. Thus this year we’ve seen a flurry of activity from contract development and manufacturing organizations (CDMOs) broadening their capabilities to support the ADC space.

Samsung Biologics has gone in heavy on the ADC space, bringing new capabilities to its site in Songdo, Korea as well as investing in ADC entities through the Samsung Venture Investment Corporation wing. Fellow Korean CDMO Lotte has followed suit, bringing ADC services to a converted former Bristol Myers’ animal health laboratory at its site in East Syracuse, New York.

WuXi Biologics and WuXi Apptec, meanwhile, has brought its relative services together through a joint venture – WuXiXDC – focused solely on bioconjugation. The venture is conducting a $500 million IPO in Hong Kong.

And then there is, perhaps, the original conjugation CDMO Lonza, which has been in the space since 2006 and boasts its involvement in the majority of approved ADC products. This past 12 months, in particular, the CDMO has been rampant in its ADC and conjugation-related investments, acquiring technology from AbTis and Simris, as well as paying over $100 million for Dutch firm Synaffix.

Why now?

As alluded to in the intro, ADCs have been around for over two decades. There are more than 100 ADCs undergoing human studies, say some studies, so the pipelines reflect the current surge in activity, but the question remains: why now?

“Development of ADCs has accelerated recently because research over the past decade has resulted in a substantial expansion of available options for antibody design, type of linker, and the active payload,” Janice Reichert, chief operating officer of nonprofit organization The Antibody Society, said in a recent BioProcess International piece. “The number of validated target antigens has also substantially increased.”

One example is the advancement in conjugation technology from the first-generation of ADCs. “Most ADCs to date have been made by nonspecific conjugation of drug to antibody at multiple potential sites,” Geoff Hale, CEO of antibody technology at mAbsolve, said in the same piece.

“This leads to heterogeneity and complexity for manufacturing and quality control. More recently, ADCs are being developed with site-specific modification, so are more homogenous and reproducible. I expect this trend to increase in future.”