Combining the selectivity of antibodies with the cytotoxic power of chemotherapeutic agents, antibody drug conjugates (ADCs) have long held promise as a ‘magic bullet’ therapeutic modality. Despite the first ADC gaining approval back in 2000, however, it was not until the 2019 emergence of Daiichi Sankyo’s Enhertu (trastuzumab deruxtecan) that the promise was confirmed. Enhertu’s unprecedented efficacy in all breast cancer patient subgroups transformed treatment standards for that disease overnight, and led to renewed interest from multinational biopharma firms. China-based biotechs have also been strong participants in the field, uniquely well-positioned to feed the sudden global appetite for ADCs, as reflected in several multi-billion-dollar blockbuster deals. GBI provides a brief history of the development of ADCs, and looks at the dynamics of both multinational corporation (MNC) and China-based biotech activities in the space.Two decades of ACD evolutionThe concept of guiding cytotoxic substances to ensure only malignant cells are targeted while leaving healthy tissue intact was first conceived of by the father of chemotherapy, German medical scientist Paul Ehrlich, back in 1913, when he also coined the term ‘magic bullet’. The concept began to be explored in earnest during the 1960s, while the first ADCs in their current form of antibody, linker, and payload coupling assembly were produced in the laboratory setting in the 1980s. A lack of sufficient antibody targets, difficulties in engineering linkers, and fears over toxicity held these back from entering the clinic. The concept, however, was proven, and the emergence of monoclonal antibodies in the 1990s helped pave the way for the first ADCs used in humans.First-generation products (2000-2010): Rituximab and trastuzumab’s first approvals in 1997 and 1998 respectively were followed by the first ADC, Wyeth (now Pfizer)’s Mylotarg (gemtuzumab ozogamicin), which gained a fast-track approval in the US for the treatment of CD33 positive acute myeloid leukemia (AML) in 2000. However, post-marketing confirmatory studies came up short as Mylotarg’s survival benefits did not beat chemotherapy, while use of the ADC also entailed risk of severe liver injury. Mylotarg was quickly pulled from the market in 2010 as a consequence.Slow development (2011-2018): Mylotarg’s failure represented a significant setback for the entire ADC field, with several MNCs scaling back development or even entirely disbanding related R&D teams. Consequently, less than a handful of ADCs followed Mylotarg into the market: Seagen/Takeda’s Adcetris (brentuximab vedotin) for lymphoma in 2011, Roche’s Kadcyla (trastuzumab emtansine) for breast cancer in 2013, Pfizer’s Besponsa (inotuzumab ozogamicin) for acute lymphoblastic leukemia (ALL) in 2017, and AstraZeneca’s Lumoxiti (moxetumomab pasudotox) for hairy cell leukemia in 2018. Pfizer also did not give up on Mylotarg, which regained market approval in 2017 at a lower dose, and for a different patient population (newly-diagnosed AML rather than older patients with relapsed disease), albeit with the addition of a black box warning regarding liver toxicity.Exponential growth (2019-2023): R&D into ADCs continued nonetheless, pharma firms building greater understanding of the impact of ADC structure stability and homogeneity on efficacy and toxicity, and developing methods to optimize antibody engineering, payload, coupling technology, drug antibody ratio (DAR)*, and other aspects. The year 2019 was a watershed one for the ADC field, with 3 new molecules reaching the market in the space of 12 months: Roche with Polivy (polatuzumab vedotin) for large B-cell lymphoma, Seagen/Astellas’ Padcev (enfortumab vedotin) for bladder cancer, and Enhertu for breast cancer. Daiichi Sankyo’s Enhertu – under a global co-development partnership with AstraZeneca – made the biggest splash. The molecule is composed of a HER2 antibody, a cleavable stable linker, and Daiichi Sankyo’s proprietary topoisomerase I inhibitor Dxd. The ADC has a DAR reading of up to 8 – much higher than the average DAR of 2-4 seen with other ADCs, and increasing the amount of payload delivered per antibody. This reflects the stability of Enhertu’s unique tetrapeptide linker, which can be selectively cleaved by enzymes upregulated in tumor cells while maintaining its structure in blood plasma. Significantly, Enhertu has also been shown to produce a bystander effect** on non-target malignant cells.*Drug Antibody Ratio (DAR): DAR is defined as the average number of drug molecules conjugated to an antibody, and is an important factor within the design of an ADC. The DAR impacts the distribution of drug within the ADC molecule, and directly impacts therapeutic efficacy, drug clearance, pharmacokinetics, and biodistribution. Put simply, lower DAR readings can reduce the efficacy, while high DAR corelates with toxin delivery in a positive manner. However, a high DAR does not always translate into better therapeutic activity, with the potential for increased plasma clearance and off-target effects. The key is to achieve a balanced DAR that produces therapeutic effects while minimizing toxicity.**Bystander effect: After binding to target cells, some ADCs also release their payload to adjacent cells, exerting what is known as a bystander effect, killing malignant cells even if they do not express the targeted antigen, and enhancing their anti-tumor effect. The ability of an ADC to produce bystander effects, and the killing intensity of that mechanism, mainly depend on factors such as the degree of internalization of an ADC after binding to the target antigen, whether the linker can be cleaved, and whether the attached cytotoxic load is hydrophobic.Enhertu’s unique attributes are reflected in transformative clinical efficacy for breast cancer sufferers. The DESTINY-BREAST series of studies demonstrated Enhertu’s ability to not only produce significant survival benefits for HER2-positive patients but also low-HER2 expressing tumors, thanks to the bystander effect on non-target malignant cells. The drug is currently approved in the US as a treatment for unresectable or metastatic breast cancer in patients who fail other HER2 therapies, and as a second-line therapy for low-HER2 breast cancer patients. There have also been approval nods for HER2-positive gastric cancer and non-small cell lung cancer (NSCLC).Enhertu’s success reignited the ADC field from its post-Mylotarg tepidity, and a string of new approvals and deal making has followed. There has been exponential growth in the ADC market size, as 15 ADC drugs have been approved overseas, while 6 are now available in China. The global ADC market was worth USD 7.4 billion in 2022, and reached USD 4.8 billion in value in H1 2023, indicating that a new record high will be achieved this year. Forecasts for the overall ADC market reach as high as USD 60 billion+ by 2030, acting as a stimulus for a flood of deal-making and investments.ADCs show strength in solid tumorsIn terms of indication, the 15 globally approved ADCs include 8 targeting solid tumors and 7 targeting blood cancers. Although blood cancers were targeted by the first ADCs to reach the market, in both clinical and market performance terms the solid tumors field is now predominant. In addition to Enhertu, which broke through USD 1 billion mark in annual sales in 2022 and is on course for USD 3 billion by the end of 2023, Roche’s Kadcyla is also a strong contributor with over USD 2.2 billion in 2022 sales.In terms of hematological malignancies, Takeda’s CD30-targeted Adcetris has built a substantial base, with global sales at around USD 1.5 billion in 2022. However, the rise of chimeric antigen receptor (CAR) T cell therapies has reduced the impact of other blood cancer ADCs. Three of those have faced difficulties establishing themselves on the market and been withdrawn. Pfizer’s CD33-targeted Mylotarg managed to regain market entry for a new patient group after failing to confirm efficacy in its first approved indication, as discussed above.GSK’s Blenrep (belantamab mafodotin) was the world’s first BCMA-targeted ADC product, and gained fast-track conditional approval in the US in 2020 for recurrent multiple myeloma (MM). However, it also failed to demonstrate efficacy in the confirmatory Phase III DREAMM-3 study and was asked to withdraw by the FDA in 2022. Finally, AstraZeneca voluntarily withdrew the CD22-targeted Lumoxiti from global markets in January 2023, citing its extremely low clinical use, despite having no efficacy or safety concerns.The ADC market continues to shift considerably, as products with new targets are launched, and existing on-market leaders expand their approved indications. Early entrant Kadcyla topped the rankings in sales terms for several consecutive years, but is in the process of being overtaken by Enhertu. Both are HER2-targeted products, however, Kadcyla is restricted to use against breast cancer. Kadcyla sales began to plateau in 2022 at 7% expansion, and were flat at USD 1 billion in H1 2023. Enhertu, meanwhile, broke past Kadcyla with USD 1.6 billion in H1’23 sales. Daiichi/AstraZeneca showed that Enhertu produces improved overall survival and doubles progression free survival compared with Kadcyla in breast cancer in a head-to-head study completed in 2021 (the DESTINY-BREAST03). In addition, Enhertu benefits from broader use in other HER2-expressing tumors, adding gastric cancer and NSCLC indications in the US in 2021 and 2022 respectively. Market watchers have issued forecasts for the drug to hit peak annual sales ranging from over USD 6 billion to over USD 9 billion by 2028.Several ADCs on the market currently have highly niche targets and indications, such as Padcev (targeting Nectin-4, for the treatment of urothelial carcinoma), Tivdak (tissue factor, cervical cancer) and Elahere (FRα, ovarian cancer). These products enjoy a certain insulation from competition. Elahere, developed by ImmunoGen, launched in 2022 and chalked up upwards of USD 100 million in sales during the first half of 2023. Gilead’s TROP2 ADC Trodelvy (sacituzumab govitecan) experienced quick uptake upon launch with multiple market approvals around the globe. Notably, Gilead decided to ensure that it had all global rights to Trodelvy after acquiring that drug’s originator ImmunoMedics, paying off China-based Everest Medicines for the Greater China rights less than 100 days after its market launch in China. Going forwards, TROP-2 and breast cancer will be fiercely contested.China’s uniquely well-positioned biotechs ride ADC licensing waveBesides Everest and several other domestic firms that have in-licensed ADCs from foreign players for the China market, other Chinese biotechs have been well-positioned to profit from the current resurgence in interest in the ADC field, scoring a string of lucrative out-license deals. An industry insider told GBI that this reflects the R&D trends that followed the failure of Mylotarg, when many MNCs cut or deprioritized ADC pipelines. For an MNC, pipeline restructuring necessitates significant sunken costs and resources, and such decisions cannot be reversed easily. In contrast, China’s nimble biopharmaceutical companies are "small boats and easy to turn around", and also have well-stocked pipelines with numerous chances for potential success as ‘fast-followers’. While the safety issues surrounding Mylotarg soured the view of MNCs and led to a much more cautious approach, Chinese biotechs "mostly focused on molecular restructuring of listed ADCs in order to quickly launch follow-on products”. In the case of the ADC field, domestic firms have lucked out and been able to rapidly present potentially me-better or best-in-class candidate ADC molecules at a time when global R&D players had largely neglected what was viewed as a risky area.According to GBI SOURCE deals data, domestic ADCs have overtaken overseas counterparts in terms of deal volumes, the target of 9 major out-licensing deals in 2022 and a further 12 deals during the first half of 2023 alone. Total committed deal values tallied up to USD 14 billion in 2022 and just over USD 8 billion in H1’23. Meanwhile, China-based firms have not carried out any in-licensing deals targeting ADCs from foreign players during H1’23, instead turning to other domestic companies for co-development or technology platform licensing.
