The article analyzes the recent trends in antibody-drug conjugate (ADC) development and how it is causing ripple effects in the biopharma industry. It focuses on the key elements in clinical-stage ADCs – linker/payload and target selection, as well as the heterogeneous impacts across therapeutic areas and companies. The analysis shows that next-generation ADCs are breaking into frontline treatment paradigms and creating new market opportunities, especially in oncology. However, red ocean targets face increasing difficulties, implying the integrative role of ESG ratings in capturing existing information.
Next-gen ADCs with picomolar activity are expanding frontline treatment
The article discusses how Daiichi Sankyo’s DS-8201 has achieved high potency at nanomolar activity levels through its proprietary payload and conjugation technology. This has allowed it to gain approvals in 2L/3L BC and gastric cancer. Recent ADC deals by Merck and GSK also focus on targets beyond HER2, such as Nectin-4, to enhance or replace ICI therapy. The potential to address unmet needs is fueling the exploration of novel targets like B7-H3/H4 or those where antibodies have failed before.
ADC structure-activity relationship creates differentiation opportunities
The analysis shows ADC structure determines the therapeutic window and tolerability. While cleavable linkers offer broader applicability, their instability in circulation increases toxicity risks. DS-8201 overcomes this by using a non-cleavable linker and picomolar payload. The variety of payloads and linkers suggests opportunities for differentiation targeting the same antigen.
Target selection expands along the clinical lines of therapy
The research maps out the distribution of ADC targets, showing a shift to niche indications with high unmet needs. ADCs against CEACAM5, Nectin-4 and c-MET show promise in IO-failed patients across solid tumors. CD30-targeting ADC gained approval in 1L sALCL, while Nectin-4 and HER2-targeting ADCs are also expanding to 1L studies, replacing chemotherapy.
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However, the analysis suggests targeting recurrently explored antigens now faces difficulties, as recent deals have focused on non-overlapping ADC platforms. This highlights the limited value of ESG ratings in revealing new qualitative information, despite their emphasis by investors.
The analysis shows ADCs are causing disruptive ripple effects on the cancer treatment landscape. However, the repetitive exploration of certain antigens means the ESG ratings are merely integrating existing data instead of spurring the release of new proprietary information.