Global antibody conjugate drug trade is in full swing, China to meet the anti-cancer "magic bullet" research and development boom.

"51% of clinical ADC drugs in China are in Phase 2 and beyond trials, compared with 42% globally (including China). At the same time, China has a large and well-advanced pipeline, and these assets are widely recognized globally, as evidenced by the increase in global ADC transactions."

By the end of the year, how will the antibody conjugate drug (ADC), which has been "focused" in 2023, perform throughout the year?

According to the third-quarter financial reports disclosed by major pharmaceutical companies, the global market size of ADC in the first three quarters of 2023 is 7.4 billion billion US dollars, and it is expected to exceed 10 billion US dollars for the first time in the whole year. Kadcyla (trastuzumab), Enhertu (trastuzumab) and other six ADC will exceed $1 billion, of which Enhertu sales are expected to exceed $2.5 billion this year.

Antibody conjugated drug (ADC) is a complex, which is composed of cytotoxic drugs (a common class of drugs for the treatment of tumors) connected to monoclonal antibodies that target tumors. It has both highly specific targeting ability and powerful killing effect in anti-tumor. It can accurately and efficiently destroy cancer cells, and is called "magic bullet.

Pharmaceutical companies "strong alliance"

Recently, British pharmaceutical company GlaxoSmithKline (GSK) and Hansen Pharmaceutical Group Co., Ltd. (hereinafter referred to as "Hansen Pharmaceutical") announced that they have signed an advance payment agreement of US $0.185 billion to realize cooperation in new drugs.

Under the agreement, GSK will acquire the development and commercialization rights outside China for a B7-H3-targeted ADC called HS-20093. Hansen Pharmaceuticals will receive a milestone payment of up to $1.525 billion during the development period (conditional phased payment plan). After commercialization, GSK will also pay royalties based on global net sales outside China.

Abdullah Hesham, senior vice president of global oncology research and development at GSK, said: "B7-H3 is highly expressed in a variety of solid tumors, and these solid tumors still urgently need new treatment options. We look forward to advancing this potential new therapy in multiple indications and forming potential combination therapies with our existing products in the future."

This is not the first time GSK has entered into an ADC drug strategic partnership with Hansen Pharmaceuticals. In October 2023, GSK and Hansen Pharmaceuticals reached an agreement on the HS-20089 of B7-H4-targeted ADC candidates currently undergoing Phase II clinical trials in China for the treatment of ovarian and endometrial cancers. This agreement is roughly similar in content to this one, but slightly lower in price. GSK made an upfront payment of $85 million and promised milestone payments of up to $1.4 billion.

In ADC's blockbuster deal, there is no lack of Chinese innovative pharmaceutical companies. Huajin Securities December 12 research report pointed out that although the domestic ADC started late, but with the domestic policy to increase support for research and development innovation, superimposed on the domestic ADC innovative pharmaceutical companies research and development strength continues to increase, the domestic ADC technology platform and in the research pipeline is rapidly gaining wide recognition from foreign pharmaceutical companies.

According to the drug cloud database, HS-20093 are currently conducting six phase I and phase II clinical studies in China for the treatment of lung cancer, sarcoma, head and neck cancer and other solid tumors. GSK plans to conduct HS-20093 phase I clinical trials outside of China in 2024.

Since March this year, the German pharmaceutical company BioNTech has reached cooperation with two Chinese innovative pharmaceutical companies on four ADC drug candidates. On October 12, Suzhou Yilian Biopharmaceutical Co., Ltd. announced that it would grant BioNTech exclusive rights to develop, manufacture and commercialize an ADC drug candidate targeting HER3 (human epidermal growth factor receptor 3) worldwide (excluding mainland China, Hong Kong and Macao). On August 7 and April 3, Yingen Biopharmaceutical (Suzhou) Co., Ltd. entered into exclusive licensing and cooperation agreements for ADC drug candidate DB-1305 and DB-1303, DB-1311 and BioNTech, respectively.

U.S. pharmaceutical company Pfizer (Pfizer), Bristol-Myers Squibb (BMS) and German pharmaceutical company Merck (Merck KGaA) also followed suit. On December 15, and Platinum Pharmaceuticals (Shanghai) Co., Ltd. issued an announcement, its wholly-owned subsidiary Nona Biology (Suzhou) Co., Ltd. and Seagen, which Pfizer has just completed its acquisition, have signed an exclusive license agreement of US $53 million in advance payment and near-term payment and up to US $1.05 billion in milestone payment and royalties for the global clinical development and commercialization of ADC drug candidate HBM9033 targeting human mesothelin (MSLN). HBM9033 are currently conducting Phase I clinical studies in the United States to evaluate its safety, tolerability, pharmacokinetics, and antitumor activity in patients with advanced solid tumors.

Domestic R & D boom is booming

In the Chinese market, there are currently more than 120 domestic ADC drug R & D pipelines and more than 70 R & D companies. In 2020, Adcetris (for the treatment of Hodgkin's lymphoma and systemic anaplastic large cell lymphoma) and Kadcyla (for the treatment of early and metastatic HER2-positive breast cancer) will be approved in China, with total sales of $570000 in 2020.

In June 2021, the first domestically produced innovative ADC drug-Rongchang Bio's RC48 (Aidhi) went on the market. It is my country's first to obtain a breakthrough from the U.S. Food and Drug Administration (FDA) and the National Drug Administration (NMPA). The dual-recognized ADC drug is mainly used to treat gastric cancer and urothelial cancer. At present, there are 3 ADC drugs on the market in China. China has just ushered in the development boom of ADC drugs, and the market is expected to grow rapidly in the next 5 years.

On June 7, 2022, the TROP-2 ADC drug Tudavid (Trodelvy, goxatuzumab) introduced and developed by Yunding Xinyao was officially approved by the State Drug Administration for the treatment of unresectable locally advanced or metastatic triple negative breast cancer (mTNBC) that has received at least two systemic treatments (at least one of which is for metastatic disease). This drug is the first innovative ADC approved for the treatment of mTNBC in China and the only TROP-2 ADC drug approved for the market in the world.

"High price" is one of the factors that hinder the domestic volume of ADC. According to the data of the medical Rubik's Cube, the price of ADC drugs per mg at present ranges from 80 to 350 yuan RMB. However, due to the introduction of China's medical insurance policy, the price of both imported and domestic drugs has been lowered. Among them, the price of the first domestic ADC Vidicetuzumab dropped from 13500 yuan to 3800 yuan before and after the medical insurance negotiation in 2021, a drop of 71.85.

In the new round of health care negotiations, also did not see the presence of ADC drugs. Some industry experts told surging technology that ADC therapy belongs to tumor immunotherapy, and the research and development cost is high, so the price is higher, "even the initial price of some drugs exceeds the threshold of entering the medical insurance negotiation." And ADC is an emerging technology, the technology maturity needs to be developed and verified, and the data on its long-term efficacy and safety are not sufficient. "In addition, the use of therapies such as ADC and CAR-T is more complex, which brings challenges to the fine management of medical insurance drugs and the supervision of drug use." The above experts said.

In terms of technology, ADC preparation requires the use of a variety of different biochemical techniques and complex purification processes. This requires R & D manufacturers to have high-level technical teams and mature production lines, and the consideration of drug resistance is also one of the challenges for future ADC development.

However, investors are still confident in China's ADC drug market. Chen Chen, China healthcare industry analyst at UBS Securities, said: "China has 51 percent of clinical ADC drugs entering Phase 2 and beyond trials, compared with only 42 percent globally (including China). At the same time, China has a large and well-progressing pipeline, and these assets are widely recognized globally, as evidenced by the increase in global ADC transactions."

According to the Head Leopard Research Institute, the market size of ADC drugs is expected to reach 7.4 billion yuan in 2024 and 29.2 billion yuan in 2030, with a compound growth rate of 25.71 from 2024 to 2030.