The ABCs of ADCs: Investor Primer on Antibody Drug Conjugates

Insight by Boris Peaker, Cynthia Chen, Phil Nadeauand Steve Scala

THE COWEN INSIGHT

This report provides a detailed overview of the rapidly evolving antibody drug conjugate (ADC) space. While in development for the last three decades, the pace of ADC development has recently accelerated. Since 2018, the number of approved ADCs doubled from five to ten.

We estimate sales of >$3B in 2020 growing to ~$13B in 2025 from the 10 approved drugs alone. In this primer, we cite >200 ADC assets, highlight key upcoming catalysts, and detail recent ADC-focused partnerships.

ADC Development Picking Up Speed, Number Of Approved ADCs Doubled Since 2018

While in development for the last three decades, the pace of ADC development has recently accelerated. Since 2018, the number of approved ADCs doubled from five to ten. Notable approvals include Padcev, Enhertu, and Trodelvy. We estimate sales of >$3B in 2020 growing to ~$13B in 2025 from the ten currently approved drugs alone.

Nine More ADCs In Late Stages; Near-Term Regulatory Decisions And Pivotal Readouts

In addition to the currently marketed drugs, nine ADCs are approaching pivotal results or regulatory decisions. In the near term, the PDUFA for Lonca is 5/21/21. The BLA submission for Tisotumab Vedotin is planned for 1Q21. Other assets, including mirvetuximab soravtansine and Cami, have pivotal readouts in 2021.

Novel Tumor Targets and Approaches Proliferate, Generating >200 Assets In Development

At its core, an ADC is composed of an antibody, linker, and a payload. While the concept is simple, there is significant room for innovation to improve one or a combination of the components. In this report, we mention >200 ADC assets showcasing the breadth of development in this space.

Some antibody innovations include fragments, bispecifics, and pro-drug technologies. Some companies have developed novel methods of conjugation with engineered linkers and conjugation sites. Lastly, a wide range of payloads are being investigated. There is a notable trend in testing more toxic payloads, which has culminated in a PBD dimer-based platform.

Significant Potential For ADC-Focused Partnership and M&A

The broad utility and potential of ADCs has been a driver of significant M&A. Since most ADC companies are focused on improving only one component of the ADC, there will likely continue to be significant partnership activity in the industry. We have detailed 14 deals focused on ADCs that have taken place in the last 12 months ranging from $10MM to $20B in scope. We expect deal flow in the ADC space to continue to grow.