5 Major ADC Deals This Year Highlight Investment Uptick

For the first time, the global market size of antibody drug conjugates (ADCs) exceeded $10 billion last year, at an estimated $11.29 billion, according to Grand View Research. This trend is expected to continue for the next few years, with ADCs reaching an estimated worth of nearly $30 billion by 2028, according to the market intelligence firm Evaluate.

Neha Rathod Godbole, a senior analyst at Vantage Market Research, said that analysts foresee the field’s current momentum persisting, as it is supported by a robust pipeline of ADC candidates and expanding therapeutic applications.

“The ADC market is on a trajectory of rapid growth, and this expansion is driven by the escalating incidence of cancer worldwide and the growing demand for targeted therapies that offer higher efficacy and fewer side effects compared to traditional treatments,” Godbole said. “Recent approvals of ADCs, such as Enhertu for breast cancer, underscore their potential to transform oncology treatment landscapes.”

She noted that the ADC sector is also experiencing rising investment and strategic collaborations. “Major pharmaceutical companies are increasingly partnering with biotech firms to leverage cutting-edge technologies and expedite the development of next-generation ADCs,” Godbole said. As examples, she pointed to the recent partnership between AstraZeneca and Daiichi Sankyo on the development of Enhertu, as well as a strategic partnership between Caris Life Sciences and Merck KGaA.

“These alliances are not only fostering innovation but also enhancing the scalability and commercial viability of ADC products,” Godbole explained.

The ADC market does face several challenges, she noted, including high development costs, complex manufacturing processes and the need for robust clinical validation, but she added that ongoing research and technological advancements are mitigating these challenges.

“With a strong pipeline of ADCs in various stages of clinical development, we anticipate a steady flow of new approvals in the coming years,” Godbole said. “The successful clinical trials of novel ADCs targeting diverse cancer types, such as non-Hodgkin lymphoma and ovarian cancer, indicate a broadening of the therapeutic scope of ADCs.”

Here are five major deals from the first half of 2024 that caught our attention:

J&J kicked off the year by announcing that it was going to purchase Ambrx for $28 a share, amounting to a total of about $2 billion. Ambrx specialized in developing ADCs, and J&J intends to work with Ambrx researchers to accelerate the Phase 1/2 APEX-01 study of ARX517 for advanced prostate cancer, along with a pipeline of novel product candidates.

Genmab will acquire ProfoundBio, a privately owned biotech company, for $1.8 billion in cash, Genmab announced in April. The Seattle-based biotech is developing drugs to treat ovarian and endometrial cancers, and the deal “reflects strategic consolidation in the ADC space, leveraging ProfoundBio’s expertise and pipeline to strengthen its competitive position in oncology therapeutics,” Godbole said.

This acquisition gives Genmab access to ProfoundBio’s portfolio of ADCs, three of which are currently in clinical trials.

Also in early April, Ipsen and Sutro Biopharma made public a $900 million deal for global rights to development and commercialization of Sutro’s STRO-003, an anticancer ADC that is completing the final stages of preclinical development. This is the first ADC candidate in Ipsen’s portfolio, and the company will be responsible for moving the product to a Phase I clinical trial, including submission of the Investigational New Drug (IND) application.

In March, Biotheus, a clinical-stage company focused on developing therapeutics for oncology and inflammatory disease, and Hansoh Pharmaceutical Group announced an expansion of their partnership into ADCs. The partnership between the two China-based companies involves RMB 5 billion ($694.8 million) in upfront and potential payments to Biotheus. Biotheus will grant Hansoh a license to use its Phase I antibody PM1080/HS-20117 to develop ADC therapeutics.

Merck has bought biotech startup Abceutics for $208 million, according to an April announcement from the University at Buffalo. The company’s core technology, payload-binding selectivity enhancers (PBSEs), was licensed from the university, and reduces the risk of side effects when given along with ADCs, according to the announcement. The specific breakdown of the deal’s overall potential value was not discussed by either company, but the total includes Merck’s upfront payment as well as milestones for the candidates.