ADC track: 14 global listings, domestic pharmaceutical companies usher in harvest

Under the internal volume of innovative drugs, how to embrace the new R&D direction and make differentiation has become an urgent problem for pharmaceutical companies to solve
.

With continuous breakthroughs in key technologies, the research and development of ADC drugs can be described as climaxes in recent years: on the one hand, multinational pharmaceutical giants have invested heavily in the ADC track, and the enthusiasm for research and development is high; on the other hand, Rongchang Biological’s vicitusumab has sold for US$2.
6 billion.
The new record of overseas license out transactions of China's single-medicine products is even more salivating among peers
.

In this context, domestic pharmaceutical companies have "competed" on the ADC track.
What opportunities and challenges are there?

ADC heavy transactions are frequent, and the enthusiasm for research and development is high

ADC heavy transactions are frequent, and the enthusiasm for research and development is high

With the acceleration of centralized procurement into the deep water area and the internal volume of innovative drugs, the ADC drugs that have been intensively approved for marketing in recent years have caused continuous investment in industry and capital
.

On the one hand, multinational pharmaceutical giants such as AstraZeneca, Merck, and Gilead Sciences have invested heavily in ADC drugs through cooperation and mergers and acquisitions
.

On the one hand, multinational pharmaceutical giants such as AstraZeneca, Merck, and Gilead Sciences have invested heavily in ADC drugs through cooperation and mergers and acquisitions
.

In March 2019, AstraZeneca spent up to 6.
9 billion U.
S.
dollars to reach a cooperation with Daiichi Sankyo to jointly develop and commercialize the blockbuster HER2 ADC drug Enhertu (DS-8201) on a global scale
.

In July 2020, AstraZeneca spent another US$6 billion to cooperate with Daiichi Sankyo to jointly develop TROP2-ADC DS-1062

In September 2020, Gilead Sciences also announced the acquisition of Immunomedics, a pioneer in next-generation ADC technology, for US$21 billion, and acquired Trodelvy, a new and pioneering ADC drug targeting Trop-2
.

In December 2020, Boehringer Ingelheim announced the acquisition of all the shares of NBE-Therapeutics for 1.
18 billion euros, and obtained new ADC drugs such as NBE-002 developed by the latter to enter the field of cancer cell targeted therapies
.

In June 2021, Bristol-Myers Squibb also spent US$3.
1 billion and Eisai to jointly develop and promote the ADC drug MORAb-202, which targets folate receptor alpha (FRα)
.

On the other hand, domestic pharmaceutical companies and capital are vying to enter ADC drugs, license in/out blockbuster transactions occur frequently, and R&D enthusiasm is high
.

On the other hand, domestic pharmaceutical companies and capital are vying to enter ADC drugs, license in/out blockbuster transactions occur frequently, and R&D enthusiasm is high
.

In recent years, domestic pharmaceutical companies such as Genting Xinyao, Qilu Pharmaceutical, Lepu Bio, Cinda Bio, etc.
have rushed to lay out ADC drug pipelines through License in (authorized introduction) and quickly seized the track
.

▲Many companies deploy ADCs through cooperation and introduction

Source: Each company's official website, Ping An Securities Research Institute

In May 2020, Genting Shinyao, founded by Cambridge Capital, signed an exclusive license agreement with Immunomedics (acquired by Gilead Sciences) to purchase Trodelvy in Greater China, South Korea and certain ASEAN countries (excluding Japan) for US$835 million.
) And other exclusive development and commercialization rights in Southeast Asia
.

In April 2021, Trodelvy was approved by the US FDA, becoming the world's first ADC drug for the treatment of metastatic triple-negative breast cancer and the first targeted drug targeting Trop-2
.

In August of this year, Rongchang Biologics licensed vedicitusumab (RC48) to Seattle Gene for US$2.
6 billion, breaking the highest record of overseas authorized transactions of Chinese single drugs, making many peers salivate, and domestic ADC drug research and development enthusiasm has been once again Ignite
.

The golden age of "biological missile" ADC

The golden age of "biological missile" ADC

The underlying logic behind the enthusiasm for ADC drug research and development in recent years is that it shows better efficacy than other tumor therapies
.

It is well known treatment for a variety of malignant tumors, including surgery, chemotherapy, radiotherapy, immunotherapy, targeted therapy (targeted small molecule drugs, monoclonal antibodies) and so on
.

In contrast, chemotherapy drugs will kill normal cells indiscriminately, with greater side effects (such as hair loss, nausea, or blood cell reduction, etc.
); targeted drug treatments such as small molecule targeted drugs and monoclonal antibodies, although they have strong tumor specificity It has the advantages of high safety and precise targeting, so the treatment window is larger and the curative effect is better.
However, there are also defects that the tumor clearance ability of precision therapy is limited due to the strong heterogeneity between tumor cells
.

Based on this, the fourth-generation combination drugs for tumor treatment-double antibodies and ADC drugs came into being
.

Based on this, the fourth-generation combination drugs for tumor treatment-double antibodies and ADC drugs came into being
.

The advantage of ADC drugs is that they combine the advantages of monoclonal antibodies with strong targeting and high activity of small molecule toxins, which can not only reduce the side effects of small molecule cytotoxins, but also improve the efficacy of drugs
.

▲Tumor treatment is gradually evolving and upgrading

Source: Soushu.
com, Ping An Securities Research Institute

From a definition point of view, an antibody-conjugated drug (ADC) is a combination drug that combines the advantages of precise targeting of antibody drugs and high-efficiency killing of small-molecule cytotoxic drugs
.

ADC drugs include three parts: antibody (antibody), linker (linker), and cytotoxin (Payload).
The mechanism of action is to couple antibody drugs with cytotoxic small-molecule drugs, and the high specificity of antibodies will have cells Toxic small molecule drugs are delivered to tumor cells, thereby specifically killing tumor cells, so it is also called "biological missile"
.

Therefore it is also called "biological missile"
.

▲Data on the process of ADC drugs exerting tumor-killing effects

Source: The Lancet, China Securities

But if you look back in history, ADC drugs are similar to PD-1 that has been hidden, and early development has not been smooth sailing
.

But if you look back in history, ADC drugs are similar to PD-1 that has been hidden, and early development has not been smooth sailing
.

The development history of ADC drugs can be traced back to the beginning of the 20th century.
The German Nobel Prize winner Paul Ehrlich first conceived a toxic drug that specifically targets certain specific cells, that is, using antibody targeting The concept of "magic bullet" for disease treatment provides a theoretical basis for ADC research
.

After the ADC concept was first proposed in 1967, scientists have done many experiments, but due to the unstable linker, short blood half-life, and low concentration of cytotoxic drugs, the development has not been successful
.

It was not until 2001 that Gemtuzumab ozogamicin (trade name: Mylotarg), a CD33 targeted drug developed by Pfizer/Wyeth, was approved by the US FDA for the treatment of relapsed or refractory acute myeloid leukemia, and finally the world's first ADC drug was born.
This is also the first generation of ADC drugs
.

However, because the incidence of fatal toxicity in the Mylotarg combination treatment group was significantly higher than that of the standard treatment group, it was finally withdrawn from the market in June 2010

Helplessly, ADC drugs were “snow hidden” and entered the “winter period”: From 2011 to 2017, only Seattle/Takeda’s Adcetris, Roche’s Kadcyla (the world’s first solid tumor treatment) and Pfizer’s Besponsa were three.
The second-generation ADC drugs are approved for clinical use
.

▲Comparison of three-generation ADC products

Source: Company data, SPDB International

It was not until 2018 that the third-generation ADC drugs were intensively approved and entered the outbreak period
.

It was not until 2018 that the third-generation ADC drugs were intensively approved and entered the outbreak period
.

After Lumoxiti (AstraZeneca) was approved in 2018, three ADC drugs, Polivy (Roche), Padcev (Seattle), and Enhertu (Daiichi Sankyo), were approved for marketing in 2019 alone
.

Since then, Immunomedics’ Trodelvy, GlaxoSmithKline’s Blenrep and ADC therapeutics’ Zynlonta have been intensively approved

Multi-targets, multi-indications, high market growth

Multi-targets, multi-indications, high market growth

After three generations of technological changes and decades of conception and practice, the "biological missile" ADC drug has finally ushered in the golden age
.

As of now, a total of 14 ADC drugs have been approved for marketing worldwide, and 9 of them have been on the market since 2019

Segments, the wide ADC drugs indications, has been expanded by the blood to the tumor solid tumors, covering leukemia, lymphoma, breast cancer, myeloma, head and neck cancer, and gastric cancer
.

Target point
.

ADC drugs show the phenomenon of diversified targets and expanded layout

Target point
.
ADC drugs show the phenomenon of diversified targets and expanded layout
.

The data reveals the truth.
According to the research report of Guosheng Securities, the ADC projects currently entering the clinical phase 3 have a high concentration of targets, with 5 concentrated on HER2 targets.
Among all ADC research pipelines in the world (152 known targets) Point project), HER2 ranks first with 15%, followed by more products focused on EGFR, TROP-2, and CD family targets, with various target types
.

In addition, traditional targets including BCMA, Claudin 18.
2, etc.
, may also be able to regain their appearance in the form of ADC drugs, setting off a new wave of ADC drug design
.

▲Global distribution of ADC drug targets under research

Source: FDA, Guosheng Securities Research Institute

Under the comprehensive attack of multiple indications and multiple targets, the global ADC drug market scale has been rapidly expanded
.

Under the comprehensive attack of multiple indications and multiple targets, the global ADC drug market scale has been rapidly expanded
.

According to IQVIA data, from 2016 to 2020, the sales of the ADC market in the United States increased from 329 million US dollars to 1.
47 billion US dollars, with an average annual compound growth rate of 45%; European and Japanese market sales in 2020 increased to 581 million US dollars, 222 million US dollars, the average annual compound growth rate is 13% and 21% respectively
.

▲The ADC drug market size in the United States, Europe, and Japan (unit: million US dollars)

Source: IQVIA, Guosheng Securities Research Institute

Domestic ADC drug research and development "competes among the heroes"

Domestic ADC drug research and development "competes among the heroes"

Although still adhering to the fast-following strategy, the domestic ADC drug research and development enthusiasm is high, and its popularity is no less than that of PD-1 monoclonal antibody
.

The competitive landscape determines the life cycle and investment value of innovative drugs
.
Most of the early deployment of ADC drugs in China were technology platform companies, such as Rongchang Biotechnology, Duoxi Biotechnology, Biotech, Zhaohua Biotechnology, and Terris
.

In recent years, many pharmaceutical companies have competed to enter the ADC track, including traditional veteran pharmaceutical companies (such as Hengrui Pharmaceutical, Kelun Pharmaceutical, Qilu Pharmaceutical, CSPC, etc.
) and Biotech (such as BeiGene, Junshi Biological, Genting) Xinyao, etc.
), has entered the stage of competition
.

According to the company's official website and CDE data query, there are currently at least 32 companies in China that have deployed ADC drug research and development, involving 23 targets (including HER2, Trop2, CD30, Claudin 18.
2, Nectin-4, CD79, etc.
), and a total of 67 ADC drugs The product is under development (40 ADC drugs from 25 companies have entered clinical trials)
.

▲Competitive landscape of domestic ADC targets

Source: CDE, company announcements, Yaozhi data, Essence Securities Research Center

Target point
.
The popular domestic ADC drug targets are concentrated in HER2 and Trop2.
Among them, there are 17 HER2 targeted ADCs that have entered clinical trials, accounting for almost half of the country.
At the same time, 11 companies have deployed Trop2 target ADCs, of which 6 have entered clinical trials.
Experiment
.

In addition, domestic ADC drugs targeting Claudin 18.
2, cMET, EGFR, CD20, and CD19 have also entered the clinical stage; at the same time, some companies have introduced MUC1, ROR1, BCMA, Nectin-4, etc.
through independent research and development or cooperation.
The new target, as a whole, presents a situation of "a hundred flowers blooming" in the target
.

In June 2021, with the approval of Rongchang Biologics' Vidicuzumab for the third-line treatment of locally advanced or metastatic gastric cancer (including gastroesophageal junction adenocarcinoma), China also ushered in the first domestically produced ADC drugs
.

In June 2021, with the approval of Rongchang Biologics' Vidicuzumab for the third-line treatment of locally advanced or metastatic gastric cancer (including gastroesophageal junction adenocarcinoma), China also ushered in the first domestically produced ADC drugs
.

At present, Rongchang Biologics is carrying out the clinical development of 8 related indications of vedicitumumab.
Among them, the indication for urothelial cancer has been approved by the FDA and CDE for breakthrough therapy and fast-track qualification, and the indication for gastric cancer has been granted by the US FDA.
Qualification for Orphan Drugs and Fast Track Qualifications
.
In addition, the company also has RC108, RC88, RC118 and other ADC drugs that have entered the clinical stage
.

▲The R&D pipeline of Rongchang Biological (data of products under research as of June 30, 2021)

Source: Company Financial Report

In addition, the ADC drug research and development of other domestic pharmaceutical companies is gradually entering the harvest period
.

In addition, the ADC drug research and development of other domestic pharmaceutical companies is gradually entering the harvest period
.

Genting Xinyao: The Trodelvy targeting Trop-2, which was introduced to Immunomedics in April 2019, has been approved by the US FDA for marketing in April this year
.
At the same time, in May of this year, the State Food and Drug Administration has accepted Trodelvy's application for marketing authorization for biological products, which is indicated for the third-line treatment of metastatic triple-negative breast cancer, which is expected to be approved for marketing by the end of 2021
.

It is expected to be approved for listing by the end of 2021
.

Toyo Pharmaceuticals: TAA013, independently developed by the company, is formed by coupling trastuzumab with the highly active substance DM1 through a connector, and is currently in clinical phase III
.
At the same time, the company has also established a complete commercial production platform for monoclonal antibodies, ADC stock solutions and preparations that meet GMP standards
.

Currently in clinical phase III

Zhejiang Medicine: Targeting HER2, a subsidiary of biological research and development of new code ARX788, a trastuzumab conjugate with the AS269 is made using fixed coupling technology, product stability and homogeneity of unnatural amino acids increased dramatically, currently In clinical phase II/III
.

Currently in clinical phase II/III

It is worth mentioning that ARX788 was granted Fast Track status by the FDA in January 2021 for the treatment of advanced or metastatic HER2-positive breast cancer that has received one or more anti-HER2 therapies; and was obtained in March 2021 The FDA granted orphan drug designation for the treatment of HER2-positive gastric cancer and gastroesophageal junction cancer
.

Hengrui Pharmaceuticals: Currently, there are 4 ADC products in clinical research, and it is one of the companies with the largest number of self-developed products in clinical research in China.
The indications cover breast cancer, solid tumor, gastric cancer, rectal cancer, etc.
, and the varieties are quite abundant
.

Duoxi Bio: One of the domestic companies with the largest ADC product layout, currently has 24 ADC R&D pipelines, of which 3 drugs have entered the clinical trial stage
.
In May 2021, it received 1 billion yuan of financing, which was jointly led by Hillhouse Ventures, Chenling Capital, and CPE
.

In addition, Biotech, Lepu Biotech, etc.
also have a number of ADC drugs in the clinical stage
.

【Reference Materials】

【Reference Materials】【Reference Materials】

1.
Ping An Securities, Guosheng Securities, China Securities, SPDB International Research Report

1.
Ping An Securities, Guosheng Securities, China Securities, SPDB International Research Report

2.
Essence Securities, "Analysis of ADC Industry in the Research Framework of Innovative Drugs in the Biopharmaceutical Industry: Rapid Development, Ushering in the Initial Harvest Period"

2.
Essence Securities, "Analysis of ADC Industry in the Research Framework of Innovative Drugs in the Biopharmaceutical Industry: Rapid Development, Ushering in the Initial Harvest Period"

3.
Guosheng Securities, "Weekly Report on Innovative Drugs in the Pharmaceutical and Biological Industry: The Global Market continues to heat up, and the "magic bullet" ushered in a golden age"

3.
Guosheng Securities, "Weekly Report on Innovative Drugs in the Pharmaceutical and Biological Industry: The Global Market continues to heat up, and the "magic bullet" ushered in a golden age"

4.
Essence Securities, "Biomedical Industry New Drug Week View: Rongchang Biologics Claudin 18.
2 ADC is approved for clinical use, and the emerging ADC targets in China are blooming.
"

4.
Essence Securities, "Biomedical Industry New Drug Week View: Rongchang Biologics Claudin 18.
2 ADC is approved for clinical use, and the emerging ADC targets in China are blooming.
"

5.
Financial reports of Rongchang Biological, Toyo Pharmaceutical, and Hengrui Pharmaceuticals

5.
Financial reports of Rongchang Biological, Toyo Pharmaceutical, and Hengrui Pharmaceuticals