A Primer On The Next Generation Of Radiopharmaceuticals

The TD Cowen Insight

Radiopharmaceuticals harness the targeting potential of antibodies and small molecules coupled with the cancer-cell-killing ability of radioactivity. After a disappointing start two decades ago, second-generation radiopharmaceutical products show encouraging commercial success, and new investment is flowing into the field. We believe that radiopharmaceuticals are at a tipping point and the next decade will see dramatic growth. This primer provides an investor-focused overview of the radiopharma drug development landscape.

Commercial Adoption of 2nd Generation Radiopharmaceuticals

The radiopharmaceuticals industry is showing encouraging commercial adoption of 2nd generation products which is driving investment via new company formation and business development activities. Radiopharmaceuticals have been around for decades, but first-generation targeted products were launched ~20 years ago and ended up a commercial failure. This diminished the industry’s interest in developing novel radiopharmaceutical therapeutic products for several years. However, this past decade has seen incremental advances with approvals of radiopharmaceuticals in smaller indications.

Taken together, these clinical and commercial successes harken to a new era in radiopharmaceuticals. We believe that these clinical products mark a shift in clinician and biopharma industry sentiment towards radiopharmaceuticals. This is reflected in the growing pipeline of products in development and the associated M&A activity. We believe that the field is at a tipping point, and the next decade will bring a dramatic increase in investment opportunities as well as approvals of radiopharmaceutical products.

Mapping the Radiopharmaceutical Landscape

This report is supported by our proprietary research on the companies in the field, their respective pipelines, literature reviews, and interviews with seven radiopharmaceutical and nuclear KOLs and executives. We map the radiopharmaceutical landscape, focusing on drug developers while also exploring some of the key suppliers of critical radioisotopes. We also focus on the role of pharmacies and other members of the value chain.

Understanding the Radiopharmaceutical Field

This report provides a framework to help investors understand and differentiate radiopharmaceutical candidates as the field emerges. We believe that investors may underappreciate the opportunity afforded by this emerging class of therapies as they move into larger indications and redefine cancer therapy paradigms in multiple tumor types. With the two leading drugs alone on a trajectory to exceed $1.1B in sales next year and the potential approval of 5-6 additional drugs over the next 3 years, we believe that this field will create a wide range of private and public investment opportunities.