ABCs of ADCs: Investor Primer on Antibody Drug Conjugates

THE COWEN INSIGHT

This report is a follow up to our previous report on antibody drug conjugates (ADC). It provides a detailed overview of the rapidly evolving ADC landscape.

As the number of targets in oncology increases, ADC is one of the key therapeutic modalities utilized in novel drug design. The number of approved ADCs increased from five to 12 in the last three years and there are 8 ACDs in late stages.

The rate of growth in this space is likely to accelerate. We estimate sales of >$4B in 2021 growing to >$13B in 2026 from the 12 approved drugs alone. In this primer, we review 200+ ADC assets, highlight key upcoming catalysts, and detail recent ADC-focused partnerships.

The Benefits of Antibody Drug Conjugates

Antibody Drug Conjugates (ADC) have established themselves as a key modality in drug design against existing and novel targets. In addition to potency advantage over naked mAbs, ADCs offer greater protection against biosimilars due to their complexity. We anticipate the ADC landscape to continue its rapid growth in oncology and immunology.

Why ADCs Are of Interest to Investors

In this report we include >200 ADC drugs showcasing the breadth of development in this space. We also highlight key upcoming ADC catalysts with their potential stock moves. Lastly, we include a list of recently completed M&A and business development activity in the ADC space. Given the level of success with ADC drugs to date, as well as the investment flowing into this space, we anticipate ADCs will remain of high interest to investors for the foreseeable future. We believe that this report provides a useful investor reference.

Development of ADCs Has Accelerated

While in development for the last three decades, the pace of ADC progress has recently accelerated. Since 2018, the number of approved ADCs increased from five to 12. Notable approvals include Seagen’s Padcev, Daiichi/AZN’s Enhertu, and Gilead/Immunomedics’ Trodelvy. ADC Therapeutics’s Zynlonta and Seagen/Genmab’s Tivdak were approved in 2021. We estimate sales of >$4B in 2021 growing to >$13B in 2026 from the 12 currently approved drugs alone.

Additional ADCs Are in Late Stages

In addition to the currently marketed drugs, eight ADCs are approaching pivotal results or regulatory decisions. ImmunoGen’s Mirvetuximab soravtansine will be filed within the next few months. ADC Therapeutics’ Cami has a pivotal readout in 2022 along with ImmunoGen’s IMGN-632. Daiichi’s Enhertu is approaching Ph 3 readout for 2L HER2+ mBC in 2022. Gilead guided data from the Ph 3 TROPiCs-02 trial of Trodelvy in HR+/HER2- mBC for 1Q22. We have included a key catalyst table highlighting upcoming data readouts.

Investment Catalysts

In this report, we summarize the stock implications for upcoming catalysts. We also discuss expectations for business development in the next year.

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