Investor’s Guide to Immuno-Oncology: Focus on Novel Targets

THE COWEN INSIGHT

This report provides a detailed overview of immuno-oncology (IO) therapies relevant to health care institutional investors. It summarizes the major completed and ongoing trials in key therapeutic areas of IO, important programs in development, and the performance of companies in the IO space.

PD-(L)1 Market Opportunity Estimated To Exceed $50B By 2025

Worldwide sales in 2020 totaled $27B. We estimate sales will nearly double by 2025. PD-(L)1 products are now approved in 18 tumor types. Based on 18 tumor types and 11 companies/partnerships, we estimate worldwide sales for PD-(L)1 therapy to be ~$33B in 2021, growing to $52B+ in 2025.

In 2025, we estimate worldwide oncology sales will hit ~$247B. That would make IO ~21% of the entire market. Tumor types such as gastric, pancreatic and other hematological malignancies are also potential drivers for growth. Currently, there are over 1,200 trials ongoing for US-marketed and late-stage PD-(L)1drugs, representing ~28% of all clinical trials in oncology.

Cell Therapies Remain Highest Growth Immuno-Oncology Therapeutic Class

Four approved cell therapies are anticipated to achieve $1.8B in combined 2021 sales, increasing to $4.9B+ in 2025. Literature cites over 800 cell therapy candidates across all clinical and discovery stages, making it the fastest-growing IO category for 3 years in a row. Active programs include CAR-T cells (auto and allo), TCR-T cells, TILs, NK cells, and γδ T cells. Bispecific antibodies designed to manipulate T cells also target this axis.

There are currently several cell therapy programs in pivotal development. As such, they are likely to become a major therapeutic class over the next several years. We anticipate multiple high-profile approvals and catalysts in the near/medium term, including UCART19 durability data, cilta-cel, lifileucel, ide-cel, and tab-cel.

Immuno-Oncology Space Drives Returns Through Organic Growth And M&A

The IO field has been a source of sustained growth for both new and existing companies. Over the last year, 19 IO-related IPOs are up an average of 67%.

In addition, strong M&A activity in IO continues. Companies proceed seek candidates to combine with their approved and/or development-stage drug candidates. Our review of the field identified 23 transactions focused on IO drugs in 2020 totaling $11.7B. This is nearly 16% of the value of all disclosed biotech M&A.

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