• The acquisition of Seagen by Pfizer is expected to strengthen the interest of all stakeholders in the ADC space and drive its growth.

• The field of ADC has undergone transformative advancements in the past few years, with emerging new targets, higher DARs, and more stable conjugates. ADCs are also moving to therapeutic areas beyond oncology.

• Collaborations between Chinese and western companies in the ADC space have been growing in recent years and are expected to continue in the future.  Collaboration is the key to advancing drug development. Trust-building should be the first step.

On Mar 28th, 2023, MSQ Webinar, Global ADC Drug Development & China Opportunities, brought top industry leaders and dealmakers for an exclusive event, aiming to provide participants with insights and knowledge on the latest trend of ADC drug development and how collaboration plays a key role.

Echo Hindle-Yang, Founder & CEO of MSQ Ventures, moderated the event, which featured the participation of Robert Zhao, CEO of DAC Biotechnology, Nikhil Mutyal, Executive Director of BD&L at Merck, John Adamou, CBO of CSPC Pharmaceutical Group, and Ziping Wei, CEO of Bliss Biopharmaceutical.

The impact of Pfizer & Seagen deal on the biotech industry and global ADC landscape

During the discussion, Nikhil Mutyal, the Executive Director of BD&L at Merck, shared his view that acquisitions could be beneficial as they provide a means to return capital to entrepreneurs and venture capital investors, which can lead to further investment in the ecosystem. He noted that the ADC field was not as popular 8-10 years ago, but after addressing concerns around the stability of the linker-payload system, therapeutic window, and toxicity, we see its transformative efficacy and hence the approval of ADC for solid tumors. "The acquisition is expected to strengthen the interest of all stakeholders in ADCs and drive its growth," he added.

John Adamou, the CBO of CSPC Pharmaceutical Group, noted that the acquisition is indicative of the importance of ADCs. Seagen has been a pioneer in this field, and this acquisition is a remarkable achievement for them. Pfizer's entry into ADC space is a sign of the significance and growth potential of this area.

Robert Zhao, the CEO of DAC Biotechnology, expressed his belief that Chinese companies could develop several platforms within 4-5 years. He noted that many small biotech firms are seeking co-development opportunities with global pharmaceutical companies due to the lack of capital and limited experience in clinical trials. He predicted that we would see more collaborations between Chinese biotech companies and global pharmaceutical companies in the near future.

Ziping Wei, the CEO of Bliss Biopharmaceutical, emphasized during the discussion that the acquisition provides an excellent illustration of collaboration between a biotech company and a large pharmaceutical company. She highlighted that the partnership was successful due to the biotech company's advanced technology being combined with the big pharma's financial and marketing capabilities. She also noted that the acquisition showcases the value of ADCs in the current market.

The trends and opportunities of ADC drug development

Nikhil summarized the development of ADC technology. New targets that are more selective to certain tumor types are coming up. DARs are higher compared with 5 years ago. We see more stable and easier conjugation technologies. From the payload side, we see the next-generation cytotoxic payload. Besides, people are also developing combinations with other immuno-oncology drugs, such as checkpoint inhibitors. Other conjugates besides cytotoxic payload, such as degrader and oligonucleotides, are also under development.

John added that another area of development would be using novel antibody formats, such as bispecific antibodies and antibody fragments, to create ADCs with novel properties and enhanced efficacy. 

Robert agreed that many different kinds of ADCs are under development right now. And we’re moving to develop ADCs beyond oncology.

The opportunities and advantages in China in terms of ADC manufacturing

Ziping highlighted that ADC manufacturing is complex, with three times of workload compared with that of small molecules or monoclonal antibodies. The major challenge of CMC in China is the long lead time of imported goods. The advantage would be the lower cost of goods. “Overall, manufacturing in China still has advantages,” she summarized.

How do Chinese biotech manage to shine in the ADC drug development globally

Nikhil shared his experience of the collaboration between Merck and Kelun. Initially, their relationship was small and focused on the Trop-2 ADC. Kelun successfully resolved the CMC gaps, and the collaboration proceeded smoothly, giving Merck a lot of confidence. As a result, they expanded the collaboration to include more targets. Nikhil remarked that China is a hub of innovation. Merck is looking for innovative ADC and cell therapy technologies globally. Merck values partners who are flexible and willing to address critical gaps. The deal terms with Kelun are slightly more favorable than those with US or European companies, as Chinese companies are more open to global rights of development and commercialization.

Robert shared several points about their collaboration with Johnson & Johnson, highlighting the differentiation of their unique ADC platform. During the collaboration, both companies learned a lot from each other. Robert also noted that the ADC area has seen significant progress in the previous five years, boosted by the capital market and government incentives. He predicted that the area will continue to improve in the future.

John reviewed the development of the ADC platform in CSPC Pharmaceutical Group, emphasizing its importance. CSPC has invested heavily in the development of its ADC platform, with research sites in China and the US. They have brought three ADC programs to the clinical stage and licensed out the Claudin 18.2 and Nectin-4 programs to Elevation Oncology and Corbus Pharmaceuticals, respectively.

Ziping noted that they are pursuing both global and domestic collaborations. They licensed in the payload of their ADC program and have brought two ADC programs to the clinical stage, one Her-2 ADC program in Phase II and one EGFR ADC program in Phase I. They are seeking partners for these programs and emphasized that "collaboration is the key to advancing drug product development." Additionally, Bliss was able to close Series B+ funding last October during a challenging time, demonstrating that "the money still follows good assets and good science."

The key trends in biopharma partnering in the last several years, especially in China

John remarked that Chinese companies have witnessed a significant surge in license-out and license-in deals. In recent years, innovations in China have become more appealing to Western companies. Chinese companies are now out-licensing their products to global players to access global markets. Conversely, some Western companies have struggled to establish a presence in China and are collaborating with Chinese companies that possess development and commercialization capabilities, such as CSPC. We have seen a doubling of activity in both directions recently, with half of these deals focusing on oncology, followed by CNS and infectious diseases.

Nikhil added that for small companies, the Chinese market is complex and challenging to navigate. Partnering with a company that has an established infrastructure in China makes sense. Zai Lab has been successful in acquiring Greater China rights to assets from small innovative companies. For big companies like Merck, China is the second largest market after the US, making it a vital market.

Ziping highlighted the benefit of China's large patient population. Some diseases are rare in the US but prevalent in China, such as gastric cancer. Patient recruitment in China can be fast. There is potential to leverage the strengths and uniqueness of both sides to advance drug development.

Robert added that Chinese companies are still in the early stages of clinical development. Therefore, they are licensing in late-stage products. As clinical trials advance to a later stage, we can expect to see more collaborations between Chinese companies and big pharmaceutical companies.

Advice for companies who are developing ADCs

Nikhil stressed the importance of selecting appropriate targets. Rather than pursuing popular targets like Her-2, he suggested exploring emerging targets that have undergone preliminary clinical validation. Nikhil also recommended considering small deals, even if it's just an evaluation agreement. This can aid in performing due diligence, scrutinizing the technology, and paving the way for larger licensing deals. Furthermore, CMC is a critical aspect of ADC.

John emphasized that the key to finding the right partner is ensuring that both parties share the same vision for the product and are aligned on its development. Development in one territory can have an impact on other territories, hence early alignment in development is crucial.

Robert compared collaboration to marriage and noted that trust-building should be the first step.

Ziping emphasized the importance of differentiation. When designing a molecule, it's crucial to assess if the molecule adds unique value and whether it addresses unmet medical needs. She recommended that trust-building and relationship-building should be the focal point of collaboration.