Highly Favorable Opportunities in Antibody-Drug Conjugates (ADCs) Sector

3 Min Read

Considerable big pharma investments in ADCs fuel oncology research and development

An antibody-drug conjugate (ADC) is a cancer treatment that combines chemotherapy and targeted therapy, commonly used for recurring or spreading cancer, or for cancer that doesn’t respond to treatment. The antibody-drug conjugate market is experiencing significant growth due to key player partnerships and investments, increasing cancer occurrences, regulatory approvals, and more. The global ADC market is estimated at $12 billion this year and is forecasted to reach $44 billion by 2029, growing at a compound annual growth rate of 29.57%¹. These latest developments make it a sector for strategic pharma private equity investment, positioning ADCs as a key focus for firms seeking to refine their investment thesis around cutting-edge oncology treatments.

Cancer remains the largest and fastest-growing therapeutic area in biopharma, driven by increasing cancer diagnoses and substantial investments in targeted cancer therapies like ADCs².

There is a surge in ADC-related clinical trials in the United States, largely due to high levels of investment from major pharmaceutical companies. This trend is underscored by several high-profile acquisitions and strategic partnerships. Notable transactions include AbbVie’s recent acquisition of ImmunoGen for over $10 billion³, and Bristol Myers Squibb’s acquisition of an ADC therapeutic candidate from Orum Therapeutics, which has received FDA clearance for phase 1 clinical trials in blood cancers⁴. In March, Biotheus, a clinical-stage company focused on developing therapeutics for oncology and inflammatory disease, and Hansoh Pharmaceutical Group announced an expansion of their partnership into ADCs.

ADCs are a key driver of early-stage clinical trials within oncology, reflecting the broader trend of precision medicine becoming a cornerstone of modern cancer treatment.

Pharma Private Equity Investor Insights

Several key insights have emerged, signaling the ADC market as fertile ground for pharma private equity investment:

• Increased M&A Activity: High-profile acquisitions, such as a $2 billion acquisition of Ambrx by Johnson & Johnson⁵, indicate strong confidence in the ADC market. This market is slightly fragmented and competitive due to the presence of several companies across the globe that hold major market shares. Some key players include Seagen Inc., Pfizer Inc., Hoffmann-La Roche Ltd, AstraZeneca PLC, Gilead Sciences Inc., and more⁶.
• Clinical Trial Expansion: The rise in ADC-related clinical trials, supported by significant investment from major pharma companies, underscores the sector’s growth potential. The breast cancer segment accounts for the largest share of the market and is expected to grow considerably. This is due to rising breast cancer diagnoses as well as the success of antibody-drug conjugates for breast cancer.
• Focus on Precision Medicine: Precision medicine considers an individual’s genetics, environment, and lifestyle to determine treatment. ADCs are at the forefront of targeted cancer therapies, which are a type of precision medicine. Driving clinical innovation in oncology, precision medicine in cancer is designed to target only cancer cells, unlike traditional treatments which can damage or kill healthy cells. This makes precision medicine an attractive area for research and development.
• Investment Risks: ADCs are not without challenges and limitations, although the investment risks are outweighed by its potential and success. Specific risks include drug resistance to ADCs, development complexities, and high manufacturing costs⁷.

Invest in a better world.

The ADC sector is poised for substantial growth, fueled by significant big pharma private equity investments. For private equity firms, the ADC market presents a compelling opportunity for high returns, driven by ongoing clinical trials, regulatory approvals, increasing cancer diagnoses, and robust M&A activity. PE investors considering the ADC market have the unique opportunity to capitalize on returns while also investing in potentially life-saving cancer treatments.

We connect private equity consulting clients with seasoned private equity advisors who can provide deep analysis and strategic guidance. Contact us to find out more.

Resources:

¹Antibody Drug Conjugates Market Size & Share Analysis – Growth Trends & Forecasts (2024 – 2029)
²M&AS: What’s Up with the ADC Buying Spree?
³AbbVie Completes Acquisition of ImmunoGen
⁴Orum Therapeutics Announces Acquisition of ORM-6151 Program by Bristol Myers Squibb
⁵Johnson & Johnson Completes Acquisition of Ambrx
⁶Antibody Drug Conjugates Market Size & Share Analysis – Growth Trends & Forecasts (2024 – 2029)
⁷Unveiling the Potential of the Antibody Drug Conjugate