CDMO Secret War: Wu Xi, Haoyuan, Kai Lai Ying... Compete for ADC

There were generals in Shu, and Kelun was the vanguard. At the end of 2022, Kelun Pharmaceutical and MSD reached a deal of nearly 10 billion US dollars, which detonated the ADC market and added confidence to domestic new drugs going overseas.

According to incomplete statistics, there are currently more than 600 ADC drug R&D pipelines in the world, of which more than 240 are in China; By the end of 2022, 15 ADC drugs have been approved for marketing worldwide. Among them, 5 have been approved in China, namely Roche's enmetrastuzumab, Seagen/Takeda's vebutuximab, Pfizer's ogaituzumab, Remegen's vedicitumab and Immunomedics' gosatuzumab.

ADC drug development is active, the market launch is accelerating, and the actual sales are also steadily increasing. According to the financial reports of related companies, global ADC drug sales in 2021 were $5.2 billion, and sales in the first three quarters of 2022 exceeded $4 billion.

In 2021, Nature magazine predicts that the global sales of ADC drugs currently on the market will exceed $16.4 billion in 2026, becoming a blockbuster market of tens of billions of dollars. According to Sullivan's projections, the compound growth rate of ADC drugs from 2020 to 2025 will be as high as 31.5%.

ADC (Antibody-DrugConjugate), an antibody conjugate, is composed of monoclonal antibodies, small molecule drugs, and linkers linking the two. ADCs are targeted by monoclonal antibodies to recognize and enter tumor cells, releasing chemotherapy-effective drugs inside tumor cells to kill tumor cells. Key technical points for ADC drugs include active small molecule selection, linker design, and antibody modification.

Although ADC technology is relatively mature, R&D and production are very complex and the threshold is high. According to statistics, 70%-80% of ADC drug development and production will be carried out in the form of contract R&D manufacturing organization (CDMO).

Broad market prospects, active project transactions, high R&D enthusiasm and high outsourcing rate provide ADC CDMO with great development opportunities.

Behind the popularity of ADC, CDMO predator competition is also very fierce.

The strongest predator - WuXi Synthesis

In May 2021, WuXi Biologics and WuXi AppTec subsidiary Heqing Pharma announced the formation of WuXi XDC, a joint venture. WuXi will focus on contract R&D and manufacturing services (CDMO) for bioconjugates such as antibody conjugates (ADCs).

WuXi Helian has successfully enabled multiple ADC drugs to complete clinical trial applications (INDs) from DNA to new drug in less than 15 months, which is almost half the development time compared to traditional development. As of September 30, 2022, WuXi has helped clients conduct and complete 270 projects of various types, including 29 IND-submitted projects and 8 projects in Phase II/III clinical trials.

According to public information, WuXi Hop has cooperated with Kai Tak Pharmaceutical, Duoxi Biosciences, LegoChem Biosciences, Lixin Pharmaceutical, Korean company AbTis, Puzhong, and Xuanzhu Biotechnology and many other companies have reached cooperation in the development and production of ADC drugs. At present, WuXi Helian Wuxi plant is being expanded, and the production and R&D capacity of the whole plant has been completed: 23.5 tons of ADC stock solution is developed annually, 2 million ADC injection solutions and 850,000 ADC lyophilized powders are produced. In the first half of 2022, WuXi Biologics' ADC program grew 58% year-over-year.

Backed by the two giants, WuXi Synergy or ADC CDMO is the strongest predator in the CDMO field.

The ambitious Haoyuan Pharmaceutical

To create ADC CDMO one-stop service, Haoyuan Pharmaceutical is serious.

Haoyuan Pharmaceutical has been deeply engaged in the field of ADC for nearly 10 years, the company began to invest in the establishment of ADC project R&D platform in 2013, accumulated a large number of technologies and customers, as a long-term partner of Remegen ADC drug products, the company has helped China's first clinical ADC class I anti-cancer new drug (Remegen Biologics' wedecitumab) research and development, declaration and production, the project has been listed on June 9, 2021.

In the ADC business field, Haoyuan Pharmaceutical has built a rich and diverse Payload-Linker finished product library, with strong professional capabilities and rich project research and development experience, in the first half of 2022, the number of ADC projects was 55, and the cooperation with more than 380 customers.

According to Haoyuan Pharmaceutical's 2022 interim report, as of July 2022, five ADC drug-related small molecule products have registered DMF with the US FDA, assisting customers to complete multiple Payload-Linker CMC services and clinical registration applications, and providing customers with professional CDMO services with high efficiency and high quality.

Following the completion and commissioning of an ADC production line in 2021, the Maanshan R&D Center is scheduled to be operational in early September 2022 with two new ADC production lines, equipped with negative pressure isolators that comply with international OEL management regulations, and the equipment chain is designed for maximum suitability to meet the highest levels of operating specifications for highly toxic compounds.

In order to increase the production capacity of ADC projects, in 2021, Zhenge Biologics, a leading CDMO company of biologics, jointly established Zhenhao Biologics, aiming to build a one-stop CDMO service platform for the R&D and production of antibody drug conjugates (ADCs), provide end-to-end industrialization services from antibodies and other conjugate drugs, linkers/payloads to bioconjugate drug stock solutions and preparations, and accelerate the development of high-quality bioconjugates by global partners.

Hillhouse helps, Kai Lai Ying is not bad money

In the past ten years, relying on the R&D center, analysis and testing center and pilot production base, the ADC drug service platform has been established and optimized, which can provide one-stop CDMO R&D and production services, including antibody production, antibody modification, toxin-linker production and antibody toxin conjugation.

On March 25, 2022, Gloria Biologics announced the introduction of Hillhouse external investors to develop CDMO businesses such as macromolecule drugs, antibody conjugate drugs, cell gene therapy drugs and mRNA drugs, and the company has established an antibody and ADC drug R&D and production center in Jinshan, Shanghai.

The 2022 interim report disclosed that Kaileying has completed the construction of 2x2000L disposable bioreactor antibody stock solution production capacity; The pilot plant for the 100LADC coupling stock solution has been put into operation, and the 2x500L ADC commercial coupling stock capacity will be commissioned by the end of September.

With the help of Hillhouse Capital, Kaileying is accelerating its efforts in this field.

Toyo and Borui join forces with ADC

CDMO services are seamlessly integrated

On July 19, 2021, Dongyao Pharmaceutical (1875. HK) and BrightPharma (688166.SH) jointly announced that the two parties will carry out a strategic cooperation on antibody drug conjugate (ADC) CDMO services to facilitate the development and commercialization of innovative drugs.

Both Dongyao Pharmaceutical and BrightPharma are located in Suzhou Industrial Park, and the two companies can achieve seamless connection of the industrial chain in the region, which can not only avoid the risk of cross-regional supervision, but also further upgrade and expand the ADC drug CDMO service platform, providing one-stop solutions for many innovative pharmaceutical companies, while minimizing R&D risks and improving commercialization efficiency.

BrightPharma disclosed in its 2021 annual report that the company actively developed ADC drug technology service demand customers, achieving technology revenue of 67.7785 million yuan, an increase of 44.17% over the same period of the previous year.

In the first half of 2022, Dongyao Pharmaceutical's CDMO business achieved revenue of 22.66 million yuan, a year-on-year increase of 94%, with more than 85 million orders in hand, a total of 23 projects, and a project delivery rate of 100% on schedule. There are 8 ADC projects, 10 antibody projects, chemical drugs and 5 others, covering different stages from preclinical to clinical phase III. Orders mainly came from ADC and monoclonal antibody projects, with 50% of new orders and 50% of existing orders, demonstrating the continuous development of CDMO.

It is reported that Dongyao Pharmaceutical has a complete ADC commercial production workshop that integrates ADC stock solution, preparation and ADC monoclonal antibody in line with GMP standards, and the innovative ADC project has been completed 6 months earlier than customer expectations from project initiation to successful completion of pilot GMP production and submission of IND declaration, which has been highly recognized by customers.

Joining forces, these two companies in the same region have a comparative advantage in ADC CDMO one-stop service.

"Gold rush and shovel" is not wrong East China Medicine

Established leading pharmaceutical companies are undergoing innovation and transformation to reinvent themselves.

According to the financial report of East China Pharmaceutical, in the field of ADC, it continues to increase its differentiated and in-depth layout, and has successively invested in Quanxin Biotech (antibody R&D and production company), Norin Biotech (ADC linker and coupling technology company), controlled Doyle Biotech (multi-antibody platform R&D company), and carried out equity investment and product cooperation with Heidelberg Pharma, a global emerging technology company in the ADC field, to create a unique ADC global R&D ecosystem of East China Pharma.

Huadong Medicine plans to develop no less than 10 ADC innovative products within three years and actively promote registered clinical research.

HDM2002 (Mirvetuximab): The world's first ADC candidate drug for folate receptor α (FRα)-positive ovarian cancer jointly developed by Huadong Medicine and ImmunoGen, Inc. for the treatment of platinum-resistant ovarian cancer with high FRα expression. Mirvetuximab received accelerated FDA approval on November 14, 2022 for the treatment of highly folate receptor α in recurrent platinum-resistant advanced serous ovarian cancer.

In July 2022, the PK pharmacokinetic study of the product's phase I clinical trial in China completed the enrollment of all subjects. Huadong Medicine has submitted a Pre-BLA application to CDE in July 2022.

In the ADC field, while Panning for gold, East China Medicine does not forget to sell shovels.

As an innovative R&D platform for the company's industrial microbial industry, Hunda Biotechnology, a subsidiary of East China Pharmaceutical, continues to promote product research and development and makes positive progress. In terms of ADC toxin product development and commercialization, CDMO services for ADC payload, linker, and related products have been provided to more than 100 customers worldwide.

Backed by Remei Biologics

In September 2022, the CDMO platform incubated by the domestic ADC leader Remegen Biologics, MyBarry, applied for listing on the Growth Enterprise Market (GEM), intending to raise 2.1 billion yuan, mainly for the construction of biomedical innovation center and operation headquarters.

The compound growth rate of CDMO business revenue from 2019 to 2021 is about 85.27%. Remegen is currently one of the few companies in the world that has the ability to provide full-chain CDMO services for antibody drug conjugates (ADCs), and has outstanding competitive advantages in the field of ADC drug CDMO.

Since its establishment, Remegen has begun to lay out and build an antibody drug conjugate (ADC) R&D platform, and now has the technical strength of R&D and design of new linker-toxin, development of conjugate technology and screening of next-generation AXC drug candidates, and has mastered all the conjugation technologies of ADC drugs approved for marketing in the world and emerging conjugation technologies in the industry, and the analytical method platform fully covers the detection of ADC drugs.

As of the end of March 2022, Remegen has provided CDMO services for 84 ADC projects; Among the ADC projects in which Remegen participates, 1 project has been approved for marketing in China (i.e. vedicitumab, the first ADC new drug in China).

Backed by the domestic ADC brother, MyBarry has outstanding competitive advantages in the field of ADC drug CDMO.

  Summary

With more and more ADC drugs being approved for marketing, ADC drugs have become the key direction of the layout of global innovative pharmaceutical companies. At present, domestic relevant CDMO companies are either accelerating production expansion, or building a one-stop CDMO service platform for the development and production of antibody drug conjugates (ADCs) and carrying out technology upgrades, such as last August Zhixiang Biotech announced the completion of a series C financing of more than 500 million yuan, with a financing amount of more than 500 million yuan, mainly used to upgrade a number of CDMO technology platforms including ADCs.

Although there are only two domestic ADC drugs on the market, and the global sales of ADC drugs have not exceeded 10 billion US dollars, the CDMO dark war behind it has begun.