Renewed interest in ADCs will continue in 2024

SAN FRANCISCO — An established but promising group of cancer drugs was a red-hot market in 2023, and more companies could look to the treatments to fuel growth in the year ahead.

That was one clear takeaway from the JPMorgan Healthcare Conference in San Francisco, the nation’s largest gathering of biotech and pharmaceutical executives, analysts and investors. 

During the four-day event, the biotech and pharmaceutical industry signaled its enthusiasm for antibody-drug conjugates, or ADCs, which deliver a cancer-killing therapy to specifically target and kill cancer cells and minimize damage to healthy ones. Meanwhile, standard chemotherapy is less selective – it can affect both cancer cells and healthy cells.

Johnson & Johnson last week announced a $2 billion acquisition of ADC-developer Ambrx Biopharma to beef up its existing pipeline of ADCs, which some researchers believe could be heralding a “new era” for cancer treatment. Other drugmakers such as Pfizer and Merck, which closed some of the more than 70 ADC-related deals over the last year, said those drugs will be key growth drivers for their businesses. 

Interest in the drugs will only continue this year, as some analysts expect more dealmaking and advancements in ADCs currently in development.

The factors fueling the recent rise of ADCs will not abate this year, and a fear of missing out among businesses that have not entered the market will only push more companies to enter the space, Andy Hsieh, an analyst at William Blair & Company, told CNBC. 

Those factors include increased confidence in ADC technology among companies and researchers, the potentially longer market exclusivity of those drugs and the rise of attractive ADCs from drugmakers in Asia.

The drugs also have potential to draw huge profits: ADCs could account for $31 billion of the $375 billion worldwide…