1、The current high ground of global innovative drugs, I believe, isADC (Antibody-Drug Conjugate)）。
(1)In 2023, the global market size ofADC reached 10.4 billion USD, and it is expected to reach 64.7 billion USD by 2030, with a compound annual growth rate of about 30%, significantly higher than the overall growth rate of biopharmaceuticals. In comparison, by 2030, the compound growth rates of several other hotspots are: GLP-1, 15-20%; CAR-T, 13.7%; gene editing therapy, 14.5%; PD-1/PD-L1, 12%; and drugs for neurological diseases, 25%.
(2)China’s compound growth rate is even more astonishing: In 2024, the market size is 7.8 billion RMB, and by 2030, the market size is expected to be 66.2 billion RMB, with a compound annual growth rate of 72.8%, currently in an explosive growth phase.。
(3)Globally, the leading company in ADC is Japan’s Daiichi Sankyo, but Chinese innovative drug companies are rising remarkably.Out of 800 ADCs in development globally, China accounts for 519 (65%), with 56% in clinical phase III. China’s Kelun-Biotech has even shown better clinical performance than Daiichi Sankyo in some ADC areas.
2、ADC is known as a “magic bullet” or “precision missile”; it consists of three parts: an antibody, a linker, and a cytotoxic drug. The linker is straightforward, connecting the antibody and the toxic drug; the antibody can be understood as a navigation system that identifies antigens on the surface of cancer cells (such as HER2, TROP2, etc.), its purpose is to find cancer cells; the toxic drug is the bomb that kills cancer cells. Its greatest advantage is precision, as it minimizes damage to normal cells, allowing the toxicity to be concentrated, with its strength being 100 to 1000 times that of chemotherapy drugs; it also has a special advantage of broad indications, being able to treat multiple cancers, such as breast cancer, lymphoma, gastric cancer, and more than a dozen other cancers.
3、Roche is a pioneer in the ADC field, having launched Kadcyla in 2013, which has been the leader in the field until being surpassed by Daiichi Sankyo. Daiichi Sankyo originally focused on traditional cardiovascular drugs, and under the leadership of former CEO Junji Kurokawa and the newly appointed CEO Hiroshi Ozaki, the company has bet on ADC, successfully launching its first ADC drug Enhertu in December 2019, which is expected to generate approximately 3.6 billion USD in global sales in 2024. In summary, Daiichi Sankyo is leading in technology and global clinical aspects.
4、Currently, there are about 19 ADC drugs approved globally, with foreign companies including Pfizer, Roche, Daiichi Sankyo, and Gilead, etc. The main domestic companies are four:
(1)Rongchang Biologics: Aidiqi, targeting HER2, the first domestically produced ADC; (Last week, due to its collaboration with Vor Biopharma on another flagship product, it caused significant market controversy.)
(2)Kelun-Biotech: Approved in November 2024, the first domestically produced fully approved TROP2 ADC, the second globally approved TROP2 ADC, the first TROP2 ADC approved for lung cancer indications. (Reached an authorization agreement with Merck for 9 ADC products, with a total transaction amount exceeding 11.8 billion USD, setting a record for Chinese innovative drugs going abroad)
(3)Hengrui Medicine: Ruikang Qutuzumab, targeting HER2, approved in China for non-small cell lung cancer (conditional approval) in 2025.
(4)East China Pharmaceutical: Elahere, targeting FRα, for the treatment of ovarian cancer. It was introduced through authorization from AbbVie. East China Pharmaceutical has excelled in this area of authorized cooperation.
5、China now has so many ADCs in development, and even the best products will eventually lead to price competition, affecting not only domestic companies but also international ones. Daiichi Sankyo’s current poor stock performance is partly due to the potential market pressure from Chinese companies. Innovative drugs have always been a high-profit area in the West, and Washington is eager to suppress us in this regard, but they are disappointed, as there is no opportunity left.
6、Objectively speaking, most Chinese companies still use Daiichi Sankyo’s “Mc-GGFG-Dxd” structure as a template, achieving some micro-innovations. There is not much innovation, but it is very useful. Although competition is fierce, the market size is large, especially in the domestic market, and they can gain competitiveness through some differentiated advantages.
7、Currently, domestic representative companies in phase III clinical trials include:
(1)Kelun-Biotech: SKB264 (TROP2 ADC): Phase III expanded to gastric cancer and NSCLC, collaborating with Merck to advance international multi-center trials.
(2)Hengrui Medicine: SHR-A1811 (HER2 ADC): approved for HER2+ NSCLC, phase III expanded to breast cancer, gastric cancer, ovarian cancer, and other 8 indications. SHR-A1904 (CLDN18.2 ADC): targeting gastric cancer and pancreatic cancer, in phase III clinical trials.
(3)Baillie Tianheng: BL-B01D1. Authorized in December 2023, BMS overseas rights, with a transaction amount of 8.4 billion USD (initial payment of 800 million), setting a record for domestic ADC single-drug authorization. This drug is the world’s first dual-antibody ADC, currently in the final stages of market launch.
(4)Hansoh Pharmaceutical: HS-20093 (B7-H3 ADC): targeting small cell lung cancer (SCLC).。
(5)Xinda Biologics: IBI343 (CLDN18.2 ADC): targeting gastric cancer.
8、The speed of innovation in the pharmaceutical field in China is a classic case of China climbing to the top along the pole. Chinese innovation in drugs has achieved a leap from imitation to global leadership through target development, clinical breakthroughs, and overseas authorization.This speed forces multinational pharmaceutical companies to shift from being technology monopolists to equity purchasers, and Western pharmaceutical companies and Chinese pharmaceutical companies are entering a state of coexistence of cooperation and competition. In order to cope with the competition from Daiichi Sankyo and the upcoming Chinese companies, Roche has restarted its ADC layout, introducing Xinda Biologics’ DLL3-ADC (10.8 billion USD) and Yilian Biotech’s c-MET ADC (approximately 10.5 billion USD), entering niche but high-potential projects early. These cases also reflect the worries and restlessness of multinational pharmaceutical companies.
9、Finally, I have another observation: Chengdu has formed a certain scale in biopharmaceuticals, with a continuous supply of talent and advantages in local universities’ clinical and research capabilities. Companies like Kelun-Biotech and Baillie Tianheng have emerged as globally outstanding pharmaceutical enterprises, making Chengdu an undeniable force in the global biopharmaceutical field, especially excelling in ADC tracks.