Replies to post #247418 on Biotech Values

[DewDiligence]

Re: Investing in ADC companies

Don’t fall for companies that claim their conjugate is unique/different. Yeah it might make a difference but it isn’t nearly as important as the target.

I would argue that the reverse might be true—i.e. that the targets for applying ADCs tend to be pretty well know, but the different linker technologies can make a big difference in safety.

Better safety allows higher dosing, which in turn increases efficacy. ADCs are essentially chemotherapy agents with a twist that enables higher dosing without the concomitant toxicity. There are many cancer indications where traditional chemo remains the SoC that ought to be ripe for penetration by ADCs.

p.s. I do not own any ADC companies directly, but I’m long PFE (SGEN).

[dewophile]

re ADCs:

the ADC space is *exceedingly* crowded

now it is, but for a long time it was basically just SGEN and IMGN, and it was very much out of favor.

It’s crowded because ADCs are easy compared to other technologies

I disagree here. The failure rate is extraordinarily high

I think ADCs are awesome clinically, but investable? Not really. Not unless someone identifies a really novel target. CD19, CD20, BCMA, etc are played out in hematology. There are many other very crowded ADC targets

I agree, although I will point out the obvious example that bucks this sentiment and may or may not be a one off. Enhertu. common target - check (Her2). commercially successful - check (and then some). Investable - well AZN paid 1.3B up front, with many billion in milestones many of which are starting to be met, and still got a good deal by all accounts. There are also commercial duds to both common targets (BCMA blenrep) and uncommon targets (trodelvy which was an investment home run if you were long IMMU but is likely never going to come close to GILD's projections)

you are always going to get significant off-target toxicities

Agreed. It is targeted chemo (on top of an antibody) after all