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    Features

    ADCs and Outsourcing

    Fortune and opportunity in a burgeoning class of therapies

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    Tom Spurgeon, Contract Pharma09.06.12
    Antibody-drug conjugates (ADCs) represent a potentially lucrative yet largely untapped field of targeted-therapy revenue. Their basic model is intriguing: a payload drug is linked (conjugated) to an antibody or antibody fragment, the antibody binds to cellular targets, the cell internalizes that structure, and the drug is then released and allowed to perform its work. What has been nettlesome for drug companies working in this area —early development began in the 1980s — is consistent high-end execution of the linking and dosage technologies in a way that showed significant clinical benefit. This was what ultimately sabotaged the first ADC-based treatment, Mylotarg. Mylotarg was approved to treat acute myeloid leukemia in May 2000 on an accelerated basis after strong Phase II results, but was withdrawn from the market 10 years later. In Mylotarg’s case, the inability to prove clinical benefit in post-approval studies was balanced against the major side effects of the drug’s use, such as a documented risk of liver damage.

    The promise of ADCs remains powerful, as several innovators and a host of capital-rich companies have rapidly closed the gap between potential and exponentially expanding profit. Because of the targeted nature of the delivery, companies committing to ADCs hope to develop therapies with fewer side effects and diminished collateral damage to surrounding cells, allowing for a higher therapeutic ceiling than available to other treatment options. Conjugates can also be utilized to reduce plasma binding or to increase product stability.

    ADCs not only represent a potential series of breakthroughs in oncology treatment, they are a perfect candidate for commercial exploitation due to their relative novelty, the projected efficacy of the latest generation in development, the higher dosage forms available to drugmakers, and the ease with which ADCs’ benefits and mechanisms can be communicated to professionals and patients ravenously seeking an additional way to target cancerous cells.

    High charges per dosage are practically guaranteed. Despite currently occupying a small market niche, the potential profits ADCs represent to all facets of the pharmaceutical industry are enormous. This includes specific, actionable and inviting opportunities for CROs and CMOs in the immediate and long term. A 2010 survey indicated that all but 5% of surveyed companies considered ADCs a sizable market in future years; the move to instigate programs to serve all facets of development and manufacturing has been described as a mad scramble. The third annual World ADC Conference is planned for San Francisco in October, with programming time split between new developments and anticipatory planning. Organizers have a European show scheduled for Frankfurt in early 2013.

    So even as Mylotarg ended its less-than-triumphant market run, several companies had ADCs at various points in the developmental pipeline, therapies that stood to benefit from improvements in all facets of production made during the last decade. “I think the reason that there’s a lot of buzz around ADCs at this moment in time is that there’s been substantial improvement in linker technology, as well as somewhat of an improvement in cytotoxins – an improvement in technology and a targeted-therapy approach that’s been around for a while,” Tom Rohrer, senior director of ADC and Biochemical Technology at Lonza, told us. A single success can drive a company’s revenues for years at a time, both in production and benchmark-heavy investment deals.

    Seattle Genetics has used the ADC Adcetris (approved in August 2011 to treat anaplastic large cell lymphoma (ALCL) and Hodgkin lymphoma) and a successful 2010 clinical trial (two key 90+ percentage findings in tumor reduction) to generate tens of millions of dollars in revenue in 2011 and roughly four times the amount of money from the equivalent period in 2012 thus far: $97.1 million in 1H12 revenues, with $69.2 million coming from Adcetris. All of this came in addition to a $208 million partnership deal with Pfizer in 2011 related to the same technology, and a similar partnership deal with Roche/ Genentech in 2010 that included a key $12 million upfront payment. In June 2012, Ambrx announced a $15 million payment from Merck in a deal potentially worth $288 million for access to its ADC-related technology.

    Innovation for emerging companies like Seattle Genetics, ImmunoGen and Spirogen — as well as established bio-players like Genentech — has come from improvements in linking technology that allow for hydrophilic and even tumor-activated linkers to be used, in addition to improved linkers of the cleavable variety. A key for companies exploiting this field has come in finding ways to match linking technology to how the drug is to be administered. While hydrophilic linkers use a series of drugs to keep cancer cells from being processed away, cleavable linking technology has been paired with emergent treatment strategies to target cells that do not require the delivered drugs be internalized in order to be successful. This could broaden the number of treatment areas in which ADCs can be employed, starting with immune-system maladies and perhaps diabetes. Other potential areas are cardiovascular disease and fungal infection.

    For the moment, ADCs in late development reflect an oncology focus. The clinical pipeline includes treatments for breast cancer, ovarian cancer, melanoma, gastric cancer and lung cancer. Contract service providers we spoke to indicate that the vast majority of inquiries they receive in terms of working with ADCs are targeting oncology treatments of some sort. One company mentioned that it had received interest in non-oncology applications of ADCs, but stressed that this was work for preclinical development. The opportunities for contract service providers in the ADC market are shaped by several significant factors.

    Partnerships with a Range of Companies
    A spate of big pharma partnerships with innovators on linker technologies in recent years indicates that opportunities exist both for providers that offer specialty services to large clients and for providers that work on a strategic level with mid-sized or small clients, offering broader capabilities for development and manufacturing. “Dalton works with a variety of customer types on conjugations,” said Kevin McCarthy, Dalton Pharma Services’ Sales and Marketing associate director. “Many are smaller and medium-sized companies looking for ways to make existing small molecule products more targeted or effective.”

    The speed with which the area has grown and the relative lack of established businesses specifically targeting ADCs may lead companies to consider established partners before working with new companies. Dr. Grant Boldt, Director European Business Development for SAFC Pharma, told us that his company expected to see much of the business they do in this area to come from larger clients.

    Given the complexity associated with manufacturing of ADCs, as well as their cytotoxic nature, many ADC projects are being outsourced to specialized facilities such as the Halle site of Baxter BioPharma Solutions. “The clinical success of several ADC programs has led many pharma companies to start their own programs,” said Dr. Sven Remmerbach, PMP, director, Business Development/Contract Manufacturing for Baxter’s BioPharma Solutions business. “Because of that, over the last several years we have seen an increase in demand for ADC manufacturing services, which in turn allowed BioPharma Solutions to develop and invest into technologies and processes to support such programs.”

    Build on Established Strengths
    Much of the initial outsourcing opportunities for ADCs lie in existing relationship and established capacities. Dr. Boldt indicated to us that while SAFC may not have intended to move into ADCs until recently, a confluence of earlier events left it well prepared to do so. “Ten years ago, we moved into the high-potency manufacturing arena, manufacturing under containment controls,” he said. “We definitely saw that as a market driver several years ago, and made significant amount of investment in that area. That led us to the antibody-drug conjugate market because the conjugates to the antibody are potent Category IV or Category III molecules.” Dr. Boldt cited company facilities in St. Louis as perfectly suited to handle that element of the business, a specific advantage in that SAFC did not have to develop new infrastructure.

    Jason Brady, head of Global Business Development at Lonza, told Contract Pharma that while outsourcing companies must always mitigate against overinvestment in capacity, his company is confident that the upside potential outweighs the present risks. He described Lonza’s move into ADCs as a way of building on the company’s expertise in small-molecule and high-potency chemistry, and noted both its capacity for handling that business and its biologics manufacturing facilities around the world, making it ideally suited for a move into this area. “This takes two things that we’re already very good at and combines them into a single product,” he remarked.

    Companies that lack specific elements of infrastructure may focus on different aspects of the ADC business altogether. Dalton’s lack of high potency facilities has taken it out of the running for any ADCs involving cytotoxins. Said Mr. McCarthy, “One area we do not currently participate in is cytotoxic agents conjugated to larger molecules. These require specialized containment and dedicated facilities. This adds a level of complexity in that you need to be able to work with complex proteins as well as maintain links to highly potent small molecules. We continue to monitor demand for this specific area. Instead we have worked on non-cytotoxic molecules we can handle in our existing facilities.”

    Dr. Remmerbach at Baxter BioPharma Solutions remarked, “With respect to outsourcing of form/fill/finish of ADCs, our business is an established player for injectable formulations — including liquid filling as well as unit dose lyophilization. We are currently supporting multiple ADC programs out of Baxter’s BioPharma Solutions facility in Halle/Westfalen, Germany, which recently was awarded Safebridge certification.”

    That facility is focused on the formulation, filling, testing and packaging of cytotoxic and high-potent injectables for global markets, according to Dr. Remmerbach. “With a broad range of services offered for ADCs (e.g. development, clinical/commercial scale manufacturing, packaging, warehousing and shipping to global destinations), efficiency and cost savings can be achieved by eliminating ‘micro outsourcing’ to multiple service providers,” he noted.

    Matching Stringent Testing Requirements
    While ADCs are regulated as biologics, they also represent a significant high potency chemistry challenge, in terms of handling the cytotoxins and performing the chemistry steps. Companies without the analytical expertise on hand may not have the capacity to compete in the area. Mr. McCarthy described some of the basic issues for analytical testing of ADCs, stressing the comprehensive and very specific standards that must be met. “Biological or polymeric carriers can be coupled to the drug through site-specific linking or through random linking involving multiple sites. Conjugation reactions may produce by-products or may be incomplete, leaving residues of carrier drug and linker,” he told us. “Testing of these conjugates requires sophisticated analytical methods to ensure the quality of the conjugated product. The choice of analytical technique — and in many cases multiple techniques — is key in order to be able to characterize the target compound and its impurities.” Size exclusion chromatography, gel electrophoresis, SEC-MALLS and MALDI are often used in combination to understand the characteristics of the product in addition to traditional HPLC.

    The Regulatory Landscape
    The emergence of at least one ADC drug a dozen years ago has resulted in stability across multiple regulatory bodies, now firmly settled within the FDA. The commercial and clinical promise of the post-2010 generation of drugs has already driven accelerated approval processes to the benefit of the area’s innovators. As Mylotarg demonstrated, accelerated approval can later lead to regret. In fact, Adcetris, which also received accelerated approval from the FDA, later received a boxed warning due to risk of progressive multifocal leukoencephalopathy (PML). Still, these ADCs show tremendous potential and a vigilant regulatory regime can help follow up to make sure they live up to their risk-benefit profile.

    Flexibility or an Integrated Approach
    If there’s a major difference of opinion on the opportunities that await contract service providers in the ADC market, it may be on the issue of flexibility or integration. Is there more business to be had in providing specific a la carte services or in stressing an integrated approach through development and beyond?

    Mitigating the cost of infrastructure investment would seem to favor the less ambitious responsive tack. “Where we distinguish ourselves,” said Lonza’s Mr. Brady,” is that we can handle the biological manufacturing if the company needs that. Some of our customers come to us and say they’ll make the antibodies themselves, while other customers want us to make the antibodies and do the conjugation, and other companies want us to do the cytotoxin. We can do that as well. We can fill in different boxes in the supply chain for these difficult molecules.”

    With the significant presence of big pharma close on the heels of the appearance of emerging innovators, providers’ capacity to handle significant elements of development and manufacture would indicate more opportunities in matching specific needs. But lower cost, greater speed and increased efficacy are all factors that could transform a market in favor of an integrated service provider.

    In that light, it should come as no surprise that companies pursuing an integrated approach assign qualitative advantages. In describing his company’s array of services, Mr. McCarthy tells us, “Dalton offers an integrated approach from custom synthesis, conjugation and preparation of sterile finished dose in one company. We have found that being able to perform all of these activities in an integrated way saves our customers time and also delivers a more robust process. We have the analytical capabilities to fully characterize the linking or conjugation and ensure that it remains sound while processed into a finished form. We think this ability is really important in ADCs due to the added complexity of the products.” The advantage from Dalton’s point of view is a more robust outcome for the drugs in question, and the ability to increase speed to the marketplace by being able to run parallel tracks.

    The outsourcing landscape for ADCs should see significant movement over the next 12 to 24 months, as more drugs come to market. Until then, we should prepare for a crash of established names to enter into the area and a sustained public press from companies that stand to benefit from this swell of interest, particularly as new dosage forms and different treatment areas begin to open up beyond oncology.

    As Lonza’s Mr. Rohrer noted, the area has become so fertile that even Pfizer’s Mylotarg could make a comeback in combination therapies based on post-withdrawal studies that show increased efficacy. A new study presented at the American Society of Hematology (2011) suggests Mylotarg, along with chemotherapy, helped prolong the lives of patients just diagnosed with acute myeloid leukemia compared to chemotheraphy alone, which may lead to a second chance for the drug.

    As yet, nothing in the ADC universe has settled.


    Tom Spurgeon is a contributing editor at Contract Pharma. He can be reached at tomspurgeon@yahoo.com.

    Photo courtesy of SAFC.
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