J&J acquisition of Ambrx bolsters cancer ADC portfolio amidst big pharma’s growing investment trend: GlobalData

Following the news that Johnson & Johnson (J&J) has entered into a definitive agreement to acquire clinical-stage biopharma company Ambrx Biopharma for $2.0 billion;Israel Stern, Oncology & Hematology Analyst at GlobalData, offers his view:

“J&J will have the rights to antibody-drug conjugate (ADC)-focused biotech, which includes anvatabart opadotin (ARX788), an anti-HER2 ADC, which received FDA fast track designation for HER2+ metastatic breast cancer and orphan drug designation for gastic cancer. ARX788 contains a trastuzumab-based antibody conjugated to two AS269 proprietary tubulin-inhibiting cytotoxic payloads. GlobalData projects the drug to earn $534 million by 2029.

J&J now joins the other major pharma companies investing billions in ADC programs. In November 2023, AbbVie bought out Immunogen, the manufacturer of Elahere (mirvetuximab soravtansine) for $10.1 billion. A month prior, Merck paid $4 billion upfront to Daiichi Sankyo to co-develop three ADCs. In March of 2023 Pfizer acquired ADC giant Seagen for $43 billion in one of the largest M&A deals in industry history.

ADCs continue to be the hot topic in big pharma. Prior to the announced J&J deal, last year alone saw 155 deals struck for the modality, 14 of which were in M&A. J&J is growing its ADC pipeline, which includes the recently announced $100 million upfront investment to license LCB84, LegoChem Biosciences’ Trop2-directed ADC.

In addition to anvatabart opadotin, Ambrx has a second ADC in its oncology program, dubbed ARX517. The Phase ll molecule targets prostate-specific membrane antigen (PSMA), which is highly expressed in metastatic castration-resistant prostate cancer (mCRPC) as well as other solid tumors. At the 2023 European Society for Medical Oncology (ESMO) Congress meeting, the company showed that ARX517 produced a 50% or more reduction of prostate-specific antigen in 12/23 heavily pretreated mCRPC patients who received the ADC. GlobalData will be publishing a market overview for ADCs in oncology later this year.

In 2022, the global ADC market for cancer treatment was valued at $7.5 billion, with Roche’s Kadcyla generating $2.2 billion, followed by Daiichi Sankyo’s Enhertu at $1.5 billion. The market is predicted to skyrocket to $40.3 billion by 2029 at a CAGR of 27%. There are currently 15 marketed and 179 ADCs in the clinical pipeline, the majority of which are in early development. J&J is looking to expand cancer portfolio as its blockbuster blood cancer drugs Darzalex (daratumumab) and Imbruvica (ibrutinib) face patent expiration later this decade.”