To dive into the details and makeup of this year's ADC market frenzy, I met with my go-to ADC guru, Dr. Joe Daccache, and his fellow life science analyst at DeciBio, Rebecca Bair. Without Daccache's meticulous (borderline obsessive) monitoring of the ADC market, and Bair's expert data assembly, none of these insights would be in my hands — so a big thanks to them!
Editor's Note: While this is a recap of ADC deals seen in 2023, stay tuned for more ADC content coming soon — including the results from DeciBio's ADC 2024 Industry Outlook Survey, which you can participate in here.
The Deals By The Numbers
On average, the ADC space saw about 6 deals per month in 2023, with October being the busiest (11 deals) and June being the slowest (zero). Of the 76 deals DeciBio tracked this year, licensing agreements made up the majority of transactions (37), followed by collaborations and partnerships (23), acquisitions (10) and miscellaneous mergers, asset purchases, and development agreements (6).
Despite only making up 13% of transactions, acquisitions account for the majority of dollars spent in the space (around $54 billion), followed by collaborations (around $36 billion) and licensing deals (around $27 billion). The biggest deal this year (by a very wide margin) was Pfizer's $43 billion acquisition of Seagen. To put that in context, the second largest deal was Merck's collaboration with Daiichi Sankyo, valued at $16.5 billion.
The ADC field saw a lot of investments this year. The average fundraising amount was $84.4 million, with $760 million raised in total. Venture capital (VC) transactions were largely Series A funding, with Series B and C deals representing a smaller fraction. Daccache says this highlights the boom of new ADC companies being created.
The majority of this year's deals were focused on technology platforms (e.g., linker and conjugation technologies). Of the deals that disclosed targets and technologies, approximately 28% focused specifically on linkers. While many deals did not publicly disclose or specify therapeutic targets, for those that did, HER3, HER2, Claudin 18.2, Trop2 and Nectin-4 were among the most popular. "These targets and their intended indications are pretty diffuse," Bair says. "Some are for ovarian or endometrial cancers; others are meant for more breast and lung cancers — it kind of covers the whole cancer space across different subtypes. This is pretty ubiquitous amongst deals this year, which I think is important."
ADCs Are Taking Off, This Is Just The Beginning
While the publicly available data speaks for itself, there is a fair amount left to speculation. One such detail that Daccache is dying to know is just how much Eli Lilly paid to acquire Mablink Biosciences, a preclinical ADC company. "It's blowing investors' minds," he tells me. "Mablink is an early-stage company with no clinical programs, yet they were still able to secure a deal with Eli Lilly." He says this speaks to the industry's hunger for ADCs. "We've never really experienced this hunger in the space before, where people are fighting for preclinical and discovery-stage ADC programs."
ADCs weren't always in such high demand. However, thanks in large part to advancements in linker technologies and conjugation methods, innovation has revitalized interest in the space. "I think this space is seeing the most advancement, clinically speaking, than any field we've ever seen," Daccache says excitedly. Back-to-back positive clinical data is spurring more research and innovation, which he believes will further fuel this wave of acquisitions and partnerships. Heading into 2024, Daccache says, the industry will see a lot more deals being made, especially mergers and acquisitions. "If you're a big pharma company, there is literally no way you're not scouting for an ADC," he says. If you aren't, "you're basically digging your own grave."