In recent years, the hottest and most capital concentrated track in the global biopharmaceutical field is undoubtedly antibody conjugated drugs (ADCs). From cross-border pharmaceutical enterprises’ high price mergers and acquisitions, to local innovative pharmaceutical enterprises’ frequent refreshing of license out records, and to the continued hot financing in the primary market, ADC has become a core pillar in the field of tumor treatment rather than a niche frontier technology.

In fact, in previous articles, the editor has already shared with you the in-depth analysis of the two popular tracks of small nucleic acid drugs and cell gene therapy. Together with ADC, they constitute the three core directions for innovation breakthroughs in the current field of biomedicine. Compared to the precise regulation of small calculations and the curative potential of cell gene therapy, ADC has become one of the most capital intensive and rapidly clinically transformed tracks with its unique advantages of “precise targeting+potent killing”.

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1、 Detailed explanation of ADC concept

ADC， The full name is Antibody Drug Conjugate, which is a novel targeted drug that combines monoclonal antibodies and highly effective anti-tumor drugs through linkers. Its core advantage is its ability to “accurately kill tumors”, like a precision guided “biological missile”, with clear division of labor and coordinated work among various parts, which can effectively kill tumor cells while minimizing damage to normal cells.

Specifically, the three core components of ADC serve the following purposes:

Antibody part: equivalent to “missile navigation”, specifically targeting tumor cells. Tumor cells have special markers (antigens) on their surface that are rare or absent from normal cells. Antibodies can accurately recognize and capture these markers, locking in tumor cells without accidentally harming normal cells.

Connector: equivalent to the “detonation switch” of a missile, connecting antibodies on one side and tumor killing drugs on the other. It is very stable in the blood and will not allow drugs to be released prematurely and damage normal tissues; After the ADC is “swallowed” by tumor cells, the linker will break and release the tumor killing drug.

Cytotoxic drugs: equivalent to “missile warheads”, with strong tumor killing ability. If used alone, this medicine is too toxic and can harm many normal cells; But when combined with antibodies and linkers, it can be accurately delivered to tumor cells and only function at the tumor site, greatly reducing the side effects on the whole body.

Overall, ADC combines the advantages of antibodies for precise tumor detection and chemotherapy drugs for strong tumor killing, solving the problem of traditional chemotherapy that not only kills tumors but also damages normal cells. Now it is used more and more in the treatment of breast cancer, lung cancer, blood tumor, gastric cancer and other tumors, and is also a popular research direction and important treatment method in the field of biomedicine.

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2、 ADC market space

To determine the investment value of a track, the first thing to consider is the breadth and growth potential of the market space – the answer to the ADC track is undoubtedly “explosive growth”.

By 2026, 21 kinds of ADC drugs have been approved for marketing in the world, covering 12 types of solid tumors and hematomas such as breast cancer, lymphoma, lung cancer, and the market size has exceeded 20 billion dollars.

The global ADC market has grown from 2.8 billion US dollars in 2019 to 14.1 billion US dollars in 2024, with a compound annual growth rate of 37.9%; It is expected to increase to 68.5 billion US dollars by 2030 and exceed 122.7 billion US dollars by 2035. The compound annual growth rates for 2024-2030 and 2030-2035 are 30.1% and 12.4%, respectively.

The growth of the Chinese market is even more rapid, with an expected increase in size from 500 million US dollars in 2024 to 9.2 billion US dollars in 2030, with a compound annual growth rate of 60.1%; By 2035, it will further rise to 22.1 billion US dollars.

What deserves more attention is the continuous expansion of the indications. ADC has gradually moved forward from the late late treatment to the early first line, new auxiliary/auxiliary treatment, covering multiple mainstream tumors such as breast cancer, lung cancer, gastric cancer, urothelial cancer, and blood tumors. The clinical demand continues to expand, providing a sustained impetus for market growth.

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3、 Technology and Pipeline

For the biopharmaceutical industry, technological barriers and pipeline quality are the core factors determining enterprise valuation, and ADC is no exception. The core components of ADC are “antibodies+linkers+cytotoxic drugs”, and the synergistic optimization of the three forms the competitive differences between different generations of ADC, which also determines the investment value.

（1） The Evolution Path of Fourth Generation Technology

From the perspective of development history, ADC has evolved from the first generation to the fourth generation, with each iteration bringing significant improvements in efficacy and safety:

First generation ADC drugs:

The representative drug is Mylotarg (Gitolizumab), which was the first ADC drug approved by the FDA in 2000 for the treatment of acute myeloid leukemia. However, due to severe fatal liver injury and no significant survival benefits, it voluntarily withdrew from the market in 2010 and was re launched in 2017. Drug design began in 1958, attempting to use a combination of anti mouse leukocyte immunoglobulin and methotrexate to treat leukemia,

The core drawbacks are prominent: the antibody is mouse antibody, the linker cannot be cleaved, and the cytotoxicity is insufficient, resulting in high off target toxicity and low efficacy. Most products end in failure and have been basically eliminated, with extremely low investment value.

Second generation ADC drugs:

Kadcyla (T-DM1) and Adcetris are represented, of which Kadcyla is the first ADC drug approved for breast cancer, and Adcetris is prominent in classical Hodgkin’s lymphoma and anaplastic large cell lymphoma. This generation has made technological improvements by using humanized antibodies to enhance targeting, reduce cross reactivity, develop diverse target antigens, and introduce cleavable linker technology. However, there are still significant shortcomings: using traditional chemical coupling methods, the drug antibody ratio (DAR) uniformity is poor, the linker is easily cleaved in the blood, the drug loading rate is unstable, the treatment window is narrow, the effectiveness is insufficient, the ceiling is low, and the investment value is moderate.

Third generation ADC drugs:

The current mainstream drugs in the market include Enhertu (DS-8201), Besponsa, Padcev, vediximab, etc. Padcev is the second ADC drug targeting solid tumors and is suitable for patients who have failed PD-1/PD-L1 antibody therapy. On the basis of the previous three generations, site-specific coupling technology was adopted to achieve uniform DAR values. Fully humanized antibodies were used to reduce immunogenicity, while optimizing linkers and payloads to significantly reduce off target toxicity and improve pharmacokinetic efficiency. Its advantages lie in the site-specific coupling of small molecule monoclonal antibodies and the development of bispecific antibodies. The disadvantage is that the coupling technology is difficult to reproduce and insensitive to microtubule inhibitors. This generation of products has been clinically and commercially validated and has the highest investment value.

Fourth generation ADC drugs:

Breakthrough towards dual antibody ADC, conditionally activated type, immunostimulatory type (ISAC), etc. Representative drugs include DS-8201, Trodelvy, SKB264, etc. The core improvement is the use of topoisomerase I inhibitors (camptothecin derivatives) as payloads, designed for low toxicity and high efficacy, with DAR values maintained between 7.4-7.8, which can deliver more payloads to tumor cells. However, there is still room for optimization: the loading mechanism is single, drug resistance is prone to occur, the stability of linkers in the circulatory system is insufficient, ADC molecular weight is large, tumor enrichment rate is slow, permeability is low, and antibody selection is limited. This generation has high technological barriers and First in class potential, making it a future innovation direction with high expected investment returns. For example, BL-B01D1 from Baili Tianheng has become the world’s first dual antibody ADC to be declared for listing.

（2） Four core technological barriers

1. Target selection: The current target competition pattern presents the characteristics of “the rise of C-MET and the sustained popularity of HER2”. The overall target distribution TOP5 is C-MET (180 studies), HER2 (105 studies), CD30 (32 studies), TROP2 (15 studies), and FOLR1 (13 studies); Among them, mature targets (HER2, TROP2, Nectin-4) are highly competitive, while emerging targets (Claudin18.2, B7-H3, HER3, C-MET, FOLR1, etc.) have differentiation advantages and can obtain higher valuation premiums.

2. Connector technology: Its stability and drug release efficiency directly determine the toxicity and efficacy of ADC, which is one of its core competitiveness. In the future, new linker technologies will focus on improving stability and tumor selective release.

3. Payload development: Payload, efficacy, bystander effect, and immunogenicity are key factors that directly affect tumor killing effectiveness. In the future, we will focus on developing new cytotoxic payloads with different mechanisms of action to overcome drug resistance;

4. Coupling process: Compared with random coupling, fixed-point coupling can achieve uniform DAR and controllable quality, which is the core manifestation of the enterprise’s process strength and the key to large-scale production.

（3） Pipeline layout logic

From the perspective of pipeline layout logic, capital prefers enterprises that combine “thickness+differentiation+progress”. The current clinical development of ADC is still mainly based on early research, with Phase I and Phase I inference studies accounting for 41.3%, Phase II accounting for 8.3%, and Phase III accounting for only 1.4%. A large number of new ADC molecules are in the early development stage.

In terms of specific layout strategy, first, avoid the Red Sea targets such as HER2 and TROP2, and lay out Claudin18.2 (suitable for gastric cancer, pancreatic cancer and other high incidence tumors in China), B7-H3 (suitable for pan solid tumors), C-MET, FOLR1 and other segments of the track, of which C-MET has become an absolute hot target. International pharmaceutical enterprises have carried out 25 related studies, and local pharmaceutical enterprises have reached 28, highlighting the high attention of local enterprises to emerging targets;

Second, focus on tumor species with Chinese characteristics (gastric cancer, liver cancer, esophageal cancer) to build global competitiveness. Local pharmaceutical enterprises have carried out 25 studies on HER2 targets, focusing on breast cancer, gastric cancer and other local high incidence tumors;

The third is to explore the combination strategy of ADC and PD-1/PD-L1, which has been validated in multiple clinical trials to synergistically enhance anti-tumor effects. It is expected to replace IO+chemotherapy after 2028 and double the market space,

The fourth is the extension of ADC to autoimmune diseases (lupus erythematosus, rheumatoid arthritis), opening up new markets worth billions of dollars, while expanding into hematological tumors, especially multiple myeloma and lymphoma, which will become new research and development hotspots; The fifth is to lay out cutting-edge directions such as dual specificity ADCs, by simultaneously targeting two tumor associated antigens to improve specificity and create differentiated advantages.

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4、 Competitive landscape

The global ADC track presents a pattern of top concentration and distinct tiers, with multinational pharmaceutical companies dominating with funding, research and development, and commercialization capabilities, while Chinese companies rapidly rise with target innovation, cost advantages, and overseas capabilities. The two form a complementary competition and jointly promote the development of the track, becoming one of the most dynamic tracks in the global oncology drug field.

Among the top enterprises, multinational pharmaceutical companies such as Roche, AstraZeneca, and Gilead firmly occupy the first tier, with a CR5 market share of over 68%, firmly controlling the dominant position in the global ADC market. These enterprises, with decades of research and development accumulation and strong financial strength, have fully mastered the core technologies of antibodies, linkers, and toxins, and have built patent barriers that are difficult to break through. At the same time, they rely on mature commercial networks covering major global markets to promote the rapid global landing of new products and seize the high-end market with high pricing strategies.

Chinese enterprises, on the other hand, quickly broke through with their differentiation advantages and emerged a group of outstanding leading enterprises.

BeiGene’s global commercialization capabilities are industry-leading, providing solid support for its ADC field layout. The company has established a commercial system covering major global markets, with mature clinical development, registration and supply chain capabilities, which can efficiently promote the global landing and promotion of ADC products. At present, BeiGene has a deep layout in the ADC field, relying on its mature global resources to steadily advance in the forefront of ADC, and help domestic ADC products participate in global market competition.

Rongchang Biotechnology has taken a clear path of differentiated innovation, with a core focus on the ADC field. It has the first original ADC drug in China, vediximab, which fills the gap in the domestic original ADC field and demonstrates the company’s innovative strength in the ADC field. Around the core ADC product of vediximab, the company has formed a dual wheel drive model of “domestic sales+overseas authorization”, promoting the market-oriented and international development of domestically produced original ADC drugs through domestic marketing and overseas authorization cooperation, and further consolidating its differentiated advantages in the ADC field.

Baili Tianheng focuses on the ADC field as its core development direction, with a key layout of iza bene (EGFR × HER3 dual antibody ADC). This product is an important milestone for domestic dual antibody ADC to go global, marking the recognition of domestic dual antibody ADC in the global market. In 2023, the company reached a cooperation agreement with BMS for the ADC product with a total amount of up to $8.4 billion, setting a high record for overseas authorization of domestically produced dual antibody ADCs. At present, the two indications of the ADC product have been accepted by CDE and included in the priority review. The global phase II/III clinical trials are being promoted simultaneously. The company’s research and development centers in China and the United States provide strong technical support for the source innovation in the ADC field, helping it continue to promote the research and development of ADC products and global layout.

The three companies respectively have the core advantages of global commercialization, differentiated source innovation, and high-end dual antibody ADC going global, representing the leapfrog development of China’s ADC track from imitation to originality and from local to global. They also constitute the core strength of China’s innovative drugs in the global ADC competition, laying a solid foundation for the subsequent global landing of products.

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5、 Summary and Prospect

As the “biological missile” in the field of tumor treatment, ADC drugs have grown from cutting-edge technology to the core pillar of the anti-tumor market with their dual advantages of precise targeting and potent killing. The global market continues to grow rapidly, and the Chinese market has risen at a much faster pace than the global market, becoming a key engine driving industry development.

In the future, as indications continue to extend to early first-line, pan cancer, and even autoimmune diseases, coupled with the gradual maturity of combination therapy options, the ADC track still has enormous growth and imagination space. For investors and industry participants, companies that possess technological barriers, pipeline differentiation, and globalization capabilities will take the lead in the new wave of the industry; Domestic ADCs will also occupy an increasingly important position in the global cancer drug market through continuous innovation, truly achieving a global breakthrough for Chinese innovative drugs.

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