The Zhitong Finance App learned that Huajin Securities published a research report saying that due to the complex ADC structure design, the technology platform is the primary competitive barrier for innovative pharmaceutical companies; at the same time, whether the pipeline layout is differentiated and formed, and whether the development progress is advanced determines whether the competitive barriers of enterprises can continue; furthermore, whether newly listed products can quickly open up the market is related to the speed at which enterprises return. It is recommended to focus on deploying next-generation ADC technology platforms and innovative pharmaceutical companies with advanced ADC development/commercialization, such as Rongchang Biotech (688331.SH), Colon Botai Biotech B (06990), Maiwei Biotech (688062.SH), etc.; and ADC CDMO innovative pharmaceutical companies, such as Dongyao Pharmaceutical-B (01875).

The main views of Huajin Securities are as follows:

ADC innovation and development have accelerated, and the industry has entered a period of rapid development.

As an emerging macromolecule targeted drug, ADC has clinical advantages over monotherapy, antibodies, chemotherapy, etc.; in particular, after achieving a breakthrough in the field of breast cancer, DS-8201 has stimulated global enthusiasm for ADC research and development, and has broad prospects for ADC combination therapy. At present, 15 ADC drugs have been approved for listing worldwide, and the research pipeline is as high as 900. The global ADC market is expected to grow at a high compound growth rate of 30.0% from US$7.9 billion in 2022 to US$64.7 billion in 2030; domestic ADC is in its infancy, and it is believed that a number of excellent differentiated products will be launched in the next 3-5 years. The Chinese ADC market is expected to increase from 800 million yuan in 2022 to 66.2 billion yuan in 2030, with a CAGR as high as 72.8%.

Non-ingestion ADCs and XDCs open up new fields of research.

The ADC consists of three parts: an antibody, a connector, and a payload. Its complex and diverse design is a double-edged sword. On the one hand, it can provide better treatment opportunities, but at the same time, it also increases the mixed factors of treatment failure. Therefore, ADC technology is constantly being iterated to provide ADC drugs with better efficacy, a wider treatment window, and greater safety. Currently, in addition to following the traditional ADC endocytosis mechanism, the non-endocytic mechanism and a wider range of XDC drugs have provided more research directions. The indications will also expand from tumors to cardiovascular, diabetes, self-immunity, etc. In the future, it is expected that more diverse treatment options will be provided, and we will enter the “coupling of everything” era.

The differentiated layout of domestic ADC drug targets has obvious competitive advantages.

Currently, the ADC drug target layout is mostly concentrated in the field of oncology. Among them, HER2, TROP2, and Nectin-4 are mature targets that have been clinically proven, and are highly expressed in various cancers. Claudin18.2 is highly restricted in normal tissues due to its expression in various cancer types, and is gradually becoming a popular target. Judging from the competitive pattern of various ADC drug targets in China, HER2 and TROP2 targets have a rich post-clinical pipeline layout, excellent clinical efficacy, and are gradually entering the harvest period. Most of the remaining target layouts are in the early clinical stage; judging from the target layout of various domestic pharmaceutical companies, in addition to following popular targets, Nectin-4 ADC, which has advanced the second most in the world, and the world's first exclusive EGFR/HER3 dual-antibody ADC has entered clinical phase II, with obvious differentiation advantages.

Risk warning:Industry policy risk, risk of increased industry competition, risk of new drug development, risk of uncertainty in the launch of products under development, risk of sales falling short of expectations, etc.