About this episode
Original Release on April 20th, 2023: "Smart chemotherapy" could change the way that cancer is treated, potentially opening up a $140 billion market over the next 15 years. ----- Transcript ----- Welcome to Thoughts on the Market. I'm Mark Purcell, Head of Morgan Stanley's European Pharmaceuticals Team. Along with my colleagues bringing you a variety of perspectives, today I'll talk about the concept of Smart Chemotherapy. It's Thursday, the 20th of April at 2 p.m. in London. Cancer is still the second leading cause of death globally, accounting for approximately 10 million deaths worldwide in 2020. Despite recent advances in areas like immuno-oncology, we still rely heavily on chemotherapy as the mainstay in the treatment of many cancers. Chemotherapy originated in the early 1900s when German chemist Paul Ehrlich attempted to develop "Magic Bullets", these are chemicals that would kill cancer cells while sparing healthy tissues. The 1960s saw the development of chemotherapy based on Ehrlich's work, and this approach, now known as traditional chemotherapy, has been in wide use since then. Nowadays, it accounts for more than 37% of cancer prescriptions and more than half of patients with colorectal, pancreatic, ovarian and stomach cancers are still treated with traditional chemo. But traditional chemo has many drawbacks and some significant limitations. So here's where "Smart Chemotherapy" comes in. Targeted therapies including antibodies to treat cancer were first developed in the late 1990s. These innovative approaches offer a safer, more effective solution that can be used earlier in treatment and in combination with other cancer medicines. "Smart Chemo" uses antibodies as the guidance system to find the cancer, and once the target is reached, releases chemotherapy inside the cancer cells. Think of it as a marriage of biology and chemistry called an antibody drug conjugate, an ADC. It's essentially a biological missile that hones in on the cancer and avoids collateral damage to the healthy tissues. The first ADC drug was approved for a form of leukemia in the year 2000, but it's taken about 20 years to perfect this "biological missile" to target solid tumors, which are far more complex and harder to infiltrate into. We're now at a major inflection point with 87 new ADC drugs entering development in the past two years alone. We believe smart chemotherapy could open up a $140 billion market over the next 15 years or so, up from a $5 billion sales base in 2022. This would make ADCs one of the biggest growth areas across Global Biopharma, led by colorectal, lung and breast cancer. Large biopharma companies are increasingly aware of the enormous potential of ADC drugs and are more actively deploying capital towards smart chemotherapy. It's important to note, though, that while a smart chemotherapy revolution is well underway in breast and bladder cancer, the focus is now shifting to earlier lines of treatment and combination approaches. The potential to replace traditional chemotherapy in other solid tumors is completely untapped. A year from now, we expect ADC drugs to deliver major advances in the treatment of lung cancer and bladder cancer, as well as really important proof of concept data for colorectal cancer, which is arguably one of the biggest unmet needs out there. Given vastly improved outcomes for cancer patients, we believe that "Smart Chemotherapy" is well on the way to replacing traditional chemotherapy, and we expect the market to start pricing this in over the coming months. Thanks for listening. If you enjoy this show, please leave us a review on Apple Podcasts and share Thoughts on the Market with a friend or colleague today.