AstraZeneca is Winning the Cancer Race, And They Are Miles Ahead

In the battle for a cure for cancer, AstraZeneca is pulling ahead of its competitors after a slew of approvals for its groundbreaking treatments that in some cases reduce the risk of death by more than 30%.

During the last three years regulators in China, the European Union, Japan, and the United States have approved AstraZeneca’s Enhertu, Imfinzi, and Lynparza for the treatment of prostate, pancreatic, lung, liver, biliary tract, and breast cancers. AstraZeneca’s breakthrough treatments are Antibody Drug Conjugates, or ADC’s, which attack cancer cells with targeted antibodies, without the need for radiation or surgery.

This month, the Food and Drug Administration (FDA) granted approval for AstraZeneca’s Imfinzi plus Imjudo and platinum-based chemotherapy for the treatment of non-small cell lung cancers. AstraZeneca’s Imfinzi was also recommended for marketing authorization in the European Union. These come after an October approval of the drug combo for the treatment of inoperable liver cancer.

The regulatory approvals are milestones for a company in an industry that has spent and lost billions developing these treatments. Pfizer's leukemia ADC fizzled in the early 2000s. AbbVie's $5.8B purchase of Stemcentrx and Gilead Sciences' $21B acquisition of Immunomedics have yet to yield any profitable results.

Cancer treatments have not changed much in the last few decades – chemotherapy and targeted radiation treatments are the still norm for a devastating disease that is responsible for 1 in 6 deaths worldwide.

Although ADC’s may change that, the breakthroughs did not come easily for AstraZeneca, whose competitors will stop at nothing short of lawsuits, merger attempts, and corporate espionage to secure their stake in a multibillion dollar market.

Strategic Partnerships

By 2013, AstraZeneca had partnered with a little-known startup called Moderna to develop mRNA therapeutics for cancer treatment. AstraZeneca had exclusive access to select any target of its choice in oncology over a period of up to five years.

The deal was not very lucrative in today's terms. AstraZeneca only paid Moderna $420MM, but it launched the company to the public. Four years into the deal, the Food and Drug Administration (FDA) accelerated AstraZeneca's first major ADC, Imfinzi, for the treatment of prostate cancer.

Now, Imfinzi – in combination with Imjudo (tremelimumab) and chemotherapy – was approved for use after tests showed a 23% decline in mortality risk in patients with non-small cell lung cancers who received five cycles of the treatment versus various chemotherapy options.

A Phase 3 trial of AstraZeneca’s Imjudo in combination with Imfinzi found a 22% reduced risk of death from inoperable liver cancer, a result which ultimately led to Imfinzi's November approval.

After getting approval in 2017, AstraZeneca started looking for other partnerships to advance its research. Seeing an opportunity, the company’s executives met with their counterparts at Tokyo-based Daiichi Sankyo and forged a partnership in 2019 that directed substantial resources to develop Enhertu, which at the time had the potential to treat breast, lung and biliary tract cancers.

Under the terms of the agreement, AstraZeneca paid Daiichi Sankyo $1.35B upfront, half of which was due upon execution, with the remainder payable 12 months later. Contingent payments of up to $5.55B include $3.8B for regulatory and scientific milestones, as well as $1.75B for sales-related milestones.

Daiichi Sankyo started the development of its ADC platform in 2008, when it partnered with Seattle Genomics, now Seagen, to develop, test, and distribute Enhertu for the treatment of breast and lung cancers. The research targeted a single antigen found on multiple types of solid tumors resulting from an over-expression of the Human Epidermal Growth Factor Receptor 2 (HER2), which accounts for nearly 30% of all breast cancers.

Transformative Medicine

Enhertu could become “a transformative new medicine” for the treatment of HER2-positive breast and gastric cancers,’’ said AstraZeneca Chief Executive Officer Pascal Soriot at the time of the company’s agreement with Daiichi Sankyo.

“It has the potential to redefine breast cancer treatment as the first therapy for HER2-low expressing tumors,” Soriot said “It also has the potential to treat other HER2-mutated or HER2-overexpressing cancers, including lung and colorectal cancers.”

In December of 2019, the same year of the Astrazeneca-Daiichi Sankyo partnership, the FDA announced its first major approval for Enhertu.

After an accelerated test period, the drug was approved for the treatment of high HER2 expressive breast cancer. By August of 2022, the FDA then approved Enhertu for the treatment of low HER2 expressive breast cancer. The drug now covers nearly 100% of breast cancer expressions.

A month later, further positive results from a Phase 2 Lung trial showed Enhertu demonstrated progression-free survival in patients with HR-positive lung cancer, reducing the risk of disease progression or death by 49% vs. chemotherapy in patients with inoperable or metastatic cell lung cancer, the company said in September.

Daniel Stover, MD, a medical oncologist with The Ohio State University Comprehensive Cancer Center-The James, said Enhertu was a “real breakthrough” because it worked in tumors not considered HER2-positive.

"This is mind-blowing because doctors have spent the last 15 years defining specific subtypes of breast cancer and specific treatments for specific subtypes,” he said. “This is a drug that can be used across multiple subtypes."

Merck Targets Moderna

As the Enhertu approvals started rolling in, other pharma names demonstrated interest in AstraZeneca’s former collaborators. Merck, which markets the blockbuster treatment Keytruda, has a patent expiring in 2028 on the $17B per-year drug. Although revenues keep growing, as much as 26% year-over-year, Merck needed to find a way to replace a drug that currently accounts for about one-third of its total sales.

By July of this year, Merck was in advanced talks to buy Seagen for $40B. Merck and Seagen had already been working together, after Merck took a $1B stake in Seagen two years ago.

That deal gave Merck the rights to Seagens ADC and follow-up candidates, with another $600MM paid in cash, and gave rights to Seagen’s oral HER2 protein-inhibitor Tukysa (tucatinib) in a host of markets outside the US, Canada and Europe.

Executives hoped the merger would close before Seagens Q2 earnings report in July 2022. But in August 2022 Seagen sued Daiichi Sankyo for patent infringement in Texas. After a few months of deliberation, an arbitrator ruled Daiichi did not violate Seagen’s patent on Enhertu, and canceled a $42MM jury award to Seagen.

The same month, AstraZeneca sued to block top dealmaker Chris Sheldong from sharing therapy data with GSK Plc, arguing that he was in danger of breaching a non-compete agreement. The executive had access to confidential information in a host of sensitive areas including the firm’s cancer work, AstraZeneca said in a legal filing.

Shortly after, the Merck bid for Seagen fell through. Although Merck cited “price” as the point of contention, some suspect Seagen’s possession of the Enhertu patent was the driving motivator for the buyout. Merck, which needs to diversify its portfolio of cancer treatments and saw the success of Enhertu, was likely hoping to gain access to the underlying technology in the patent.

Seagen’s Enhertu patent would have expired in 2024, buying Merck the time to replace Keytruda with a stronger competitor to AstraZeneca's breakthroughs.

Next, Merck went after an older AstraZeneca partner: Moderna. The two companies partnered in October to develop an mRNA-based cancer vaccine for high-risk melanoma patients.

Some have speculated this partnership was driven by prospects of gaining access to AstraZeneca’s previous work with Moderna, which may have led to further breakthroughs in their new ADCs.

Moderna’s messenger RNA technology is now being studied in combination with Merck’s Keytruda to treat patients with high-risk melanoma, the deadliest form of skin cancer, in a Phase 2 trial. The companies expect to report data by the end of this year.

Despite these efforts, AstraZeneca has continued to pull ahead. And it is doing so through additional partnerships that could advance its cancer treatment.

Further Collaborations

A 2019 partnership between AstraZeneca and BenevolentAI on DNA sequencing for Chronic Kidney Disease (CKD) and Idiopathic Pulmonary Fibrosis (IPF) strengthened its gene-therapy portfolio.

"The collaboration with BenevolentAI has seen our scientists work side-by-side to develop a knowledge graph that will enable us to explore and find new targets for chronic kidney disease,’’ Professor Pernille Laerkegaard Hansen, Senior Director, Head of Biosciences Renal at AstraZeneca said. “Together, we are transforming how new medicines are discovered and the identification of this first target is only the beginning of what our partnership hopes to achieve.

On October 11, AstraZeneca announced a strategic research collaboration with Illumina ($ILMN), a global leader in DNA sequencing and array-based technologies, to accelerate drug target discovery by combining their strengths in artificial intelligence (AI) based genome interpretation and genomic analysis techniques along with industry expertise.

The collaboration leverages Illumina's next generation of AI-based interpretation tools, PrimateAI and SpliceAI, in combination with AstraZeneca's analysis framework for rare variant genomic discoveries-alongside the latter's own AI tools.

"Continuous innovation in the AI tools and frameworks that are applied to the growing human genomics, transcriptomics, and proteomics medical research resources will enable us to answer some of the toughest questions and contribute to our aims of uncovering novel drug targets with a higher probability of success,” Slavé Petrovski, head of AstraZeneca's Center for Genomics Research, Discovery Sciences, R&D, said.

AstraZeneca’s collaborations with Benevolent AI and Illumina have devoted significant time to discovering the driving mechanisms of gene therapies through proprietary artificial intelligence processes.

The collective effort has yielded strong results. By October of 2022, Capivasertib, a non-ADC treatment developed by both companies, showed promise in Phase 3 test against HR positive breast cancers, and a promising Phase 2 test for prostate cancers.

Capivasertib targets ATP, a molecule necessary for cell energy production. By targeting ATP pathways, the underlying technology is able to change the way cancer cells are formed, or to stop them entirely. This may be part of the underlying technology portfolio that AstraZeneca has discovered with Daiichi Sankyo and Benevolent AI.

Enhertu Revenue

AstraZeneca’s Enhertu cancer treatment is already impacting its revenue, though marginally for now. Total revenue from Enhertu in the first two quarters of 2022 outpaced that for all of 2021, according to AstraZeneca. The company reported $205MM in revenue for the first two quarters this year, compared to $198MM during all of 2021.

“AstraZeneca had a strong financial first half of 2022, and great pipeline delivery,’’ Soriot said when the results were released. “We announced practice-changing data for several medicines including Enhertu in breast cancer.”

Enhertu sales are expected to expand almost eightfold in eight major markets, namely the US, France, Germany, Italy, Spain, the UK, Japan and China. They will increase from $1.2B to $8B from 2022 until 2028.

With blockbuster success on the horizon, one might wonder why other pharmaceutical companies have not had such success with ADC’s. The answer lies in scientific complexity.

Scientific Background

ADCs are a new group of medications designed as a targeted therapy for cancer treatment, developed by linking a cytotoxic anticancer drug to a highly specific antibody via a biodegradable linker. The whole antibody-drug conjugate is internalized within the cancer cell, where the linker is degraded and the active drug is released.

The production of ADC’s is complex and requires very technical infrastructure. Working around this complexity requires experience in technologies for small and large molecules.

Although ADCs have achieved great success so far, future development is increasingly constrained by the quality of linkers. Current linkers are somewhat ineffective. They can lead to off-target toxicity and present a very limited therapeutic window. The danger is that the payloads, commonly 100-fold more toxic than conventional chemotherapeutic drugs, could be non-specifically released in normal tissues by the linkers.

The most notable case of poor linker quality is Gemtuzumab Ozogamicin (Mylotarg), an ADC developed by Pfizer. It was withdrawn in 2010 for causing severe liver toxicity. Although Mylotarg was approved again in 2017 after redesign, the FDA required a black-box warning.

Global Cancer Market

The increasing incidence of cancer cases is expected to drive the need for advanced cancer therapies for the effective treatment of patients. As a result, the cancer therapy market is expected to witness tremendous growth over the forecast period.

According to the Globocan 2020 fact sheet, an estimated 19,292,789 new cancer cases were diagnosed worldwide, with nearly 9,958,133 deaths due to cancers, globally. Additionally, according to estimates from the International Agency for Research on Cancer (IARC), by 2040, the global burden of cancers is expected to grow to 27.5mn new cancer cases and 16.3mn deaths worldwide.

The global cancer therapy market was valued at approximately USD 158 billion in 2020, and it is expected to witness a revenue of USD 268 billion in 2026, with a CAGR of 9.15% over the forecast period, according to Mordor Intelligence. Asia-Pacific is expected to be the fastest growing market worldwide for cancer treatments.

“The factors that are driving the market growth include increasing patient assistance programs (PAPs), increasing government initiatives for cancer awareness, rising prevalence of cancer worldwide, and strong R&D initiatives from key players, along with the increasing demand for personalized medicine,” Mordor Intelligence wrote.

AstraZeneca’s successful push into ADC treatments has occurred as the pharmaceutical industry splits into different research pursuits: Covid-19 and viral treatments against genomic treatments for targeted diseases. Pfizer has been the clear winner with its Covid-19 treatments, with revenue of $11.3B in the first half of the year from its vaccine, now known as Comirnaty.

The Covid-19 vaccines had proven to be a blockbuster investment for the big pharmaceutical companies. By the end of the third quarter Pfizer and Moderna are expected to report collective sales of $18B. But as demand for the vaccine eases, sales are expected to follow.

A recent poll by Kaiser Family Foundation found that two-thirds of American adults do not plan on getting a COVID vaccine soon. Analysts forecast that the U.S. Covid-19 vaccine market will represent only about one-third of the annual flu vaccination market.

Airfinity, a health data analytics group, said Pfizer, BioNTech and Moderna have raised prices to compensate for the drop in demand for Covid shots in 2023. Pfizer alone intends to raise the price by 10,000%. Covid-19 vaccine sales are expected to fall to $47B next year from $60B this year.

The decline in Covid-19 sales and the expected rise in Enhertu’s sales has spurred intense competition among pharmaceutical companies for treatments that target cancer cells. As it stands now, AstraZeneca appears to be the clear winner in the race for a less intrusive cancer treatment.

A dozen ADCs in the world currently hold approval and 80 more are in testing, with the ADC market projected to hit at least $15B by 2030.