Drug services companies ride the ADC wave

As antibody-drug conjugates (ADCs) continue to catch the fancy of the pharmaceutical and biotechnology worlds, it is becoming ever more clear that it takes a village to bring them from concept to commercial drug.

In the past year, several contract development and manufacturing organizations (CDMOs) have made hefty investments to support the rising demand for ADCs from their clients—the innovator drug companies that are designing and testing the conjugates. Only a handful of CDMOs make ADCs from start to finish. Many more are tailoring their services to produce the individual nuts and bolts of ADC molecules.

ADCs are attractive therapeutics precisely because their constituent parts can unleash attacks on cancer cells while sparing healthy ones. In a typical ADC, the drug, or payload, is a toxic small molecule that targets the cancer cell’s DNA; a monoclonal antibody serves as a vehicle to guide the payload to the tumor; and a linker connects the payload to the antibody.

But the field of ADC development is not standing still. As pharmaceutical and biotech companies deploy their research and development capital to engineer new varieties of ADCs, the CDMOs that work with them are ramping up their services in kind. As the field continues to boom, drug services firms are going to be busy for a long time.

ADCs are a new pharma favorite

The US Food and Drug Administration approved the first ADC in 2000 as a treatment for a form of acute myeloid leukemia. The molecule, called gemtuzumab ozogamicin and sold under the brand name Mylotarg, was developed by the biotech companies Wyeth and Celltech. But after nearly a decade on the market, the drug was withdrawn because of concerns about its safety and efficacy.

That setback didn’t stop the ADC field from flourishing. Since Mylotarg’s withdrawal, over a dozen ADCs have reached the market, including the most recent, AbbVie’s Decnupaz for treatment of a rare blood cancer. Mylotarg even returned in 2017, when the FDA approved its use at a lower dose.

According to Hanson Wade’s Beacon platform, which provides information on clinical trials, over 200 ADC drug candidates are being actively tested in clinical trials worldwide.

“Right now, everyone wants to be in the ADC space,” says Dowdy Jackson, founder of Jackson Consulting Group, which advises pharma and biotech companies on clinical development strategies.

Jackson says the ADC field has become crowded,and companies are trying to figure out how to stand out. “They are starting to throw everything against the wall and seeing what sticks,” he says.

Innovation is happening across all three parts of the ADC complex. For instance, companies are replacing small-molecule payloads with oligonucleotides, which act as RNA silencers, or with radioactive isotopes that deliver radiation to cancer cells. Others are rethinking antibodies by giving them more arms to bind to different parts of cancer and immune cells. And in recent years, companies, including industry giants such as Merck & Co., have started making novel ADC linkers.

The market value of those innovations is perhaps best reflected in the billions of dollars pharma companies have shelled out to acquire biotech start-ups with novel ADC technology. Already this year, at least four blockbuster deals have been signed in the ADC space.

In April, Eli Lilly and Company agreed to acquire the early-stage ADC biotech CrossBridge Bio, which has developed dual-payload ADCs and peptide-based linkers that can easily cleave from payloads. In June, Johnson & Johnson paid $1 billion to acquire Firefly Bio, a start-up focused on making degrader-antibody conjugates—molecules in which the antibodies are fused to a targeted protein-degrader instead of a typical small molecule. And in July, Novartis agreed to pay up to $1.5 billion for Myricx Bio, a start-up focused on a novel payload technology.

The largest deal, agreed on in April and completed a month later, saw Gilead Sciences spend $3.15 billion to acquire Tubuilis, a German start-up. Tubulis has novel linker technologies that ensure stable delivery of payloads to cancer cells. Among its lead candidates are molecules to treat ovarian cancer and non-small-cell lung cancer.

One-stop shops aren’t standing still

While pharma and biotech companies reimagine ADCs, CDMOs skilled in manufacturing them find themselves busy.

The process of making ADCs typically involves producing the antibodies, payloads, and linkers separately and then combining them. The antibody is usually expressed in mammalian cells, while the payload and linker are synthesized via chemical processes and attached together. The payload-linker duo is then fused to the antibody via bioconjugation, and the resulting ADC is packaged into a vial or syringe under sterile conditions.

Biotech and pharmaceutical companies often hire CDMOs to manufacture the molecules for use in preclinical and clinical trials and then to make FDA-approved ADCs at commercial scale.

Lonza, the industry leader in the CDMO space, can perform all those steps in-house, given its capabilities in producing all kinds of molecules, from small molecules to large biologics. “Lonza entered the [ADC-manufacturing] space quite early, in 2006. And over time, we have tried our best to establish a full CDMO service, really covering the whole value chain,” says Iwan Bertholjotti, senior director of commercial development for bioconjugates at Lonza.

In 2023, Lonza acquired Synaffix, a biotech company that had developed three technologies for fusing payloads to linkers, for $107 million and possible milestone payments. According to Lonza’s announcement at the time, Synaffix’s technologies can considerably enhance the efficacy and tolerability of ADCs. And this June, Lonza announced plans to expand its payload-linker manufacturing capacity in Visp, Switzerland, to support rapidly growing customer demand. The company also manufactures antibodies and performs bioconjugation at the site.

Abzena also offers most of the services required to make ADCs. Like Lonza, the British firm invested in facilities needed to make ADCs in the early days, a choice that its chief scientific officer, Campbell Bunce, now describes as “serendipitous.”

Today, the company also has manufacturing capabilities in the US. There’s a biologics manufacturing facility in San Diego, and facilities in Bristol, Pennsylvania, where the company makes high-potency pharmaceutical ingredients for payloads and linkers and offers bioconjugation services. In 2024, Abzena invested $5 million at the Bristol site to ramp up bioconjugation capabilities.

The company now offers bioconjugation of next-generation ADCs that contain molecules such as antisense RNAs, protein degraders, and radioisotopes. But even one-stop shops such as Lonza and Abzena can’t do it all. For example, neither has the capability to manufacture oligonucleotides.

“We work with our client to find the best solution for that,” Bunce says. “They might have a preferred provider already, or we know groups that do that very well and can connect our client to other companies.”

Stitching ADCs piece by piece

While some CDMOs offer almost everything under one umbrella, others have clear priorities: either they offer some combination of payload, linker, and bioconjugation services or they focus on the antibody side of the ADC business. But the inability to provide end-to-end services doesn’t seem to hurt their business prospects.

Axplora, for instance, makes small-molecule active-pharmaceutical-ingredient (API) payloads and linkers and offers bioconjugation services, but it does not manufacture antibodies. Over the years, the company has added services such as linker-payload manufacturing and bioconjugation to its roster. Jin-Seok Hur, global platform head for ADCs at the firm, says small-molecule API manufacturing continues to be the company’s bread and butter.

And those services are in demand. In 2024, Axplora announced it would invest nearly $9 million to expand ADC payload manufacturing capacity in Le Mans, France. And in 2025, the company said it would further that expansion, although it did not disclose the investment amount. Axplora is also investing $60 million to expand production of high-potency APIs, some of which are used in ADC payloads, in Gropello Cairoli, Italy.

Hur says companies with a strong presence in biologics are the ones focused on making antibodies. “But they need someone like us, the small-molecule-based company, for making the linker, payload, and bioconjugation.”

Different companies, different preferences

When a drug company decides to hire multiple CDMOs to make the various parts of an ADC, it must ensure it has the human power to coordinate the various stages of drug development, Jackson, the pharma consultant, says. And most small biotech companies don’t have this luxury. “If you’re a small biotech, you really don’t have very many people. Some of them have just two or three people. Who’s going to manage all this?”

For example, the Canadian biotech Zymeworks has been developing ADCs for nearly 2 decades. The company’s commercial ADC, Ziihera, for the treatment of biliary tract cancer, received FDA approval in 2024. The firm has over a dozen more ADCs in various stages of clinical study.

Zymeworks outsources the manufacturing of those ADCs to the Chinese CDMO WuXi AppTec, another one-stop shop. “We don’t really use them to develop our molecules and take them forward,” says Sabeen Mekan, chief medical officer at Zymeworks. “We really use them for manufacturing.”

Bertholjotti says the one-stop-shop offerings from firms such as Lonza are appreciated most by up-and-coming biotechs and pharmaceutical companies with complex ADCs in the early stages of development.

In contrast, Bertholjotti says, large drug companies with more-standard ADCs tend to hand-pick the ADC services they need. “They may have some in-house capabilities—say, maybe they can produce the monoclonal antibodies in-house—and then they don’t need [to outsource] that piece.”

Hur agrees. “Big pharma tries to find the best in each area. So best player for antibody, best player for linker payload, best player for bioconjugation, and best player for fill and finish,” he says.

Kivu Bioscience, which in 2024 raised $92 million to develop ADCs with fewer off-target effects, has another reason to work with multiple specialist CDMOs to develop its molecules: contingency. “I’ve learned in life that you don’t want to put all your eggs in one basket,” CEO Mohit Trikha says. Once a molecule enters clinical trials, the company needs to ensure uninterrupted supply, and having multiple CDMOs provides a safety net, he says.

The multi-CDMO model also allows the company to work with the players that are best at what they do, Trikha adds. The approach requires a high level of coordination with the various drug services firms, “But this is not our first rodeo,” he says. “So, project coordination, project management, and project leadership are very much in our mantra.”

As companies develop new generations of ADCs, several of which are making their way closer to FDA approval, experts such as Dowdy say the market will have a place for all kinds of CDMOs. “Some [CDMOs] will become more global players, and some might be more regional players,” he says.