How Far Is China's ADC Innovation from Daiichi Sankyo? A Deep Dive from Payload-Centric Design

Since Nobel laureate Paul Ehrlich proposed the concept of using antibodies as “magic bullets” to target diseases in 1913, the research history of antibody-drug conjugates (ADCs) has spanned over a century, marked by successive technological iterations and a fluctuating development trajectory. In recent years, the ADC field has once again entered its moment in the spotlight amid the march of history.

From the perspective of market size, according to Nature’s projections, the total global sales of the 10 ADC products launched before 2020 will exceed US$16.4 billion by 2026. China’s ADC market was initiated in 2020 and is expected to reach RMB 7.4 billion and RMB 29.2 billion in 2024 and 2030, respectively, with a compound annual growth rate (CAGR) of 25.8% from 2024 to 2030.

From the perspective of development trends,, According to a report released by PatSnap, the global ADC innovation track is gradually entering a golden period of development. ADCs have become a key focus for innovative pharmaceutical companies worldwide, and a new peak may be reached in the next 3-5 years.

As the antibody-drug conjugate (ADC) sector heats up, many are asking whether it will become the next frontier in cancer immunotherapy and whether it will face the same intense competition seen with PD-1/PD-L1 inhibitors. In light of the current crowding around similar targets, how can startups differentiate themselves to secure a foothold in the market?With these questions in mind, VCBeat’s New Medicine channel interviewed BiOneCure, an ADC novel drug developer. See how this startup has broken through industry pain points and stood out among its peers.

According to statistics from the Insight database, as of December 29, 2021, there were 408 antibody-drug conjugates (ADCs) in various stages of development worldwide, with approximately 300 ADCs having disclosed their targets. Among these, prominent targets include HER2, CLDN18.2, CD19, FRα, CD33, ROR1, CD70, CD276, IL3RA, and DLK1, with each target having several to dozens of products under development.

A few brief lines reveal the recent surge in popularity of antibody-drug conjugates (ADCs). With continuous technological iterations, a steadily rising market, and an ever-growing number of projects, a question has emerged: Will ADCs become as fiercely competitive and saturated as PD-1/PD-L1 inhibitors?

“ADC drug development differs significantly from that in the field of tumor immunotherapy,” Dr. Bao Haifeng, CEO and Co-founder of Baikai Biomedical, told VCBeat New Pharma.

Dr. Bao Haifeng explained: “First, ADC drug development involves high technical requirements and more complex molecular design.In addition to antibodies, ADCs also involve cytotoxins, linkers, and the conjugation method between the linker and the antibody. ADCs composed of different targets, cytotoxins, and linkers each have distinct characteristics and biological activities. Cytotoxins are essentially chemotherapy agents. It is well known that different chemotherapy drugs are used to treat different tumors, while the same chemotherapy drug may be effective against several different types of tumors. Similarly, ADCs targeting the same antigen but conjugated with different toxins can have different tumor indications, patient subpopulations, and therapeutic outcomes. Therefore, the differentiation of ADC drugs depends not only on the antibody target but also on the cytotoxin.

Dr. Bao Haifeng continued, “In recent years, an increasing number of biopharmaceutical companies in China have entered the field of ADC (antibody-drug conjugate) research and development. What I see is not competition or involution, but rather growing opportunities and support. Certain areas of new drug development, such as anti-angiogenic therapy in the past or current cancer immunotherapy, require solid basic research to fully understand the relevant physiological and pathological mechanisms (theories), which serve as the foundation for drug development. Domestic biopharmaceutical companies are currently in a phase of accumulation and catch-up, and there is still a considerable distance to go before achieving truly groundbreaking first-in-class drugs. ADCs are different; the mechanisms of action of both the antibody and the toxin are relatively well understood. The challenge lies in making technological breakthroughs, an area where Chinese companies excel.”

“Therefore, I believe that in the field of new drug development, Chinese companies are most likely and quickest to reach the global forefront in the area of ADCs. A good example is Japan’s Daiichi Sankyo, which was previously relatively unknown in the ADC field but became a leader in ADC new drug development after creating DXd. The entry of more companies into the ADC field means they can bring their respective experiences and strengths, thereby strengthening China’s comprehensive R&D capabilities in ADCs. Moreover, collaboration among developers has always been the mainstream approach in international ADC product development.”

On the other hand, market saturation presupposes that numerous products have already been successfully launched in the therapeutic area, or that its technical barriers have been breached. In the case of PD-1/PD-L1 inhibitors, antibody development technologies are relatively mature, resulting in minimal differentiation among developers. With the target itself being the sole distinguishing factor, this space is prone to intense homogenized competition.From the perspective of product differentiation, antibody-drug conjugates (ADCs) span multiple dimensions—including targets, antibodies, small-molecule toxins, linkers, and conjugation methods—all of which vary significantly, thereby facilitating differentiated development. In terms of technical barriers, it is evident that numerous unresolved technical challenges remain for ADCs at the current stage. Only a small fraction of ADC candidates in development ultimately succeed in gaining regulatory approval for market launch, indicating that the field is still far from being oversaturated or excessively competitive.

It is evident from the above points that antibody-drug conjugates (ADCs) will have vast practical application scenarios and a future industry development trajectory free from hyper-competition.

While pursuing market differentiation and avoiding hyper-competition, how to improve the success rate of new drug R&D remains an enduring topic in the industry. Since domestic drug development in China previously focused mainly on generic drugs and has gradually shifted toward me-too and fast-follower strategies, the success rate of drug development has remained relatively high. As the proportion of innovative components increases, the failure rate will rise accordingly, prompting companies to place greater emphasis on how to enhance the success rate of new drug development while pursuing innovation.

According to a report jointly released by the Biotechnology Innovation Organization, Informa Pharma Intelligence, and QLS, the average success rate for drug development projects progressing from Phase I clinical trials to U.S. FDA approval was 7.9% over the past decade (2011–2020). Undoubtedly, the R&D success rate is even lower for new drugs with higher technical requirements, such as antibody-drug conjugates (ADCs).

“The development of new drugs is not only a technical challenge but also a systematic engineering endeavor.“, especially for new drugs with high technical requirements such as ADCs,” said Dr. Bao Haifeng. “The journey of a drug from early discovery through subsequent preclinical research and clinical trials to regulatory approval and market launch is a complex, interdisciplinary systems engineering endeavor. To successfully bring an innovative drug to market, every step of the drug development process must be executed to the highest standard. Hangzhou Baikai Biomedical Co., Ltd. has been fortunate to have experienced core scientists ‘stationed’ at each critical stage of this systematic new drug development process.”

Currently, the core team of Baikai Biomedical primarily consists of seven scientists. These seven scientists form a cross-disciplinary and complementary scientific alliance, with each member possessing at least 15 years of work experience in new drug development or related fields. Most have previously held key technical positions at pharmaceutical giants such as Amgen, Pfizer, and AstraZeneca, where they were responsible for the development of new drug projects. The core members have known each other for many years and demonstrate strong synergy and execution capabilities. Leveraging the team’s efforts and collaboration, Baikai Biomedical has structured its pipeline according to a new drug R&D strategy:Identify the problem, understand the problem, solve the problem.

To address how to improve R&D efficiency and increase the success rate of new drugs, pharmaceutical giant AstraZeneca proposed the “5R Framework,” which was published in *Nature Reviews Drug Discovery* in 2011 and 2018, respectively. The “5Rs” refer to the Right Target, Right Tissue, Right Safety, Right Patient, and Right Commercial Potential. Several executives at Baikai Biomedical previously worked at AstraZeneca and were directly involved in defining and implementing the 5R principles. Consequently, Baikai Biomedical’s new drug development strategy is deeply influenced by the 5R framework, with a strong emphasis on the application of translational science.

Dr. Bao Haifeng stated, “During the development of BIO-106, to determine the correct target-disease relationship, we analyzed tumor samples from hundreds of patients. We found that Trop-2 is not only overexpressed in most tumors but also exhibits a homogeneous expression pattern. Meanwhile, Trop-2 is also highly expressed in normal tissues such as skin and mucosa. Therefore, the molecular design of BIO-106 places particular emphasis on minimizing damage to normal tissues. To identify the appropriate patient population, we conducted so-called ‘Phase 0’ trials to screen for a series of tumor types sensitive to BIO-106, which has significantly facilitated the differentiated clinical development of BIO-106 compared with other Trop-2 ADCs. Furthermore, PK/PD modeling studies in animal models were performed to more accurately predict the clinically effective dose.”

Dr. Bao Haifeng stated, “I am a staunch advocate of the 5R strategy. Since entering the field of translational medicine in 2004, I have witnessed numerous instances where translational scientific research has facilitated drug development over the past two decades. I have also personally experienced how findings from translational research have salvaged new drug development projects that might otherwise have failed. Therefore, during the development of BIO-106, Hangzhou Baikai Biomedical Co., Ltd. is willing to invest millions of yuan in a series of translational medicine-related studies, and we believe that these research outcomes will help our project proceed more smoothly toward success.”

Baikai Biopharma has successfully developed various types of novel payload technologies through independent R&D.Daiichi Sankyo, the leader in ADCs, has become the current frontrunner in the ADC field precisely due to its R&D efforts and breakthroughs in payload technology.Dr. Liu Dingguo, Head of Medicinal Chemistry and Co-founder of Baikai Biomedical, explained, “We believe that the focus of ADC drug development lies in the payload platform, which serves as the foundation for ADC innovation.”

Dr. Liu Dingguo continued, “In the development of the Baikai Biomedical platform, we place particular emphasis on exploring and developing platforms for low-toxicity/high-drug-to-antibody ratio (DAR) values and payload technologies with novel mechanisms of action (MOA). ADC drugs with low toxicity and high DAR values offer a wider therapeutic index, which plays a crucial role in determining their clinical success. Furthermore, payloads with novel mechanisms of action can diversify the currently limited range of ADC toxin types.”

Based on its technology platform, Baikai Biopharma has currently established an ADC pipeline targeting various antigens., with indications focused on the two major fields of solid tumors and hematologic malignancies.

In March this year, the Investigational New Drug (IND) application for Baikai Biomedical’s core ADC candidate, BIO-106, was approved by the U.S. Food and Drug Administration (FDA), directly validating the clinical applicability of Baikai Biomedical’s technology platform. On the day of approval, Baikai Biomedical simultaneously launched its clinical studies in the United States, demonstrating the high execution capability of its team.

BIO-106 is the second TROP-2-targeted antibody-drug conjugate (ADC) from China’s biopharmaceutical sector currently undergoing clinical trials in the United States. Hangzhou Baikai Biomedical Co., Ltd. has specifically designed BIO-106 based on the pathophysiological expression characteristics of TROP-2 and employed its proprietary payload technology, thereby affording the drug an improved therapeutic window and enhanced safety profile.This marks Baikai Biomedical’s transition from technological platform innovation to a new phase of clinical development. Over the next three years, Baikai Biomedical will maintain a pace of advancing one ADC product into global clinical trials each year.

Discussing the future of the ADC sector and companies, Dr. Bao Haifeng stated, “Undoubtedly, antibody-drug conjugates (ADCs) have entered a new phase of development globally, but this phase is not as mature as we might imagine. Although relevant products have been successively approved in recent years, ADC technology has not yet reached maturity; we cannot easily achieve precise targeting with guaranteed efficacy. As a technology-driven enterprise in the pharmaceutical industry, while striving to improve the success rate of ADC product development, we should approach this systematic engineering endeavor with greater caution and rationality.”

“Furthermore, I personally believe that the molecular design of ADCs will continue to evolve toward greater precision. In the face of a continuously maturing ADC landscape, we should foster industry-wide collaboration to drive sectoral advancement. Hangzhou Baikai Biomedical Co., Ltd. has always maintained an open mindset, welcoming partnerships with industry peers to co-develop projects and jointly optimize technological platforms, thereby propelling the industry forward together.”

“Baikai Biomedical will remain steadfastly focused on the development of next-generation ADC products. In the near term, we will steadily advance the BIO-106 project in accordance with the current clinical trial design, while continuing to refine our payload technology platform for integration into future pipeline combinations. By leveraging technical, financial, and clinical resources from both China and the United States, the company aims to develop globally oriented technology platforms and ADC products.”

We look forward to more ADC companies, such as Hangzhou Baikai Biomedical Co., Ltd., successfully developing accessible drugs that use these “magic bullets”—which hit their targets with precision—to overcome major clinical diseases that have plagued patients for years.