BoTeng Pharma Invests RMB 1.085 Billion to Build ADC Commercialization Platform, Positioning Itself as a Full-Service CDMO in the Booming ADC Market

Recently, according to the approval announcement on the official website of the Chongqing Liangjiang New Area Administrative Committee, PORTON (Chongqing Porton Pharmaceutical Technology Co., Ltd.) will construct a commercialization platform for Antibody-Drug Conjugates (ADCs).

It is reported that this ADC commercialization platform is an expansion project, located within PORTON’s existing factory premises (No. 7 Yuntu Road, Beibei District), with an expected construction period from August 2023 to December 2026.The total investment in the project is RMB 1,085.6121 million, of which the estimated total environmental protection investment is RMB 2.4 million, accounting for 0.22% of the total investment.

The proposed project will construct two new antibody bulk drug substance production lines, one antibody formulation filling line, and one fully automated packaging line in Production Building 1.Achieve an annual production capacity of 28,800 kg of bulk drug substance for macromolecular antibodies.A portion of the antibody bulk drug substance (approximately 27,000 kg) is directly used for the production of large-molecule antibody formulations, yielding 2.7 million vials of finished products; another portion of the antibody bulk drug substance (approximately 1,800 kg) is used for the production of ADC conjugation bulk drug substance. Two new ADC conjugation production lines (50–500 L scale), one ADC conjugated formulation filling line, and one fully automated packaging line are newly constructed in Production Building 2.Achieve an annual production capacity of 46,080 kg of ADC conjugation bulk drug substance and 2.2 million vials of finished ADC conjugated drug product.

This is not PORTON’s first foray into the ADC space.

In April 2023, PORTON announced that its wholly-owned subsidiary, Porton Zhixin (Shanghai) Biotechnology Co., Ltd., had officially commenced operations in the Waigaoqiao Free Trade Zone of Pudong New Area, Shanghai.R&D and Production Center for Biological Macromoleculesof the commencement of construction. As a crucial component of PORTON’s strategic new capability building, the Macromolecule Center, upon becoming operational, will provide one-stop CDMO services for global biopharmaceutical companies and new drug R&D institutions, covering process development and pilot-scale manufacturing for antibodies and antibody-drug conjugates (ADCs) in the early clinical stages.

Just five months later, in September, the CDMC R&D Center for Antibodies and ADCs officially commenced operations, comprising the Antibody Drug Substance Process Development Center, the ADC Conjugation Process Development Center, the Antibody and ADC Formulation Process Center, and the Quality Research and Testing Center. It provides CMC services for antibodies and antibody-drug conjugates (ADCs), including developability studies, cell line construction, upstream and downstream process development, ADC conjugation process development, formulation development, and analytical method development and validation.

Once completed, PORTON’s large-molecule commercialization platform in Chongqing will complement its custom R&D center for large molecules in Shanghai, potentially enabling end-to-end coverage from custom research and development to manufacturing services for large-molecule drugs such as antibody-drug conjugates (ADCs) and antibodies. This marks PORTON’s renewed strategic bet on large-molecule therapeutics, following its earlier expansion into cell therapy, gene therapy, and other biopharmaceutical sectors.

Not only PORTON, but numerous CDMOs have also entered the ADC market within the past three years.

Leading the charge is the “WuXi Group”—specifically WuXi XDC, a leading CRDMO focused on the global ADC and broader bioconjugate drug market.

On November 17, 2023, WuXi XDC was listed on the Hong Kong Stock Exchange, becoming the fourth IPO company under the “WuXi AppTec” group. According to its official website, WuXi XDC provides comprehensive CRDMO services through a fully integrated, one-stop bioconjugate drug platform, covering the discovery, process development, and GMP manufacturing of bioconjugate drugs, monoclonal antibody intermediates, and linkers and payloads related to bioconjugate drugs.

From a financial perspective, WuXi XDC’s total revenue from 2020 to 2022 was RMB 96.4 million, RMB 311 million, and RMB 990 million, respectively; its net profits were RMB 26.3 million, RMB 54.9 million, and RMB 156 million, respectively. In the first half of 2023, the company’s performance fully surpassed that of 2022, achieving total revenue of RMB 994 million and net profit of RMB 177 million.

According to WuXi XDC’s prospectus, its ADC outsourcing services cover every stage of the ADC development process, from discovery to commercial manufacturing. The complexity and high technical demands of ADC development have led most pharmaceutical and biotechnology companies to rely on outsourcing partners:

• Discovery – The discovery process for antibody-drug conjugates (ADCs) involves six key steps to ultimately identify preclinical ADC candidates with desirable properties: (1) target selection, (2) discovery of bioconjugated antibody intermediates, (3) payload-linker chemistry discovery, (4) conjugation process development, (5) physicochemical characterization and developability assessment, and (6) in vitro and in vivo biological activity studies.

• Development – During the development phase, various activities are conducted to optimize ADC manufacturing, ensuring production consistency and successful scale-up. These activities include optimizing antibody expression conditions and purification processes; performing medicinal chemistry analysis and optimization of the payload-linker; developing synthetic processes for the payload-linker; optimizing conjugation processes; formulating and developing drug products (“DP”); conducting non-GMP manufacturing; performing toxicology studies in preparation for IND submission; and preparing CMC documentation and providing regulatory support until the candidate drug receives approval from regulatory authorities. Due to the complexity of the development process and stringent quality control requirements, it is uncommon to change outsourced service providers after this phase if the selected provider offers comprehensive services covering both development and manufacturing.

• Manufacturing – Our manufacturing services encompass the production of all components required for Antibody-Drug Conjugates (ADCs), including the manufacture of antibody intermediates specifically customized for ADCs, as well as the production of payload-linkers, ADC drug substances, and ADC drug products at various scales and in various forms to meet customers’ clinical and commercialization needs, in compliance with the requirements of the FDA, the National Medical Products Administration (NMPA), the European Medicines Agency (EMA), and other regulatory authorities.

According to Frost & Sullivan, by the end of 2022, the global outsourcing rate for antibody-drug conjugate (ADC) discovery, development, and manufacturing had reached approximately 70%, surpassing the 34% observed outsourcing rate for biologics overall.Among the 15 ADC drugs approved and marketed globally (as of June 2023), 13 rely on outsourced supply services, with only Pfizer opting to build its own ADC industry chain; most of these companies outsource to multiple contract development and manufacturing organizations (CDMOs).

Meanwhile, there is robust demand for numerous antibody-drug conjugate (ADC) pipelines in both clinical and preclinical stages. Since 2018, 15 to 57 ADC candidates have entered clinical trials annually. As of June 2023, more than 500 clinical trials were underway globally, involving 231 ADC candidates.

In 2022, the global market for ADC outsourcing services was valued at $1.5 billion, with a compound annual growth rate (CAGR) of 34.5% from 2018 to 2022. This growth exceeded the CAGR of 21.8% for the overall biologics outsourcing services market during the same period. The global ADC outsourcing services market is projected to expand significantly, reaching $11 billion by 2030, with a CAGR of 28.4% from 2022 to 2030.

As China’s first ADC outsourcing service provider to go public, WuXi XDC has adopted the strategy of “Empower, Follow, and Win the Molecule,” not only growing alongside existing clients by providing services from the early stages of the product development cycle but also acquiring new customers through its involvement in the bioconjugate drug development process.

As of June 30, 2020, 2021, 2022, and 2023, WuXi XDC had a total of 9, 12, 24, and 30 ADC candidates, respectively, advancing from the discovery stage to the CMC development stage. As of June 30, 2023, WuXi XDC had secured all ADC development contracts in China for ADC candidates that filed dual INDs and/or BLAs in both China and the United States. Meanwhile, among the ten Chinese companies that out-licensed their ADC pipelines overseas since 2022, eight were its clients.

The manufacturing process of ADC drugs involves the toxin-linker, antibody, and ADC drug substance, requiring the integration of multiple operational modules for small molecules, large molecules, and highly potent compounds. This implies that CDMOs must possess expertise in diverse complex processes and overcome specific technical barriers.

As ADC drug development becomes increasingly competitive, intensified innovation in payloads and linkers is continuously raising technical barriers, such as those associated with synthetic processes. In the past, ADC companies typically collaborated with multiple CDMO suppliers providing services for antibodies, toxin-linkers, and bioconjugation, with a complete ADC production chain often involving suppliers across multiple countries. This significantly prolonged the cycles for design, R&D, manufacturing, and supply. Such fragmentation and lengthy processes not only escalated risks but also imposed higher demands on quality control and supply chain management.

Industry insiders point out that one-stop, end-to-end outsourcing services are becoming the current trend for CDMO companies in China's ADC sector.From PORTON’s large-molecule R&D center—its ADC commercialization platform, empowered by WuXi XDC, and its CRDMO strategy of following and winning molecules—to Asymchem’s “new engine for one-stop GXP services” and Pharmaron’s integrated ADC R&D services.

Small-molecule CDMOs, which specialize in chemical reactions, hold an advantage in ADC development due to their accumulated expertise in linker and payload technologies, yet they remain latecomers in the antibody and conjugation segments. Conversely, large-molecule CDMOs focused on antibodies face shortcomings in the chemical aspects. CDMOs transformed from ADC biotechs possess comprehensive industrial platforms and experience, but they are perpetually shadowed by suspicions of competitive conflicts among peers. Establishing a one-stop, end-to-end ADC outsourcing service is more challenging than anticipated. After all, WuXi XDC’s unique convergence of favorable timing, geographical advantages, and human resources remains unparalleled in China.

According to the prospectus of WuXi XDC, its global market share stands at 9.8%, while its market share in China reaches 69.5%. Meanwhile, biotech companies transitioning into CDMOs, such as Allist Pharmaceuticals, MabPlex, and Chembio Therapeutics, have entered the field. Industry insiders revealed that Pharmaron, Auscan Biologics, and ZhiXiang Biologics are also considering entering the ADC sector.

The War Among ADC CDMOs Has Not Yet Reached a Fever Pitch.

References:

WuXi XDC Co., Ltd. Draft Filing (Post-Hearing Information Pack)

DeepBlue View: “Striking Gold in ADCs: The CDMO Opportunity”

https://mp.weixin.qq.com/s/6Cjpo1Wd7q5rciTDjx3mLg

https://ljxq.cq.gov.cn/zwgk_199/jczwgk_172875/hjbh_172927/ljxqlm_273979/ljxqlm_273986/202401/t20240110_12807477.html