According to Mehta Partners, first-generation monoclonal antibody (MAb)-based drugs are the cornerstone of treatment of major diseases such as rheumatoid arthritis (RA), multiple sclerosis (MS), cancers and age-related macular degeneration (AMD). As the patents for these first-generation MAbs are set to expire from 2014 onwards, Mehta focuses on companies with novel technology platforms developing second-generation MAbs to deliver ‘better biologics’ (also called ‘biobetters’).

Mehta Partners states that second-generation targeted therapies using MAbs could offer drugs for novel targets, but also existing validated targets with a better efficacy/safety profile and/or improved versions of existing blockbusters.

“This ‘Ever Greening Effort’ has the potential to deliver molecules with a higher therapeutic index enabling optimally effective treatment to be achieved at a dose below the maximal tolerated dose, thereby minimising the adverse-event profile of the drug”, they write.

Mehta analysed two maturing platforms, which yielded several attractive RS investment opportunities, as discussed in its report ‘Ever Greening’ To Remain Evergreen: Evolution of Antibody Technology to Drive M&A.

These opportunities are highlighted in company-specific capsules:

• Second-generation MAbs: Ablynx, Morphosys, Trubion, and Micromet;

• Antibody drug conjugation (ADC): Seattle Genetics, Immunomedics.

Mehta expects the innovative technology platforms used to generate new MAbs to accelerate mergers and acquisitions (M&A) and attract robust collaborations, as some of these companies are at their inflection point as their products enter proof-of-concept (POC)/pivotal clinical trials.

Mehta states that collectively, all companies in the report offer a long-term investment opportunity, as the technology platforms used for generating these products are being validated by multiple partners. “Positive data could trigger M&A at a premium, like Abgenix, CAT, or Medarex”, they write.

Reference:

Subita Srimal. Developing “Better Biologics” through "Evergreening" = High Value Proposition. Mehta Perspectives. 2010 January 6.