Intrigued by Novartis and Lilly deals, investors pour money into radiopharmaceuticals

All of a sudden, radiopharmaceuticals are the hottest game in town—outside of antibody drug conjugates, of course. GlobalData reports that venture capital deals in the space have grown 550% to $408 million this year.

This compares to $63 million in 2017, according to a new report from the analytics firm.

Leading the trend are Novartis and Eli Lilly, both pharmas that have splashed down significant cash and resources into the space. Novartis, however, has made radiopharmaceuticals a pillar of its oncology portfolio. The Swiss pharma has two already approved therapies in Lutathera and Pluvicto.

Lilly, meanwhile, has made more recent moves. In October, the pharma offered $1.4 billion for Point Biopharma Global, a biotech focused on radioligand therapies with in-house manufacturing capabilities. The deal has, however, run into trouble recently, with Point investors withholding their shares to wait for an imminent phase 3 readout.

Lilly’s Jacob Van Naarden, president of the Big Pharma’s oncology unit Loxo@Lilly, said when the deal was announced that Point would just be the beginning of the company’s moves into radiopharmaceuticals.

Point is not the only egg Lilly has in its basket, either. The company also contributed to Mariana Oncology’s $175 million series B in October. The biotech is working on advancing MC-339 into clinical trials for small cell lung cancer.

All of this Big Pharma activity is helping to generate buzz in the investor space, according to GlobalData’s Ophelia Chan, business fundamentals analyst.

“A growing number of companies engaged in the development of early-stage radiopharmaceutical drugs, particularly those in the discovery and preclinical phases, are experiencing heightened interest from investors,” Chan said.

Venture financing for U.S.-based radiopharmaceutical companies hit $1.2 billion between 2018 and 2023, with the highest fundraisings occurring in 2021 at $262 million. These fundraisings were exclusively within the preclinical and discovery stages of development, GlobalData said. There were eight preclinical deals totaling $565.5 million and six discovery-stage deals at $523 million.

RayzeBio has been one of those companies, raising $160 million in a series D last year before making a run for an IPO in November. The offering ended up being one of the biggest of the year at $311 million—a unicorn in an exceptionally tough market for biotechs. The company’s total fundraising is $418 million since 2020 over four rounds. Lead asset RYZ101 is in phase 3 for neuroendocrine gastroenteropancreatic tumors.

ARTBIO has also generated interest. Just six months after launching, the radiopharmaceutical biotech scored a $90 million series A, announced Thursday. The company's total fundraising now sits at $113 million and will support what it touted as a simpler benchtop format for manufacturing. 

Getting into radiopharmceuticals is not as easy, as Novartis’ Jeff Legos, Ph.D., underscored to Fierce Biotech at the European Society of Medical Oncology (ESMO) Congress in Madrid in October. The Big Pharma has dealt with supply challenges and overwhelming demand after approval of its therapies. “We’ve had to overcome that,” he said.

GlobalData’s Chan said that the manufacturing challenges don’t seem to have fazed companies from getting involved.

“Despite facing challenges such as supply chain issues related to the radioisotopes’ short half-life, selection of the appropriate isotope, efficacy, and logistical concerns in transportation, the expansion of portfolios and increased clinical trials by radiopharmaceutical companies are expected to fuel the growing investor interest,” Chan said.

All of these moves still pale in comparison to what’s happening with ADCs. The biggest deal of the year will likely end up being Merck & Co.’s $4 billion upfront play to co-develop Daiichi Sankyo’s next three ADC prospects. Lilly also got in on the ADC action with the acquisition of Mablink Bioscience in October. AbbVie just bought Elahere maker ImmunoGen for $10.1 billion while Bristol Myers Squibb and GSK have also made deals for ADCs.

But radiotherapeutics represent another exciting emerging modality that will certainly dominate oncology news in the years to come.