Study: Deal terms getting richer as pharmas stockpile antibody tech

There's nothing new about antibody technology. The field has been growing for years now. But a new study from Deloitte Recap crunched the numbers and found that a group of key players are still actively stockpiling all the most promising antibody work they can find on the planet. And there's no sign that the antibody race is even close to the finish line.

"The antibody technology field is not saturated yet," says Jennifer Doyle, the Deloitte Recap senior analyst who authored the new report. "Companies are stockpiling antibody technology as quickly as they can."

Looking over the deals done in the last decade, Deloitte Recap found that cancer is the dominant disease in the antibody arena, accounting for slightly more than half of the mAb deals they could track. Autoimmune and inflammatory diseases followed at 16% with infectious diseases (14%) and CNS (5%) accounting for another chunk.

But the numbers took an odd twist after that stage. Deloitte Recap concluded that the median upfront cash and equity available for autoimmune and CNS programs was several times higher than cancer deals commanded. Upfront cash and equity totaled about $15 million per autoimmune/CNS deal versus a median of $5 million for cancer deals.

"Autoimmune and inflammatory and CNS have the richest deals; that was a little surprising," says Doyle. Maybe, she adds, that's because these other disease arenas have a broader market potential, with numerous label expansions possible. And there's no doubt that overall market potential is driving richer deal terms.

"Because of the price point of antibodies," says Doyle, "once approved they can be very successful in treating diseases with a significant unmet need." And as Deloitte spelled out in its first analysis of the antibody market, "after you get to market the sales are huge."

"All big pharmas and biotechs wanted to buy the latest technologies in the race to get the next blockbuster," adds Doyle. "And some targets are notoriously difficult."

Alzheimer's, for example, is one of the most difficult targets in the drug discovery field, and one of the hottest in terms of new antibody deals. Single-domain antibodies, like Ablynx's Nanobodies, have also been particularly attractive to partners.

Most of Deloitte's biotech customers are looking for an indication of where the sweet spot lies for doing a deal. And the answer for antibodies is Phase II. Phase III antibody deals tend to be more region-specific, she says, which naturally limits their potential.

"The highest deal terms are in Phase II," says the analyst. "And certainly the higher risk is in Phase II. If you try to go to Phase III there's a substantial risk that you won't get there. The sweet spot is at II."

There are a broad array of pharma companies focused on it. Deloitte Recap found that the top 21 buyers have been building their portfolios of mAb products, with Roche, AstraZeneca ($AZN), Bristol-Myers Squibb ($BMY) and Novartis ($NVS) in-licensing or simply buying tech that spans all 7 defined mAb technology categories.

The biggest buyers: Roche is number one with 10.2% of the tech deals (38 of 373); Pfizer came in second, with 6.2% (23 of 373); AstraZeneca was third, with 5.6% (21 of 373), and Merck came in at fourth with 5.4% (20 of 373).

Doyle will be discussing the results of the study at a webinar with BioWorld today at 1 p.m. EST.

- here's a link to the report