Research on AstraZeneca PLC (LSE:AZN) by JP Morgan underlined the scale of the opportunity on offer for the micro-cap life sciences companies developing the next wave of antibody-drug conjugate (ADC) treatments.
ADCs combine antibodies with therapeutic payloads, that can then accurately target diseases such as cancer without the collateral damage that comes with some traditional therapies.
AZ’s two ADC cancer treatments, Enhertu and DS-1062, are predicted to have peak sales of US$20bn, a note penned by analysts at the Wall Street bank predicts.
That will be music to the ears of up-and-coming companies such as AIM-listed BiVictriX Therapeutics PLC (AIM:BVX, OTC:BVTXF), which is using ADC technologies to create targeted drugs that take out cancer cells, leaving healthy cells intact.
The company’s first cab off the rank is a BVX001, which binds an existing antibody-drug conjugate to the company’s ‘fingerprint’ technology to be selective for acute myeloid leukaemia (AML).
BiVictrix chief executive Tiffany Thorn admits AML is a ‘crowded’ area for R&D, but one that has yielded precious few breakthroughs for an illness with an extremely poor prognosis (the five-year survival rate in over-65s is 5%).
The issue is the toxicity that comes with traditional untargeted treatments.
“It's a bold start,” Thorn said in a recent interview with Proactive.
“But, if we can show that we can develop one of these therapeutics that is more selective in this disease indication, it shows the industry that actually there's a real benefit of this approach; because we will have gone for one of the hardest-to-treat cancers.”
On AZ, meanwhile, JP Morgan raised its price target for the shares to £120 from £100. It says it sees "significant future upward revisions [of forecasts], which should help drive a further re-rating in Astra shares”. It rates the stock ‘overweight’. It is the second valuation upgrade in two days. Deutsche Bank raised its target to £11.50.