Oncology R&D

China has rapidly emerged as a global force in oncology, contributing a significant share of next-generation immunotherapies to the cancer pipeline, including a standout candidate that could rival Merck & Co.’s megablockbuster Keytruda. 

Chinese drugs account for 51% of antibody-drug conjugates in development, 48% of bispecific monoclonal antibodies and 48% of CAR-T therapies, according to Mark Lansdell, director of custom intelligence at Evaluate. 

Western drugmakers have taken notice of the country’s advances and dealmaking is booming. In 2023 and 2024, approximately 30% of molecules in-licensed by Big Pharma companies came from China, Lansdell said. The agreements include major deals by companies such as Merck and Novartis. 

“That’s up from 0% just six years prior,” he noted. 

Upcoming U.S. trial results for ivonescimab, developed by Chinese biopharma Akeso and licensed by U.S.-based Summit Therapeutics, may mark a pivotal moment for China’s trajectory in oncology. 

The drug, already approved in China, is a bispecific antibody that targets both PD-1 and vascular endothelial growth factor (VEGF), a protein that promotes blood vessel growth and helps shield tumors from the immune system. It significantly outperformed Keytruda in a head-to-head phase 3 Chinese trial for non-small cell lung cancer, nearly doubling progression-free survival. Overall survival, however, did not show a statistically significant improvement because the data were immature and there were not enough patients in the study to draw firm conclusions. 

Keytruda, a PD-1 inhibitor, has redefined treatment standards across several cancers, and if U.S. trials, including one with an anticipated December 2025 completion date, confirm the result of Chinese trials, it could provide a big boost to the country’s oncology efforts, Lansdell said. The drug’s potential has already sparked a flurry of deals as companies look to license their own checkpoint inhibitors that also target VEGF. 

“If results don’t replicate, I think that will have a dampening effect,” Lansdell said. 

An emerging force

Chinese firms have evolved from their earlier role as support staff for Western pharma companies. In the late 1990s and early 2000s, pharmas began enlisting Chinese companies to carry out some of the more mundane aspects of drug development while retaining control over molecule design and biological pathway selection, Lansdell said. 

“It was only a matter of time before those skilled [Chinese] scientists started to think, ‘Why don't we start our own drug discovery business rather than always acting as a service for Western companies?’” he said.

Most Chinese companies aren’t pursuing game-changing innovations but are primarily focused on improving or adapting existing drug approaches.

“Given enough time, my expectation is that China will start to explore novel biology and get better at discovering new ways to target diseases,” Lansdell said. “And that will be an interesting challenge for the West.”

U.S. companies are increasingly recognizing the value of licensing drugs from China, where trials are cheaper and get started more quickly due to the country’s faster enrollment rates. 

“Seventy-five percent of all China-developed companies are in clinical trials, while in the U.S. only 64% of companies are in the clinic,” Lansdell said. 

China’s drug regulator, the National Medical Products Administration, is a member of the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use, so companies follow internationally standardized human clinical trials practices, Lansdell said. But the FDA remains cautious of single-country trials and prefers broader validation. While data from Chinese trials alone may not have been enough to get a nod from the FDA in the past, mindsets are changing, and they can give pharma companies the confidence to proceed with a deal.

Predicting future growth

Chinese companies without a commercial footprint outside the country have an incentive to make deals. Without U.S.-based partners it’s difficult to break into the global market. While many experts anticipated a further acceleration of 2024’s record-breaking deal making with Chinese companies, Lansdell said this year’s data shows it’s holding steady. 

“The momentum we saw in 2024 has been sustained, but not built upon,” Lansdell said.

It’s not clear if Chinese drug developers will continue to focus on Western markets or pivot to the domestic market, according to Lansdell.

“I think you are going to see more companies decide to develop drugs for their domestic market,” he said. “The excitement about being able to out-license to Western companies will dampen over time because it will reach a saturation point.”

Other questions remain about China’s trajectory. 

“Will they take that next step and start innovating on the biology side? How long will it take? What happens when they start to do that?” Lansdell said.

Dr. Mathai Mammen knows the bar is high for a biotech bringing new drugs to the market. But to stand out among the crowd, the former head of R&D at Johnson & Johnson is steering his current company Parabilis Medicines toward not just difficult biological targets, but those once deemed “undruggable.”

The effort reflects what Mammen has seen over a decades-long career from biotech startups to Big Pharma and back — that differentiation and durability are the key to making it through the gauntlet of tough financial times and fierce competition.

Mammen began his career as co-founder of Theravance, a company that brought five medications to market during his tenure, before leading several disease areas at Merck & Co. and serving as R&D leader at J&J, where he oversaw approvals of blockbusters like Tremfya and Darzalex Faspro. 

With that experience in tow, Mammen recognizes that a slew of biotechs now suffer from a “me-too” problem, joining the fray in pursuit of common targets. As CEO, president and chairman of Parabilis, he’s trying to take biotech back to the drawing board using AI-based prediction and a highly adaptable platform to tackle difficult pathways that haven’t been addressed before. 

Founded in 2015 as FogPharma, the biotech changed its name to Parabilis last year. The company’s lead candidate in phase 1/2 trials inhibits the protein beta-catenin:TCF, which plays a role in many types of cancer, including colorectal — no other therapy has successfully targeted the pathway. Parabilis also has earlier-stage programs targeting drivers of prostate cancer that Mammen said look promising.

Addressing new targets once considered beyond medicine’s capabilities captures an unmet medical need and lets a company lead the sector in a new direction, standing out as a pioneer, Mammen said.

“You should develop your medicine in a unique and effective way that also will be very difficult for others to follow,” Mammen said. “If you pay attention to that and build a culture and a team that knows how to execute and tackle new problems from scratch — combining experience and novel thinking — you’ll have a good company.”

Here, we spoke to Mammen about the state of the biopharma industry, how a tight funding environment could allow certain companies to stand out and why “undruggable” targets offer a window of opportunity for those willing to leap into the unknown.

This interview has been edited for brevity and style.

PHARMAVOICE: From your perspective, what is the state of the pharma industry right now?

DR. MATHAI MAMMEN: Big picture, my perspective begins in 1997, and I’ve seen this industry go up and down — and up and down again. There have been multiple cycles, and I compare our current state to that of the late 90s when we were funding Theravance with an A round of $5 million and a B round of $20 million. Those numbers were a lot smaller than they are now, even in this downturn, so I think there’s plenty of money for good ideas. But what’s happened, especially since 2020, is there has been a proliferation of companies and generalist money — dare I say too many companies, with a dilution of effort. There are only so many good ideas worth pursuing, and so we’re seeing a contraction.

Still, the efficiency of making a medicine is higher because many of the old challenges have been solved. Now, everyone indexes a few things like the ‘most favored nation’ policy or the Inflation Reduction Act, but they sometimes forget there are many things that are extremely favorable right now that outweigh those specific challenges.

With more money in the system and less efficient use of it, where is the wasteful spending right now?

I wouldn’t characterize it as a waste, but there might be many shots on goal for programs that might not make the most important medicine. Eight or 10 companies might be working on something very similar that may even yield good data, but perhaps only one or two are going to make a difference in the market. The outcome is not as independently valuable anymore, because there might not be a buyer.

Another aspect that’s not wasteful necessarily but just damn hard is understanding biology well enough to predict for a novel mechanism. We still have high failure rates because we don’t understand the relationship between a piece of biology and the disease we’re trying to modify. These are very hard problems that are very hard to solve, and the industry is spending efforts along very narrow axes. The problem is too much focus on incremental innovation.

What is fundamentally most important for a biotech when funding is tough to come by?

You need to have confidence that your biology can translate. What distinguishes good drug hunters from the rest is being able to connect the dots in a unique way. You need to have a differentiated medicine — otherwise you’ll get to the end and not have value.

You also need to find a reason that your differentiation is durable. Today, with the volume of innovation from certain regions like China, if you’re building a small molecule or an antibody, engineering is good enough now that others can quickly follow such molecules. The idea itself should be contrarian, to maintain that differentiation over time. At Parabilis, the modality is so challenging to wield that very few people know how to wield it.

You said last year that you want to “break boundaries and crush dogma.” What are the boundaries and dogmas you think are holding biotech back that Parabilis can overcome?

A big one through my career at Theravance, Merck and J&J is that many of the projects or biological targets you might imagine working on, where you’ve gained conviction through genetics or certain phenotypic methods, need to be put to the side because most of it is not actionable given the tools we have. Our toolsets don’t allow us to go after certain kinds of targets. I used to say, ‘Oh, well, there are some targets like that. Too bad.’

Some proteins seem ‘undruggable’ — they have smooth surfaces without cavities to support a small molecule. But what we’ve created at Parabilis are special peptides called ‘Helicons’ that aren’t constrained to one shape and contain thousands of amino acids to bring the full diversity of small molecules to a peptide backbone. That’s a phenomenal opportunity to address interesting pieces of biology that are otherwise not actionable.

What’s the business appeal of aiming at a target that was previously considered “undruggable”?

I’m cautious using that term — some situations seem undruggable, but they just haven’t been drugged yet. The business value, of course, is that you can take on targets no one else can take on, and you can go all the way to clinical proof of concept and beyond. As a business, that’s a big barrier to entry, a wide moat to cross. But it gives a durable advantage to a company, especially in a day and age when there’s a high volume of innovation. In this ‘undruggability’ space, if we’re able to uniquely drug the interface between beta catenin and TCF, for example, that’s a huge deal, and the business advantage is in that durable differentiation.

Antibody-drug conjugates were the topic du jour at this year’s annual meeting of the American Society of Clinical Oncology and the rising trend in cancer care has many in the industry champing at the bit for a piece of the action.

It wasn’t always a sure bet that ADCs would break through the noise, though. The first one approved by the FDA — Mylotarg from Pfizer subsidiary Wyeth for acute leukemia — came to market in 2000. The company voluntarily withdrew the treatment 10 years later due to high liver toxicity, but the concept was strong. 

A cancer-killing drug with an antibody homing device attached has the potential to target specific tumors and keep dosing to a healthier minimum. 

“It’s essentially smart chemo,” said Ethan Smith, therapy area director for oncology at Norstella.

Despite a rough start, researchers have been tearing down the walls in subsequent generations of ADCs. Now, 15 different molecules have been approved by the FDA. The latest, Emrelis from AbbVie, represents a distinct approach to non-small cell lung cancer by targeting the biomarker c-Met.

The scientific and market success of flagship ADCs like Daiichi Sankyo and AstraZeneca’s groundbreaking breast, gastric and lung cancer drug Enhertu is paving the way for the modality to move into earlier lines of therapy for patients, as well as the next generation of targeted cancer medicines.

Being the ‘flag carrier’

While drugmakers have overcome some of the early safety challenges of ADCs, getting the formula to the right balance of cancer-killing effectiveness without dangerous side effects is still tricky.

“One of the biggest challenges of ADCs that hasn’t really gone away is engineering them — you’ve got your [monoclonal antibody], your linker and your payload, and making sure they all work in tandem has been difficult,” Smith said. “It’s only been around the last five years where many of these challenges have been resolved.”

Getting the drug-to-antibody ratio correct and a stabilized linker to deliver a potent payload without too many off-target effects has been the goal for drug developers. And the established target of HER2, present in about one in five instances of breast cancer, helped make Enhertu an important entry, Smith said.

“For most analysts, Enhertu has the highest forecasted revenues and is the one breaking a lot of ground, particularly across breast cancer in nearly every setting,” Smith said. “It is a flag carrier of ADCs.”

One of the compelling aspects of ADCs is you can rechallenge a target, Smith said. For example, a patient taking Roche’s monoclonal antibody Herceptin for a HER2-positive tumor can follow up with Enhertu afterward without encountering resistance to the target — only resistance to the payload, which is another hurdle moving forward.

Enhertu is also proving its worth in earlier stages of care. At ASCO, one of the most talked-about studies was a late-stage trial in which the treatment outperformed chemotherapy as a first-line drug.

Smith called it potentially “practice changing.”

Daiichi Sankyo is now seeking approvals in these earlier-disease positions, Ken Keller, head of the company’s global oncology business unit, said during a PharmaVoice and BioPharma Dive event this year.

“As successful as Enhertu has been so far, the story is still evolving,” Keller said. “Most of our indications early on were in late-stage disease patients who had failed many lines of therapy — we’re at the point in its life now where we have top-line readouts for a number of different studies that are moving Enhertu earlier and earlier in the treatment paradigm.”

And like many roads in oncology, Enhertu’s leads to tie-ups with other successful cancer treatments to squeeze as much utility out of the molecule as possible.

“As we move earlier, almost all of our trials will be in combination with different [immuno-oncology] drugs and … even chemotherapy drugs,” Keller said. “As you move forward, the opportunity to leverage different [mechanisms of action], especially ADCs and IO therapies, that’s going to deliver the best outcomes for patients.”

Pfizer rising

This year’s ASCO meeting has had the biggest ADC showing to date, which has been growing year by year, Smith said.

“Back when ADCs first came into play, that was before we had a lot of the validated targets we have today,” Smith said. “HER2 has been around for a long time and remains an established target, but now we’re seeing much bigger development in the payloads themselves for a next generation of ADCs.”

For example, Pfizer, which acquired early ADC innovator Seagen in 2023, is going after a familiar target in the oncology arena: the PD-(L)1 pathway. Checkpoint inhibitors like Merck & Co.’s Keytruda and Bristol Myers Squibb’s Opdivo, among many others, have blocked the pathway in an immuno-oncology setting, and Pfizer is betting the same tracking mechanism can help an ADC shine.

Pfizer has also teamed up with biotech Summit Therapeutics to combine ADCs with bispecific antibodies in early-stage development.

“There’s not much detail on it, but if that’s something that’s successful, they could be riding not just an ADC wave but the PD-(L)1 and VEGF wave with Summit,” Smith said. “That’s something to look out for.”

Gilead’s Trodelvy also turned heads at ASCO with a study in first-line triple-negative breast cancer along with Keytruda. Providing a chemo-free treatment as a first option for patients would address a highly unmet-need population, Smith said.

Leading a trend

Being an early adopter of an oncology trend like ADCs isn’t always an easy feat to pull off for drugmakers. While data is king, getting a foot in the door requires a first step into the unknown, Smith said.

“The proof in these trends is always the data, but companies can’t wait that long — the later someone is to a licensing deal, the more they have to pay,” Smith said. “In truth, a lot of these licensing deals happen on faith, and perhaps some desperation.”

And the industry doesn’t always move on the right trends. A rush on Lag3 blockades, for instance, brought on the approval of Bristol Myers Squibb’s melanoma drug Opdualag in 2022, but a series of trial failures and axed programs from pharma giants like Merck and Roche left a sour taste.

Even though it takes faith to enter the arena, data will still always be the true test of a modality’s lasting power, Smith said.

“A trend is only confirmed when you’ve got that threshold of data — even if you see a bunch of companies licensing a new technology, that doesn’t validate it,” Smith said. “Perhaps it’s just pessimism, but until you have that validated data, it’s best to stay away from the noise of licensing activity.”

ADCs are beginning to cross that threshold, he said. Between established leaders and a slate of novel targets on the way, some hurdles remain, but the trend is shaping up to be a game changer.

Treatment options and survival rates for patients with the world’s deadliest cancers have skyrocketed over the course of decades with much credit to the pharma and biotech industry. But how do drugmakers reach the critical next step in innovation?

That’s not a question easily answered by even the top oncology companies as they seek opportunities for game-changing treatments in a sea of incremental efforts. Although arguments can be made that “me-too drugs” offer benefits for patients, pharma giants need to stand out with new modalities or breakthroughs to make a difference, said Mark Wildgust, vice president of oncology global medical affairs at Johnson & Johnson Innovative Medicine.

Wilgust pointed to immunotherapy as an area with untapped potential following the previous decade’s outpouring of checkpoint inhibitors. While PD-1s like Merck & Co.’s Keytruda and Bristol Myers Squibb’s Opdivo, for example, are still amassing new indications and market growth, there’s room for new molecules that address unmet medical need, he said.

“How do you innovate where innovation didn’t exist before? And how do you innovate on top of innovation?” Wildgust asked during the annual meeting of the American Society of Clinical Oncologists. “When you look today at oncology as a whole, immunotherapy is at the forefront of where we’re going to change cancer therapy from incremental change to fundamental change.”

For J&J and others in oncology, eradicating cancer — once a pie-in-the-sky ambition — is now a more realistic possibility. But for a therapeutic area with so many distinct diseases, that effort will require new approaches and a wide range of scientific expertise.

“I have to be super careful when I say this, but we are taking steps closer to a progression-free cure every day,” Wildgust said. “How do you make [immunotherapies] better? You learn and understand the biology, and you innovate beyond that.”

Pushing for cures that ‘sound like science fiction’

Immunotherapies for oncology come in many forms, all designed to make cancer cells more vulnerable to a patient’s immune system. And as immunotherapeutic approaches like cell therapy mature, they’re generating enthusiasm in long-running studies that showcase their durability over time.

J&J’s Carvykti, a CAR-T cell therapy with a single infusion, achieved a “transformative” five-year trajectory in patients with returning multiple myeloma, Wildgust pointed out. A third of patients in the follow-up trial did not see their disease progress during those five years — historically, patients experience less than six months of progression-free survival and overall survival of only about one year.

That kind of advance deserves to be shouted from the rooftops, Wildgust said, so oncologists and patients can benefit.

“We need to help communicate that information so that community oncologists go, ‘Wow, it’s changing the outcome,’” Wildgust said. “It’s a combination of unlocking the barriers to get our medicines used where the patients are and cutting through the chatter to share that science in an unequivocal way.”

At a company like J&J, which has several hundred irons in the fire, there are always more drugs on the horizon to push the boundaries of cancer treatments. 

While Carvykti is considered one of the best in its class of multiple myeloma treatments, it wasn’t the first to market — Bristol Myers’ Abecma holds that title. But J&J is gunning to be first in other areas with early-stage prospects.

At ASCO, the pharma giant presented first-in-human data in prostate cancer with a bispecific antibody called pasritamig targeting a new antigen called KLK2 combined with a CD3-targeting antibody.

“This is one of the safest bispecifics we have ever seen,” Wildgust said. “What we want to do is to develop medicines that give patients more time and more hope — and part of that is looking to not just incrementally change outcomes, but to get in front of cancer and change the biology.”

With each new advance in these various modalities, ultimately the goal of J&J’s pipeline is to eradicate cancer in its entirety. What does that look like?

“It sounds like science fiction, but it’s becoming reality where we can treat patients, and intercept and stop patients from ever having the disease,” Wildgust said. “It’s a new way of thinking.”

Collaborations that create ‘modalities of the future’

Japan’s Astellas Pharma is thinking well into the future of drug development for oncology, and chief commercial and medical affairs officer Claus Zieler wants to make sure the company isn’t just focusing on today’s innovations but preparing for the next ones.

“We believe you need to create a portfolio where you have different shots on goal,” Zieler said. “Maybe not all will be successful, but you’re increasing your chances of bringing an innovation to treat patients in a better way in the future.”

While Astellas has oncology treatments like the monoclonal antibody Vyloy for gastric cancer — and potentially pancreatic cancer down the road — the company has also focused on external business development and collaborations to explore the outer reaches of cancer innovation.

Earlier this year, Astellas showcased long-term results from a study of Padcev, an ADC developed with Seagen, now owned by Pfizer. The drug is approved in the U.S. and other markets in combination with Merck’s immunotherapy powerhouse Keytruda for patients with urothelial cancer, and the study demonstrated doubled overall survival and progression-free survival compared to chemotherapy.

These collaborations are a must for oncology advances, Zieler said.

“If you look at innovation in this industry, it is not very centralized — it is not the big players that have all the innovations,” Zieler said. “Because of that decentralized nature, you are almost forced to build partnerships … as a very efficient way of bringing together skill sets in a complex industry.”

Just ahead of this year’s ASCO meeting, Astellas announced it purchased exclusive rights to a new ADC from Evopoint Biosciences targeting a biomarker found in gastric, gastroesophageal and pancreatic cancers.

“We’re partnering a skill set in clinical development with research and innovation in antibody-drug combination technology,” Zieler said. “If you didn’t bring together players who dominate those skills, you would either have a much longer development time — or you would maybe never even get there.”

Zieler sees the same potential in gene and cell therapy as some of Astellas’ future shots on goal, along with expanding its expertise in ADCs.

“It’s a hugely exciting time for us as a company to, on one hand, grow in the market and, on the other hand, build a portfolio of technologies for the future,” Zieler said. “In 10 years, even 20 years, we want to be at a point where we say, ‘OK, we are one of the companies at that forefront, because we built up our know-how.”

With $16.9 billion in sales in 2024 alone, Novo Nordisk has clearly received huge R&D returns from its blockbuster obesity and diabetes drugs Ozempic and Wegovy. And it’s not alone among companies cashing in. 

R&D returns for 2024 rose to 5.9% for the top 20 biopharma companies, up from about 4% the year before and continuing a year-over-year upward climb, according to forecasts in a new Deloitte report. Those returns are part of a larger trend. But although the industry is getting better returns from R&D overall, skyrocketing sales for obesity drugs are also skewing those results.

“A lot of that improvement is specifically driven by a smaller number of high-value, outsized assets, primarily within the obesity category,” said Kevin Dondarski, principal, life sciences R&D strategy leader for Deloitte Consulting.

In fact, GLP-1 therapies are playing such a huge part in driving R&D investment growth, that without them, the average return would drop to 3.8%, according to the report, which analyzed the internal rate of return of late-stage pipelines for the top 20 biopharma companies by R&D spend.

Moreover, the two best-selling drugs last year, Keytruda and Ozempic, both face threats that could jeopardize sales. Keytruda’s patent cliff is looming for Merck & Co., while the IRA’s price negotiations could take a bite out of Ozempic’s profits.

Other companies are up against similar challenges as R&D costs rise and external market factors like tariffs, price negotiations, a looming recession, and sweeping staff cuts at government healthcare agencies create new uncertainties for the industry.

Against these headwinds, ensuring R&D dollars are well spent remains a prime goal for the industry. Here are three strategies that can help pharma along.

Prioritize novel mechanisms of action

When Deloitte analyzed pipeline composition, two key themes emerged.

“Around 40% to 50% of the pipelines are associated with relatively new mechanisms of action,” Dondarski said, meaning they’re either a novel compound or a “fast follower” to another novel compound that had been approved for the first time in the past three years.

And new MOAs accounted for close to 70% of the forecasted value for pharma, Dondarski said.

“There’s a disproportionate amount of forecasted value associated with those programs,” Dondarski said. “It's encouraging, because it shows the market is still valued in placing a premium on innovation.”

Despite these findings, only 32% of biopharma execs in another Deloitte survey said they plan to prioritize transformative innovation over “sustaining” innovation, like me-too drugs.

But the data clearly shows the need to balance surer bets with riskier, but potentially more disruptive and lucrative, development programs.

“One of the things that always comes up in the conversations we have with R&D leaders is the pressure they face to drive near-term growth, but also novel and disruptive innovation,” Dondarski said. “The important part is ensuring that you don't fall too heavily on either side of that coin and ensuring that your portfolio is comprised of opportunities that can drive incremental near-term growth, but also that you’re continuously being disciplined with the investments that are associated to drive that exploration and focus on novel therapeutics.”

Focus on strategic dealmaking

Dealmaking also remains a critical approach to driving R&D returns. Externally sourced assets in the late-stage pipeline rose to 61% in 2024, up from 59% the year before, according to Deloitte.

“There's been such advancements, technologically and scientifically over the last handful of years, whether that's new modalities or new mechanisms of action, it's not surprising to see companies leveraging external deals or acquisitions as a way to accelerate bringing some of that innovation in-house versus trying to do it organically,” Dondarski said.

As companies approach potential deals, Dondarski said many currently have “the desire to swim upstream” and source “innovation earlier in the value chain.”

“That can be in the early clinic to preclinic to even the late-research period,” Dondarski said. “We've seen companies try to shift to an approach of placing more bets that are smaller and earlier in the life cycle, as opposed to trying to make one big deal.”

Overall, Dondarski recommends that companies create novel deal structures that go beyond traditional acquisitions and licensing, such as providing funding for the option to license or acquire an asset down the road.

Play to existing strengths

In both dealmaking and drug development, leveraging your company’s unique capabilities can help boost the chances of R&D success.

“What we have noticed empirically, is that companies that tend to have consistency in the areas that they focus on tend to fare better in the market,” Dondarski said.

He says strategic transactions should bolster existing areas of strength, such as certain therapeutic areas or disease categories, rather than create deals that don’t align with “existing portfolio capabilities” simply for the sake of jumping into something new.

The same is true when it comes to drug development.

Although companies with strong R&D returns “may have a larger focus across different therapeutic areas, there tends to be two or three areas where they really concentrate their efforts,” Dondarski said.

Recurrent and metastatic cancers remain formidable challenges. But a recent radiopharmaceutical revival after years of stagnation could bring new options to the table. And If the drugs deliver on promises to expand into new types of cancer, they’ll unlock a vast market.

Radiopharmaceuticals have been in use since the 1951 approval of radioactive iodine for thyroid conditions. However, safety issues — due to broad toxicity that can harm healthy tissues along with cancerous cells — have limited their applicability. 

Now, technological advances have led to new radiopharmaceuticals that target specific receptors and deliver a precision blast of radiation to tumors while minimizing off-target effects. These developments have reignited interest in the field, driving a spate of acquisitions, including Bristol Myers Squibb’s $4.1 billion RayzeBio acquisition and Eli Lilly’s $1.4 billion purchase of Point Biopharma.

A reviving class

The radiopharmaceutical market is still nascent, said Thijs Spoor, CEO of Perspective Therapeutics, which is testing an alpha-emitting isotope, Pb-212, to target cancer cells with radiation more precisely by using peptides. 

Outside of smaller companies like Perspective, pharma giants have brought several products through the regulatory gauntlet, including Bayer’s Xofigo for prostate cancer, Novartis’s potential blockbuster Pluvicto for prostate cancer, and the neuroendocrine tumor treatment Lutathera, also from Novartis. 

But much of the field’s promise is untapped. 

“I've heard various Big Pharma players say they believe only 7% of all tumors that could be addressed with radiopharmaceuticals are being addressed,” Spoor said. “So there’s an awful lot of opportunity.” 

Oncology targets could include head, neck, gynecologic, genitourinary, gastrointestinal and lung cancers. 

“There are all kinds of applications,” Spoor said. “We haven’t even scratched the surface of what the radiopharmaceuticals can do.”

These treatments are uniquely suited to metastatic disease, but they’re not limited just to cancer that has spread and could fill a void in the oncology market for patients who don’t respond to other options. 

Around a dozen startups are working in the space, including Ratio Therapeutics, Radiopharm Theranostics and Aktis Oncology, and are developing treatments for various cancers. 

Perspective’s formula uses a radioactive imaging agent to detect a target peptide that then drives the attack on the tumor and cancer cells that have spread. 

“With the radiopharmaceuticals, all we have to do is bind to the cell, and then we just blow it up like a mine on the ship,” Spoor said.

An early-stage trial of Perspective’s radiotherapy VMT-a-NET for neuroendocrine tumors showed that the treatment was safe and kept eight of nine patients stable. Six of the nine patients saw their tumors shrink, but only one had a confirmed response. 

The trial drew some fire because it fell short of an earlier investigator-led study, raising questions about its approach and causing a drop in the company’s stock price last fall. However, the results allowed the company to move forward with dose escalation. 

Perspective is also advancing a phase 1/2a treatment for melanoma, which recently gained FDA fast track designation, along with several preclinical programs.

Radiopharmaceuticals still have to meet critical milestones to become primary players in the oncology landscape. One of the most pressing issues for drug developers is building the necessary infrastructure. Many recent market acquisitions have aimed to give these drugs the scaffolding they’ll need to climb into the mainstream, Spoor said. 

“There are a lot of people in the space trying to create isotope supply, trying to create manufacturing capacity,” he said. 

Once these foundational elements are in place, the next challenge will be identifying the most promising candidates. 

“Everyone's looking for a pipeline — they’re looking for drugs with IP they can run with,” Spoor said. 

If the recent crop of companies emerging from stealth is any indication, innovators are doubling down on opportunities to join the juggernaut weight loss market while exploring fresh opportunities in immuno-oncology and pain management. Investors appear eager to back their efforts, pouring hundreds of millions into these new initiatives. The flow of capital reflects overall market trends. 

Global spending on cancer medicine is predicted to increase from $223 billion in 2023 to $409 billion by 2028, for example.

But many of these biotech hopefuls will also face intense competition for market share, particularly in weight loss, where the pipeline contains more than 150 clinical-stage assets, including several in phase 3, according to a recent IQVIA report. 

“As these assets progress through the pipeline, innovators will need to navigate an increasingly crowded field and seek differentiation on multiple dimensions, including efficacy, tolerability, convenience, durability and quality of weight loss that distinguishes between fat vs. lean mass,” the report states.

Here’s a look at some of the most recent startups to emerge from stealth and the innovations they’re bringing to the table. 

The obesity race

Three new startups are advancing drugs that could earn them a cut of the blockbuster GLP-1 market, now on track to become the best-selling drug class in history.

Helicore Biopharma announced itself in January, backed by $65 million in series A financing. The company is looking to build on the success of GLP-1 drugs by adding a second target — the glucose-dependent insulinotropic polypeptide (GIP) receptor — and creating a dual action approach that researchers believe could enhance weight loss. Helicore is also betting that the combination will help it sidestep one of the main drawbacks of GLP-1 drugs: muscle wasting. In preclinical studies, its lead asset, HCR-188, appeared to preferentially target fat over muscle. 

Kailera Therapeutics came out of stealth last year with more than $400 million in investor dollars. It is also focusing on the GIP pathway, with a suite of four clinical and preclinical drugs for weight loss and metabolic conditions that the company acquired from Jiangsu Hengrui Pharmaceuticals. Its lead injectable medication, a GLP-1/GIP combination, is now in phase 2 trials for both obesity and type 2 diabetes. 

Metsera also arrived on the obesity scene last year and hopes to innovate itself ahead of the competition with a portfolio of oral and injectable therapies, including GLP-1s, drugs using alternative non-incretin pathways and combination approaches. The company’s portfolio has attracted investors, garnering $290 million in initial funding and another $215 million in November. Phase 2a results show its lead product was well tolerated and patients in a 12-week trial saw as much as a 20% reduction in their body mass. The study also supported the feasibility of a monthly dosing schedule, which could give it a competitive advantage over current weekly GLP-1 shots.

Rising immuno-oncology contenders

Leveraging the immune system to treat cancers continues to be a major focus for drug developers. 

Ottimo Pharma, headed by former Seagan CEO David Epstein, threw its hat into that market in October with its investigational drug, jankistomig, a PD1-VEGFR2 bifunctional antibody that it hopes can rival Merck’s blockbuster checkpoint inhibitor Keytruda. The drug is a checkpoint inhibitor that also aims to inhibit angiogenesis, the formation of blood vessels that cancers need to grow and spread. Ottimo has been testing the molecule in preclinical trials for the past three years and is looking to file an IND at the end of 2025.

Nuntius Therapeutics also emerged from stealth last year and announced a partnership with Taiho Pharmaceutical to develop mRNA-based cancer immunotherapies. Taiho will use Nuntius’s unique mRNA delivery platform, which helps avoid some of the drawbacks of current mRNA delivery technologies. Its cell-specific peptide dendrimer- and lipid-based nanocarriers appear less likely to trigger an immune reaction and may be more effective at reaching targets outside the liver. The company is also developing mRNA therapeutics that target cancers, and lung and neurodegenerative diseases.

The pain push

In the wake of the opioid epidemic, many companies, including Tris Pharma, SiteOne Therapeutics and Latigo Biotherapeutics, have strived to develop safer pain treatment alternatives. 

The field got a boost when Vertex scored a win in January with its first-in-class non-opioid painkiller Journavx, which analysts predict could top $10 billion in sales. 

And Maxoma, another newcomer advancing an option to manage pain without the addiction risks, came on the scene in February. The company is developing a non-opioid, non-NSAID oral therapy to tackle both acute and chronic pain. The primary ingredient in its candidate is nefopam, a prescription medication already used for pain in some European countries and East Asia. The company announced good safety results from a phase 1 trial, and hopes the drug could eventually become the first triple monoamine re-uptake inhibitor approved for acute pain in the U.S.