Why is pharma going gaga for radiopharmaceuticals?

The pharma industry is always on the lookout for new therapeutic angles that might prove to be a competitive advantage. Ben Hargreaves outlines how oncology is a priority for research, and how radiopharmaceuticals are one of the major new interest areas.

Radiopharmaceuticals are radioisotopes that emit radiation, allowing for their precision use to destroy cancer cells. The radioisotopes are bound to biological molecules that are able to target specific organs, tissue, or cells within the human body. This type of therapy has actually been around since 1941, but in recent years they have drawn more interest due to their increasing sophistication.

This has led to far more capital being invested in the area, through initial public offerings (IPOs), venture capital, and through big pharma snapping up promising radiopharmaceuticals through M&A activity. It is the big pharma acquisitions in 2023 that are going some way to drawing further interest in the area, as the industry predicts that this type of therapy could be one that offers major return on investment in the years to come.

Targeting cancer

The main driver for the interest in radiopharmaceuticals is the importance of the oncology market to the pharma industry. According to Statista, by 2027, worldwide spend on oncology will rise to $377 billion, more than double the next largest therapy area of immunology and $177 billion expenditure. Meanwhile, in 2022, IQVIA stated that oncology trials starts were at a historically high level, up 22% from even 2018, such is the interest in developing assets in the area. 

The drive to bolster the pipeline of oncology assets has seen a range of new treatment modalities be adopted in the therapeutic area. Recent years have seen the rise of CAR-Ts, ADCs, checkpoint inhibitors, and various other innovations.

Are RPTs the next big therapeutic modality?

Radiopharmaceutical therapies (RPT) play directly into this trend, as they represent a different approach from existing treatments. The drugs have long played a role in diagnostics, but now the same capabilities that make them useful in this area are being transferred to therapy. So it was that pharmaphorum spoke to Steffen Schuster, CEO of ITM, to learn more about why the treatments are so effective in oncology.

Schuster explained that, “injected in vivo, radiopharmaceuticals accumulate directly in the affected organ or tumour, largely sparing surrounding healthy tissue. The high specificity and precise localisation of radiopharmaceutical diagnostics and therapeutics have the potential to detect and target even the smallest tissue changes, such as tumour metastases. Precise diagnostic and therapeutic radiopharmaceuticals can thus address specific tumours in a highly effective manner. This enables treatment options where other therapies are limited or even fail.”

A further benefit that Schuster mentioned was the ability to use RPTs in a ‘theranostic approach’, whereby the treatment is used in both a diagnostic and therapeutic manner, at the same time.

One big pharma company that recognised the potential of the area early was Novartis. The company acquired Endocyte in 2018 to gain access to its radiopharmaceutical, now known as Pluvicto (lutetium vipivotide tetraxetan). The product is used in the treatment of prostate cancer and managed full-year 2023 sales of $980 million, up 53% from Q4 2022. This represented the product’s first full year on the market, and reaching close to blockbuster status will be seen as a validation of the potential for radiopharmaceuticals to generate strong commercial return.

Investment heats up

The commercial interest in the area is now beginning to take-off, with a number of big pharma companies dipping their toes into the market during 2023. Following Novartis’ lead, both Eli Lilly and Bristol Myers Squibb have invested into establishing a footprint in radiopharmaceuticals.

The larger of the two deals was made by BMS, with a deal sealed right at the end of 2023 to acquire RayzeBio for $4.1 billion. RayzeBio’s pipeline includes multiple RPT prospects, including its RYZ101 asset that is currently going through both phase 3 and phase 2 trials for different cancers, as well as other early stage candidates.

Lilly’s $1.4 billion deal was agreed in October 2023 to purchase Point Biopharma. Similarly, Point has a treatment that was going through phase 3 trials at the time of the arrangement, as the company investigated PNT2002 for the treatment of metastatic-castration resistant prostate cancer. The results from the trial came back in December, and proved to be positive for the treatment. Shortly after the data release, the deal between the two companies was completed.

When asked why this commercial interest is arriving now, Schuster commented: “Despite the immense progress made in oncology, cancer is still a leading cause of death worldwide due to metastases often remaining undetected and/or impossible to target with current therapies. Precise diagnoses and indication-tailored treatment options are therefore key to improving outcomes for patients. This is where RPT comes into play and why we believe it is rapidly gaining traction in terms of funding and M&A interest. RPT is quickly rising as a promising new treatment regimen transforming the precision oncology space with its unique ability to precisely target and destroy tumour cells.”

Fuel to the fire

As mentioned by Schuster, it is not just M&A activity that is increasing, there is also more funding flowing into those companies that are developing RPTs. To begin the year, Ratio Therapeutics closed a $50 million Series B financing round, receiving backing from BMS in the process.

Only a few months ago, Nucleus RadioPharma also managed to oversubscribe its Series A financing to raise $56 million. The company plans to use the funds to create a network of manufacturing facilities in the US, as part of its expansion project.

The finance flowing into the area is notable because of how scarce financing for biotechs has become in recent years. The vote of confidence in RPT-focused biotechs speaks for the wider therapeutic area; GlobalData conducted research that found a 550% increase in venture capital deals between 2017 and 2023 focused on RPTs.

Ophelia Chan, business fundamentals analyst at GlobalData concluded: “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.”