Johnson & Johnson is adding to Big Pharma’s love for antibody drug conjugates with a $2 billion cash deal to swoop up Ambrx Biopharma.

The deal was announced Monday morning as the annual JP Morgan Healthcare Conference gets underway alongside two other acquisitions: Merck-Harpoon and Novartis-Calypso. The trio of acquisitions follows a deal-heavy December as the industry expects Big Pharma to start spending its trove of cash to shore up its pipelines as end-of-decade patent expirations loom.

Nearly every large drugmaker has made a foray into, or return to, ADCs in the past few quarters as the fine-tuned and more targeted chemotherapy approach finds its footing with recent approvals, blockbuster moves and standing ovations at oncology research conferences. Merck, Bristol Myers, Roche, BioNTech and others have inked multiple licensing and collaboration deals to nab rights to ADCs.

The $28 per share offer represents about double Ambrx’s Friday closing price. The San Diego drugmaker’s shares $AMAM were up about 28% before Monday’s opening bell on the buyout news, to $17.56 apiece. The companies expect the deal to close in the first half of this year.

J&J, which has inked ADC pacts in the past with the likes of Mersana Therapeutics, will get its hands on clinical assets like ARX517, a PSMA-targeting ADC for metastatic castration-resistant prostate cancer; HER2-targeted ARX788 for metastatic HER2+ breast cancer; and CD-70-targeted ARX305 for renal cell carcinoma.

The HER2 field has received a great amount of R&D interest with the breakout success of Daiichi Sankyo’s AstraZeneca-partnered ADC Enhertu. About 15 HER2-targeted ADCs are in clinical development, according to a recent report from Leerink. ARX305’s CD70 territory is less explored, with only two in the clinic, per the report.

“Ambrx’s ADC technology offers unique advantages in the conjugation of stable antibodies and cytotoxic linker payloads, which results in engineered ADCs that effectively kill cancer cells and limit toxicities,” said Yusri Elsayed, J&J’s global therapeutic area head of oncology, in a statement.

The Big Pharma has a large presence in oncology with its blood cancer cell therapy Carvykti with Legend Biotech and its AbbVie-allied Imbruvica, as well as multiple other recently approved hematologic medicines like Talvey and Tecvayli on top of others still in development. It’s all part of J&J’s ambition for 20 new drugs.

Ambrx was formed in 2003 based on research out of The Scripps Research Institute.

The deal marks J&J’s first full-on biotech acquisition in recent years, as most of the healthcare giant’s moves have been in medtech, with its $16.6 billion Abiomed deal in 2022 and $400 million upfront Larimar deal last November. Last month, it said it’d buy a retinal disease gene therapy from MeiraGTx for $65 million upfront.

Author: Kyle LaHucik

Publication: Endpoint News

Link: #JPM24: J&J makes $2B push into ADCs with Ambrx buyout in oncology deal spree – Endpoints News (endpts.com)