Pharmaceutical companies believe that direct radiation of tumors will be the next big breakthrough in the fight against cancer.
Bristol-Myers Squibb, AstraZeneca, Eli Lilly and other pharmaceutical companies have spent around $10 billion on acquisitions or partnerships with radiopharmaceutical manufacturers, buying up smaller upstarts to gain access to a technology that, while still in its infancy, could treat numerous types of cancer.
“Any large company that is in oncology or for which oncology is an important therapeutic category will likely need to have a presence in this space in one way or another,” said Michael Schmidt, an analyst at Guggenheim Securities.
Two radiopharmaceuticals from Novartis are already available. A dozen more are in development, Schmidt said. The total market potential is difficult to estimate because there are so many possible types of cancer that could be treated with the drugs, he said.
Schmidt predicts that the category could generate sales of less than $5 billion if the technology remains limited to treating some cancers such as prostate cancer and neuroendocrine tumors, up to ten billion if it turns out that effective against more types of cancer.
The drugs work by attaching radioactive material to a target molecule that looks for and binds to a specific marker on cancer cells. The trick is finding markers that are present on cancer cells but not on healthy cells. This allows the treatment to irradiate the cancer cells and protect the rest of the body from the extent of the Damage associated with many cancer drugs.
It has taken some time to prove that the technology is both scientifically and financially viable. The first radiopharmaceuticals were approved in the early 2000s, but interest from major pharmaceutical companies has only recently increased.
An employee works at the NSA radiopharmaceutical plant in Aedea, Italy.
Franco Origlia |
Producing the drugs requires a complex manufacturing process and logistics, two major drawbacks. Radioactive material decays quickly, so patients must be treated within days of the drug being manufactured.
Pharmaceutical companies have proven that they can develop complex, time-critical drugs such as CAR-T for blood cancer or gene therapies for rare diseases. Then Novartis showed that these strategies can also be applied to radiopharmaceuticals.
The Swiss pharmaceutical giant received approval in 2018 for a radiopharmaceutical called Lutathera for a rare type of cancer of the pancreas and gastrointestinal tract. In 2022, Novartis received another approval for the prostate cancer drug Pluvicto. Together, the drugs are expected to generate sales of about $4 billion by 2027, according to consensus estimates from FactSet.
These successes sparked broader interest in radiopharmaceuticals.
“We put all this together and thought we should do something, we need to do business here,” said Jacob Van Naarden, president of Eli Lilly's oncology business.
Lilly acquired radiopharmaceutical maker Point Biopharma last year for about $1.4 billion and also formed some partnerships with companies developing the drugs. One of the most important factors in Lilly's initial search was whether the companies were willing to make the drugs, Van Naarden said. Radiopharmaceuticals are not easy to make, and Lilly wanted to make sure that an initial acquisition would allow it to produce the drugs itself rather than outsourcing the work.
Manufacturing was also a key component in Bristol Myers Squibb's $4.1 billion acquisition of RayzeBio, said Ben Hickey, RayzeBio's president. At the time of the acquisition, RayzeBio was nearing completion of a factory in Indiana and had secured its own supply of radioactive material needed to develop the experimental drugs in its pipeline.
“It was obviously one of the criteria to make sure we were in control of our own destiny,” Hickey said.
Novartis has shown why this is so important, as the company initially struggled to produce enough doses of Pluvicto. The company is currently investing more than $300 million to open and expand radiopharmaceutical manufacturing facilities in the United States to produce the drug and deliver it quickly to patients. The company is now able to meet demand for the drug, which requires careful planning of distribution.
Each dose is equipped with a GPS tracker to ensure it gets to the right patient at the right time, said Victor Bulto, president of Novartis' U.S. business. Novartis is delivering the doses to destinations within nine hours of the factory to minimize the risk of disruption from storms, Bulto said.
Doctors and patients on the receiving side also sense the complexity.
The Bassett Healthcare Network in upstate New York had to renew its medical license to handle radioactive material before it could administer Lutathera and Pluvicto, said Dr. Timothy Korytko, Bassett's chief radiation oncologist. The drugs, which are given intravenously, must be administered by a certified specialist.
It can take several weeks from the prescription of a radiopharmaceutical to the actual administration. With Pluvicto, patients come every six weeks for up to six treatments.
Radiopharmaceuticals begin to decay after they are produced and therefore only have a shelf life of a few days.
Ronald Coy and his wife Sharon.
Courtesy of Ronald Coy
Ronald Coy knows how important it is to keep his appointments. Coy, a retired firefighter who has been battling prostate cancer since 2015, drives more than an hour through upstate New York to receive Pluvicto in Bassett. Coy hasn't had any problems so far, but he's worried a snowstorm could jeopardize one of his appointments between now and the end of January.
“Hopefully there won't be any major storms by then, and if there are, it will be a week before I leave,” Coy said.
When Coy returns home from treatment, he has to take precautions, such as staying away from his wife, Sharon, so she is not exposed to radiation. He drinks a lot of water to flush excess radiation from his body. He doesn't mind a little inconvenience for a few days when it comes to fighting his cancer.
For Novartis, the investment in infrastructure to manufacture and distribute radiopharmaceuticals would be worthwhile for Pluvicto and Lutathera alone, Bulto said. But it is even more attractive because of the potential to treat more types of cancer. He cites Novartis' work on developing a drug for a marker This can be demonstrated in 28 different tumors, including breast, lung and pancreatic cancer.
“If we could apply all the knowledge we have gained from manufacturing and distribution to patients with lung cancer and breast cancer and potentially demonstrate these significant levels of efficacy and tolerability, we would potentially have a very big impact on cancer treatment. And of course a very viable business as well,” he said.
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At this point, the question is still open. The field is still in its infancy, executives say, and the effectiveness of radiopharmaceuticals beyond the cancers they currently treat has yet to be proven.
“If we can expand the target and tumor type repertoire, this could be a very large class of drugs,” said Eli Lilly's Van Naarden, adding that it's hard to say at this point whether the class will be “super important” or “just important.”
Bristol Myers Squibb sees an opportunity in combining radiopharmaceuticals with existing cancer drugs such as immunotherapies, says Robert Plenge, head of research at Bristol. AstraZeneca shares this vision.
AstraZeneca spent $2 billion to acquire Fusion Pharmaceuticals earlier this year. Susan Galbraith, the company's executive vice president of oncology research and development, points to existing treatment regimens that combine immunotherapy with radiation.
The size of AstraZeneca's radiopharmaceutical portfolio will ultimately depend on its initial prostate cancer program and other, as-yet-undisclosed targets that are already in the works, Galbraith said, but she believes the technology will become an important part of cancer medicines over the next decade.
It could take years to realize the technology's true potential, as many experimental drugs are still in early development. One remaining question is whether other radiopharmaceuticals are as safe and well-tolerated as Novartis' Pluvicto, particularly those that use other types of radioactive materials, Guggenheim analyst Schmidt said.
Ronald Coy has been battling prostate cancer for nearly 10 years. Earlier this year, he started taking Novartis' Pluvicto.
Courtesy of Ronald Coy
Big pharmaceutical companies aren't waiting to get in the race. Stories like Coy's give them confidence that the work will pay off.
Coy has undergone numerous treatments over nearly 10 years for prostate cancer that had spread to his bones. After just one Pluvicto treatment earlier this year, blood tests showed that Coy's cancer levels had dropped significantly.
Not everyone responds so well to Pluvicto, and things can always change for Coy. But for now, Coy is happy that he is part of the group that responds well to Pluvicto. That makes the trips and precautions worth it to him.
“I am very happy every day that – as it stands now – I am part of the third where this works really well for me,” he said.
— CNBC's Leanne Miller contributed to this report.
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