Targeted cancer drugs may replace chemo for some patients — and drugmakers say they're getting closer

Pharmaceutical companies like AstraZeneca, Daiichi Sankyo, Pfizer, Merck, Gilead, GSK, AbbVie, Bristol Myers Squibb, Eli Lilly, BioNTech, and Johnson & Johnson are heavily investing in antibody-drug conjugates (ADCs) as potential replacements for traditional chemotherapy, with the ADC market projected to reach $31 billion by 2028; recent data presented at the American Society of Clinical Oncology (ASCO) annual meeting highlighted promising results for ADCs like Enhertu, Adcetris, Padcev, and Trodelvy in treating various cancers, although challenges remain in refining these treatments and identifying the right targets and payloads, with combination therapies also being explored to enhance efficacy.

Analysis

The pharmaceutical industry is heavily investing in Antibody-Drug Conjugates (ADCs) as a potential successor to traditional chemotherapy, aiming to deliver targeted cancer treatment with reduced side effects; this sector is projected to constitute a $31 billion market by 2028. Recent presentations at the 2025 American Society of Clinical Oncology (ASCO) annual meeting showcased significant progress. AstraZeneca and Daiichi Sankyo's Enhertu, with 2024 sales exceeding $3.7 billion, demonstrated potential to become a first-line treatment for HER-2-positive metastatic breast cancer. Pfizer's portfolio, strengthened by its $43 billion Seagen acquisition, includes Adcetris ($1.1 billion 2024 sales) and Padcev ($1.69 billion 2024 sales), the latter approved with Merck's Keytruda. Despite these successes, development hurdles persist: Gilead's Trodelvy ($1.3 billion 2024 sales) showed ASCO promise in a breast cancer trial with Keytruda but previously faced a bladder cancer market withdrawal and a lung cancer trial failure. Similarly, Merck and Daiichi Sankyo withdrew a U.S. application for their HER-3 targeting ADC due to overall survival data in a lung cancer trial. GSK is reviving its ADC Blenrep, anticipating £3 billion in peak annual sales after addressing initial setbacks and securing UK reapproval, with a U.S. decision pending. Innovation is a key theme, with companies like AbbVie achieving approval for a first-in-class c-Met targeting ADC and developing next-generation platforms, while Bristol Myers Squibb and Eli Lilly explore bispecific ADCs and novel non-chemotherapy payloads. Combination therapies, especially ADCs with immune checkpoint inhibitors, are emerging as a critical strategy to improve outcomes, as highlighted by Pfizer and Gilead.

Key Decisions for Investors

• Investors should consider the significant growth potential within the ADC sector, projected to reach $31 billion by 2028, while remaining vigilant about the inherent risks of drug development highlighted by mixed clinical trial results across various companies.
• Portfolio allocation could favor companies with robust clinical data, innovative ADC platforms, and strategic acquisitions, such as AstraZeneca with Enhertu's expanding use, Pfizer leveraging its Seagen acquisition, and AbbVie with its novel target ADCs.
• Developments in combination therapies, particularly ADCs with checkpoint inhibitors, warrant close attention as they may unlock broader efficacy and create new treatment paradigms, potentially benefiting firms like Pfizer and Gilead despite other asset-specific challenges.