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0419 Adagio
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Finance

Adagio raises $336M on promise of best-in-class COVID-19 mAb

Where Adagio sees a substantial market opportunity for its COVID-19 mAb

Adagio sees a substantial market opportunity for its COVID-19 mAb against new variants, in acute treatment settings and in individuals unwilling or unable to get vaccinated. 

Apr 20, 2021 | 1:29 AM GMT

Adagio’s strategy of prioritizing breadth of coverage over speed to market for its COVID-19 mAb discovery program appears to be paying off. Despite the ramping up of vaccinations worldwide, the biotech still sees a substantial market opportunity against new variants, in acute treatment settings and in people either unwilling or unable to take a vaccine.

Investors are buying into the story. On Monday, Adagio Therapeutics Inc. raised $336 million in a series C round led by RA Capital and backed by 14 other life sciences specialist investors. The round brings Adagio’s total raised to $469.2 million since it spun out of antibody discovery play Adimab LLC in July.

Co-founder and CEO Tillman Gerngross told BioCentury that other COVID-19 mAb developers including Regeneron Pharmaceuticals Inc. (NASDAQ:REGN) and Eli Lilly and Co. (NYSE:LLY) focused on speed in their development programs with the aim of getting an antibody treatment to patients as quickly as possible. 

“When this pandemic emerged, the crème de la crème of antibody drug discoverers stepped into the ring and said we are going to do something here, and they chose different strategies. Most folks — and it was a rational choice at the time — said speed matters the most. Let’s get neutralizing antibodies, move them forward quickly, and what we don’t have in breadth, let’s make up for that in cocktails,” Gerngross said. “What we said is not so fast. You need breadth because there are going to be variants, or there are going to be future new viruses emerging from that animal reservoir, and we want to be able to cover those. That takes time and doesn’t happen overnight.” 

Gerngross is also co-founder and CEO of Adimab.

High speed to market has come with mixed results. Lilly’s bamlanivimab showed a large reduction in potency against emerging variants such the B.1.351 variant that was first identified in South Africa, so much so that last week FDA revoked the EUA for bamlanivimab monotherapy in favor of Lilly’s combination of bamlanivimab plus etesevimab. Lilly co-developed bamlanivimab with AbCellera Biologics Inc. (NASDAQ:ABCL) and etesevimab with Shanghai Junshi Biosciences Co. Ltd. (HKEX:1877; Shanghai:688180).

Regeneron’s casirivimab/imdevimab demonstrated a large degree of protection against the initial SARS-CoV-2 variants and has retained much of its efficacy against B.1.351. But similar to Lilly’s mAbs, Regeneron’s mAb are administered in an IV formulation, which has proven difficult to dispense to patients.

Gerngross said Adagio’s ADG20 offers a potential best-in-class profile as an intramuscular injection with broad coverage of sarbecoviruses, including SARS-CoV-2 and its emerging variants, and enough potency to provide up to six months of protection in a prophylactic setting.

Adagio CFO Jane Henderson told BioCentury the profile of ADG20 has additional advantages including high titer yields in manufacturing. “Our manufacturing process that results in a low cost of goods means we’ll be able to price this in a way that we believe will allow us to reach a broad percentage of the population, not only to treat but to prevent COVID-19 and future coronaviruses,” she said.

ADG20 is currently in the Phase I/II/III STAMP trial in high-risk individuals with mild or moderate COVID-19; data that could support an EUA are expected this year. A prophylaxis trial is also slated to start this quarter.

Market opportunity

A near-term opportunity for ADG20 is treating or protecting patients against emerging variants that render existing vaccines less effective. “A combination of new variants and time, you won’t be protected anymore. It is going to happen, it is just a question of how long that takes, how many people will be affected by that,” Gerngross told BioCentury.

One use case encompasses how the mAb therapies are used now, as acute treatment or as post-exposure prophylaxis family members or other close contacts have been infected.

“A family scenario is the microcosm version, but think about a university. We go back to normal, things open up again and if you all of the sudden have new cases, what do you do then?” Gerngross said.

Even as vaccine manufacturers ramp up new vaccines against emerging variants, a therapeutic like ADG20 could function as a bridge that provides temporary protection until a new booster vaccine is available. 

The world is also still years away from being fully vaccinated, providing an opportunity for treatment or prophylaxis in regions where the vaccination campaigns are slower.

Other opportunities include immunocompromised individuals, children and adolescents, and people hesitant or unwilling to get vaccinated. 

“We know there are a significant portion of people that do not want to take vaccines for various reasons. Here in the U.S., but also in Europe, Eastern Europe, some countries are greater than 50% the people that do not want a vaccine,” Henderson noted.

Gerngross said market research has shown many of those same people would be willing to receive an intramuscular injection of antibodies.“ We were skeptical too, but its pretty consistent. That’s what the data tells us,” he said. 

Manufacturing focus

One of the major bottlenecks for the mAbs has been manufacturing capacity, and the case is no different for Adagio. 

“We are not currently constrained by patients. We are currently constrained first by an approval, which we need to run our clinical trials on, but then it’s a manufacturing issue,” Gerngross said. “We are feverishly booking capacity, and we now have capacity booked around four million doses, but that rolls out over a period of time. What really is concerning is lining up more capacity for us.” 

He said it’s likely at least half of the series C capital will be allocated to buying up space in existing manufacturing facilities for ADG20.

Gerngross was non-committal when it came to whether Adagio would seek out a commercialization or manufacturing partner. “You never say never, but it is always a matter of what is your cost of capital, and we’re able to raise the capital based on the merits of the program. Now we’re very focused on how we get this drug into the hands of people,” he said.

He said Adagio is working off a base case of four million doses over the next two years, but as more inquiries come in from around the world wanting to buy the mAb, he said the company will look to increase its capacity. “It is us finding the capacity, but also lining up the buyers for that capacity that is all going on in parallel.” 

Henderson wouldn’t comment on if Adagio would be looking to IPO in the near-term, but said the company would look at several different financing options.

The series C syndicate included new investors Redmile Group, Federated Hermes, Foresite Capital, ArrowMark Partners, PremjiInvest, and another leading healthcare investor, while existing investors Fidelity, OrbiMed, Polaris Partners, Mithril, GV, Population Health Partners, Adimab and Omega Funds also participated.

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