In Conversation With
Andrea Guffanti: What were some of the liabilities associated with these new treatments, and how did you deal with them?
Chris Martin: The path to de-risking a therapy is quite well established in terms of testing a drug in laboratory conditions as much as we can and then taking it to patients. Technically, there are ways to control the drug's safety and any liabilities associated with that. We start with a very low dose, in a well-controlled situation, slowly increasing the amount.
We make sure that when we contract with hospitals, we get informed consent from the patients – meaning that everybody's very informed about the risks and benefits of the experiment they're taking part in. On that side of things, it's fairly easy to control the liabilities.
As a business, the somewhat complicated area is the supply chain. Manufacturing a drug like this is complex; the supply chain literally stretches around the world. We need to control the quality of the material in the supply chain very carefully. It is heavily regulated, and we need to ensure continuity of supply of drugs to patients – because these are very sick individuals. They must get the drug and take it continuously for their treatment to work. A very secure supply chain is vital, with stocks of material stored along the various parts of the supply chain. We can control this potential liability through good management and contracting, and also to some extent through insurance to share that risk.
There's also the whole business regulatory side: the financial risks. Another area is intellectual property. You rely upon patents to protect the drug and stop other people from competing and making a cheap version of the drug. People can challenge patents, or a firm could accidentally infringe somebody else's patent. We put enormous effort into filing patents, working with patent agents to file those worldwide. But again, it's an area where potentially firms can transfer some of the risk by insuring on the patent side.
ADC acts like a guided missile. Its antibodies are proteins that only recognize cancer cells due to particular proteins on the cells' surface.
The antibodies circulate the body until they locate a cancer cell; they lock onto them and are internalized. This process releases the antibodies' very toxic molecules, which kill the cancer cells. The idea behind ADC is to spare patients the side effects of chemotherapy, which treats the whole patient and can lead to symptoms such as hair loss, nausea, and fatigue.
When ADC Therapeutics' CEO, Chris Martin and Vice Chairman, Michael Forer joined Aon's EMEA Chief Commercial Officer, Andrea Guffanti at Aon's London Office, four themes drove the conversation: access to capital, navigating volatility, digitalization, and workforce resilience.
Chris Martin : We also invested in flying people together to meet fairly regularly. We kept that culture and team working well. When COVID-19 came along, we were already working virtually, and we had moved all of our systems onto cloud-based software. We've used well-established software and infrastructure in the cloud from major vendors, and we've layered a lot of cybersecurity on top.
We have our own very large server system in Switzerland, where we physically back everything up every day, then periodically keep those copies. We've got a total of seven layers of cybersecurity, which all of our systems use continuously. So I'd say digitization has been a real opportunity for us. It's allowed us to be a small company of 300 employees with a global footprint.
Michael Forer : I think the other side of the coin is the digitization of money. As a biotech company with almost half a billion dollars in the bank as our key asset to fund the pipeline, cybersecurity is front of mind as well. We have phishing emails daily. I've seen emails from Chris, or emails from myself, to the finance team requesting transfers, and we've had hackers break into our online banking to attempt fraudulent transfers.
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Andrea Guffanti: Was New York your choice because you thought it was the best place to raise capital?
Michael Forer: Many people associate the NASDAQ with technology stocks and the New York Stock Exchange (NYSE) with the General Motors, Chryslers and GEs of the world. But in recent years, the NYSE has been very proactive, and interested in bringing in technology companies. We chose to list on the NYSE rather than NASDAQ, as there are some important benefits for traders and investors.
Andrea Guffanti: How do you think the IPO has unlocked the potential for the firm?
Michael Forer: Last year was the first in the 10 years since we founded the company that we had real revenue. We're constantly investing money in our research pipeline, both preclinically and clinically.
An IPO for a biotech company is more of a financing event than a liquidity event for its investors. It gives us access to a much broader pool of investors than we would have in the private market. And really, it's just that access to capital that allows us to reinvest that capital into the pipeline, to advance it forward and build revenues and value in the pipeline.
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ADC Therapeutics stands for antibody-drug conjugate (ADC) – the anti-cancer drug the firm has developed.
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Manufacturing a drug like this is complex; the supply chain literally stretches around the world. We need to control the quality of the material in the supply chain very carefully. It is heavily regulated, and we need to ensure continuity of supply of drugs to patients – because these are very sick individuals."
After raising $558 million privately, ADC went public on the New York Stock Exchange in 2020, giving it additional capital to fund its pipeline amid lockdown.
For the life sciences industry, effective risk management is crucial across the production lifecycle, especially for a firm that has recently gone public. Alongside regulatory risk, D&O, and drug safety, risks like supply chain and intellectual property present deeper complexity for ADC.
When Chris and Michael formed the company, they wanted to recruit the best talent for each part of the business. Early in the company, ADC Therapeutics had a considerable geographic footprint: headquarters in Switzerland, laboratories in London, clinical in New Jersey, and manufacturing in San Francisco. Connectivity was vital, so they focused on digitalization right from the start.
Aon talks with ADC Therapeutics about innovation in the cancer treatment space, their recent IPO and the challenges of attracting and retaining top talent.
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Andrea Guffanti: You referred to the IPO as an opportunity to access financing, but can you put into context how it has helped you focus on patient quality?
Chris Martin: One of the pleasures of working in a company like ADC is that we are all very focused on the patient. When you develop a successful drug for a disease like cancer, there are often opportunities to make it available to patients more early in their treatment and for patients with different types of cancer. And that requires a substantial investment in new clinical studies.
The IPO gave us access to the financial capital to expand our pipeline. It came about a year before our first drug was approved. And when approved rapidly by the FDA, we followed up with studies to confirm the data we already had. We started with patients who had received at least two previous lines of therapy. Now we are conducting a study that allows us to move to patients who have only had one previous line of therapy and some patients who've never been treated – those are expensive studies.
The IPO allowed us to expand the focus of the patients to whom we can dispense an effective drug and use the same technology in a number of other programmes. We have six other programmes targeting different types of cancer, all of them very difficult-to-treat diseases for which patients need new therapies. And again, going to the public markets has given us the capital to fund those studies, initiate them, and keep the R&D pipeline flowing.
Andrea Guffanti: We're all getting used to these new, better ways of working. When you think about your talent pipeline, what is the landscape?
Chris Martin: The key way of attracting people is by having exciting, promising technology and working with drugs that are really going to benefit patients. So that patient focus is a central part of acquiring and keeping talent.
There are not that many companies where you can go from conceiving a molecule, creating it in a laboratory, all the way through to delivering it to patients in the marketplace. Obviously, large pharmaceutical companies do that. But people who want to work in smaller, more nimble companies, where decisions are made quickly, are attracted to companies like ADC Therapeutics.
One of the challenges we have, as we grow, is to keep that culture of rapid decision making, with a close connection to the science and the patients, and to keep people focused on that because that's what they enjoy. That attracts the kind of people we want to work with.
Andrea Guffanti: Thinking about those who recently landed their PhD, how much is well-being and working in an agile environment a priority?
Chris Martin: I think it's fascinating because the generation coming out of university now really are looking for purpose. I find it very interesting, coming from a generation that maybe wasn't so focused on that – to see young people very consciously wanting to work in something that will make a difference. That's probably the most important thing for them in terms of the job that they're looking for.
It is a significant tool to have a very clear statement that the company's purpose is to help patients and their families, give them hope and provide therapies to them. But you ask a question about the working environment and being flexible. Acknowledging that people need to have work/life balance, they need to look after their families; they need to be part of a community – it's something we very much encourage. And I think the idea of connecting to the community and being contributors to our local community is essential for the company.
Andrea Guffanti : Absolutely, and we share the same values. We have observed the same thing: that purpose is very important, much more relevant than for our generation; we were probably driven by something else back then.
Michael Forer: Survival.
The life sciences industry comprises highly educated and experienced people. The vast majority of ADC employees hold PhDs or further degrees; many are medical doctors and highly trained scientists. Competition for talent is fierce as the sector rapidly innovates and mushrooms simultaneously.
Talent and Workforce Resilience
As a biotech company with almost half a billion dollars in the bank...cybersecurity is front of mind...we have phishing emails daily. I've seen emails from Chris, or emails from myself, to the finance team requesting transfers, and we've had hackers break into our online banking to attempt fraudulent transfers."
Andrea Guffanti: Thinking about the future, what are the plans for ADC – what's coming in the next two to three years?
Chris Martin: The convergence of technologies allows the industry to diagnose patients' diseases far more accurately. Somebody used to be diagnosed with breast cancer, and that was it. Nowadays, it's HER2-positive breast cancer with BRCA gene, and so on. And so, the physicians treating the patient can do so on a molecular basis, as can we when we develop drugs. The information technology allows the whole system to match patients to the therapies, the therapy lines they can use, and other treatments like radiotherapies. These technologies are converging and making a tremendous difference to patient treatment and outcomes.
Michael Forer: Over the last year, we've got approval for our first product, we've launched our first product, and we're taking it into new markets. And we have a second programme lining up for approval shortly. Behind that, we've got five solid tumour programmes focused on patients with solid tumour cancer as opposed to haematological disorders and cancers, and three of those are in the clinic. We're testing those now, and it's an exciting period because if we get signals on certain cancers that it's working, we have the potential to help a lot of patients and take those products forward in multiple cancers.
It is a fascinating time to work in cancer and pharmaceutical therapies because digital, diagnostic, and therapeutic technologies are converging.
From Left to Right: Aon's EMEA Chief Commercial Officer, Andrea Guffanti;
ADC Therapeutics' CEO, Chris Martin and ADC Therapeutics' Vice Chairman, Michael Forer
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