Orphan Drug Incentives Shape Next Wave of Cancer Deals

US orphan drug incentives are quietly steering ADC development and deal-making, nudging firms toward rare cancers as precision oncology accelerates

8 Jan 2026

US orphan drug incentives are quietly influencing how cancer medicines are developed and how companies structure investment and partnerships, particularly in the fast growing field of antibody-drug conjugates.

As demand rises for more targeted cancer treatments, ADCs have become a central focus for large and small drugmakers. These therapies combine antibodies with chemotherapy, allowing drugs to be delivered more precisely to cancer cells and reducing damage to healthy tissue. Their scientific promise is offset by high development costs and manufacturing complexity, making early stage risk management a priority.

Under the US Orphan Drug Act, treatments for diseases affecting fewer than 200,000 patients can qualify for benefits including seven years of market exclusivity and tax credits. While these incentives are not driving the ADC boom on their own, companies are increasingly using them as part of early pipeline strategy.

Many ADC programmes now begin in rare cancers or narrowly defined patient groups, where orphan designation is easier to secure and early clinical risk can be limited. Developers can generate data, build regulatory familiarity and attract partners before expanding into larger indications.

This approach has coincided with sustained dealmaking in oncology. Large pharmaceutical groups have continued to build ADC portfolios through acquisitions and collaborations, drawn by scientific differentiation and the potential for premium pricing. Pfizer’s $43bn acquisition of Seagen, completed in late 2023, remains a reference point for the value placed on established ADC platforms, even if its link to recent orphan incentives is indirect. Roche and AstraZeneca have also maintained heavy investment through internal development and external partnerships.

Regulatory activity highlights the continuing relevance of orphan incentives. New ADC candidates targeting rare cancers continue to receive orphan drug designation, including programmes such as ARB1002, reinforcing the role of these pathways in early clinical and commercial positioning.

For patients, this strategy can speed access to treatments for cancers that have historically attracted limited research. For companies, it offers a clearer route through an increasingly crowded oncology market. Questions remain over how orphan incentives should be applied when drugs later expand into common cancers.

Even so, the trend is clear. Orphan drug incentives, alongside scientific advances and market pressures, are shaping the next phase of precision oncology and the strategies that underpin ADC development and dealmaking.