Antibodies should comprise roughly half of the ten highest selling drugs over the next several years. Although they're incredibly effective, they're also very difficult to work with. A small biotechnology company named Ablynx in Belgium may have found an interesting solution that could make antibodies even more useful. Ablynx is currently partnered with Novartis (NVS 0.20%), AbbVie (ABBV -0.88%), and Merck (MRK 0.19%). Here's a look at a how these giants are applying this exciting new technology.

Why all the fuss?
Antibodies are large proteins used by the immune system to identify targets that need to be eliminated. Typically, they bind to specific antigens on the surface of infected cells or bacteria and act as a signal flare, but that's not their only use. Anti-inflammatory therapies, like AbbVie's Humira, employ antibodies that bind to cell signaling proteins and prevent them from creating an immune response.

Thank a camel
While antibodies are incredibly useful, their size and complexity makes them difficult to work with and limits their application. Members of the biological family Camelidae have somewhat unique, incredibly small single-domain antibodies. They do as good a job as your garden variety human antibody, but are about one-tenth the size. Being small and stable makes them a fantastic vehicle, capable of acting on a variety of targets inaccessible to their larger cousins.

The single-domain antibodies are strikingly similar to sections that naturally exist in humans. Ablynx swaps out the foreign sequences for those found in humans to minimize immunogenicity. So far it seems to be working well in a handful of early clinical studies. Now, it seems the company is signing deals left and right with well funded pharmaceutical giants.

Swing and a miss
One of the early, big pharma players to take a shot with nanobodies was Novartis. The target was death receptor 5 (DR5). In theory, binding to this receptor on the surface of a tumor cell should initiate programmed cell death. The candidate looked great in test tubes, and a Phase 1 clinical trial was planned. Unfortunately, the study was terminated before yielding any results. Novartis continues to work in partnership with Ablynx, although the two have no compounds in clinical trials.

Upgrading Humira?
Unlike Novartis, AbbVie snatched up a compound already in the clinic. In September of last year, AbbVie entered into an agreement to develop Ablynx's anti-IL-6R nanobody, ALX-0061 to treat inflammatory diseases.

Prior to the AbbVie deal, this nanobody scored some impressive marks in a 37 patient rheumatoid arthritis trial. The results were consistent with what would be expected from a smaller, more stable therapeutic with a higher affinity for the IL-6 receptor. It was effective at the expected dosage and adverse events were minimal.

Be sure to keep your eyes open for more data from this compound in the future. If it scores high marks in an upcoming phase 2 lupus trial, AbbVie should take the reigns with late stage development. This could be something of a replacement for Humira, the drug that comprises over half of AbbVie's revenue and goes off patent protection in 2016.

Channels and checkpoints
More than a year ago, Merck began exploring the neuroscience potential of nanobodies by employing Ablynx to discover a candidate capable of modulating gated ion channels. Small molecule ion channel drugs sell billions annually, but attempts to use monoclonal antibodies to affect their function have so far proved fruitless. Although Ablynx has an Alzheimer's candidate in a phase 1 study, in partnership with Boehringer Ingelheim, the Merck partnership has yet to progress past the discovery phase.

Lack of progress in the gated ion channel department hasn't soured Merck's relationship with nanobodies. Earlier this month, the two inked a second discovery pact, this time in the oncology field. This new agreement will focus on the discovery and development of immune checkpoint modulators.

One immune checkpoint that has been getting a great deal of attention lately is the PD-1 inhibitory protein present on the surface of activated T-cells. Some tumor cells have been shown to cause T-cells to stand down by presenting an antigen to PD-1. Merck's star candidate MK-3475 acts like a goalie in front of the PD-1 protein, allowing it to continue attacking tumor cells.

Over the past several years it has become clear that there are several other checkpoints that tumors exploit to keep the immune system from attacking them. The ability of nanobodies to affect multiple targets with minimal toxicity makes them a smart bet for cancer immunotherapies. Merck's R&D chief, Roger Perlmutter should know; he has a seat on Ablynx's board.

What to look for
While this new technology certainly appears promising, what works in the laboratory doesn't always pan out in the clinic, as illustrated in the Novartis example. Before jumping into these stocks, it might be best to adopt a wait-and-see approach.

Currently there are 3 nanobody candidates in phase 2 studies. Keep your eyes open for more data from ALX-0061, the compound partnered with AbbVie. Caplacizumab and ozoralizumab, for treatment of thrombotic thrombocytopenic purpura and inflammatory diseases respectively, are also in phase 2 trials. They're both wholly owned by Ablynx, but their performance in the clinic could have implications for their partners.