The Swiss contract manufacturer is upgrading its current laboratory scale productions in Visp with the view to combining the company's two core sectors, antibody and chemical drugs manufacturing.
Construction of a new commercial scale production unit in Visp started late last year.
Antibody-drug conjugates are a new class of drugs which promise to revolutionise the treatment of cancer.
The technology involves linking a monoclonal antibody to potent cytotoxic drugs and targeting to specific cells where the drug can be internalised and have its lethal effect, thereby sparing non-targeted cells.
The drugs promise to be up to 100 times more efficient than chemotherapy.
"We believe that in the future antibody-drug conjugates will represent 5-10 per cent of the total biopharm market and we'd like to participate in this strong area," Lonza investor relations spokesman Alexandre Pasini told in-PharmaTechnologist.com.
Currently, there is only one antibody-drug conjugate on the market, which is Mylotarg (gemtuzumab ozogamicin) manufactured by Wyeth.
The drug is composed of a recombinant humanised immunoglobulin G4, kappa antibody conjugated with calicheamicin, a cytotoxic antitumour antibiotic.
The antibody portion binds to the CD33 antigen which is found on the surface of leukemic cells.
Mylotarg was approved in 2000 to treat acute myeloid leukaemia.
Sales of the drug are currently around $20m (€14.7m) and could reach $60m by 2010, according to market research firm Decision Resources.
Lonza's optimism about the potential of drug-antibody conjugates is reinforced by the number of drug candidates coming through clinical development.
But the class represents a tiny fraction of the total market for biologic drugs used in cancer, with a number of billion-dollar products already on the market, notably Roche/Genentech's Herceptin (trastuzumab) for breast cancer, Genentech/Biogen Idec's lymphoma treatment Rituxan (infliximab) and colorectal cancer drug Erbitux (cetuximab) sold in Europe by Merck KGaA.
Overall the monoclonal antibody market in 2005 alone was worth more than $13bn, with expectations it could reach $30bn by 2011.
The new Lonza plant is expected to be on line in 2008 with the capability of producing at a commercial level more than 100kg of antibody-drug conjugates a year.
It currently produces small scale quantities in grams.
"The idea is to benefit from the growth of the market and serve several customers when the plant will be working on full capacity after 2008," Pasini said.
Lonza is working with a customer in the development of antibody-drug conjugates, but Pasini could not disclose any further information.
Several companies are looking at the drugs, including Seattle Genetics which has SGN-35 in Phase I trials as a treatment for Hodgkin's lymphoma.
SGN-75 is still in preclinical development.
Medarex released positive preclinical data in cancer animal models last month for drugs anti-CD19 and anti-CD70.
Genentech BioOncology is looking at a HER2 antibody-drug conjugate and Progenics Pharmaceuticals acquired ownership of a prostate-specific membrane antigen antibody-drug conjugate last year which has been tested in animal models.