Peptide-Drug Conjugates Move Closer to the Clinic: TwoStep Therapeutics' FDA IND Clearance and the Emerging PDC Landscape

Key takeaways

• TwoStep Therapeutics received FDA IND clearance for TS-104, its lead multi-specific peptide-drug conjugate (PDC), on 9 September 2026, with patient enrolment in a Phase I solid-tumour trial expected before year-end.
• The company simultaneously closed an oversubscribed $62.5 million Series A, co-led by Merck KGaA's M Ventures and Pfizer Ventures alongside Insight Partners and Medical Excellence Capital.
• TS-104 uses a polyspecific integrin-binding peptide (PIP) designed to engage five tumour-associated integrins, offering a broader tumour-recognition profile than single-antigen-targeted therapies.
• The PDC modality as a whole is attracting sustained capital: the market was valued at approximately USD 3.85–5.3 billion in 2025 and analysts project expansion to USD 14.5–15 billion by 2033–2035.
• UK and European research-procurement teams should note the modality's manufacturing profile — PDCs combine peptide synthesis with conjugation chemistry, creating distinct sourcing and quality-assurance requirements.

The TS-104 Programme

TwoStep Therapeutics, a San Carlos, California-based oncology biotech founded in 2024, announced on 9 September 2026 that it had received FDA clearance of the investigational new drug (IND) application for TS-104 and closed an oversubscribed $62.5 million Series A financing. The two events, announced simultaneously, position the company to initiate its first clinical study in the months ahead.

TS-104 is structured as a multi-specific peptide-drug conjugate. Rather than relying on a single target, TwoStep uses a polyspecific integrin-binding peptide (PIP) as the targeting component of its therapies; PIP is a small, synthetic peptide that targets five tumour-associated integrins expressed across a broad range of solid tumours, and by engaging multiple targets rather than depending on high expression of a single antigen, PIP is designed to provide broader and more consistent tumour recognition across heterogeneous tumours.

TS-104 combines TwoStep's multi-targeting technique with the potent chemotherapy payload monomethyl auristatin E (MMAE). MMAE is the same cytotoxin used in several approved antibody-drug conjugates (ADCs), though the peptide carrier differs significantly in size, synthesis route, and tissue-penetration characteristics.

The peptide's small size, rapid internalisation, and flexible conjugation chemistry also provide attractive properties for targeted drug delivery, including the ability to pair the same targeting scaffold with different therapeutic payloads. This modularity is a stated rationale for the platform: the same PIP could, in principle, be paired with distinct payloads across a pipeline.

TwoStep said proceeds from the Series A will fund the Phase I trial of TS-104, advance a radioligand therapy programme, and support expansion into next-generation peptide conjugates.

Financing and backers

The $62.5 million Series A was led by Insight Partners and Medical Excellence Capital, with M Ventures (the strategic, corporate venture capital arm of Merck KGaA, Darmstadt, Germany) and Pfizer Ventures joining as co-lead investors, alongside existing investors NFX and 2048 Ventures. Additional investors also participated, including Stanford University, where the foundational science behind TwoStep was developed before the company launched in 2024. Total capital raised to date reaches USD 71.2 million, up from a USD 6.5 million seed led by NFX.

The co-lead participation of both M Ventures and Pfizer Ventures in a Series A is notable. Both parents have active peptide-related programmes — Merck KGaA through its established radioligand assets and Pfizer through its metabolic pipeline — and their presence at this stage implies a degree of strategic, not purely financial, interest.

The company is run by co-founder and Chief Executive Officer Caitlyn Miller, PhD, and was founded in 2024 out of Stanford's Innovative Medicines Accelerator alongside three Stanford faculty co-founders: bioengineering professor Jennifer Cochran, PhD, oncologist Ronald Levy, MD, and Carolyn Bertozzi, PhD, who shared the 2022 Nobel Prize in Chemistry.

The PDC Modality in Context

Peptide-drug conjugates occupy a structural position between small-molecule targeted therapies and the now-mature ADC class. Peptide-drug conjugates link a short homing peptide to a cytotoxic, radioactive, or biologically active payload through a chemical linker, using the peptide's selective binding to receptors on diseased cells to deliver the payload directly where needed rather than letting it circulate systemically; compared with antibody-drug conjugates, peptides penetrate tumour tissue more readily, cost less to manufacture at scale, and carry lower immunogenicity risk, drawing growing biotech and pharmaceutical investment into the modality.

According to SNS Insider, the peptide-drug conjugates market was valued at USD 3.85 billion in 2025 and is expected to reach USD 15.05 billion by 2035, growing at a compound annual growth rate of 14.6% from 2026 to 2035. Grand View Research places the 2025 figure somewhat higher, at USD 5.3 billion, and projects USD 14.5 billion by 2033 at an 11.8% CAGR, though definitional scope differences account for much of that variance. Europe represented approximately 27% of the global market in 2025, valued at USD 1.04 billion and projected to reach USD 3.72 billion in 2035.

Most commercial revenue today comes from approved radioligand therapies in prostate cancer and neuroendocrine tumours, while cytotoxic and antigen-independent conjugates advance through trials targeting historically resistant cancers. Novartis's Pluvicto (lutetium PSMA-617) remains the anchor commercial asset in the radioligand sub-class.

Compared to ADCs, PDCs offer easier synthesis, better tissue penetration, and rapid clearance that reduces off-target toxicity; there are currently six PDCs in Phase III trials and approximately 96 in total development.

Other recent PDC clinical activity

TwoStep's IND sits alongside other PDC programmes that have moved into the clinic in 2026. In March 2026, Avacta Therapeutics dosed the first patient in its FOCUS-01 Phase I study of AVA6103, a FAP-targeted peptide-drug conjugate carrying exatecan, marking the progression of its next-generation pre|CISION programme into clinical testing.

A Phase I study record in July 2026 described first-in-human weekly intravenous dosing of PQ203 for advanced solid tumours, including triple-negative breast cancer.

On the platform-investment side, macrocyclic peptide discovery company Syneron Bio, which operates the proprietary Synova™ AI-driven peptide discovery engine, closed a $150 million Series B in April 2026. After securing a multibillion-dollar biobucks deal with AstraZeneca and raising nearly $100 million the previous year, Syneron Bio announced the closing of a $150 million Series B round to support its macrocyclic peptide development platform. Synova combines AI, data science, and high-throughput screening to improve the efficiency and success rate of identifying macrocyclic peptides that combine the specificity of biologics with the drug-like properties of small molecules.

Manufacturing and QA Considerations for Research Teams

PDCs present a distinct set of procurement and quality-assurance challenges compared with standard linear peptides. The conjugation step — attaching the payload to the peptide via a chemical linker — introduces additional synthetic complexity, and characterisation by mass spectrometry is required to confirm linker integrity and drug-to-peptide ratio alongside standard HPLC purity assessment.

The development of antigen-independent and receptor-agnostic PDC platforms offers a significant area of growth; metabolic instability and manufacturability issues present ongoing challenges. For research-procurement professionals, this translates into a need to verify that suppliers of PDC reference material or research-grade conjugates can demonstrate lot-to-lot consistency on conjugation efficiency, not merely peptide purity.

Cytotoxic peptide-drug conjugates are attracting investment as companies work to improve linker stability, tumour penetration, and payload release. Linker design varies considerably across programmes — cleavable versus non-cleavable, pH-sensitive versus protease-sensitive — and these distinctions affect both the pharmacological profile of a candidate and the conditions required to maintain conjugate integrity during storage and handling. Researchers procuring PDC material for in vitro or in vivo work should confirm storage temperature ranges and reconstitution protocols with the manufacturer, as MMAE-containing conjugates in particular are sensitive to thermal degradation.

Regulatory Status

TS-104 is currently an investigational compound. FDA IND clearance allows TwoStep to proceed with human testing in the United States; it carries no approved status in any jurisdiction. The compound does not appear on MHRA's approved product lists, nor has it been reviewed by EMA at this stage.

Research use of peptide-drug conjugates in UK academic settings falls under standard laboratory chemical safety obligations; cytotoxic payloads such as MMAE require appropriate COSHH assessment and containment measures independent of any regulatory designation of the peptide carrier. Procurement teams acquiring PDC material for in vitro work should ensure suppliers provide documentation of payload identity, purity, and conjugation efficiency, and should treat any MMAE-carrying material as a category of hazardous chemical under applicable UK Health and Safety Executive guidance.

TwoStep has not disclosed a clinical trial site in the United Kingdom or European Union at this stage; the Phase I protocol is expected to open at US sites.