argenx SE Q3 FY2025 earnings call

Key Points - VYVGART is delivering impact in MG and CIDP, with prefilled syringe approved in major markets. - Pipeline progress includes 3 Phase III assets: efgartigimod, empasiprubart, and ARGX-119. - In MG, positive data from ADAPT subcu and SERON studies support label expansion for seronegative subgroups. - In CIDP, ADHERE data is showcased with new HEOR insights. - Commercial strategy focuses on strengthening MG leadership, growing CIDP presence, and expanding through PFS launch and payer access. - Investments in operations and pipeline innovation to support long-term growth.

In the third quarter, total product net sales were $1.13 billion. Regionally, product net sales were $964 million in the U.S. (85.3% of total), $60 million in Japan (5.3%), $94 million across rest of world markets (8.3%), and $9 million for product supply to Zai Lab in China (0.8%). The Q3 product net sales grew 19% quarter-over-quarter and 96% year-over-year, with the prefilled syringe driving growth in MG and CIDP.

Forward-Looking - Expenses are expected to grow in the single digits for the rest of the year, with combined R&D and SG&A expenses between $2.6 billion and $2.7 billion. - 2026 will see 5 registrational readouts, including ocular MG, myositis, TED, MMN, and ITP. - Each Phase III indication is expected to have revenue potential similar to the MG opportunity.

Risks - Operational challenges with empasiprubart in dermatomyositis due to enrollment issues. - Competition in autoimmune disease markets, such as J&J's head-to-head trial in gMG. - Placebo responses in Sjogren's disease trial could impact trial powering assumptions. - Uncertainty in regulatory approval timelines for new indications.

Q: Clarification on formulation mix and thoughts on Sjogren's disease A: Karen noted prefilled syringe is a major growth driver but IV also contributes. Tim commented on Novartis' Sjogren's data, stating 2-point improvement is clinically meaningful and efgartigimod is a precision tool targeting circulating immune complexes.

Q: Color on CIDP launch and efforts to make efgart first-line A: Karen said prescribers have positive feedback, and CIDP is at the beginning of growth curve with continued expansion of prescriber base and patient penetration.

Q: Revenue potential of Phase III indications and diligence on Graves' pursuit A: Tim said each Phase III indication roughly represents an MG-like revenue opportunity. On Graves', there's a clear biology rationale and substantial unmet need for alternative medication in a subset of patients.

Q: Empasiprubart discontinuation in DM and CIDP enrollment A: Luc Truyen explained DM trial enrollment issues due to competitive environment and C5 readout, while CIDP enrollment is too early to assess.

Q: Seronegative opportunity commercial confidence and MSE data A: Luc Truyen discussed excitement from SELON study results supporting VYVGART's benefit in seronegatives. Karen highlighted seronegative as a significant commercial opportunity with high unmet need.

Q: Myositis endpoint bar and steroid tapering A: Tim stated success in myositis trial is defined by statistically significant separation from placebo, with a 20-point TIS improvement considered clinically meaningful.

Q: Empasiprubart trial endpoint change for MMN A: Luc Truyen explained change was in close consultation with agencies, with CBUR/CDUR endpoints harmonizing with IVIg use, and prior endpoint still a key secondary.

Q: Lupus nephritis data impact and empa subcutaneous development A: Luc Truyen said lupus nephritis data doesn't support registrational study, and intention is to leverage subcu platform across indications for empa.

Q: Ianalumab data and placebo response in Sjogren's A: Tim said placebo effect in Sjogren's trial is in line with expectations when designing the clinical trial.

Q: J&J head-to-head trial in gMG and OpEx guidance A: Luc Truyen commented the trial may not add significant patient value, and Karl stated OpEx for the year will be between $2.6B and $2.7B with expenses continuing to grow.

Q: External innovation and balance sheet impact A: Tim said increased cash balance expands aperture for novel biology, with more external collaborations expected in immunology research.

Q: VYVGART off cycles and seronegative responsiveness A: Tim said VYVGART's label allows redosing based on clinical judgment, and Luc Truyen noted triple seronegatives often have longer diagnostic course but show meaningful benefits in subsequent cycles.

Q: Graves' disease data and market potential A: Tim commented on peer FcRn data being small sample, warranting further investigation. Karen highlighted Graves' has large prevalence and unmet need, with significant commercial opportunity.

Q: Graves' disease trial design and disease modification A: Tim said trial design details will be shared later, and disease modification is an interesting hypothesis needing more data.

Q: VYVGART myositis Phase II data and competitive landscape A: Tim said competitive landscape in DM is welcome as it helps build the market, and injection site erythema in myositis is mild, transient, and not a barrier to commercialization.

Q: Ex-U.S. launches and market opportunity A: Karen said ex-U.S. markets like Japan are growing with PFS approval, and other markets are seeing growth through pricing/reimbursement agreements and CIDP launches in additional markets.