Good afternoon, everyone. Welcome back. My name is Yatin Suneja. I am one of the biotech analysts here at Guggenheim. Welcome to our Inaugural Healthcare Innovation Conference. It is my pleasure to welcome our next presenting company, argenx. From the company, we have the Chief Executive Officer, Karl Gubitz. Karl?
CFO.
Chief Financial. Oh, yeah. I don't know what he said. Yeah.
I'll tell Tim I've been promoted.
Yeah, yeah. Tim. Karl, why don't you maybe give a five-minute overview of the company and just tell us what's going on, what are some of the milestones, obviously very, very strong performance in the third quarter. We'll discuss that. Yeah.
Thank you. Thank you, Yatin. It's a pleasure to be.
He's already promoted you.
Yeah, and I'll tell Tim the model which has brought us success is also the model which will take us forward. As a company, we're building a leading biotech. We're focusing on novel biology. We have a best-in-field antibody engineering, and then we build product and pipeline products which will result in differentiated outcomes for patients. That is what we've done, and that's what we plan to do going forward. As we approach the end of 2024, and we look at what we've achieved, setting out to complete our Vision 2025, which we laid out a few years ago, all of those have been achieved early.
And then at the R&D day earlier this year, we laid out our Vision 2030, raising the bar of what we as a company want to do, and we're now executing on that plan, starting with commercial. We're establishing ourselves as a leading biologic in myasthenia gravis. You've all seen the Vyvgart signature, rapid, fast, sustained response. We're getting 50% of patients in MSE, Minimal Symptom Expression, walking around with no symptoms, keeping them there. On CIDP, we had a very successful quarter one. We can talk about that a little bit later. In terms of near-term catalyst, we're gonna have myositis data before the end of this year. We're gonna give you data on bullous pemphigoid. In the beginning of next year, we look forward to the prefilled syringe approval, the PDUFA date of April next year.
I think all of those milestones set us up for a very exciting time looking forward.
But very good. So just maybe focusing on the financial performance. So CIDP was, is a big focus, and I think it will continue to be a focus for the next few quarters. Very good numbers in my view, you know, at least what you disclosed. Just help us understand what you are seeing in the marketplace. What are some of the key factors that are allowing you to get that robust adoption early in the launch timeframe?
Yeah, it's all built on the results of the ADHERE study, the biggest study in CIDP. And now we're in the launch phase. If I take it through the different elements, starting with payers, we've got 54% of commercial payers, 65% of the government channels in terms of covered lives in the U.S. That's really good performance, on track to have broad access and favorable policies by the end of this year. In terms of reaching the physicians, we have now between MG and CIDP, over 3,000 prescribing physicians. There's a big overlap between CIDP and MG. 75% of the prescribers of CIDP did previously write an MG prescription for us. In terms of patients, we see the unmet need. As we said, over 300 patients in the first quarter.
I think all of that is setting us up for a good launch, but it's only one quarter, so we do want to caution that we don't want the street to look at MG and immediately use that as an analog. There is, of course, differences.
Got it. What are the differences? Because I think if we go back and look at the myasthenia gravis launch, the awareness was not there. You still did, I think it was 380 patients. Now you did 300 in CIDP. Next quarter, it was close to 1,000 total, so about 60+ you did. Like, what are the differences, similarities that you're seeing? Why cannot you replicate what you did in myasthenia gravis?
Yeah, I think each launch has its own dynamics, and the MG launch is clearly very successful.
Yeah.
I think it would not be a great thing if CIDP is successful but not viewed as a successful launch compared with MG. I think with CIDP, of course, it's a progressive disease. It's a switch. Most of your patients, 85%-90% of your patients, have been on IVIG, and they need to be switched.
Mm-hmm.
We're compared to MG, which is basically an add-on therapy. Yes, our infrastructure is in place. Yes, the physicians do now understand the mode of action or are familiar with Vyvgart. But the launch has its own dynamics. We've got a lot of work still to do on market access. So one launch in, very bullish on the long-term opportunity here, but we just need to be cautious in the next few quarters as we build the market.
Got it. What are you seeing from the IVIG payer? Because obviously, you're gonna take their market share. Are you, like, what are you hearing from your team that is on the ground? Like, how are they detailing your product or counter-detailing it, and how are you winning it?
Yeah, I think, I mean, clearly, this is a big value driver for IG companies. I think it's their second biggest indication after primary immunodeficiency. So they are very active, share our voice. It's a very big market for them. But I think we are focusing on our attributes. And as we always say, what's really important for us, and the data, and I think it's resonating with payers and patients and physicians, but we are not just a more convenient IG. The regain of function data, which we have, is really resonating with the payers in particular.
Mm-hmm.
I think that's setting us up for success.
Got it. Maybe one or two more questions. So, I think you articulated there are about 12,000 patients, right, that, sort of is the TAM for CIDP. Can you just maybe help us understand of this 12,000 patients, how many patients do you think, what buckets you can put these patients in? Like, what are, like, the first one who adopt your drug, the second bucket, and the third bucket, and how quickly you get to those buckets?
Yeah. If we look at the, let's go through the whole funnel quickly.
Yeah.
All the CIDP patients, diagnosed patients in the U.S., mid-30s, between 30,000 and 40,000. Patients who are treated based on claims data, 24,000 patients in the U.S. The patients who we believe are not adequately treated is 12,000. Those are the patients we will go after.
Mm-hmm.
We will ask the doc to give us a patient or to try Vyvgart first. Is that 12,000? Those are the patients who are not responding to IG, who have relapsed from IG, currently on steroids or immune suppressants. Basically, the patients which are not adequately treated. And that also includes very relapsed refractory patients. We haven't broken down by 12,000 more for publicly.
Okay. Touch on the access a little bit because here the price is, you know, higher than, let's say, IVIG. So how has the access been or the negotiation with the payers been?
Yeah, I mean, you asked earlier what the, about the IG companies. I think yes. The IG is around between $100,000 and $400,000 per patient per year. Remember, there are patients out there who use a lot of IG. And when you get close to $400,000 per patient, our price, based on our assumptions in terms of utilization, gross to net, and so forth, is around $450,000 per patient per year. In terms of where we are now with access, we are. We have said it multiple times. We believe our market access team is a key differentiator for us. We might be a new company. We might not be experienced as a company, but the people we hire come with expertise, come with experience, and the market access team is a really good example of that.
We've done it once with Vyvgart, second time with Vyvgart Hytrulo, and now we're doing it with CIDP, where we go through the negotiations with the payers. We put the target out there to have broad access by the end of the second quarter following launch.
Mm-hmm.
After the first quarter, at the end of Q3, as I said, 54% of commercial lives, 65% of government channels, and those policies are all favorable. They generally ask for IVIG experience. Not all of them. Some of them don't even ask for it, but generally, they do ask for IVIG experience. And that could be at any time during the treatment history of a patient. As long as they've tried it, and then they can move on to IG. That really is favorable policies.
Mm-hmm.
Since then, we've also made further progress. We're on track to have broad access with favorable policies by the end of Q2, second quarter of the launch in Q4. As I said earlier on, the regain of function data is resonating with the payers.
Got it. Very good. Moving on to gMG. Could you talk about the adoption of Vyvgart Hytrulo? What are you hearing both from physicians and patient preference for a Vyvgart Hytrulo versus an IV?
Maybe if we start with international markets first.
Sure.
Like in countries like Germany, for example, very quickly switching over to Vyvgart Hytrulo.
Oh, wow.
The healthcare systems are designed to keep patients out of a hospital, and Vyvgart Hytrulo provides you with that optionality. Same in Japan. In the US, IV is still the bulk of our business, but Vyvgart Hytrulo is a key growth driver for us. In the beginning of our Vyvgart Hytrulo launch, it gave us new patients in terms of Vyvgart-naive patients and new prescribers. Now it is a little bit more mixed, but it is still a key growth driver for us, and remember, looking forward, that optionality of having Part B and Part D and self-administration vs a subQ vs an IV to play all the options out there. I think is really important, and that is a unique differentiator for Vyvgart.
Okay. What about PFS? You know, once you have the prefilled syringe, how is that dynamic?
Yeah, so PFS, we did the filing a few months ago now. The PDUFA date is in April. We believe we're on track, by the way. We can see the interaction with the FDA. We don't comment on that, of course, but we believe we're on track to get approval, and we, subject to the FDA, we hope that it would be self-administration. I think with self-administration, you open up more patient segments. Think of a younger, more active patient who doesn't necessarily want to get tied down by the logistics of infusion centers or going to a physician office. The way we look at MG in particular is that the growth has been really impressive. It's been consistent, and there's many levers of that. Now we are moving into the earlier lines.
But for that, for that launch, for that growth to continue, we need innovation, and I think the PFS is gonna give that to us.
Interesting.
And then, of course, with self-administration, we will be able to be Part D for the latter, for Medicare, and Part B with the IV. So you create that optionality in terms of payers, physicians, and patients.
Yeah. So you do expect with PFS, the market to grow. Did that happen when Vyvgart Hytrulo was made available?
Vyvgart Hytrulo did grow the market. Following the Vyvgart Hytrulo launch, we also doubled our infrastructure in the U.S., customer-facing infrastructure, I should say, allowing us to reach the community physicians. It is with those physicians and with Vyvgart Hytrulo which delivered a lot of the growth in the last few quarters.
Okay. I mean, I don't know if the company has a view for which indication is bigger. Is it the gMG and CIDP? Just curious, like, how do you see these two indications, different size, but obviously pricing different, but, like, relative size?
Yeah. I mean, on in terms of pricing, of course, we price per vial. It is the utilization which drives differentiated pricing per indication. I think with MG, our total addressable market, we recently updated it to 60,000 patients. That includes the seronegative and the ocular label expansion studies. We can talk about that later if you want and of course also is a subject of moving into the earlier line, so 60,000, which is clearly more patients than CIDP but with CIDP, I think the launch, of course, as we said, would be sticky, and we need to get through that.
Mm-hmm.
But of course, the utilization of CIDP should be higher.
Mm-hmm.
For MG, we went out there with a price of $225,000 per patient per year. That's a price, that's a net income for us. For CIDP, it's double at $450,000.
Mm-hmm.
All based on our internal assumptions.
Okay. Now, fourth quarter, are there any seasonal dynamics? There are holidays, like, that we should be sort of thinking about and keeping to mind as we model the launch?
No, I don't think there's necessarily seasonality. We all know about Thanksgiving and Christmas.
Yeah.
Especially the infusion business. If you lose infusion days to some winter storms, you don't make it up. So I think that, also in terms of Q3, traditionally, that's probably the strongest quarter for most drugs in the U.S. So I think all of those dynamics need to be taken into account. But I think if you just step back and you look at MG in particular, the consistency of the growth, that $40 million-$50 million growth, which we saw quarter over quarter, some quarters more, some quarters less, I think that is the growth which we are seeing, and we don't think that we are at the end of that. I think there's still plenty of patients out there to sustain that growth.
CIDP, I mean, yes, we had one really good quarter, but it's just one quarter, and we need more time to see how the launch is progressing.
I mean, anything you can say on the CIDP is, sort of a pent-up demand, or there's like a real true demand where not, doesn't seem like it was a bolus?
No, we don't see pent-up demand or a bolus. We think that, the scripts which we got is linear over the three months. Every single month, we got scripts. Most of those scripts were converted into patients getting the drug in September only, and that is because of market access dynamics.
Dynamics. Okay. One more question on these two. How should we think about Europe? I mean, relative to U.S., it still is a very small component, but, you know, how at peak? Like, is it a third of the market, bigger than that, maybe Europe and/or U.S. combined?
Yeah, I mean, our European business is now starting to get good traction. It's the growth also there has been consistent.
Yes.
The pricing and reimbursement dynamics, of course, just takes a very long time. In the last quarter, we've added France, Belgium, and Luxembourg. We now have 11 markets in Europe where pricing and reimbursement is fully negotiated and the drug is available. That includes four out of the big five markets. U.K. is being the fifth, which is not there yet. So I think the growth will come. It is. Every single quarter, every single market where it's approved and available, you do see growth. In terms of a peak opportunity, I mean, it will, of course, never be the U.S.
Yes.
But it should be the international market should be, I mean, more than 50% of the US, probably two-thirds of the U.S. eventually. It just takes longer to get there. I include Japan into that calculation.
Okay. Okay. Let's talk about some of the newer studies and the catalysts that are coming up. So first one is on the myositis and bullous pemphigoid. What exactly are you gonna communicate? Will the disclosure be similar to what you have done for CIDP?
I think.
Or maybe Sjögren's?
My, I think it will be on myositis first.
Mm-hmm.
We're on track. You'll get, you'll know by the end, before the end of this year. Remember with myositis, there are three subsets, same endpoint, same, so it is a, it's a basket study. The data will be announced at the same time, but the way to think about it, it's 30 patients in each study. Once we got to the 91st patients, we immediately started the phase three, so the phase threes of each of these three subsets are enrolling at the moment.
Mm-hmm.
When we announce, we will just tell you for subset A, we are continue or not, and for B and for C. If we're not continuing, we'll announce that we'll stop the Phase 3.
Okay.
So it will literally just be a go, no go.
Go, no go.
For bullous pemphigoid, remember we had originally the same study, in terms of a seamless Phase 2, Phase 3, but with the Pemphigoid study results, which were a clinical setback, we basically said, "Now, let's allow all the Phase 3 patients to mature as part of a Phase 2 study." And then we're gonna look at that in large patient set of patients, and then we're gonna make a decision on when or how to progress or not into a phase three. And that data will be in-house before the end of this year, but we'll probably make an announcement to JPM organ on that.
Okay. All right. Very good. On the next-gen Vyvgart or, or the longer-acting, probably second gen, like, how are you thinking about that molecule, sort of the disclosure that you're gonna make and sort of the internal excitement around it?
Yeah. So the commercial colleagues ask our discovery colleagues to build a second FcRn. And I said what would be meaningful is a drug which has the same efficacy, the same safety, but only once-a-month dosing. That's what they've asked for, and that is the drug which is currently being built now. You've seen the data at the R&D day. So we're working on it. The IND should hopefully be in 2025, and the drug is progressing. The question we always get is, how do we think about that? Is it gonna be your classical lifecycle management, think what Soliris to Ultomiris, or are we gonna do what Roche, for example, has done with the CD20s, where you have multiple drugs, in different indications working in, next to each other? Those options are all available to us.
At the moment, we're creating optionality, and we'll make those decisions later.
Okay. With regard to the ocular and seronegative study, what is the timeline for those studies or, you know, expectation that they will be on the market?
So those studies are enrolling.
Yes.
We are not specific on when they will be reading out, but yes, it's, I think it's exciting for MG. It, it's each of them is around 15% of MG, growing the MG as a market. And I think, yeah, I don't think we're not guiding on a day two, but it's enrolling. We're working on it.
Got it. I wanna go back to the financials a little bit. Obviously, strong quarters, you know, profitable now. How are you thinking about, you know, deployment of cash in the R&D side? Just, like, talk about, you know, how the profitability will increase over the next two, three years.
Yeah. In Q3, I mean, we achieved break-even. I won't call it profitable because year to date, we still have a operating loss of $125 million. The quarter itself was profitable with $14.14 million. Really, it's break-even.
Yeah.
But the good news is that what it really means is that we are no longer dependent on the street. We stand on our own legs. We're clearly a sustainable company. Our cash increased this quarter by nearly $300 million. And what it allows us to do is to invest in our innovation engine. We have a unique opportunity to set the company up for the long-term future, and that's what we're planning to do: invest in innovation, progress the pipeline, also make sure that we reach our patients, maximize our patient reach through the commercial arm of the house, but it's all about innovation.
Got it. On the pipeline side, I wanna touch on C2, the empasiprubart, right?
Yes.
I think I thought the proof of concept in MMN was very good, and now you're moving directly into CIDP pivotal. Don't get a sense that investors are focused on, like, what is the issue or, like, what, how is your team excited about it? Where exactly in the CIDP landscape is it gonna fit in?
Before I talk about CIDP, just in general on empasiprubart, with empasiprubart, our C2 blocker, you've seen the MMN data, which is transformational.
Yep.
What we've done with efgartigimod alfa and everybody thinks of argenx as efgartigimod alfa, and we understand that that's the type of asset which builds companies. In my mind, once-a-decade drug. It's a product and a pipeline. What we've done with efgartigimod alfa, we wanna show you that that's repeatable, and we wanna do that with empasiprubart. So empasiprubart, MMN, multifocal motor neuropathy, that's the data you've seen. We're now moving into a phase 3 transformational data. We're also in delayed graft function and dermatomyositis, and now we're starting in CIDP. Why CIDP? We've done the biggest study in CIDP with efgartigimod alfa, and we know that the drug only works in 70% of the patients. So what about the other 30%? And we think that our C2 blocker could play a role there.
That's why we're going straight into a pivotal study with empasiprubart.
Okay. Final question. Any thoughts on revenue guidance?
I think it's really important that we stay close to the street. We're not gonna rush to guidance. If expectations get out of whack of where we think it should be, then we probably will have to do something. But our focus will be to make sure that the street have a good appreciation of what we're gonna do with our assets.
Very good, Karl. Thank you so much.
Yep, and thank you very much, and thank you, everybody.
Appreciate it.