Let's go ahead and get started. Thanks, everyone, for joining. This is a Fireside Chat with Argenx. Happy to have with me, CEO Tim Van Hauwermeiren. Tim, thank you for joining us. Appreciate it.
Thanks for having us. It's a joy.
Of course. My name is Vikram Purohit. I'm one of the biotech analysts with the Morgan Stanley Research team. Let me read a brief disclosure before we get started. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures, and if you have any questions, please feel free to reach out to your Morgan Stanley sales representative. With that, Tim, let's dive right in. A lot to talk about for Vyvgart, a lot to talk about across the pipeline, but maybe we can just start with kind of a recap of where you've been focused for the business, your recent articulation of Vision 2030 at your recent R&D Day. Maybe that's a good place to kind of kick things off.
I think that's a great start of the conversation. Of course, you know, we're firing from all cylinders. You know, commercial execution is going well, the clinical pipeline is progressing according to plan, and I think the discovery engine is running. Where I spend most of my time is on the pockets where we innovate. So we have plenty of people who can run the business. Attention and full focus is on innovation. So I think the R&D Day was a very important day for us, where we could zoom out of just top line revenue growth, which is important and which is going well, but actually showing, you know, what we have under the hood, above and beyond just Vyvgart. So we need to maximize the Vyvgart opportunity, but we need more molecules.
I was thrilled to see the EMPA data in MMN and be able to talk about them. I'm thrilled about one nineteen, and then, of course, the four R&D molecules, which are racing towards the clinic. I think we're more than halfway through the year, and argenx is executing according to plan.
Great. Great. So, I know CIDP, that launch is on top of mind for a lot of people, so maybe we can just start there. At a high level, how's it tracking versus your initial expectations?
We're very early in the launch.
Sure.
So we're only two months into the launch. There is very little things we can say quantitatively, and we will try to help the audience in the earnings call to give you some early metrics, you know, exactly the same way we did it for MG. We will talk about, you know, breadth and depth of the prescriber base, the phenotype of the patients coming on drug, and importantly, you know, how we're doing with installing the proper payer policies. Today, I can say we are on plan. I'm very happy to see the level of awareness in the CIDP community. It's very clear from the patient interactions and the physician interactions that people are waiting for that other tool in the toolbox. I think the regain of function data resonate extremely well with physicians, but also with payers.
and I think the market access team is on track installing, you know, proper payer policies, where speed is not necessarily the most important metric, but broad access is gonna be the important metric.
Understood. From the early uptick you're seeing so far, are there any specific types of prescribers or types of patients or types of centers that are just more prone to being early users of Vyvgart and CIDP?
It's too early for me to comment on that here on the podium. Wait for the earnings call, where I think we will start to give you some credible evidence. It's now just too early to say it. We do see, of course, patients which are IVIG experienced, which is not abnormal. This is a prevalent disease, and most patients will have seen, you know, at some, in some way or shape or form, IVIG on their journey.
Understood. We'll definitely wait for that. I guess on the topic of metrics, you mentioned metrics similar to what you provided for Vyvgart and MG. I'm assuming everyone here is pretty familiar with that story, how that launch unfolded, but just to kind of level set, what were some of those metrics?
I just called them out. We would like to give you an initial view on depth and breadth of prescriber base. There's a big difference between just a few champions giving you all your patients, as opposed to, you know, a broad prescription basis, which is a foundation you can build from. And we will be watching the division between academic centers and community because we think the majority of CIDP treaters are in the community. From the patient phenotype point of view, of course, we will have an interest in, you know, who are these patients coming on drug, what is their history, and can we see a pattern there? And then in terms of payer policies, think along the metrics of, you know, how many commercial lives are covered, and what is the quality of these policies which we're putting in place.
Got it. Any qualitative feedback from payers you can share on the announced price?
You can imagine that we did a lot of homework when we were setting the price for CIDP. Part of that, of course, was, you know, socializing the data from the study with the payers and making them understand the value of the product. You can never look at price in isolation; it's all about the value, and I think the data which resonate very well are the regain of function data. Compared to the best people could get on IVIG or steroids, we really saw a marked step up in function of these people. For example, the majority of people entering the trial in a wheelchair could leave the study walking independently. Now, that's the type of data which articulate value and the type of information payers are very interested in.
Got it. Okay, great. So we'll watch out for more color on the launch at the next earnings call. Maybe for the time being, then, we pivot to MG. So you've mentioned a couple of times this year that the opportunity in MG has ended up being larger than you'd initially expected. I guess, what are the factors that have surprised you to the upside? Because I'm sure you did a lot of homework and have been doing a lot of homework after launch unfolded. But now that you've mentioned it a couple of times, I'm curious, which factor caught you by surprise?
The first thing you need to know about myasthenia is the mindset is evolving. I mean, when we did our initial market research and we were talking to neurologists, they would give you the answer that my patient is doing fine. That would be a typical answer. And I think the benchmark was, my patient is not hospitalized at this moment in time. That was doing fine. That was the meaning of doing fine. I think we have invested significantly in trying to move the goalpost to patients are actually living a life the way they could live it before they were diagnosed with MG. What does that mean? It means you can live your life symptom-free. 50% of Vyvgart patients in the real world have no longer symptoms. We call that MSE.
80% of Vyvgart patients have an ADL below five. That means they no longer qualify even to enroll in a clinical trial. That is massive. Secondly, side effects. The safety and tolerability profile of Vyvgart in the real world is spick and span. It's a very clean safety profile, and now we have so many, many thousands of patient years worth of safety data that is consistent. And that's a big deal because neurologists will worry first about safety and only then efficacy. And then the third thing you need, of course, for a patient to live his or her life without being reminded of the disease constantly, is independence. I think the IV product is great.
The subQ product, Vyvgart Hytrulo, is even greater, and I think the prefilled syringe, which we're developing aggressively, I think will be that finishing touch into independence from the infusion chair or the medical practice. So I think we're really moving the goalpost. And then the second factor, which is important, I think, which is not unusual for rare diseases, is when you have an underserved rare disease and innovation starts to come in, more patients come out of the woodworks. There are more MG patients than what the Phillips publication suggests back in 2002 . I think we're rather looking at 80,000-100 ,000 MG patients in the United States instead of the reported 65 ,000. So that, again, you know, is an underlying current, which is an important one.
Got it. And you just touched on the subQ version of Vyvgart, which was approved last year, commercialized last year. How is that split currently looking to you, IV versus subQ? And I guess looking three to five years out, do you think that there's going to be a role for IV?
Mm-hmm.
Or do you think it's going to be-
That's a great question, and I think here we need to look at the United States and rest of the world. In rest of the world, I think the subQ product is going to quickly overtake the business. I think I would not be far off if I would predict it's gonna be 10% IV versus 90% subQ, because that's how the medical systems are organized.
Right.
Here in the United States, I think it's essential you have both. There will always be a market for the IV product that is driven by patients, but also physician and payer preference. And the subQ product, I think, will grow in importance. So how that ultimately is gonna break out, I don't know, but I think it's important to have both in the portfolio.
Got it. Got it, okay. And has the subQ option expanded the market as you had hoped it would?
As hoped, patients coming on Vyvgart Hytrulo are patients we've never seen before. I mean, you see a small amount of switches from IV to subQ-
Mm-hmm.
but the majority of patients, the large majority of patients, are patients we have never seen before. Also, prescribers we have never seen before. Typically, people who do not have easy access to an IV infusion chair or facility. So it's really growing the market, and I think we see more and more people actually coming straight from orals onto Vyvgart and Vyvgart Hytrulo, which is exactly where we need to go if we want to build the market. We need to take market share from these old, pretty dirty chemotherapeutic agents.
Got it. Got it. And then, the prefilled syringe, by what factor do you think that could increase the realistic addressable population for Vyvgart? You know, what portion of the population do you think is waiting for that type of option to be available before they'll go on Vyvgart?
It's difficult for me to quantify ultimately how many patients will go on the PFS, but it's the missing link to full independence. Because unlike the rest of the world, where we already have self-administration for Vyvgart Hytrulo, here in the United States, we don't have that yet. And I think it's clear from the interaction with the FDA that the PFS would be the stepping stone into self-administration at home, which I think is gonna be a big deal for the younger, active patient population. So we're diligently working on it. A quick update here for the audience. You know, we did submit in June. The file got accepted without any review issues, which is great.
We have a PDUFA date of April 10, and the FDA came straight out of the gate with, you know, inspection announcements for the manufacturing facilities, and the Q&A started on the data review. So it looks like the FDA is giving this file the level of attention it deserves.
Got it. So April tenth, that'll be a decision point for both MG and CIDP.
Correct.
For the prefilled syringe.
Yeah.
Okay, great. We're switching gears a little bit, but staying on MG. There's a good amount of late-stage data coming out from potential competitors later this year, throughout the course of 2025 . Broadly, how much does competition in MG concern you for the tail on the Vyvgart franchise?
The first thing I'm gonna say is, competition is good, and that's what we're trying to say in the R&D Day. It's the innovators which build the market. And what we see currently is that everyone is building market share. So jointly, we're building the overall size of the market. It's not a win-lose game, it's a win-win game. And that's a very important overall dynamic to bear in mind. If and when we would have to compete with an innovator, I think we're very well equipped because we've put the bar so high that I haven't seen anyone come close. So our job has not changed. We need to get as many patients on VYVGART as possible as fast as possible, because once you're on VYVGART and you're doing well, there is no compelling reason I have seen to actually switch medication.
I guess, to play devil's advocate, what do you think a competitor would need to show? Where could they differentiate to convince the prescriber that the prescriber should reach for that therapy versus Vyvgart?
Vikram, you're asking me a very difficult question. 80% of the patients live a life with no or little symptoms. The safety profile is as clean as it gets, and we have the most complete product offering. So let's wait for the Q, okay?
Fair enough. Fair enough. I guess, final question on Vyvgart, and then we should switch over to other parts of the pipeline, just kind of keeping time in mind. Your next-gen FcRn agent that you talked about a bit during the R&D Day, where does that fit in terms of, in one, broader kind of Vyvgart lifecycle management, but then also, two, specifically for MG?
I think it's a big deal. People ask me the question, "Tim, what's wrong with Vyvgart? You told us it's a great drug and now you have a next- gen," and then my first answer is: there's no problem with Vyvgart, except for the fact that the opportunity is so big that it cannot be addressed by one molecule. We need multiple molecules to address such a universal opportunity. There's a patent clock ticking in the background. There's an IRA clock ticking in the background, so we're approaching the point where, you know, after these first fifteen indications, we need to ask ourselves the question, is it still a justified investment to go into the next indication, so we need another molecule. That molecule, I think, is nicely differentiated from Vyvgart.
The ask to the scientist was: Give us a molecule which can replace the four weekly infusions or injections, which is one cycle of Vyvgart, with a single administration. That's a hell of an engineering job, and they did it. I think we have such a molecule. I'm very proud of it. And now our job is to take that through phase one as fast as we can. And then it's opening up optionality. You can play the Soliris, Ultomiris game, where you roll up your existing indications really fast with your next-gen, or you go into new indications with a whole new price point and value proposition. So we don't need to make that decision today. Let's create an optionality. I think that's the way you maintain leadership in a very exciting franchise over time.
Got it. Got it. And remind us of timelines for two, one, three?
That molecule is gonna go live in the clinic first half of next year.
Got it. Okay. And then I'm guessing, once you have that data set, then you'll be ready to speak about kind of indication, expansion, selection-
Exactly. So we're now doing the strategy work, which is fun, and once we have the phase one data, we will be ready to move.
Got it. Okay, great. Let's switch gears then to ALKIVIA. You have that data set coming out by the end of the year. You've mentioned it's going to include go, no-go decisions on all three subsets of myositis that are involved in that study. One, just to kind of level set for everyone, talk us through the design of that program. And then, two, how are you defining the go, no-go for each different subset?
Yep, it's a great question. So I think myositis is a very interesting indication for Vyvgart. We selected three subsets of myositis where we have conviction. Pathogenic IgGs drive the disease, immune necrotizing myopathy, ASyS, and dermatomyositis. And here was an opportunity for the first time in the history of the company to do a basket trial. So we had a long back and forward with the FDA. We could agree on a basket trial, a seamless phase two, phase three trial, by the way, with a common endpoint, the total improvement scale or score, sorry, which they used as an approvable endpoint already in dermatomyositis. And we're running these three subsets, you know, in the basket trial in parallel.
We de-risk the investment by looking at the first 30-ish patients per subset, where we make a go, no-go decision point, similar to what we did in CIDP. So it's a statistical rule based on 30 patients. You can ask statisticians to do a one-sided test and see actually, is there with reasonable confidence, a signal in these thirty patients or not? Because it's placebo-controlled. So the only decision we can actually make is a stop decision, because we are already enrolling the phase three at risk. So the decision we will be talking about in the fourth quarter of this year will be: Do we continue with all three, two, one, or zero of these subsets?
Got it. Okay. I guess frame for us the commercial opportunity across these three different myositis subtypes, excuse me.
It is very significant. The three together would represent an opportunity, same ballpark as myasthenia, which is sizable. Dermatomyositis is the biggest subset. ASyS is somewhere in the middle, and then necrotizing is the smallest indication. The unmet medical need is equally high across the three. I mean, I have been personally attending the patient panels when we selected the indications to listen and learn from patients, to also discuss the trial design. They're in a really bad shape, and the toolbox is limited. It's corticosteroids, it's some off-label use of IVIG and Rituximab, except for dermatomyositis, where IVIG is on label, and there's a big medical need there. So I think this is the type of indication we like. High unmet medical need, there's an opportunity to shape the market, the treatment paradigm, in case the biology works in our favor.
Understood. So, theoretically, if you were to decide to go with all three indications, then would you subsequently need a pivotal program for each different subtype?
That's how the phase three is currently enrolling, so the phase three is actually enrolling a certain amount of patients per subset, you know, going to the endpoint, and then we read out the study across the three indications with one and the same endpoint.
Sorry, I should have clarified. Would you need another subsequent phase three study in each different subtype, or would that be the filing?
So what we pre-agreed with the FDA is that it's, of course, always a data review issue, but in principle, when there's a clear, data-based, differentiation, one study will suffice for registration.
Got it. Okay. Moving along then, maybe we can just pivot to another Vyvgart indication you've talked about recently, TED, thyroid eye disease. You have a trial underway there. Just give us an update on what can you tell us about how that trial is progressing, and I guess your internal level of excitement about what that opportunity could be for Vyvgart.
We're not talking too much about TED, because we're not first, and we don't have to. But that trial is a global trial. It's enrolling well. We're using the prefilled syringe from the get-go, and of course, we're looking for differentiation. So we know we have the ability or the right to differentiate based on safety. If you extrapolate the safety profile of Vyvgart into TED, that I think is compelling. And then, of course, the jury is out, whether this pathway will be competitive with the Tepezza pathway. I think it will be, because there is plenty of evidence this is an IgG-driven disease. These IGF-1R antibodies are known. There's sufficient to create the disease in passive transfer models. The titer of these IGF-1R antibodies correlates with disease severity.
So I think we're in a good position to shine in, in TED, and now the data need to speak. So we've fully focused on execution to study with quality and speed, and then the data, the data will tell.
Got it. And sorry if you just mentioned it and I missed it, but, any color you can provide on the profile of patients coming into this trial?
I think the
In terms of-
Blueprint has been set by Tepezza. I think Tepezza is a fantastic drug. I think that's a blueprint from a study, a trial design point of view, so we are building from that trial design, including inclusion, exclusion criteria.
Got it. Is it going to be a mix of Tepezza naive patients and experienced, or is it going to be-
We do allow Tepezza experienced patients in the trial, given the unmet medical need in that population.
Got it. Got it. Okay, great. I guess in terms of where these different commercial opportunities sit, whether it's myositis, the different subtypes, TED, how do you compare and contrast them to MG and potentially what CIDP could be as well?
I think they're all relatively equal in size. You know, when you try to scope the commercial opportunity, when you look at, you know, the ability to price, they're comparable opportunities. I would bin MG, CIDP, myositis, TED, and Sjogren's, all in the same basket of opportunity, size of opportunity.
Understood. Yeah, understood. Okay. MMN and Empasiprubart, maybe that's the next best place to go, just to make sure we don't miss it through our conversation here. Just remind everyone what you've seen in that molecule's profile so far, and kind of what's giving you a high level of conviction that you made the right choice here.
I'm super excited about the data. I mean, I was so proud that in the R&D Day, we could show the full phase 2 data. People had been waiting for them. MMN is a very interesting indication. It's the third biggest IVIG indication in neuro. The only treatment option these patients have is IVIG, and they're the biggest consumers of IVIG. They need the highest dose with the highest frequency, and despite being on IVIG, they still progress. So they're losing gradually function, which is a pretty bad position to be in. So the way we designed the phase 2 trial is accepting everyone is on IVIG.
We had a run-in phase where we established the dosing cadence per patient of IVIG, so we allow them to do three cycles of IVIG, and at the peak efficacy of the third cycle, they got randomized on EMPA or placebo, one to one. Of course, patients going over into placebo, they needed rescue therapy with IVIG in no time. While the EMPA patients actually hardly needed any rescue, to the contrary, they were actually regaining function compared to their IVIG best baseline. We have seen spectacular data in terms of, you know, regain of function, which had been lost in patients already for years. So it's clear that if you hit the biology of MMN in its heart, that you can achieve things with patients which you have never been able to do with IVIG.
So I think that's a transformative opportunity. It's a high unmet medical needs. We're pretty much alone in MMN coming in, and I think it's again, a market opportunity where we can build. I think the disease is underdiagnosed, it's under treated, underrecognized, and I think an innovation like EMPA can really change the game there.
How?
We're now going into phase three as fast as we can. I'm very close to that trial, and we will, we will be in phase three before the end of the year.
Okay. How sticky is standard of care, what patients currently have?
If you progress on standard of care, I think we have a good chance.
Okay. Fair. Okay, and you haven't talked yet much about the design of that phase three trial yet, have you?
No, that is for later. We are wrapping up the conversation with the FDA. We're finalizing the protocol and starting the trial. Give us some time to talk about real trial design and endpoints. It's something we will be talking about later.
Understood. Okay. Just taking a step back, I mean, I have a broader question for you. When you think about optimizing your R&D dollars, when it comes down to choosing additional indications for Vyvgart and your next-gen FcRn , or putting dollars against a completely new molecule, what drives that decision? What are some of the key criteria that you use to kind of drive those pipeline priorities?
Vikram, we need to do both. It's not good enough to say that we need to make a choice. If we see an indication where we think we can really create enormous value for patients and shareholders, we need to go for it. I think we have the balance sheet to do that, you know, with more than $3 billion on the balance sheet. That cash balance will be intact by the end of the year, by the way, and we're reaching very quickly the point of break even or profitability. That means we should be able to fund all that R&D work, you know, from our own dollar. We're not gonna slow down on R&D. We're gonna double down and maximize the opportunity in front of us.
Got it. I guess that said then, from an R&D productivity standpoint, there's quite a lot that you talked about at the R&D Day. Can people expect to see more molecules coming into the clinic, more products being nominated, 2025, 2026 onwards, while all of these later-stage efforts progress?
It is a luxury problem, but it's a problem. So our Chief Medical Officer needs an aspirin from time to time. But we're innovative in how we unpack such a volume of opportunity. We do have creative relationships with some of our CROs, where we can insource talent. We have a pretty creative development deal with IQVIA, where they really lean in heavily. And then, of course, we have Zai Lab in China, which is much more than just a commercialization partner, but also a development partner, and boy, they do a hell of a job. So I think we're in good company. We do the heavy lifting in close partnership with our allies.
Got it. Got it. I guess going back to Empasiprubart right there. You also mentioned CIDP for that molecule, right?
Yep.
At your R&D Day. Just talk a little bit about that indication selection and also, how you think empasiprubart, Vyvgart, could coexist, assuming empasiprubart makes it to the market.
It's a great question. So Vyvgart has shown the best ever data, response data in CIDP. No one did ever better, but we only have a 70% response. So what is wrong with these other 30% of patients? That's an important question. And then we have seen our own translational data, which are not published yet. We have seen data from Sanofi in phase two with a C1 blocker, which I think are attractive. So I think it is suggesting there is space for a real good complement blocker in CIDP, which should be able to coexist with Vyvgart. So we're giving EMPA in phase three, a real shot on goal. We're not going to niche it into a subpopulation. We give it, you know, the full opportunity. We're gonna see how it's doing, and I think CIDP is big enough.
There is so much work to do in CIDP, that two innovative molecules can fit under one roof.
Got it. So it's not going to be a trial that's eventually run to filter out people not responding to Vyvgart?
Exactly. We're not gonna niche it prematurely. There is no reason to do it. We will give it its full chance.
Got it. Got it. Okay. I guess with all these programs kind of moving forward pretty aggressively, do you feel the need from a financial capabil-- from a financial standpoint, from a manpower standpoint, to ever look into partnerships with other biopharma companies?
I think we're asking that question regularly, you know, should we, should we team up, should we partner up in order to do things faster or smarter? So far, the answer has been no. Also, on the commercialization front, let me remind you that we did a global rollout of Vyvgart in 12 calendar months. In three continents, we were selling to patients. For Vyvgart Hytrulo, we did it even in eight months' time. I don't think pharma can do that faster or better than what we do. So I think for the moment, I think we're well equipped to unpack the full opportunity for our own shareholders, and we will not have to do... to share any value with someone else.
Got it. Got it, okay. We have around three minutes left. I mean, taking a very broad look at the business then, IRA headlines have been pretty fast and furious recently. There's been obviously the initial announcements of the initial price negotiation. When you think about what the IRA impact could be for your business, I know you mentioned that two and three is speaks to that consideration from one angle, but how else are you kind of planning for what the potential scenarios could be from IRA to some of the work that you've been doing in some pretty sizable indications?
From where I sit, and it's far away, I didn't see any real surprise in the outcome of the price negotiations for these products. I think the big unknown under IRA is actually not the price negotiations. It's the reform of Medicare Part D. But whatever the outcome is, I think IRA is a call for more innovation. There will be no escape possible, and innovation happens to be our core business. So we're not so negative about IRA. We like to innovate.
Understood. Understood. Okay. In closing then, there's a lot in your pipeline that we didn't get to talk about. Are there major milestones, major programs that you think people should be paying attention to come 2025, that you feel aren't being discussed enough yet?
What we typically do, Vikram, is at the start of the calendar year, we outline the clinical agenda for the year. So let's focus on the myositis readout, which is the last big datacard to turn in a very busy 2024 . When we open 2025 , we're gonna show you a detailed view on the clinical calendar for 2025 . But you know, there's a ton of work happening in phase two and phase three, new molecules coming to the clinic, so 2025 will be a very busy year, but we're still focused on 2024 .
Got it. All right. With that, I think we're at a good stopping point. Let's go ahead and close out. Tim, thanks so much for your time. Really appreciate it. Thanks, everyone, for joining.
Vikram, thank you. Thanks for having us. Thank you.