argenx SE Q1 FY2025 earnings call

Commercial Business

• Underlying growth was as expected, with typical seasonality following a strong fourth quarter.
• FDA approved VYVGART Hytrulo pre-filled syringe for self-injection, enhancing patient access.
• Launched patient activation campaign for CIDP to empower patients in decision-making.
• VYVGART continues to show strong efficacy in gMG and CIDP, with data from ADVANCE-NEXT study showing 56.5% of gMG patients achieved minimum symptom expression.

Pipeline

• Advancing 10 registrational and 10 proof-of-concept studies across the pipeline.
• On track to progress 4 INDs in the clinic this year with ARGX-109 and ARGX-213 in Phase I studies.
• efgartigimod exploring rheumatology and endocrinology indications, empasiprubart in MMN and CIDP registrational studies.

Launch Dynamics

• Successful pre-filled syringe launch in U.S. and Germany for VYVGART.
• 13 quarters of growth maintained through patient-centric innovation and multiple launches across markets.

In the first quarter of 2025, Argenx reported total operating income of $807 million. Product net sales were $790 million, representing a 99% year-over-year growth. The breakdown of product net sales by region was $681 million in the U.S., $32 million in Japan, $57 million in the rest of the world, and $20 million in product supply to Zai Lab in China. Gross margin was 90%, operating expenses were $668 million, resulting in an operating profit of $139 million. The net profit for the quarter was $169 million, and the cash balance at quarter end was $3.6 billion, an increase from the previous quarter.

Financial Guidance

• Previously issued guidance on total R&D and SG&A for the year remains unchanged.

Growth Confidence

• Confident in driving consistent growth, with PFS launch to maintain momentum, and pipeline milestones including Phase III and proof-of-concept readouts to support growth.

Industry Risks

• Impact of future policy development on the industry, potential effect on supply chain and reimbursement.
• Market dynamics affecting revenue, including changes in payer mix and policy impacts on gross-to-net calculations.

Q: Tazeen Ahmad from Bank of America asked about the profile of gMG patients at launch and discontinuation rates.

A: Karen Massey responded that they're early in the launch curve, ~60% of gMG patients come from orals, and no significant shift in discontinuation rates.

Q: James Gordon from JPMorgan inquired about net price and PFS launch.

A: Karl Gubitz and Karen Massey discussed PFS pricing, net price dynamics between Part B and Part D, and long-term growth trajectory.

Q: Vikram Purohit from Morgan Stanley asked about CIDP new patient starts and trends.

A: Karen Massey responded on continued new patient adds, prescriber growth, and positive patient impact of VYVGART in CIDP.

Q: Derek Archila from Wells Fargo asked about MG treatment cycles and PFS.

A: Tim Van Hauwermeiren stated that cyclical dosing doesn't materially impact VYVGART dosing, and ADAPT-NXT supports individualized dosing.

Q: Yaron Werber from TD Cowen asked about CIDP patient numbers and safety.

A: Karen Massey mentioned consistent patient adds and low discontinuation rates in CIDP.

Q: Victor Floch from BNP Paribas asked about PFS volume and seronegative trial.

A: Karen Massey and Tim Van Hauwermeiren discussed PFS volume growth potential and seronegative MG trial opportunity.

Q: Nat Charoensook from Leerink Partners asked about VYVGART product presentation split.

A: Karen Massey noted Hytrulo driving growth, with pre-filled syringe expected to increase its share.

Q: Amy Li from Jefferies asked about PFS transformation and MFN mitigation.

A: Tim Van Hauwermeiren stated PFS manufacturing is substantial, and MFN handled with disciplined pricing.

Q: Charles Pitman-King from Barclays asked about Part B/Part D price differential and IV growth.

A: Karl Gubitz explained net price difference and IV's continued importance in U.S. market.

Q: Myles Minter from William Blair asked about CIDP disease worsening on switch.

A: Tim Van Hauwermeiren noted low single-digit CIDP worsening, consistent with historical studies.

Q: Suzanne van Voorthuizen from Kempen asked about empa positioning in CIDP.

A: Tim Van Hauwermeiren discussed empa's CIDP trial design and potential in refractory settings.

Q: Yatin Suneja from Guggenheim asked about gMG penetration and competition.

A: Karen Massey and Tim Van Hauwermeiren discussed gMG growth, market share leadership, and PFS role in growth.

Q: Andy Chen from Wolfe Research asked about MFN and Part D exposure.

A: Karl Gubitz and Tim Van Hauwermeiren discussed MFN pricing and patient demand driving Part D shift.

Q: David Nierengarten from Wedbush Securities asked about ocular MG dynamics.

A: Tim Van Hauwermeiren discussed high unmet need in ocular MG and VYVGART's potential to disrupt treatment.

Q: Gavin Clark-Gartner from Evercore ISI asked about PFS payer contracts.

A: Karen Massey and Karl Gubitz discussed payer contract strategy for PFS to ensure broad access.

Q: Samantha Semenkow from Citi asked about CIDP discontinuation rates.

A: Karen Massey stated doctors still give 12-week trials, with low discontinuation rates for VYVGART in CIDP.

Q: Leland Gershell from Oppenheimer asked about CIDP switch study data and 119 trial.

A: Tim Van Hauwermeiren discussed switch study importance and 119 trial endpoints for CMS.

Q: Joel Beatty from Baird asked about auto-injector timeline.

A: Karen Massey stated auto-injector development is on track, with focus on innovation for patients.

Q: Xian Deng from UBS asked about European vs. U.S. net price and PFS opportunity.

A: Karen Massey discussed disciplined pricing in Europe, PFS opportunity in Europe due to lack of IV infrastructure.