argenx SE (ARGX) Earnings Call Transcript & Summary

Great. Good afternoon. I'm James Gordon, JPMorgan European Pharma and Biotech analyst. And today, I've got the pleasure of introducing the Argenx presentation. We're going to have a breakout afterwards in the Sussex room, and I can help lead you there. But with that said, I'll hand over to Tim Van Hauwermeiren for the presentation. Thank you very much.

Thank you, James. Good afternoon, ladies and gentlemen. My promise to you for the next 25 minutes is that we are going to take a close look at our patient focus. We're going to take a look at MyRealWorld MG, our real world evidence study in myasthenia gravis. We're also going to learn how we have been adapting the design of our Phase III global registration trial to the will of the MG patients. We're also going to take a closer look at the late-stage clinical development pipeline of the company. We're going to take a closer look at efgartigimod and cusatuzumab, the 2 workhorses behind the company. And I'm extremely proud to inform you today that our global Phase III registration trial in MG, called the ADAPT study is fully enrolled ahead of schedule. I would like to applaud the ADAPT team for a job well done. And our new guidance is that we will read out top line data for this Phase III trial midst-2020. I will also be showcasing very briefly the Phase II proof-of-concept data in our third beachhead indication called pemphigus vulgaris. That means we can declare a victory. This strategy has worked with now 3 out of 3 beachhead indications where we had a very robust proof of concept. Finally, we're taking a look at the engine behind the company, the innovation engine, our innovative access program, which continues to build and drive value in the earlier-stage pipeline of the company. First, let's define where we're going to play. We're going to play in the neuromuscular franchise with indications like MG, CIDP and soon MMN. We're also going to play in a hem/onc franchise with indications like ITP, AML and soon high-risk MDS. We have an abundance of opportunity. That means we can easily build a third franchise, which could either be skin or kidney. If we take a look at our late-stage clinical development pipeline through the lens of these 3 franchises, you basically see a phenomenal momentum feeding into these franchises. Basically, this year, we're going to run 5 Phase III clinical trials and 7 early-stage clinical trials, all feeding into these franchises. But don't be mistaken, we are building a real company. We're not just focused on late-stage clinical development. If you take a look at the pipeline slide, you see that we continue to crank out new assets. We announced about half a year ago, ARGX-117 and ARGX-118. And my promise to you is that in 1 -- that ARGX-119 will be announced later this year. Super excited about the markets we're going to play in. Just take a look with the current indications we have on the radar screen, you see sizable, healthy markets, healthy growth, and this is just the start. Based on the beachhead strategy, we will be adding indication after indication, and we are very excited about the commercial potential of these franchises, which we're building. Now that we took a look at where we play, I'm going to spend most of my presentation about how we're going to win. The first thing we need to win is people. And I'm very proud to stand here today and tell you that all key commercial functions in this company have been staffed with people who have experience and a track record in successfully launching orphan drugs in the type of franchises we want to play in. I'm very proud about our MRL team, which is currently supporting our late-stage clinical development trials and soon will be supporting our commercial stage products. And we're going to be thoughtful about how we staff the sales force. Don't be mistaken about the ambition level of the company. We're going to launch in the States, then we're going to launch in Japan, and then we're going to turn around and take on Europe. Let's now turn our attention to a second success factor for winning in the franchises where we want to play. I think this company is developing an ability to innovate, to differentiate every step of the value chain. I'm going to use efgartigimod as an example, we have built a differentiated molecule. I'm going to show you today how we have built a differentiated clinical trial design with ADAPT, and then I'm going to talk about our differentiated commercial positioning for the product. Let's start with the molecule. People who know this company know our format for innovation and molecule level rights. We call it our innovative access program. We team up with the world-class experts on novel breakthrough immunology findings. In this case, the lab of Sally Ward, FcRn pathway, FcRn targets and leveraging the unique insights from Sally, we could build actually the only fragment in this space with very unique properties. These properties already translated into a differentiated clinical product profile. From an efficacy point of view, we've put the bar very high. In MG, we rival PLEX in terms of performance. In ITP, we show a performance, which basically reminds us of TPO receptor agonists but this time in a TPO refractory population. And as I'm going to showcase in a few minutes, in pemphigus, we see the right to go fast to complete remission. From a safety point of view, it's fair to say that all FcRn antagonists are not made equal. I think we have a differentiated safety profile. We do not see any trends in headache, GI toxicity or drops in CRM albumin. And last but not least, convenience, thinking about the patient. We want to win in every channel. I think we have a phenomenal execution on the IV side, a fast, clean infusion, no premedication, no infusion-related reactions requiring follow-up. So this product will give very fast and over time in the infusion share. Subcu, we have developed 2 products, one for maintenance and one which is interchangeable, thanks to the Halozyme technology with the IV products. But we also built in convenience from a dosing paradigm point of view in the ADAPT study, as I'm going to show you in a minute. How did we go about choosing indications? If you look at indications, which are driven by pathogenic IgGs, there's an abundance of opportunity in front of us. So we deployed a beachhead strategy. We picked MG as the beachhead indication in the neuromuscular space, ITP as a beachhead indication in the hem space. And then thirdly, pemphigus as the beachhead in the blistering skin disease space. Basically, the unifying biology is pathogenic autoantibodies drive disease. And based on success in the beachheads, we can now expand, for example, in CIDP, which we announced and explained just a few weeks ago back in New York. Proof-of-concept in our beachhead indications constituted the following: we wanted to show a convincing correlation between the knockdown in IgGs in yellow and pathogenic IgGs specifically and improvement in disease scores. That correlation in MG stands like a rock. Same for ITP, very clear-cut correlation between knockdown and anti-plated antibodies, on the one hand, and an increase in platelet count and reduction in bleeding events. And ladies and gentlemen, just look at the consistency of this molecule in our subjects, you see an identical curve in our pemphigus patients. A rapid PD effect, this time in the IgG IV class, the pathogenic antibodies in green or anti-desmoglein-1 and anti-desmoglein-3 autoantibodies. And hand-in-hand with that knockdown, we see a systematic improvement in the PDI score. Actually, if you maintain the pressure on the patient with efgartigimod, you have the right to push that PDI score all the way down to 0. In this study, we had a very nice representation of pemphigus patients, both vulgaris and foliaceus, all the subtypes of vulgaris and basically newly diagnosed and relapsing patients. The drug works equally well in all of them. Actually, we have some pretty bad patients in this study, when you look at the activity and the PDI score. This was an adaptive study. Some of you asked me, "Tim, why is taking such a long time to get PV data, right? Have you forgotten about it? Have you deprioritized it? "No. In fact, we made this trial adaptive. We could single variably test the effect of efgartigimod as monotherapy versus combo therapy with low-dose corticosteroids. We could dial up or down the dose of efgartigimod, and play with the dose of corticosteroids and learn about how you taper off the corticosteroids. I'm really glad we did it because the findings are pretty impressive. Speed of onset is impressive regardless whether it's monotherapy or combo therapy, we have the right to push patients into disease control after the first or the second infusion. Deep responses. Once we optimized the dosing with corticosteroids, we could see a 70% complete clinical remission. We also saw the right to taper off corticosteroids in a very powerful fashion. An independent safety review committee declared the drug to be safe and tolerable and actually we started to understand more about the biology of corticosteroids in skin, and how actually they upregulate synthesis of the autoantigens, whilst we with efgartigimod can take away the pressure on these autoantigens. Probably explaining why this drug, in combination with corticosteroids, can go so fast into complete clinical remission. Now I want to talk about how we differentiate at a clinical trial design level. For those who have seen the Phase II MG data, you will remember that this drug gave a very fast onset of action in MG, deep responses and surprisingly, a long-lasting benefit. Actually, when you propose such a presentation to the stakeholders, the patients, the physicians, the payers, they overwhelmingly told us to leverage the strength of this molecule and actually give them time off drug where they can basically enjoy a sustainable benefit. Patients do not want to be dosed if they don't need to. They want to go on vacation. They want to lead normal lives and don't be reminded of their disease when they have no symptoms. Physicians don't want to chronically immunosuppress patients anyhow. And payers only want to pay for the drug when you need it. So when we interacted with physicians and patients, we learned about the roller coaster these patients go through. Basically, generalized MG patients experience the disease as a waxing and waning disease in terms of symptoms. Each and every MG patient is experiencing his or her symptoms in a uniquely different way. And what the physician tries to do is actually, with fast-acting steroids with horrible side effects and broad immunosuppressants, which are slowly acting, it takes 6 to 12 months' time to work, require some cumulative safety baggage. They basically try in a balancing act to manage symptom suppression on the one hand and basically side effects on the other hand. With this drug in our hands, we can go to a new world, basically, that patient no longer needs to go through that roller coaster. You can push the patient into minimum symptom expression, keep the patient there and basically allow the patient to enjoy substantial periods off therapy, we call it our sustained clinical benefit. This is the tailored dosing patients really want. Now if you know this desire to switch off the patients, you will understand our clinical trial design. I invite you to first look at the box. That box, that 8-week study, that's the heart of the Phase III trial. And it is nothing else than our Phase II study. It's exactly the same design, 4-weekly infusions, you achieve maximum PD effect. And basically, a responder is any patient who achieves a delta of 2 points on the ADL score for 4 consecutive visits at least. That's just reminiscent of our Phase II rights. Now all the rest is pure upside. Basically, we enroll patients above and beyond the patients, which we saw in our Phase II trial. We also enroll patients, which have autoantibodies against other elements of the neuromuscular junction. But it's a low-risk approach because they're not involved in the calculation of the primary endpoints, okay? It's pure upside potential. They will be involved in the secondary endpoint. The other upside potential in this study is that now in contrast to the Phase II, we can allow the full benefit of that sustained therapeutic effect. We can allow the benefit to run as long as it lasts before we need to retreat a patient when the patient is losing the response. So the design of the 26 weeks blinded control study is such that we can accurately measure the duration of the benefits, but there is more to it. We can also learn how patients respond the second time. Will they basically respond the same way? Will they have a bigger benefit, a longer-lasting benefit? We don't know that. We can also learn about patients who did not respond in the first treatment cycle, whether now they can respond on a second treatment cycle. So a lot of data which our marketing and market access people can really leverage when it comes to commercialization of the drug. So think of the box as the registration trial, think of the remaining period in the 26-week study as data collection, learning from a market access and marketing point of view. At the end of the 26-week study, basically, everybody can roll over into an open-label extension study, where both placebo patients and efgartigimod patients can now enjoy efgartigimod at a dosing cadence tailored to their own needs. From a positioning point of view, we have basically positioned the drug such that it can play across the treatment paradigm. That's the green box. We have the right to play early. We could actually facilitate accelerated tapering of steroids early on. But we can also push out in time, the use of these broad immunosuppressants or maybe even replace them completely. Of course, from a mode of action point of view, we have the right to play in the relapsed/refractory patient population. So broad positioning across the entire team in paradigm. Now I'm very proud of my market access folks because I started my career in Procter & Gamble, where the consumer is the boss. Actually, here, the patient is the boss. This is the most ambitious, unique real-world evidence study in MG ever. We're basically going to enroll 2,000 patients in this global study in close collaboration with the patient associations. And we are going to collect a wealth of information when it comes to pathway of cash, burden of disease and burden of the current medication. So think of building a value dossier where basically the ADAPT data are complemented by MyRealWorld MG data, supporting the value of the drug in our upcoming discussion with the payers. Quick ITP. We have been talking about the ITP study or the ITP Phase III campaign extensively. You basically have an IV study flanked by a small confirmatory study where we're going to induce and maintain patients with the IV products. We also have a study we're going to -- where we're going to induce IV and maintain subcu. The aim of this study is actually to go for a record platelet response and, hopefully, durable platelet responses. We extensively discussed the design of the CIDP trial. It's a very thoughtful design. And the only thing I want to say about it today is that it's substantially de-risked because after 30 patients, we have a go, no-go decision whether or not to transition into a Phase III registration trial. That study has started earlier this year. Let's turn our attention to cusatuzumab, that second workhorse behind the company. It comes out of the argenx mold. It's a novel target. It's a pathway with deep understanding from our academic collaborator Professor Ochsenbein, so we could co-create an antibody, which we could never create in isolation. It's a molecule with phenomenal data from a Phase I dose escalation study, 100% response rate, most of them CRs. Deep responses in terms of MRD negativity. And I'm very proud to tell you that our Janssen collaborator is basically executing that global development plan like Swiss clockwork. So again, we have 2 new studies we can announce. Basically, there's 4 studies running today. This is like a machine, which is in partnership with argenx, rolling out the cusatuzumab global development plan. I'm also very proud of ARGX-117, our novel complement program, which started clinical development earlier this year. It comes out of the argenx mold. It's a totally new target biology, which we tapped from our innovative access program collaborators, Black Belt Antibody Engineering to make it sweeping. And again, a pipeline of opportunity in front of us in terms of indications, which we are going to mine using the same systematic beachhead strategy as we have deployed for efgartigimod. One slide on our Innovative Access Program. This is the engine behind the company. It's a very simple formula, is the former of co-creation. We basically bring Black Belt Antibody Engineering know-how to the table, with world-class translational biology, which we find in labs across the world. And it's a formula which works. We have a track record. Every year, we build a new pipeline assets. And we have success in 8 out of the 10 assets which we built so far. So here's our to-do list for 2020. We have 3 priorities. The first priority is prepare for the launch of efgartigimod in myasthenia gravis. I showed you that we know what it takes to win. And I can tell you that the entire company is going to shoulder this launch, which we call the launch of our life. We're also going to continue to execute. We have 5 Phase IIIs to do and 7 Phase I and Phase II studies. That's a lot, but this company has a track record of execution. I'm confident that this team can do it. And last but not least, we will not switch off the discovery engine. My commitment to you is that we will continue to build pipeline. And later this year, we will be announcing ARGX-119. And with that being said, I would like to conclude this presentation, and invite you to come with us to the Q&A session. Thank you.