argenx SE (ARGX) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the argenx ADAPT Phase III trial top line results conference call. [Operator Instructions] I would now like to introduce Beth DelGiacco, Vice President of Investor Relations at argenx. Please go ahead.

Thank you, and good morning to everyone on the call. Earlier today, we issued a press release summarizing our positive top line Phase III ADAPT trial results. The press release and the presentation for today's webcast can be found on our website. On the call today are Tim Van Hauwermeiren, our Chief Executive Officer; and Wim Parys, our Chief Medical Officer. Keith Woods, our Chief Operating Officer, will be available for the Q&A session following prepared remarks. Before we begin, I'd like to remind you on Slide 2 that forward-looking statements may be presented during this call. These may include statements about our future expectations, clinical development, regulatory time lines, the potential success of our product candidates, financial projections and upcoming milestones. Actual results may differ materially from those indicated by these statements. argenx is not under any obligation to update statements regarding the future or to conform those statements in relation to actual results unless required by law. I will now turn the call over to Tim.

Thank you, Beth, and good morning to all. We are very happy to share with you today the positive top line results from the Phase III ADAPT trial of efgartigimod in patients with generalized myasthenia gravis. Before we get to the details of the data, which Wim will walk through, I want to take a step back and talk about what these data mean for people living with MG for the future treatment of autoimmune diseases and for argenx overall. These positive data from our first pivotal trial bring us closer to the patient than ever before. We are hopeful that we can offer a new therapy to a patient population badly in need of alternative options. This is also a transformational day for argenx, and I share the sentiment with my entire team. We are ready to realize our 2021 vision and to make the shift to be a commercial organization. As we look to the future and reaching patients, we also remain firmly rooted in our scientific foundation. We launched argenx over 10 years ago around an antibody engineering discovery. Our research network brought us to Professor Sally Ward who became our collaborator on efgartigimod. She was the first to identify the crucial role that the neonatal Fc receptor or FcRn plays in maintaining and distributing IgG antibodies throughout the body. She worked with us to develop efgartigimod to be a best-in-class FcRn antagonist and to explore its broad potential across autoimmune diseases mediated by IgG antibodies. The data in today's announcement validate her discovery. And as a result, we are confident in the opportunity efgartigimod may offer as an innovation in MG and other severe autoimmune indications driven by pathogenic IgG antibodies. I want to thank everyone who participated in ADAPT. We worked with MG patients and physicians in designing this trial and continue to partner with the MG community as we advance efgartigimod. We are truly driven by the resilience and the determination each day. With that, I'd like to move to Slide #3. The pivotal ADAPT trial achieved its key objectives, and we believe the data we will share today support a new standard in the treatment landscape for gMG patients. We saw a highly significant response rate on the myasthenia gravis activities of daily living, or MG-ADL score, our primary endpoint. We also saw a very favorable safety profile that was comparable to placebo. We believe this will be an important differentiator. The data show a fast onset of action, deep responses and the potential for sustained responses. Taken together, we believe these results enable an individualized dosing paradigm for gMG patients. We initially designed ADAPT with this powerful, personalized offering in mind and are pleased that the data support our vision. We will be taking the next steps to advance efgartigimod and are on track to file our BLA by the end of the year with a planned 2021 U.S. launch. Slide #4. Myasthenia gravis is a rare and chronic autoimmune disease where IgG antibodies disrupt communication between nerves and muscles, causing debilitating and potentially life-threatening muscle weakness. Muscles that control the eye and eyelid movements are typically the first affected, but more than 85% of people with MG progress to a generalized form of the disease within 18 months where basically all voluntary muscles throughout the body can be affected. Patients with MG can experience extreme fatigue and difficulties with facial expression, speech swallowing and mobility. In more serious cases, MG can affect the muscles responsible for breathing, and up to 20% of patients experience a life-threatening myasthenic crisis with respiratory failure requiring mechanical ventilation. Patients with MG continue to experience symptoms and morbidities that may have profound negative impacts on their quality of life. From our frequent communication with patients and physicians, we know that the gMG treatment journey is characterized by delayed diagnosis and multiple treatment switches. We also know that patients with MG all experience their course of disease differently, yet therapies are not always accommodating to these variations. This community continues to need new, effective treatment options, and we are hopeful to bring this to them with efgartigimod. Slide 5. Efgartigimod is a first-in-class FcRn antagonist designed to reduce IgG antibodies in diseases like MG where the antibody is the driver of disease. We understand the role of the disease-causing antibodies in MG very well. We know what the specific autoantibodies are and what they do. Efgartigimod is a precision tool designed to selectively go after them. For patients with confirmed oral antibodies against the acetylcholine receptor or antibody-positive patients, the IgG autoantibodies have 3 modes of action: first, to block receptors at the neuromuscular junction; second, to cross link and internalize these receptors, so there are fewer available to transmit signals to the muscle; and third, to recruit complement. For patients without confirmed acetylcholine receptor antibodies or antibody-negative patients, we believe autoantibodies primarily serve to block function of other components of the neuromuscular junction. Overall, by reducing the autoantibody, we are targeting MG disease biology at its core. Based on the unifying mechanism of the IgG autoantibody, we believe efgartigimod offers an innovative concept in autoimmunity, and these positive ADAPT data validates the broad opportunity ahead of us. Slide 6. Before I turn the call over to Wim, I want to remind you of the key details of the trial. That, that was a global Phase III trial that enrolled 167 generalized MG patients. We believe it is the largest MG trial to date. Patients were stratified according to 3 factors: first, by ethnicity, honoring our commitment to the PMDA to evaluate efgartigimod in Japanese patients; second, by background medication. Patients were required to be on a stable dose of existing therapy prior to randomization and to keep a stable dose throughout the primary trial. By stratifying, we ensured we had a good balance of those on broad immunosuppressant therapies and those not; and third, by antibody status. We opened the trial to patients regardless of their antibody status, including both antibody-positive and antibody-negative patients, making this the broadest MG trial of its kind. Antibody-positive patients represent about 80% to 90% of the generalized MG population. But it was really important to us to include the antibody-negative patients as well because of the biology rationale, and these patients are often left out of clinical trials. Our agreement with the FDA was that we would explore a signal in the antibody-negative population because of the unmet need, but that these patients would not factor into the primary endpoint analysis. ADAPT was uniquely built based on feedback from patients and physicians and the data gained from our Phase II trial. Furthermore, we built the trial to explore the use of individualized dosing because we know that each individual patient experiences the course of MG differently. Patients in ADAPT were randomized one-to-one to receive efgartigimod or placebo for a total of 26 weeks as part of the primary trial. All patients initially received a first treatment cycle consisting of 4 weekly infusions of efgartigimod or placebo. Retreatment with additional cycles was protocol-defined and initiated when patients lost a clinically meaningful improvement on the MG-ADL score. A 2-point improvement on the MG-ADL score is the published threshold of clinically meaningful and is also typically accepted by physicians as such. The primary endpoint analysis was conducted in the acetylcholine receptor antibody-positive patients and was defined as the percentage of patients who achieved a response on the MG-ADL score. Responders were defined as having at least a 2-point improvement for 4 or more consecutive weeks during the first treatment cycle. We felt this was a very high bar to demonstrate the power of efgartigimod while also trying to minimize placebo response. After the 26-week primary trial, patients were eligible to roll over into a long-term, open-label extension trial, ADAPT-Plus. We had a very high rollover rate, and 90% of patients from the ADAPT trial continued into the open-label extension study. I would now like to turn the call over to Wim to talk about the results from today. Wim?

Thank you, Tim. Good morning, good afternoon, everyone. Slide 7 shows the baseline characteristics of patients who enrolled in ADAPT, including the primary endpoint population and the total population, which includes the antibody-negative patients. We see before us a representative MG population. Baseline characteristics are well balanced between efgartigimod and placebo and between the primary endpoint population and the total population. The time since diagnosis is around 10 years, and these are pretty severe patients with baseline MG-ADL and QMG scores around 9 and 16, respectively. There were no enrollment criteria to have failed a certain number of therapies. The requirement was to be on stable background medication and to not be well controlled as demonstrated by patients having an MG-ADL of 5 or greater at baseline. Background MG medications that were allowed were as acetylcholinesterase inhibitors, corticosteroids and brought immunosuppressants, representing as NSIDs here. You'll notice our stratifications at work for the nonsteroidal immunosuppressant therapies and antibody status. Slide 8. Next, I'd like to walk through the safety and tolerability results from the ADAPT trial. With chronic lifelong autoimmune diseases, a favorable safety profile is a meaningful differentiator. We are very happy with these data that showed the efgartigimod safety profile to be comparable to placebo. Most of the treatment-emergent adverse events were mild or moderate in nature. The most frequent adverse events were headache, nasopharyngitis, GI symptoms and upper respiratory tract infections. These were balanced between treated patients and placebo. We had 3 patients discontinue in ADAPT due to adverse events in each arm. More patients on placebo had an event characterized as a serious adverse event. And in summary, we were very pleased by what these data showed. Slide 9. We move now to our efficacy endpoint starting here. We are thrilled to share with you today that the Phase III ADAPT trial convincingly met the primary endpoint, which, again, was defined as a percentage of responders on the MG-ADL score in the antibody-positive patients. The MG-ADL score is patient-reported and physician-administered and is generally appreciated by regulators for quantifying the patient's experience. It ranges from 0 to 24 and evaluates the daily functions of MG patients based on 8 activities, such as double vision, swallowing, talking or breathing. As a reminder, we included both a magnitude and a durability component in the MG-ADL responder definition to hold our drug to a high bar of success and to minimize the placebo response. The result was highly statistically significant with 67.7% of MG-ADL responders in the efgartigimod treatment arm and 29.7% of responders in the placebo arm. This was achieved with a p-value of less than 0.0001. Slide 10. Here, you see the response on the quantitative myasthenia gravis score. This was our first secondary endpoint and was measured in the antibody-positive patients. Response was defined as having at least a 3-point improvement for at least 4 consecutive weeks. On the QMG score, 36.1% sic [ 63.1% ] of patients were responders in the efgartigimod arm versus 14.1% in placebo. The results further substantiate the efficacy response we saw on the MG-ADL score, showing consistency across both measures. QMG is a more objective measure than MG-ADL. It ranges from 0 to 39 and evaluates muscle strength across 13 activities, such as swallowing, speech ability, stretchability and forced vital capacity. Slide 11. Here, we look at minimal symptom expression, which has emerged as an important measure for both physicians and patients. It evaluates the magnitude and depth of patients' responses. Minimal symptom expression is achieved when patients improve to an MG-ADL of 0, meaning symptom-free; or 1, meaning minimum symptoms. In ADAPT, 40% of efgartigimod patients achieved minimal symptom expression during the first cycle treatment compared to 11.1% of placebo. Significant was achieved with a p-value of less than 0.0001. These are the deepest responses a patient can achieve, and we are really pleased with this result and what it could mean for MG patients. Slide 12. We had 5 secondary endpoints in the ADAPT trial. And if you look to the right at the p-values, you can see we achieved highly statistically significant results in 4 of the 5 endpoints. All of the secondary endpoints were measured in the antibody-positive patients except for 1, which I'd like to call out specifically. The primary endpoint analysis measures MG-ADL responders in the antibody-positive populations, but you'll see on the second line that we also measure MG-ADL responders using the same definition but in the overall population, including both the antibody-positive patients and the antibody-negative patients. This was the agreed-upon endpoint with regulators to capture responders across the trial's broad patient population. The MG-ADL response in the total population achieved significance with a p-value of less than 0.001. When we broke out the antibody-negative patients, we saw a consistent response rate in the treated patients. But as you can clearly see, we also saw a substantial placebo response. We will continue to look at the data. This subset was exploratory in ADAPT. And while we are encouraged by the response in the treated patients, we need to understand why this difficult-to-treat patient population had this placebo response. On the next slide, I will walk through some select secondary endpoints in more detail. Slide 13. First, we look at onset of action. We know from earlier efgartigimod trials in MG and in other indication that this is a drug that has the potential to work very quickly. We see confirmation of this in ADAPT, and 56.9% of antibody-positive patients in the efgartigimod arm started to respond during the first 2 weeks of dosing compared to 25% of placebo. Additionally, of the 44 patients who are efgartigimod responders, 84.1% had a fast response that's initiated within the first 2 weeks. This means that if you receive efgartigimod and you respond, you typically respond after the first or second infusion. Slide 14. Here, we looked at durability and the potential for efgartigimod to drive sustained responses. As you saw on the earlier chart, time to qualify for retreatment is the 1 secondary endpoint that did not meet significance. We started measuring the endpoint 1 week after the last infusion and checked how long it took for patients to qualify for retreatment. The median time for efgartigimod patients was 35 days compared to 8 days for placebo. This included responders and nonresponders. It is surprising that a 4x difference does not lead to significance in the p-value. But this has more to do with a log-rank test that was used than it has to do with the strength of the data. On the right side, we looked at additional analysis of durability that was prespecified. We took the responders that showed a clinically meaningful improvement for at least 4 weeks and broke down the durability of these responders -- or responses. 88.6% of antibody-positive patients who responded to efgartigimod had a benefit that lasted at least 6 consecutive weeks. 56.8% of these patients had a response of at least 8 weeks and 34% for at least 12 weeks and as long as 25 weeks. We know as part of the course of MG that each patient experiences the disease differently. These data align with the understanding and support the need for individualized dosing schedules. Slide 15. ADAPT was the first trial in which we studied retreatment of patients on efgartigimod. We were very pleased to see that repeat treatment yielded equally strong benefit. 71% of efgartigimod patients responded during a second cycle compared to 26% of placebo. It is also important to note that 12 patients who responded on efgartigimod in the first cycle never required a second cycle in the 26-week primary trial. Thus, these patients were not included in the retreatment analysis. Some additional points we learned on retreatment. Patients who did not meet the responder definition in cycle 1 were retreated in a second cycle. 36.8% of these patients became responders in the second cycle. Before I turn the call back to Tim, I'd like to say how excited we are with these results. We confirmed what we saw in Phase II. We saw fast responses and deep responses to the extent that patients achieved minimal symptom expression. We also showed that we can reproduce these results in subsequent treatment cycles. The open-label extension is still ongoing, and we will continue to learn more about the profile of efgartigimod from these data. With that, I'd like to turn the call back to Tim to conclude.

Thank you, Wim. Look, based on these data, we expect to have an exciting 12 to 18 months ahead of us. We will be presenting the detailed results of ADAPT at an upcoming medical meeting. We are also on track to file our biologics license agreement with the U.S. FDA by the end of 2020 and our Japanese marketing authorization application with the PMDA in the first half of 2021. As a reminder, efgartigimod has been granted orphan drug designation in the U.S., Japan and Europe and additionally has fast track in the U.S. And finally, our commercial team will now be ramping up plans to be ready to launch efgartigimod in gMG in 2021. Slide 17. This is our final slide before turning the call over for your questions. We believe that the ADAPT data presented today demonstrate the exciting potential for a paradigm shift for how MG patients will be treated. We know that MG patients each experience their disease in a unique way, and we believe that patients deserve an individualized solution that is purpose fit to their own disease course. Data from ADAPT established impressive responses relating to speed, depth and durability of responses and the safety profile that looks comparable to placebo. Data also show that we can drive patients quickly into minimum symptom expression where their MG-ADL is at 0 or 1. These attributes should enable our concept for individualized dosing where we intend to first minimize symptoms and keep them there rather than having to navigate a perpetual balance between symptom management and side effects. Today, we have realized our vision for ADAPT. We show this name for the trial with a plan in mind to develop efgartigimod to be adapted to the individual needs of the gMG patients. We want to treat the patient and the way they experience the disease. Now we can see this path forward to hopefully make us a plan -- this plan a reality. Thank you once again for joining the call today, and thank you for the ongoing support. I will now open up the call for Q&A. Operator?

[Operator Instructions] Our first question comes from the line of Tazeen Ahmad from Bank of America.

Congrats on the data. Maybe, Tim, a couple on potential market opportunity. If we look at the type of patients that were enrolled into the study, it does look like that most of your patients is stage 4. There weren't too many. I'm just wondering, in a real-world setting, how are stage 4 patients normally treated? Are there a lot of diagnosed patients who are stage 4? How are you thinking about the contribution from that peculiar subset to your drive for market penetration? And then I have a follow-up.

Thank you, Tazeen. Thank you for joining us today in the call. It is clear that we opened up the trial for stage 4 patients, and what we know about these patients is that they're pretty unstable. Now that is one of the requirements. Of course, the common study that is that you are sufficiently stable to make it through the study. So by virtue of the disease, we had a minority of stage 4 patients. Now we don't expect these patients to be treated any differently on efgartigimod or standard of cash. Basically, what we saw in our patient population is that the bulk of the patients actually were on a mix of background therapy, the most common background therapy, you can see in MG. And therefore, we feel we had a balanced and a very broad patient population in the study, including some quite bad patients. So we don't see any real difference in how to go forward in stage 4b patients in the real world. It's just by nature of the study design that we have a limited number of them in the study.

Okay. And then as we think about the potential for patients who need to be redosed, as you prep for your meeting with FDA, how do you think a label would read or directions would read as to in a real-world setting? What dose or at what time point a patient might need retreatment?

Maybe, Keith, I would like to refer this question to you, please.

Sure, Tim. If you take a look at Slide 14, Tazeen, I mean, first of all, as you know, the Phase III study was designed based on what we saw in Phase II and that durable response that we saw with 75% having a response at least 6 weeks. It gave us the idea to set up for individualized dosing or personalized medicines. And really, that's exactly what the Phase III ADAPT study delivered if you look on the right-hand side of the slide with 89% of the responders for at least 6 weeks. And then you can see the 57 for 8 and so on. So this is the distribution curve that we actually expected. And I think what you're going to have is you're going to have a range of patients that are going to benefit from a long duration of benefit period to some that will need to be dosed more frequent. So we're going to continue to work through the data. But the long and short of it is get a patient into response fast, get that response deep, and then you'll dial in their customized interval.

Our next question comes from the line of Yaron Werber from Cowen.

And congrats on the data as well. This is really extremely important data for patients, and so congrats. This is not easy to get to. I have a couple of questions for you. One is relating to the acetylcholine receptor-negative population, which, as you noted, was included as a -- in the pool data, but it's a secondary endpoint. But just given the unmet need, can you give us a sense, your FDA and PMDA discussions, can this data be supportive for label inclusion? And then I have another question.

Yes. Thank you, Yaron, for this question. So I think you hit the nail on its head. First of all, we wanted to recognize the fact that these negative patients are always systematically excluded from access to clinical trials, and their unmet medical need is very high. We had, in our end of Phase II meetings, a very collaborative conversation with the regulators where we could agree on including a cohort of acetylcholine receptor antibody-negative patients without having to include them in the primary endpoints. Remember, we didn't study them in Phase II. So the endpoint the FDA and PMDA agreed on was actually the endpoint we reported today. That is the endpoint where you pool the negatives together with the positives in a total population and you redo your test for your primary endpoint. And it is clear that we pass the test with very high statistical significance. What we saw is that these patients experienced a similar magnitude of effect on efgartigimod but had a surprisingly high placebo effect. Now that can be due to the fact we were using the ADL score, which is more prone to subjectivity. It could be due to the fact that this is a more heterogeneous patient group, and it certainly reflects how desperate these patients are for effective and safe medication. So I think we're still analyzing this data in detail, and we will have a database discussion ready when we will go and meet with the FDA and the PMDA on the potential inclusion of these patients in the label.

Okay. So it sounds like PMDA was a little bit more kind of upfront about agreeing to the endpoint. And the FDA, you'll be up to a discussion during the review. Is that sort of fair?

No. I think they both said exactly the same. So they both bought in into the proposal, which was to have a separate cohorts of a capped number of patients in the negative group and then to pool them into the analysis with the positives, looking for a similar signal. So I think both regulators bought into exactly the same study design. The only requirement which was specific from the PMDA was to include a minimum number of Japanese patients mainly to collect safety information.

Okay. Got it. And then can you give us a little bit of a sense in -- we're looking at the Slide 15 that shows the first and second response, and it's extremely high in both cases. So how many patients actually got 3 cycles on efgartigimod? And sort of what's the distribution between patients who got sort of a first cycle and pretty much were controlled for the 26 weeks and those who got 2 cycles?

Yes. The bulk of the patients actually got away with 1 or 2 cycles. Very rarely, they needed 3 cycles. So we're talking literally a handful of patients who made it to 3 cycles. And you're very right, Yaron, to call out the excitement around the cycle 2 because I think the drug is again passing this very high bar as elegantly as it did in the first cycle. So we were super pleased with this second cycle data point.

And then maybe finally -- and is it safe again to assume -- or maybe just give us your sense, it sounds like probably about 40% of placebo got a third cycle. I mean we're kind of looking at 55% of placebo patients are still not controlled after the second cycle and the first cycle. So did they get a third cycle?

No. I think the bulk of the placebo patients will probably have rolled over in case of no response into the OLE by then.

Our next question comes from the line of Derek Archila from Stifel.

Congratulations on the data. Just a couple of questions from us. Maybe, Tim, I was wondering if you could provide any color on the patients who did not require retreatment during the trial. Maybe in terms of the IgG reduction you may have seen or the severity of disease at baseline. I mean what do you think is kind of driving that durability? And then the second question, relative to your Phase II study, what's the magnitude of the depth of response in MG-ADL score? Was that relatively consistent with what you saw in Phase II?

Thank you, Derek, for these questions. Look, these are top line data. We're still in full data analysis mode, so I cannot answer your question yet on what could have caused patients to just make it on 1 cycle. You see it's a significant portion of patients. But rest assured that by the time of the medical conference where we will present the more detailed data sets that, hopefully, by then, we will have an answer. So please bear with us. These are just top line Phase III data. Same is true for your second question. Debt of ADL response on an absolute scale, same for QMG, that analysis is ongoing. Based on what we have seen in general, I can tell you that the signal we picked up in Phase III is at least as robust as what we saw in Phase II.

[Operator Instructions] Our next question comes from the line of Matthew Harrison from Morgan Stanley.

This is Max Skor on for Matthew Harrison. I was wondering if you can provide any more details regarding how physicians could use this medication for generalized myasthenia gravis. Specifically, will they have a wide flexibility deciding when to retreat?

Keith, would you like to take this question, please?

Yes. Happy to. So Max, I think probably the best thing to compare how you would think how they would use it is when you think about how they're going to start a patient currently on chronic IVIg. We hear from the KOLs that when they're going to start a patient on chronic IVIg, they typically start with a dose of around every 3 weeks, and that's because of the dose that they're accustomed to using in CIDP. And they try to get patients in a response, okay? And once they don't have them in -- if they don't have them in response, they may even have to go to every other week IVIg. And those that they do have in response in every 3 weeks, they will then try to stretch the dose out, trying to get to every 4 weeks, maybe every 5 weeks. We're told from the KOLs it's very rare that they get to every 6 weeks. I think what you're going to see here -- and going back again to Slide 14 and the duration of response, is you're going to see that the physicians are going to -- based on the data, are going to select an area of an interval of which they're going to start their patients, and they're going to give them the 4 consecutive doses. You know that the fast onset of action that our responders, 84% of them should respond after 1 or 2 doses. We also should see the minimal symptom expression in about 40% of the patients in that first cycle. And once they get them into response, I think you'll see a similar pattern of how they really use it. You will see them stretch out the interval, and it will be on a patient-by-patient basis. So that's a real world, and we've done a great deal of market research on this clinical trial with the physicians. And it was quite favorable in regard to this.

Our next question comes from the line of Josh Schimmer from Evercore.

Just wanted to follow up on the retreatment group, particularly the placebo patients, and it looks like there were about 21 patients who didn't make it to a second cycle. Can you comment of those patients, maybe what percent didn't require one due to an initial response versus others who dropped out for other reasons?

Josh, thanks for joining us today in the call. I'm not sure we have been public on this data yet. We don't have this data handy. We will probably break them out for you later at the medical conference, but we don't have them here ready for the top line data results. I'm sorry for that.

Our next question comes from the line of Joon Lee from SunTrust Robinson.

Congratulations on the data. I just want to make sure I understood this correctly. So the agreement with the PMDA and the FDA was that you just needed to hit statistical significance for the pool of patients to get a label for non-acetylcholine receptor antibody-positive patients, and not -- you don't necessarily have to hit the statistical significance in the subpopulation. Is that correct?

I think your second part of your assumption is spot on. We do not need to do any statistical test in the cohorts itself. What they're looking for is a similar signal in the total population as compared to the primary endpoint population, so it's up to us to present the data in a database and scientific fashion and make the case. So I think the p-value in the total population is certainly going to help, and we will probably give them detailed color on these patients. But I can confirm that we will not require to show statistical significance in that small subset of negative patients.

And maybe allow me to add to that, that it will ultimately be a risk-benefit assessment. And you've seen the benefit, the risk to safety profile is comparable to placebo. So in that risk-benefit assessment, I think if we can show the benefit, it will be a review issue, as I've said, but definitely a possibility.

And what's your best thoughts as to why the placebo response in that subpopulation was so high compared -- I mean, the response rate in this placebo seems like in the 60% range. And so I mean, whereas your drug group was similarly efficacious, the placebo just kind of threw things off for you, I think, in the smaller cohort. What are your thoughts there?

I think that's a nice summary. So we saw an equally big drug effect and then a surprisingly higher placebo effect. I mean we can only speculate for the time being because we are actually still crunching the data. Three things come to mind when we talk to our PIs. One would be the high variability within this group. Secondly, these patients are pretty desperate. And remember that the score we use or report in this endpoint is ADL, so that is definitely a bigger placebo effect or potential placebo effect as compared to QMG. So these are a couple of reasons why we think that could have been a bigger placebo effect. But bear with us, we are still analyzing the data.

Our next question comes from the line of Christopher Marai from Nomura.

First, congratulations on the data. Second, I was curious if you could remind us when the safety analysis was conducted. Was that at the primary endpoint of 8 weeks, at least the safety data you presented? And then is the safety data for the patients continuing in the study looking similar, how is that evolving? And I have a follow-up.

Yes. The safety analysis is on the full data set of the entire double-blind, placebo-controlled study. The -- we don't have...

Over what period of time?

26 weeks.

Great. Okay. And does it continue to evolve similarly? Or have you noticed any other potential safety signals.

No. It's not been analyzed to the same extent as a double-blind study, of course. But so far, we don't see any change in the safety profile.

Okay. Great. And then just with respect to sort of the early onset of response that really mirrors what you saw in PV, I was wondering if in your early analysis, there was a subpopulation that responded more rapidly. And if you could discuss perhaps deepening of that response over time and how that might correlate to IgG lowering. And then maybe something of the subset analysis and ongoing analysis that you think will be most interesting when you're able to actually present it at a podium presentation.

Thank you, Chris. It's just as we're doing any type of analysis you can on these data, looking at all sorts of background factors, which could influence the right to response, respond fast and respond durably. But if you look at Slide 13, to the right-hand side, if 84% of your patients respond as fastest within the first or the latest the second infusion, I don't think we're going to pick up major differences here between different patient subsets. I mean invariably, they all react very fast, and I'm glad you called out the analogy with pemphigus because it's a striking analogy. This drug seems to act very fast.

Okay. And then just on the IgG reduction and this type of response. Is that something that you've correlated yet? Maybe comment on those analysis that are ongoing that you think might be most exciting.

Thank you, Chris. So these are top line Phase III data, so analysis is ongoing. For sure, we're going to look at the PD effects of the drug and how the PD effect correlates within different subgroups of patients with efficacy. But this is work in progress, so it would be speculation for me to comment on that now. But rest assured that we are going to analyze the data set as deep as we can.

Our next question comes from the line of Jason Butler from JMP Securities.

I'll have my congrats on the results also. 2 questions. First, on the safety and tolerability profile, can you just talk about the dynamics of the adverse events, when they occurred, and to what extent they were transient versus persistent? And then, again, thinking about the real-world scenario for efficacy and retreatment, in the patients that were not responders in the first cycle, but then did respond in the second cycle, were there signals even after first cycle that would give the physician the encouragement to persist with the second treatment cycle?

I'll take the safety question. I think, so far, there is no specific pattern with respect to when infusion took place. It's a very similar pattern between the 2 treatment groups, so nothing particular in the analysis so far.

With regards to your second question, Jason, I think I like this question a lot because people underestimate how tough the endpoint actually is. So 4 subsequent visits means that you need to have 5 subsequent measurements where you need to hit clinically meaningful improvement. If you miss it once, you basically are not a responder. And indeed, when you take a deeper look into the quarter-on-quarter nonresponders, we should not automatically conclude that they didn't have clinical benefits because we have seen quite a few patients actually which really saw or showed a clinically meaningful improvement, but maybe not just 5 times in a row. Maybe there was somewhere a blip, and they had 4 or 3 or we had a missing visit. And then, basically, you don't qualify as a responder in the first cycle. So it's not because you don't respond in the first cycle and you respond in the second one that, in the meantime, you did not have clinical benefits if you see what I mean.

Congrats on the results again.

The next question comes from the line of Akash Tewari from Wolfe Research.

So I'm guessing there's not too much data you can give on subsets. So I guess stepping back, how is the ADAPT treatment regimen different than what you would expect in a real-world setting, right? Like people kind of look at your data and think an FcRn will be treated in a symptomatic manner. So do you think that efgartigimod will be dosed symptomatically? And also on steroid tapering, that didn't seem to be allowed for ADAPT. So how do you think that's going to bind in a real-world setting? And just one question maybe that's a bit on the weeds. Can you give some clarity on the MG-ADL responders who qualified for a second cycle? So if you look on Slide 15, there's 51 patients on the efgartigimod arm and 43 patients in the placebo arm that got treated for the second cycle. What I don't understand is, why was the denominator in the placebo arm lower versus efgartigimod despite showing lower response rates in the first cycle? Theoretically, they seem like they would be people who would get -- who would qualify for retreatment. So is there any color you can kind of give on that?

Yes. So let's maybe start. These are 3 questions, right? But let's take them all. Why don't you just start out with the first one, Keith? So sorry. This is a question for Keith. So Keith, I mean, how would it be used in real world? And how is ADAPT reflecting real world, please?

Yes. So Akash, I think that the biggest difference between ADAPT, and real world is going to be the criteria to be retreated in ADAPT. Remember, we didn't know the full duration of response from our Phase II because our observation period ended. So to understand how long the patient fully has a clinically meaningful benefit from efgartigimod, we had to have the patient go through the clinically meaningful benefit and begin to lose that benefit or lose that 2-point drop in ADL. In the real world, I see physicians treating a patient with efgartigimod, getting them into minimal symptom risk expression and then maintaining them down there. They're not going to allow them to worsen, okay? So that's where I think you'll see this happening in the real world. Your second question was, are they going to dose based on symptoms? No, I think they're going to utilize this on a chronic basis. And I think they will determine what that interval is, that duration of time where they don't have to administer. Partially that would be based somewhat on symptoms, but I don't see this as just being reactive. I think that they truly will dial it in, just like the example I gave earlier with IVIg.

And then on your third question, Akash, I mean, it's, of course, top line data we show here. And there is some complexity under the surface, but what you're facing in placebo is a higher number of dropouts, I mean, people who actually drop out and then actually go into the open-label extension because they didn't derive any benefit. So this is one of the key factors in the background. I think we had 8 dropouts when you go from cycle 1 to cycle 2 in the placebos. But thanks for the question.

Congrats on the data.

Our next question comes from the line of James Gordon from JPMorgan.

James Gordon, JPMorgan. My question's about putting the efgart data in a commercial context and how it's actually going to -- the drug is going to be used at the back of this data. So one option at the moment is immunoglobulin. So if you can contrast the data you've generated with immunoglobulin and how you think it will fit there and ultimately the C5 option ready. So how should we think about that? So where does this actually get used? And how does it fit in biotherapies, please?

Keith, would you mind going first with this question?

Sure. So James, we designed the trial in mind to be used all the way across the treatment paradigm of MG patients. So as you see from the medications that they could have been on, it could be anything from ACIs to steroids to immunosuppressive therapies. We believe that the results ultimately are going to show the opportunity to help patients that are on high-dose steroids, be able to taper off of them. We think that we could delay or eliminate the use of immunosuppressive therapies. But I also think that this data is going to show that this data does show patients that respond to IVIg, where IVIg chronically is being used. Efgartigimod could certainly be a convenient and effective option for those patients. And I think, as Tim mentioned earlier in the call, we do see the potential to be used in a relapsed refractory population. I mean our starting QMG levels and starting ADL levels, we had some pretty sick patients in this trial.

Our next question comes from the line of Ted Tenthoff from Piper Sandler.

My congrats as well. Really impressive, incredible results. My question really has to do with Japan a lot of the others sort of kind of asked So I just want to get a sense of why Japan second? And maybe you can lay out a little bit the dynamics over there for the MG population.

Thank you, Ted. I think that is a great question. And Keith, would you mind taking this one?

Yes. Ted, we're super happy to be going to Japan second. One of the reasons that we went there directly following the U.S. is, first of all, you've got around 20,000 MG patients that are in Japan. And so that's a good-sized group that are being treated by only about 200 to 300 neurologists. So it's a very concentrated effort. For us to be able to scale up and build a Japanese affiliate as a company that is moving forward to commercialization, we're able to do so with only about 45, 50 employees in Japan. So it's very scalable for us. Additionally, and probably more important, is the fact that 100% of Japanese patients are covered by insurance, and that Japan doesn't pay for off-label utilization of products. So having this on label in Japan is going to be an extreme advantage for us.

Thank you, Keith. And if I can may -- if I may add to that, that there is a tremendous excitement at the side of the PMDA about this molecule and this trial. MG is an important disease in Japan. And I think we saw a regulator, which was highly motivated to work with the company and actually to follow us in our thinking of a single global Phase III registration trial, building in some minimum requirements from a Japanese patient safety point of view only. So I think that's all boding well.

Excellent. Well, congratulations. Fantastic results.

Our next question comes from the line of Yatin Suneja from Guggenheim Partners.

And let me add my congratulations as well. Could you first comment on the enhanced subcu formulation, where that is in development, what your strategy is? How would you bring that to the market? And the second question is on the treatment burden that you currently have with the current weekly IV. In light of the durability data that you have shown, if you look at Slide 14, it seems like about 45% of the patients do dose response at week 8. So it seems like these guys need to be treated much more often. And to Keith's point, where you said that patient needs to be treated chronically to maintain response, so that would imply somewhere in the 20 to 24 infusion in a year. So can you maybe put that in perspective in terms of the treatment burden, what your research is suggesting in terms of patient willingness to go to the hospital that frequently?

Keith, would you mind going again briefly through our subcu strategy, please? And then we can talk about how we differentiate with this finding from a chronic IVIg or PLEX situation, right? So please go ahead.

Yes, yes. So Yatin, first, we have shared with the subcu efgartigimod, which is already being used in our CIDP trial, that we would be moving forward with a bridging strategy in MG patients, and that we would be meeting with the regulatory bodies and be sharing an update with the team as soon as we have a clear path forward. So that is still our intention, and we still plan to bring this into the MG space as fast as possible.

And then, Keith, on the burden of treatment, if we can call it burden of treatment, compared to a chronic IVIg or plasma exchange within a different league right.

Yes. I guess the first thing is, when I say, chronic treatment, that -- I'm not referring to necessarily an interval that is as often as -- I'm not sure where you've come with the 20 to 24. We're still going to be analyzing the data in great depth. But what I'm saying with chronic treatment is people will be on a regularly scheduled dose. If you look at some of those patients at regularly scheduled dose, we're projecting could have a substantial break in between that cycle of 4, okay? So if you look at all other treatments right now for MG, they are all on a regularly scheduled dose, and they're actually quite frequent. I guess, Soliris with their approval is every other week. So right now, patients are accustomed to having frequent treatment. We're giving a new option by this study design, whereas many of your patients will be able to experience the personalized dosing schedule.

Our next question comes from the line of Graig Suvannavejh from Goldman Sachs.

Congrats on the data. I just have 2 quick questions. One, I know we've spent some time discussing the Japanese opportunity. I was wondering if you could provide granularity on why Europe falls lower down on the list. Is it mainly on reimbursements, and perhaps what a commercial build out there looks like? And then second of all, just as a clarification, just for in terms of the enrollment into the open-label extension study. I think it was about 10% of the patients didn't enroll. And I just want to clarify if that was simply just because of placebo dropouts or if there's another factor.

Yes. Thank you, Graig, and thank you for being with us today. So the very high rollover rate into the OLE of a bit more than 90%, I think, is extremely gratifying. Per protocol, people who have to be rescued or drop out prematurely, they cannot roll over to OLE, and these were mainly in placebo. So I think we saw a very high rollover rate basically showing 2 things that is how well efgartigimod works, and secondly, how motivated MG patients are in general. Back to Japan, before I hand over to Keith, an easy way to think about it, Graig. Europe is one united market when it comes to obtaining regulatory approval. However, when you go into the reimbursement decision and discussion, you're facing 27 different member states. So if you look at them on an individual basis and you compare and contrast them with Japan, actually Japan is your preferred market opportunity before you take on any of the big 5 European countries. But maybe, Keith, you want to add a little bit more color to that, please.

Yes. No, first of all, I think that's spot on for Europe, and it explains why we got that just after Japan. Because we can go through the regulatory process, but then we have to go through each individualized country for reimbursement. In Japan, we go through the regulatory process, and then we will negotiate price and be in a -- quite frankly, in a situation where this would be a revenue-generating product in Japan shortly after approval. And that's why we have selected that ahead of Europe.

Maybe just a quick follow-up. Is the current plan that you will go into Europe on your own? Or is that something that would be open to a potential partnership?

Keith?

Yes. So we did share back at R&D Day, well, now it's been 1 year ago, that our intention is to go into Europe, at least the big 5, on our own. We're actively pursuing those plans. We're actively interviewing and hiring our senior leadership team in commercial over in Europe right now. So we will go to the big 5 by ourselves, and then we will be sharing with you the rest of our plan at a later time.

Congrats again.

Our next question comes from the line of Mike Ulz from Baird.

Congratulations on the data as well. Just a quick follow-up on an earlier question. Just curious what percentage of MG patients are acetylcholine receptor negative. And then I have a follow-up.

Yes, that's an easy one. According to the literature, that must be between 10% and 15%. Most of those should be MuSK MG patients. And then the remaining 85% to 90% are all acetylcholine receptor autoantibody-positive patients.

Got it. And then just in terms of the filing of the BLA, can you just give us a sense of the next steps from here? And I'm just curious, you mentioned filing by year-end. Is there any potential to get that filing in sooner?

So we have been publicly stating systematically that we have the intention to file the BLA before the end of the year. I think there's nothing special about the steps between now and the filing, Mike. I think these are the usual steps, where you're waiting for some further preclinical and CMC data points to come in and fank your clinical data. And then you want to make sure that you can do high-quality submission. So nothing out of the ordinary to report here.

Congratulations on the data.

Next question comes from the line of Sandra Cauwenberghs from KBC Securities.

Congrats on the data, and thanks for giving us the in-depth explanation on the information that you have at hand today. With regard to the learnings from this study with the information that you have today, is there anything that you can tell us about the ongoing CIDP trial? So does it give you a bit more comfort with the ongoing trials in earlier stage, such as with CIDP? Or anything you can extrapolate from the findings you have today? That's the first question. The second question is with regard to the marketing efforts in the U.S. If I'm correct, the data would be a trigger to start hiring more people for the U.S. sales team or at least that's what I recall. This has probably changed a little bit under the COVID era that we're in today. Is it possible to give some more explanation on that?

Thank you, Sandra. I'll defer for the second question to Keith. On your first question, I'll realign the question because the way we have been selecting the indication so far is that we always started from what we thought would be a solid biology rationale. So the way we picked indications like MG, ITP, pen figures, but also CIDP is based on compelling evidence in the literature on the key role pathogenic IgGs play and precedent in clinical practice, especially from plasma exchange and immunoabsorption. You will recall that immunoabsorption is a technique, which is specifically removing IgGs and nothing else. So based on these proxies, we each time concluded on the priority of these indications moving forward. So now we have 3 out of 3 hits in our proof-of-concept studies, MG, ITP PV. And the first hits in the first Phase III global registration trial, I think that bodes well for the other indications we are pursuing with efgartigimod. That being said, of course, they're all distinctly different diseases. They play in different compartments, and the design of the clinical trials is also quite different. So I think it validates the biology rationale. I think there is still intrinsic risk associated with each indication and trial design. Keith, would you like to comment on the scale-up of the commercial infrastructure, please?

Sure. So Sandra, you're correct. I think that we have always taken approach that's been very responsible with our investment communities, whether it's the CIDP trial, where we've put in the go/no-go after 30 patients, or whether it's the hiring plan. And this was certainly one of the gates to continue to hire in the U.S. for commercial launch. We've been actually quite successful and been building the team for over a year now. We have all the senior leadership positions in the U.S. already hired. We have a full field team of medical research liaisons, and we have a full field team thought leader liaisons that we have already hired. You mentioned COVID-19, right? And look, we had built our plans and our structure based on the data of the physicians and health care professionals that we would need to be able to reach to launch this product. And one thing that we've learned during COVID-19 is the opportunity to reach out to them virtually has actually far exceeded our expectations. So as we go to plan, we are looking at a scenario where as this pandemic lifts, we return to normal, in which case we would be able to go with the full. And I've referred to this publicly before. We have about 150 people in the U.S., just about 70 of them being frontline salespeople. We could go to that type of a model. We're also preparing at the opposite end of the spectrum to where, what if we're in a situation where it's a launch from complete work from home? So our work with virtual and digital forums has enhanced -- has increased enormously here in the last 2 months. But we're also looking at a hybrid that could be part field-based and part internal with digital capabilities as well. So we're looking at all 3. I think the last thing of this long answer is to say, the working from home and doing everything by video conference has not slowed down our ability to attract talent. And we've hired quite a few people in the U.S., about 20 people over these last 2 months.

Our next question comes from the line of Yanan Zhu from Wells Fargo Securities.

Thanks for taking the questions. So first, just want to drill a little bit deeper in terms of numbers on Slide 15. So first, could you clarify the second cycle? Does that mean the -- refer to the 8 weeks immediately after the first weeks? And also, if we look at the denominator for the second cycle, which is 51 patients in the efgartigimod arm, that would suggest 14 patients, which are not included here, are probably still having greater than 2-point improvement at the end of the first treatment cycle. Of course, there might -- if there are dropouts, that number would be even smaller. Would that mean that the response rate at the end of the cycle, cycle 1, is only 22% or less. How to interpret this data?

I think the deduction is right that these 14 patients were still enjoying the benefit of just cycle 1. The dynamics of the retreatment is not time-driven. It is basically driven on the individual patient needs. So it's not the 8 weeks’ time block following the first 8-weeks time block. It is anywhere for a given patient when the patients start to lose their clinical meaningful response. So that's on an individualized basis. And that's what we then pull into cycle 2 in its totality. So it's individualized and not time bound. Thank you.

Got it. The follow-up would be, how do you compare data with others, whether it's already published or to be presented? I assume by the time of your podium presentation, you might have some of additional analyses. In general, I think the primary endpoint is not comparable because it's -- because of the individualized dosing design of the ADAPT study. But how -- what would you be looking for in terms of data comparison? Granted it's not apple-to-apples because yours are Phase III and others are probably mostly Phase II. But could you share some thoughts on how would you compare data?

I think you're spot on. It is extremely difficult to compare between trials. Actually, you would need to do a head-to-head trial in order to come up with an objective answer to your question. And mind you, this is the second Phase III trial ever in an MG community. All other trials have been small studies. So very difficult then to compare with the only other Phase III trial out there today, which is REGAIN, which was the trial performed by Alexion with the C5 antibody, Soliris. There, again, the primary endpoint was quite different. I mean, they had a readout at the end of week 26. You kind of take a picture at an individual moment in time, and then you look at your statistically significant separation from placebo. What we do is actually we pioneer a whole new endpoint, which, I think, is a much tougher endpoint because now you not only require the clinically meaningful improvement, but you also want to see durability in that endpoint of, as we discussed today, at least 4 consecutive visits, which means 5 measurements. Probably the only way to objectively compare between molecules across different trials would be to look at the absolute drops you see in the QMG and ADL course. And actually, that's going to be a topic of the medical conference presentation, which is due later this year. So that's going to give you a feeling for how powerful this drug really is.

Our next question comes from the line of David Nierengarten from Wedbush Securities.

Just one question from me. On the regulatory filing and thinking about your product profile of being able to treat, retreat patients over an indefinite period of time, are there any other additional safety data or studies that you think you might need to conduct in order to satisfy any regulatory concerns about that? Or has the guidance from the FDA been, this is sufficient to have that kind of -- subject to physician and patient determination interval dosing?

Look, David, I certainly don't want to go into any speculation before we had our meeting with the FDA. But what I can tell you is that the ADAPT trial has been pre-discussed with the FDA and the PMDA. And we did, of course, have their buy-in into the approach to how we build the safety database. It all depends, of course, on ultimately the safety profile of the molecule you take to them. But I think the safety profile we have been disclosing today is a highly favorable profile. It's comparable to placebo. And therefore, I think we have strong cards when we will go and meet with the FDA face-to-face.

So in other words, you don't anticipate additional data for potentially treating a patient for over a year, 2 years, 3 years? Any additional requirements spend on that front?

No. Mind you that we basically have that open-label extension going on in the background, so we will have patients with substantial duration on study drug. And I think the totality of that safety database based on everything we know today should be sufficient.

Next question comes from the line of Emily Field from Barclays.

Just some quick one. First, do you expect that you will get a priority or accelerated review from the FDA? I know you have fast track. Secondly, just any updates on how you're thinking about pricing, given the emphasis on this individualized dosing because it seems like there could be a wide spectrum of amount of drug used per patient per year, and also you have the other indications to potentially think about. And then lastly, I believe you commented that your -- you see your financing as adequate into 2021. Just any updates on how you are thinking about your current cash balance versus needs given, obviously, with this positive data that a launch is looking ever more certain.

Thank you, Emily. That's a mouthful of questions, but let's start with the first one. And when -- what is the perspective on the regulatory track, please?

It's difficult to speculate on what the FDA will do. This will be a question that we will be addressing when we meet with them for the pre-BLA submission meeting.

Okay. And Keith, do you want to comment on the pricing question briefly, please? Keith, did we lose you?

Sorry about that, Tim. I was on mute. We've been doing -- yes. We've been doing work behind the scenes on pricing for quite some time and waiting for this Phase III data to see the overall utilization that's actually taking place. And so we'll continue to crunch the data. We continue to put ourselves in a position with our real-world evidence study and understanding the burden of illness for MG and the difference that efgartigimod can provide. We also are conducting a great deal of market research with payers, and we've had ongoing health economics outcomes research studies. I think where I leave this is when we've always used a statement that we would be transparent in our pricing and responsible. The price is about the value that we're providing to the patient and providing value by successfully and safely treating them. And this data actually excites me from a pricing point of view because here, we have a high bar on our response rate, the fast onset of action, the deep magnitude of response with the MSE, the potential for the individualized treatment schedule and a safety profile. So I think our value to patients is very high, and we will work into a price that, like I said, would be transparent.

Thank you, Keith. I think we covered the key questions. Shall we move on?

I just had the last question on financing, if you don't mind.

Sure. Yes. Sorry. Well, you do remember from the Q1 earnings call that this company is in a strong financial position. I think we're in a fortunate position to have a strong shareholder base, to have a solid cash balance. And that basically means that based on these positive data, we're going to continue to try and accelerate an aggressive business plan as good as we can. And it is, of course, the obligation and the duty of management to make sure that we continue to be in such a financial position of strength.

And our final question comes from the line of Thomas Guillot from Degroof Petercam.

2 quick ones, please. The first one is on the acetylcholine negative patient population. Do you believe that based on your current results, I understood that you don't need to do a specific statistical analysis on the subpopulation? But do you believe that you will need a specific Phase III trial for this population to get conditional approval, for instance? Or maybe can you be a bit more specific on that? And then we have a follow-up.

Yes. Look, we collect a large amount of data for each patient in this study. So there's an enormous amount of data to still go through. Let us first process and understand the data of the specific cohorts. We not only have ADL data, but also QMG data and other data. So let us first bring all these pieces of information together and make the case. And then I think it's really going to be subject of the discussion with the regulators in terms of the level of confidence they can derive from this data from a benefit risk profile point of view. So I would not jump to any conclusion yet. I think that's totally premature.

Okay. And just a quick one. On the safety, can you just remind me if patients were allowed to take concomitant pain killers during the clinical trials?

Yes. That was not on prohibited rescue medication, so they could.

But trying to understand the question, we picked up in the past sometimes the question, do you pre-medicate your patients in order to deal with potential headaches or infusion-related reactions, what have you? Well, that's certainly not the case. We have never pre-medicated our patients. We did not pre-medicate them in ADAPT. This drug is not basically causing any infusion-related reaction of any meaningness.

We had a very conservative analysis in place to look at that. And our -- and infection -- and infusion-related reactions are far less than placebo.

Congrats on those great results.

That was the final question. Please continue.

That concludes our prepared remarks today. Thank you very much for joining the call, and thank you for your ongoing support.

Thank you. That does conclude today's conference. Thank you to everyone who's participated in today's call. You may now all disconnect.