argenx SE (ARGX) Earnings Call Transcript & Summary

Yes. But I think we can have some pretty good projections because now we're at the point where you have some MG, efgartigimod patients that have been on therapy for almost 2 years because you've got a very large percent that rolled over into the open-label extension. So we're really being able to hone in on where those buckets fall because that also, as you mentioned, affects pricing.

Got it. Will you guys -- have you guys talked about that data publicly? Or is that some data you might put out in the future, just to understand that a little bit more?

I mean the data that we provided on duration is the top line data, where we bucket it into the greater than 12 weeks, the greater than 8 weeks so on and so forth.

Okay. Great. And then I just want to also ask, so in terms of the Halozyme subcu formulation, how do you think about that also in the MG space? So obviously, you're taking that forward in all the other indications. MG, you might have to do some bridging. So maybe you can just talk about where you guys are with that and what we could expect in different types of scenarios. But commercially, how does that change, I guess, the offering that you guys have with efgartigimod? Do you think most people will use subcu and that will be kind of the mainstay? Or do you think there is basically room for both presentations? And why would you use one over the other, I guess?

I think that the answer there is that there is room for both. And this isn't just me saying this to you, this is what the physicians and the patients are saying back to us. Not all patients want to inject themselves. Some absolutely do not want to inject themselves. You've got a certain part of the population, your Medicare population that they actually go in, they prefer to go into the office. They prefer to see their physician and prefer to see their nurse. You've also got an economic component of it where an IV formulation is going to be billed Part B under Medicare, where a subcu that you inject at home would be under Part D. That can have a different association for out-of-pocket expenses. So all in all, I'm really thrilled about the direction that we're heading in and bridging subcu into MG because it's been our commitment to make IV and subcu available on each of our indications.

Okay. And I guess -- and just remind us of the timing. So we should learn something, is it later this year or early next year, in terms of what kind of requirements the FDA may have you do in terms of bridging that?

Yes. I mean, look, we said that we will meet with the FDA before the end of the year, and then we will provide you with the guidance of exactly what the plan is going forward. I want you to know that we're not sitting still while we're waiting for this guidance from them. I mean we are currently designing an opportunity to treat MG patients that are either on efgartigimod IV in the open-label extension. And we want to be able to answer the question for clinicians and patients, "Can I switch my IV efgartigimod patient over to subcu?" So we want to study that patient population. But also physicians are going to want to see data in efgartigimod naive patients that go directly with the subcu. So we're planning for that as well.

Okay. Excellent. Let's touch on, again, the OUS opportunity for efgartigimod in MG. And I guess, again, when do you expect to gain approval in the EU? And then also, you talked about the Japan opportunity being pretty sizable. So maybe you could just kind of walk us through the mechanics of, again, approval and the regulatory components, but also kind of the commercial opportunities in both of those regions.

Yes. So why don't we go to -- we'll go U.S., where we filed the BLA by the end of the year, and we expect to hear in regard to priority review within 60 days of that filing. Shortly after that, we will file next in Japan with the PMDA. That will be our second market. So we will go to the PMDA shortly after the time with the FDA. And then a bit after PMDA will be time to go to EMA in 2021. If you look at what takes place in Japan, right? From the time that you file, you're usually about 10 to 12 months until you're available on the market. You have a period of time where you're actually approved, but then there is 3 more months before your pricing is available. So during that 3 months, our commercial and medical team in Japan can talk about efgartigimod and can promote it to physicians. They just won't be able to buy it until the pricing is set there in Japan. So why Japan second? Why was it so appealing to us? I guess, first of all, because you have unmet medical need in MG that exists in Japan. You have 20,000 patients that suffer from MG in Japan, and they all have insurance. It is categorized and is on the rare disease list. So there is an opportunity with minimal co-pay. They don't pay for off-label medications in Japan. And lastly, those 20,000 patients are managed by -- between 200 and 300 neurologists. So it's quite concentrated. Bottom line, we can build out our neurology franchise and our Japan business with about 50 people. So it is very scalable for us to go to. And as a company that does not currently bring in revenue, it's very appealing to have a marketplace similar to the U.S. where revenue can follow very quickly after approval. When we go to the EU, we're going to have to take a very step-wise approach. We file with the EMA, we go to gain approval. And then we sequence in the countries, Germany, France, Italy, and we will just roll out the sequence of the countries and how that we will go about each of the country, whether it's a distributorship, whether it's argenx Inc. within that company. And then also, we need to look at rest of world because efgartigimod looks like it has the possibility to benefit a large number of patients in a number of different diseases, and there is no reason why we should leave other parts of the world where patients wouldn't be able to receive that benefit.

Do you think the launch curve in Japan looks a lot more aggressive and steeper and faster than it would look like in the U.S., given what you kind of just described in terms of the concentrated mix there and then also the fact that like there is just maybe less obstacles for a patient to get on therapy? I mean, again, I'm not too -- I haven't looked at a lot of Japanese sales ramps. So I'm just kind of curious, is that something that could happen once it's approved, you see a much more hockey stick kind of launch trajectory?

I don't know that I would want to make that projection because what doesn't ever change here, Derek, is the fact that this will be the first FcRn agent that's launched there. And there is -- until somebody knows that in Japan, I'd say a little bit more conservative view is taken until they're very comfortable with the agent that they're treating with.

Okay. And then just maybe lastly, I'm just looking at some of the questions coming in. But I guess, how do you think about the kind of the overall competitive dynamic in MG? So there is a lot of different therapies. Like again, you'll be the first FcRn. There is a couple of other FcRns being developed, but also other C5 competitors coming in. So ultimately, how does that dynamic kind of change? And do you feel like there is going to be, again, a big chunk of patients that are just going to stay on FcRn therapy, and then there'll be a chunk of patients on C5? I asked Alexion the same question this morning. I don't know if maybe -- what your answer will be, I don't know, I'll just feel -- I'll give you that question, you can run with it.

Yes. Okay. I guess, first of all, let's say that this is a great benefit for patients that suffer with MG. They haven't had a single thing approved in the last 60 years. And now not only do you have Alexion having a product approved, we're on the cusp of it, and you see a lot more clinical trials being placed in MG by a number of companies. So I think that, first and foremost, is beneficial to the patients. Where do we play? Look, the bottom line is that we set a pretty high bar on efficacy with efgartigimod. As I mentioned before that almost 80% in cycle 1 or cycle 2, a rapid onset of action and a great safety profile. So the bar is there clinically for FcRn to be utilized. Do I think that you're going to see a space that is going to be big enough to where you will have both utilization of FcRn and C5? I do. But I do believe that FcRn -- and actually, I've seen a slide that Alexion uses where they have FcRn playing upstream of C5. And I agree with that slide because of the simple mechanism of action. It's the mechanism of action of us removing the autoantibody at the neuromuscular junction which is giving the relief to the -- clinical relief to the patients with MG. But one of that autoantibody's roles is recruiting complement. If we removed it, you're not going to be recruiting the complement.

Right. Okay. All right. Let's shift gears a little bit just because the next kind of, I think, milestone or catalyst for you guys is in CIDP, a go, no-go decision in part a of the Phase II. So maybe you could just kind of, again, walk us through the dynamic of that trial. And then in terms of what we're going to see when you guys provide that go or no-go decision in the first half of next year.

Yes. So as you know, we are currently enrolling in this CIDP trial. We've placed a 30-patient go, no-go decision. I think that's a very responsible thing for us to do for the investment community, for our investors because we don't want to go into a full-blown program if we don't see the efficacy that we need to see. However, if we do and we make that go decision, this is going to allow us to take this trial and convert it directly into a registration-enabling trial. So it will be exciting to see that data. The trial design that we have is actually -- it's been very thoughtful. Our Chief Medical Officer and his team came up with a very thoughtful trial because one of the biggest hurdles that you have in CIDP is misdiagnosis of CIDP. So the #1 thing that we wanted to focus on was make sure that the patients that we put into this trial are, in fact, documented CIDP patients. So each patient that one of our sites attempts to put into the clinical trial, that patient and their information, their charts will be studied by a panel of CIDP experts to determine if, in fact, that patient has CIDP. Then that patient, if they're on IVIg, that therapy will be discontinued, and we'll see if that patient begins to worsen. As soon as they begin to worsen, that's where you will treat them with efgartigimod. So it's a very thoughtful trial. We also have a segment of patients that are going to be treatment naive that are diagnosed with CIDP and then would start directly with efgartigimod. So I'm excited to see the results of the trial.

You guys haven't offered the split between the patient segments, right, like between treatment naive and patients who are on IVIg treatment going into part A? Like have you talked about that at all?

Yes, we haven't offered it up yet, but I can tell you that we have patients that fit in both of the buckets. So it will be really interesting for us to see the data and see if there is any difference in somebody that was previously exposed to IVIg or somebody that never has been at all. So -- but I can't answer that until we see the data.

Fair enough. And then I think, again, and Tim has talked about this as well, and you just mentioned it, so is it after part A? And if you get a good result there, and maybe we can talk about that next and what you could constitute as a good result, but I guess, is that when you go to the FDA to basically get the blessing for it to be a registrational study? Or is this something already been pre discussed with the FDA that if you hit a certain threshold, it's going to be allowed for a registrational study in part B?

Yes. So first of all, know that this study has already been discussed with the FDA. So we have already had a discussion with them. But look, we haven't been specific on the criteria for the go, no-go. I mean we're studying precedents, and what we look to most is placebo-controlled CIDP trials, of which -- that makes me refer to the ICE trial in IVIg, where IVIg had a 53% response rate and placebo had a 21% response rate. So that placebo response in CIDP is substantial, and it's something that -- that's why I think the thoughtfulness of our design is designed to try to minimize the placebo response and that we have the appropriate patients in there. But when we have the go, no-go, and we have the criteria, we'll share information with you on why we made the decision we made.

All right. And then just last question. As you think about the market opportunities for efgartigimod, obviously, MG, quite large; CIDP, also quite large. I guess as you think about the 4 indications that you're currently developing it in, I guess, could you like rank order which opportunities you think are the largest for efgartigimod from a sales perspective and taking into account like all the competition and things like that? Because I think, one of the things -- these are all pretty large markets, but I guess we're trying to understand which one do you kind of view internally as like the largest opportunity for this pipeline and a product.

So let's make sure that we're speaking clear about, at this point out of the floor, we're talking about sales volume, not about number of patients treated.

Correct.

So if it's just about sales volume, if we produce in the CIDP study, a positive response. So if I go back to that 53% that you saw with IVIg, if we have something like that, and you combine that with the fact that these patients -- look, they love their IVIg and -- because it's the only thing that's working well for them, but it does come with a bit of a price, which is, you're in an infusion chair for almost 5 hours every 3 weeks, right? Our CIDP therapy, you could be self-injecting at home in less than 1 minute, all right? You also have the safety aspect. IVIg, proven, but it does come with that IVIg hangover that patients have told us about where they have that massive headache and then they begin to feel good. And as it gets closer to that 3-week interval, they feel their IVIg wearing off and they have to go back and be infused. So it can be bigger than just the efficacy. There also can be that convenience and safety portion. If we turn out the data that says, we can replace IVIg, there is over $1.7 billion of IVIg sales in just the U.S. alone for CIDP. And if you combine rest of globe, it's over $3.25 billion a year in just treating CIDP. So out of the 4 indications, what could generate the highest sales volume is CIDP.

Got it. All right. Well, Keith, as always, it's a pleasure. Thank you again for joining us. I think we'll leave it there given the time. And thanks, everyone, for joining in on the call. Everyone stay safe and be well.

Derek, I appreciate it. Thank you for the time. Take care.