argenx SE (ARGX) Earnings Call Transcript & Summary

Good morning. My name is Elissa, and I will be your conference operator today. At this time, I would like to welcome everyone to the argenx Conference Call. [Operator Instructions] Thank you. Beth DelGiacco, Vice President of Investor Relations and Corporate Communications, you may begin your conference.

Thanks, Elissa. A press release was issued earlier today announcing our decision to continue the ADHERE trial of efgartigimod for the treatment of chronic inflammatory demyelinating polyneuropathy, or CIDP, following an interim analysis and confirmation by an independent data monitoring committee. The press release can be found on our website along with the presentation for today's webcast. 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 developments, 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 these statements regarding the future or to conform these statements in relation to actual results unless required by law. I'm joined on the call today by Tim Van Hauwermeiren, Chief Executive Officer. We also have Keith Woods, Chief Operating Officer; Wim Parys, Chief Medical Officer; and Erik Hofman, Scientific Lead of the CIDP program available for Q&A. I'll now turn the call over to Tim.

Thank you, Beth. I'm pleased to be here with you all today to discuss our decision to continue the ADHERE trial of efgartigimod in patients with CIDP following the planned interim analysis. This is what we have been calling our GO/NO GO decision, and we have a clear GO. We expect to enroll approximately 130 patients in total, and believe that with positive data, this trial will support registration of efgartigimod in CIDP. We are very excited to have cleared this first hurdle on the path to bringing efgartigimod to CIDP patients. Today, I will briefly give you the reasons why we pursued CIDP, the innovative design of the ADHERE trial and provide color around the GO decision and the potential market opportunity in CIDP. At the end, we will open up the call for Q&A. I'd like to remind you that ADHERE remains an ongoing potential registration trial, so we are limited in the extent of detail we may provide today to preserve the integrity of the trial. As always, we will do our best to be transparent, but in doing so, we must first and foremost prioritize the patients in the ongoing trial. The decision to continue enrollment in ADHERE is an important step in our path to bringing efgartigimod to CIDP patients. In addition, this decision underscores the broad treatment potential, we believe, efgartigimod can deliver to people living with autoimmune diseases. We have long said that efgartigimod is a pipeline and a product opportunity, and today, we see that potential more than ever. Slide 3. FcRn is a foundational component of the immune system, and we recognize there are a significant number of autoimmune indications that would make sense for us to study from a biology perspective. We have been very deliberate in how we selected indications starting with the biological rationale but also prioritizing the following: orphan diseases, where we can credibly run focused trials; indications with established clinical and regulatory endpoints; appealing commercial markets, where we can have an impact on patients and their communities; and finally, we have started to build our therapeutic franchises. And we'll first focus on indications within these areas. CIDP is the fourth indication in which we have shown clinical proof-of-concept for efgartigimod. This puts us in a firm leadership position with not only the most advanced program but also the most data across indication. CIDP is the second indication we chose within the neuromuscular franchise on the heels of positive proof-of-concept and now positive Phase III data in myasthenia gravis. With CIDP, we did not run a typical proof-of-concept Phase II. We've rather included the GO/NO GO decision into a seamless Phase II/III registrational program. We believe that our 4 out of 4 headways for proof-of-concept indication validates our thoughtful selection strategy. Slide 4. CIDP is a rare autoimmune disease targeting the peripheral nerves and affecting approximately 16,000 people in the United States. It is characterized by progressive weakness, most often in the arms and legs as well as numbness or tingling. This typically leads to severe disability at some stage of disease in about 50% of patients and many progress to be wheelchair dependent. CIDP patients report feelings of fatigue and an overall decreased quality of life because it is difficult to complete normal daily activities. Due to the progressive nature of the disease, 70% of patients require ongoing treatment, yet current therapies commit significant treatment burden. We hear from physicians, patients and their supporters that this is a community in need of innovation. We also hear from physicians that CIDP is an example of an autoimmune disease, where the clinical understanding exceeds our current scientific understanding. That being said, there's a growing body of evidence that CIDP is caused by an immune attack on the myelin sheath, damaging this protective covering of the peripheral nerves and leading to reduced signal transmission. We believe that autoantibodies play a key role in this immune attack, though we do not know the identity of all the autoantibodies involved. I would like to point out that this uncertainty around the CIDP biology is one of the reasons we implemented the GO/NO GO decision in the first place. The GO/NO GO exits as a gating event to transition from the proof-of-concept portion of the trial to the registrational portion. We wanted to be sure we could confirm our hypothesis of the pathogenic role of IgGs in CIDP before committing valuable resources to a large registrational trial. This is part of our commitment to our shareholders to be good stewards of capital. I will quickly cover the clinical evidence to support the hypothesis that CIDP is an antibody-mediated disease as well as the preclinical data that have been gathered thus far. On this slide, you can see the clinical evidence supporting our hypothesis. As you move down the funnel, the therapy is getting increasingly selective and targeted in removing IgG. Some of these are small studies, but directionally, you see that the clinical benefit is maintained in the therapies that are most selective to IgG. The ICE trial results to the right are from the most relevant, placebo-controlled study of IVIg in CIDP. We will talk about this trial in more detail later in the call because the data were an important input in our determining thresholds for the GO/NO GO decision. Moving on to the preclinical evidence supporting the role of IgGs. We often get the question that if there are multiple components of the immune system involved in CIDP, how do you know that IgGs are driving disease? On this slide, we see a depiction of a passive transfer model, and I'm going to focus on the right-hand of this figure. IgGs are harvested from CIDP patients, purified and then injected into nonhuman primates. This leads to reduced nerve conduction speed, a key hallmark of CIDP. We additionally do know the identity of the autoantibody in about 10% of patients, which you can see on the slide. Autoantibodies against paranodal or nodal proteins are confluent to play a role in slowing nerve conduction. In another 20% to 30% of CIDP patients, we know that antibodies against the myelin-producing cells are present, which we do not know exactly which autoantigen they affect. Of course, our own trial outcomes are the best indication of the potential of efgartigimod for the treatment of CIDP, and now we have interim results that give us a strong confidence of this. Turning to Slide 9. The ADHERE trial has been thoughtfully designed to avoid the pitfalls that previous studies of this population have encountered. The most common difficulties in operationalizing a CIDP trial are around finding the right patients, notably, patients who fully have CIDP because it is commonly not diagnosed and patients with an active form of CIDP making sure that these patients are patients who require ongoing therapies. Before dosing patients with efgartigimod in the ADHERE trial, we sought to identify patients with confirmed active CIDP. First, at least 2 top neurologists must confirm the patient has full CIDP as part of an independent diagnosis committee. The patient then enters a run-in period to confirm disease activity, which is done by withdrawing current therapies, either IVIg or steroids. The patient is required to show a worsening of disease within 12 weeks as measured by at least 1 of 3 currently used clinical measures, including INCAT, I-RODS and grip strength. Newly diagnosed or treatment-naive patients can skip the run-in period. As soon as a minimum clinically meaningful worsening is observed, the patients may enter stage A, where they received a weekly dose of 1,000 milligram subcutaneous efgartigimod, which is co-formulated with Halozyme's recombinant PH20 enzyme. In stage A, it is necessary for the patients to show a proportionate amount of improvement within 12 weeks based on the same scale with which the patient worsened during the withdrawal period. The only exception to this is the INCAT score. If a patient worsens in the grip strength or I-RODS but improves on INCAT, they will also be considered a responder. The reason for this is that the INCAT score is the most stringent measure, and also the accepted endpoint by the regulatory authorities with regards to CIDP. Only stage A responders are able to enter stage B, which is a placebo-controlled, double-blind, randomized study for up to 48 weeks. As I mentioned initially, we have set a GO/NO GO decision of the first 30 patients enrolled in stage A to determine whether or not to continue enrollment up to 130 patients in support of registration. We are happy to be here today to tell you that we have exceeded the predefined threshold for a GO decision, and we're able to make this determination without having to wait for the last patient to finish stage A. On Slide 10, we show the predefined thresholds that we used to make the GO decision and would like to explain how, based on our statistical rules, we feel very confident moving forward with the trial. We relied on the results from the placebo-controlled ICE trial as inputs into our statistical model. We then built further buffers around these results to make sure the response rate we are seeing is unlikely to be attributed to placebo. The threshold for the GO decision was to see a response in at least 14 out of 30 patients. Indeed, with 14 patients or more responding, we can conclude that the responder rate, shown in blue with its one-sided 90% confidence interval exceeds the 95% confidence interval around the 21% placebo response rate as observed in the ICE trial. We know that we are well in the GO zone and can confidently make the decision to continue expansion of this bigger registration trial. The observed interim tolerability profile in ADHERE was also an important component of the GO decision and was reviewed by an independent data monitoring committee along with the interim efficacy results. Thus far, the observed tolerability is consistent with what we understand of efgartigimod from previous clinical trials. This is the extent of which we can share today, but we can reiterate that we are excited to be moving forward with the CIDP trial and will do as quickly as possible. We continue to enroll patients and have already surpassed 30. We additionally will be opening up more clinical trials globally. Given the uncertainty of the pandemic and its potential impact on the trial, we are unable to provide further guidance on timing of top line results, but we plan to provide updates during our quarterly earnings call where possible. With that said, we believe the long-term market opportunity in CIDP is promising. On this slide, you can see that CIDP represents approximately 24% of the total IVIg markets making it a greater than $3 billion global market that is growing double digits annually as it is a rare chronic and progressive disease and the current standard of care is associated with long infusion times and adverse effects. We continue to believe that there is a high unmet need for innovation in this space. This is an unrelenting disease, and we are hopeful that today's decision will take us one step closer to reaching people living with CIDP. Before we move to Q&A, I'd like to thank you for taking the time to join the call today, and I want to leave you with some key conclusions. First, as we have said many times in this call, we have looked at the interim data from ADHERE and are confident in our GO decision to continue enrollment up to support registration of efgartigimod in CIDP. Second, the tolerability results that we have seen so far from ADHERE are very consistent with prior clinical trials. In addition, we have an independent data monitoring committee in place for ADHERE, who has reviewed the efficacy and safety data and supports our decision to move forward. This is the first clinical trial in which we have evaluated subcu efgartigimod in patients, and the initial feedback is very positive. Our subcu is a fixed 1,000 milligram weekly dose and can be administered in a single rapid injection with a pain-free bottle and without blood pressure. We have trials ongoing with subcu efgartigimod in myasthenia gravis, immune thrombocytopenia and pemphigus vulgaris as well. Efgartigimod has now shown proof-of-concepts in all 4 indications we have studied to date. We believe this shows not only the potential of the mechanism addressing FcRn but also our strategy in carefully selecting indications based on biology. We believe the market opportunity for CIDP alone is sizable and will be an important indication in the broader efgartigimod portfolio. As a proxy, global IVIg sales in CIDP currently exceed USD 3 billion. Finally, this is a step closer to reaching the CIDP patient. This is a community that needs new innovation that face a serious progressive disease and the options for therapy commit significant treatment burden. We see this unmet need and are working every day to bring new options in these patients. This concludes our prepared remarks today. As always, we are committed to maximizing shareholder value by making database decisions such as the one today. This strategy will continue to guide us as we build out our differentiated pipeline. We look forward to gathering additional data as the ADHERE trial progresses, and we are optimistic that this will lead to both a greater understanding of this debilitating disease for the scientific community and a potentially innovative treatment for patients. I will now turn the call back to the operator to begin the Q&A.

[Operator Instructions] The first question today comes from Tazeen Ahmad of Bank of America.

Congrats on the update. Tim, how are you?

Tazeen, nice to see you again on this call.

So I wanted to just get a couple of questions about the type of patients that you've enrolled in this study. Our doctor checks, thus far, say that CIDP could be a very large indication as you noted in your prepared remarks, but that a lot of patients seem to be misdiagnosed. So in your enrollment criteria, what did you do to ensure that all of the patients that you've enrolled actually do have CIDP? And are you including all the types of variants, both the typical and atypical in stage B?

Yes. Thank you, Tazeen, for this question. It's an important question. So the answer is yes. I think we have been looking to include all true CIDP patients regardless of the subtype and -- or regardless of the knowledge on the antibody status. And I think it's fair to say we have a balanced representation of newly diagnosed patients as well as patients on IVIg and steroids. And I can assure you that we're very happy with the independent validation of the CIDP diagnosis, which is done by a panel of CIDP KOLs. They make that decision of verification by consensus. So we're pretty sure based on the medical file of these patients that we're dealing with true CIDP patients.

The next question comes from Akash Tewari of Wolfe Research.

So I guess the obvious question here is, did you see a higher response rate in naive patients? Or did you see a higher response rate in refractory patients? Assuming you guys aren't going to comment on that, I will pivot and say, given the trial design where you're kind of cycling patients off therapy, do you think just, commercially, you're going to get uptake in patients who are well controlled on IVIg? Or are you really positioning this drug kind of for new patient starts? Like you guys have a very clever trial design, but the concern on my end is, I'm not sure a doctor would be able to look at the data generated in the study and identify patients who would be maybe responding -- would respond to your drug. So commercially, how would you take the data generated in the trial and position the drug?

Thank you, Akash, and thanks for joining us on the call today. You're absolutely right. We're not in a position to comment on whether we see a differential response between newly diagnosed or patients already on active therapy. There is information to disclose later, but we're not modifying anything to our trial design moving forward. I will first ask our Chief Medical Officer, Wim, to comment on your concern. Wim?

Yes. Thank you for the question. So the randomized withdrawal design is, of course, put in place to show the intrinsic activity of efgartigimod on CIDP. So that is the primary goal to show, as I mentioned, the activity -- proven activity to get the indication approved. And that, I think, by itself, would have to suffice for treating physicians to have comfort in the biological activity of efgartigimod on CIDP.

And Keith, we don't believe that the trial design is limiting by any means the full commercial potential of efgartigimod in CIDP, right?

Yes. That's correct, Tim. I mean right now, IVIg is first-line therapy, but we've designed the ADHERE trial so that we can take on IVIg head-on in first-line therapy. But also, as you know, we have patients that were previously on IVIg that are then being treated with efgartigimod. I think, ultimately, we need to do more homework and continue to run the study. But this is about the benefit to the patients. And I think we have an opportunity to positively differentiate ourselves across the measures of efficacy, safety and convenience.

The next question is from Joon Lee of Truist Securities.

Congrats on the GO decision. The patients were assessed on a mix of INCAT, I-RODS and grip strength. What were the mix of contribution of each? And is that an approvable endpoint? And then related to that, in your run-in period, you enrolled patients and were only allowed to enter stage A if they had progressed sufficiently. What's the proportion of patients who failed to enter stage A because they didn't have sufficient progression of the disease? And what does that say in terms of the commercial opportunity and the broader CIDP?

Thank you, Joon, for these 2 questions. Of course, we cannot answer the second question you have. So from a responder rate analysis point of view, we have comfortably exceeded the threshold, which we discussed today. We cannot give you any further color on the exact percentage. On your first question, I'm going to hand over the word again to my colleague, Wim, who is our Chief Medical Officer, to discuss what worsening and then improvement really means in this study. Wim?

Yes, sure. Thanks. So as you quite rightfully noted, the initial deterioration could happen on 1 of 3 scales, INCAT, I-RODS and grip strength. While the endpoints of the stage B will be INCAT, which is the typical accepted primary endpoint in this disease and from a perspective of a registrational study. So patients could deteriorate on 1 of 3 before they qualify to go -- to continue in the study. Now we are not going to discuss or review at this moment in time, the sub-analysis that are possible. The only thing I can say is that we feel quite comfortable that patients who qualified to continue clearly showed that the deterioration or improvements on efgartigimod is real because there is a significant correlation between the different scales we used.

Just as a follow-up, at your CIDP KOL event, you said that stage B of ADHERE is 90% powered for one-sided p-value of 0.025 at 88 events. Is that still the case after seeing the stage A data?

That has not changed, indeed.

The next question comes from Derek Archila of Stifel.

Congrats on the update. So just 2 quick ones from us. First, I think, Tim, you said that you met the predefined threshold without waiting for the last patients in stage A. So I don't know if you can give us a sense of where you were in the total of those patients when you made that decision? And then the second part would be, as you kind of move into stage B and enrolling more patients and getting more sites online, can you just remind us how many sites that you're looking to include in the entire study? And on average, how long does it take to get a site up and running?

Yes. Derek, thanks for joining us today. So it's true that we didn't have to wait until the last patient of the 30 has to end stage A because efgartigimod was already passing the threshold with flying colors. So this is good news for the speed of the trial. From a number of clinical sites point of view, we need to think about 70 to 80 sites globally. And you're right, I mean, opening these sites and initiating the sites is actually a way limiting step in the study. And that's why actually already at risk, we started to scale the study before we had this GO/NO GO decision point so just in case we would have been in a clear-to-go situation as we are today, we would actually be already in full scale up. So we're working around the clock to get the study at fulsome speed as fast as we can.

The next question is from Yaron Werber of Cowen.

Congrats on the decision as well. So maybe 2 interrelated questions. Can you give us a sense that the first 30 patients, do they roll over or if they started rolling over into part B? And then secondly, when we look at your slide on Page 10, I mean, you're showing in blue what the response curve is. Is that the actual response curve that you're seeing in the study? Or is that the response curve that you're emulating to do the GO/NO GO? Because the response rate, I mean, if I'm reading it correctly, it looks like everybody is responding. So I assume it's an emulation.

It is -- yes, I think, Yaron, you correctly called it out. This is the frame of the decision mix, right? So it allows us with a few simple statistical rules to delineate what we think is a clear NO GO zone or a clear GO zone, and we have been definitely and comfortably in the GO zone. And back to your first question, obviously, the patients which made it through stage A are currently already in stage B. So they're running their course in the blinded, placebo-controlled portion of the study.

Okay. And maybe just another question to explain. So the curve -- the confidence interval, the 95% based on the ICE 34%, I mean, it sounds like you're looking for a GO decision that is dramatically in excess of that 34% delta. I mean if we're kind of looking at it, you're looking at something that's kind of even 60%, 70% higher. I'm just talking about the GO gray-shaded area. I don't know if you can comment on that?

Yes. So that GO zone really starts as a 14 patients because that's where basically the confidence interval of the responder curve starts to detach from your upper boundary of the placebo response in the ICE trial. So anything above is a goal. And again, I repeat that we're comfortably in the GO. Thanks for the question, Yaron. Thanks for being with us.

The next question comes from Danielle Brill of Raymond James.

Tim, you said you're comfortable on the GO zone. I guess given what you've learned so far, what do you view as the biggest risk to success moving forward? And then also curious, what are the other indications this might open the door to?

No. I think that's a great question. I think execution -- this is, I think, a thoughtful trial. It's a sophisticated trial, and we will need to be disciplined in how well we execute in order to really enjoy the benefits of the trial design. So count on argenx as being a company which is focusing on execution -- host execution. Of course, this is opening the door further and deeper into the neuromuscular franchise. We already alluded to the fifth indication being an important neuromuscular indication, and we have plans to probably unveil that indication during an upcoming R&D Day. So I think we can move forward with increasing confidence throughout the neuroinflammation space. But hold on to the R&D Day, where we can take a deep dive then into the biology one should know for that fifth indication.

The next question is from Suzanne van Voorthuizen of Kempen.

Congrats on the posted news. I'm just wondering, roughly speaking, based on the improvement rates so far, what kind of time line do you think is feasible to fully recruit study to the 130 patients? And then when can we expect the top line readout?

Yes. As we said in the prepared remarks, Suzanne, and thank you for being with us today, this is difficult in post COVID times. So if you would not be in a COVID period, we could now start to triangulate and give you guidance. I think in all honesty, the best thing we can do is keep you up-to-date in our quarterly calls on how this study is enrolling because, although we are all hopeful, of course, about all the vaccines coming, the day-to-day reality in the clinical field is, of course, that the studies are all hit by COVID. So bear with us.