argenx SE (ARGX) Earnings Call Transcript & Summary

Well, good afternoon, everybody, and thank you once again for joining us for the 42nd Annual Cowen Healthcare Conference. It's a great pleasure to moderate the fireside chat today with argenx. I'm Yaron Werber, one of the biotech analysts here at Cowen, and I'm with my colleague, Brendan Smith, also on our team. So it's a great pleasure to have with us, and they all need no introduction. Tim Van Hauwermeiren, who's the CEO of argenx; Keith Woods, Chief Operating Officer; and Karl Gubitz, who is the Chief Financial Officer. So gentlemen, thank you for joining us. We appreciate it.

Thanks for having us, Yaron. As always, it's a pleasure.

So we have a lot to talk about. So Tim, I know you've been spending a lot of time with Karl, obviously, and the whole team in New York -- in Boston and in the U.S. really over the last few weeks, do an even checks in the field. And maybe what is the initial feedback you're hearing so far in VYVGART? How is it being used? And maybe, I know you discussed it on your call recently, what's the early reimbursement landscape looking like so far?

Yes. I'll go ahead and take that one you're on. So thanks for the question. What we shared on the earnings call last week was that, overall, we're cautiously optimistic. We've also said what I think is an important statement that we're ahead of our internal expectations. What's basically taking place is we have prepared for this launch for an extensive period of time. We brought our team on early, and we were able to begin to have interactions with patients, with patient advocacy groups, also with health care professionals and payers. And I think that being prepared has paid off in this situation. I'll just take each of those segments very brief. Payers, we went with and put up your 6 largest national payers under confidentiality agreement and discussed a great deal of data and the potential for value-based agreements before we even had the approval with the FDA. With the health -- with the patients, you've seen not only have we put a great deal of work into working with great organizations like MGFA and other patient advocacy groups across the U.S., but also MG United, My Real World MG project that we ran. And probably most recently, you've seen that we went to DTC early in this launch to make patients empowered to feel if VYVGART is right for them that they go ask for it. And the last segment is the health care professionals. We have an experienced sales team. They had relationships with these doctors, which is absolutely crucial because during COVID, it's even tougher to get to these positions. It's led to us to really maximize peer-to-peer educational programs. We have over 74 trained speakers here in the U.S., and it's also allowed us to conduct a number of speaker programs as well as one-on-ones.

Okay. Terrific, Keith. And the VPAs or the 6 largest payers, are those in place already? Or those are still in progress of actually getting signed?

Some are signed and in place. Others are -- we're finishing up. Additionally, you'll see where some of the largest payers have already published through our policies, which was part of this agreement. We really want to get the policies established for VYVGART. In the early going, Yaron, I would tell you that the policies look favorable and are really allowing for the same population that we studied in ADAPT, which is all the way across the treatment paradigm from second line after mestinon all the way to relapsed/refractory. It's fitting squarely within these early policies that have come out.

Okay. Got it. And you mentioned on your earnings call that, inevitably, obviously, you expect there's going to be initial bolus and initial pent-up demand even from patients who are on Soliris or failed Soliris or eligible Soliris. Any sense how big is that population in the early experience?

Yes. Well, I think the reason why it was a little bit of a bolus to us is we're not really targeting that patient population because we believe we play upstream of the C5. So in all of our marketing messages, it's around VYVGART being the first infusable therapy that you would select to treat an MG patient. And so the populations that we see is prior to IVIg. We were also seeing high-dose steroid patients that really want to be able to get off those high-dose steroids and the potential to use VYVGART instead of an off-label IST. So what happened is you had a successful launch with Soliris, but not all products have 100% efficacy rate. And so you have some Soliris failures. And after -- what ultimately happened was VYVGART's now approved on the market, and they wanted to give that a try. So those are patients that kind of came to us instead of us directly going and asking for them.

Okay. Absolutely. You also -- in your price of an average 225,000 net, you're assuming about 5 cycles in gMG. I assume we're going to see updated data and maybe some of the ADAPT OLE in retreatment and real-world experience in OLE also at AAN. I'm just trying to get a sense of kind of what -- is that reasonable? Because that will give us much more of a sense how do we see what you saw that allowed you to kind of really tailor the price in the label.

Yes. So 2 things there. First of all, I wouldn't say that we're planning for 5 cycles. What I would say is that what the OLE data shows us with 150 patients on VYVGART for better than a year, what it shows us is the distribution curves. I mean we do have some patients that required 1 cycle in a year, some of them required 2, 3, and we can go on. And what we did was we took this data set from the OLE and sat down with these payers in advance. We looked at the distribution curve. We then looked at the MG patient population in the U.S. broken down by gender and then broken down by average weight because, as you know, efgart is weight-based dose. We then took a look at site of care and overall payer mix. And really, with them together, we calculated out what would be the typical cost for a typical patient, and we had a WAC price of 59.50. That's what we used hypothetical before approval. And ultimately, that is the WAC price post approval.

Brendan, over to you.

All right. Great. So I think that's actually a great segue here actually into the upcoming subcu data that you guys have that we're expecting some time in the next few weeks, I think. So obviously, you have the bridging study with the subcu efgartigimod, looking at IgG reduction at day 29 versus the IV formulation. So obviously, a lot of questions we've gotten over the past couple of months has really been about kind of dosing, 6 1,000 mg dosing that you get selected for subcu. So what can you tell us, maybe to put it all in context, versus the Phase I in healthy volunteers? What did you learn from that Phase I study about the 4 different doses that you did test? And what maybe some of the implications are for weight-based dosing and how you use that to select the fixes for the bridging study?

Yes, Brendan, that's an excellent question, given that top of mind of our shareholders. So the reason we work with conviction into that Phase III data point readout is because, indeed, we did a lot of homework going into selecting the 1,000 milligrams of subcu flat dose, with the dose escalation in healthy voluntaries to inform the PK/PD model. Based on the model, there was a prediction that 1,000 milligram subcu flat dose would be the equivalent of a 10 mg per kg IV dose, which, by the way, was also kept as of a certain rate basis in the ADAPT trial. And then we tested 1,000 milligrams of few flat dose in healthy volunteers. And indeed, the PD curve, if you basically observe, for 1,000 milligrams subcu dose is equivalent to a 10-milligram per kilogram IV dose. So that's an important healthy volunteer data point. The other data point we triangulate by is that in MG patients -- and by the way, in any other patient we tested so far, the PD curve created by efgartigimod is identical to healthy volunteers. So there's no reason IgG antibodies in a patient should be hit differently than IgG antibodies in a healthy volunteer. So if 1 and 1 is 2, we can walk with a good level of conviction into the data point. There is still risk involved, of course, because this is still a clinical trial. It's still execution risk, but we did a homework on that 1,000 milligram subcu flat dose. And it shows again the commitment we have to the MG space. I think we want to be a long-term committed to the space, serving the patients in the most complete possible way. That means from a dosing point of view, from a product offering point of view, we want to serve all the different segments, which we can see in our MG market.

Okay. All right. I see what you're saying. So really, I guess, so for the bridging study, I guess you've also noted that, statistically, you're only really required 50 patients. But you've obviously enrolled well over 100 to really expedite building the safety database here. So I guess first question on that point is, will all the patients enrolled at this point be included in the statistical analysis for safety and efficacy that you guys are going to have coming up? And beyond that even, from this point, do you still need to enroll additional patients in the study to reach that safety threshold?

Yes. A couple of points here. You're absolutely right that in order to satisfy the powering requirements, 50 patients would have been sufficient to read out that noninferiority primary endpoint. In order to satisfy the safety data requirements from the FDA, we had to enroll more than 50, actually enrolled more than 100. And you're right, and this is an opportunity for me to correct something I said wrongly in the last week. All these patients will indeed be taken into account for the primary endpoint analysis. I had an opportunity to verify it with the statisticians last weekend. So all patients will be used for the primary endpoint. I can confirm to you that the minimum number of subjects we needed for safety are all on products already for a while. So now it's indeed a waiting game to make sure we reach the sufficient exposure required by the FDA in order then to take this data and start to compile the BLA submission. When we read out the top line data, Brendan, we will give you some clarity on time line to filing.

All right. Great. I think that was really the last point that I wanted to make sure we got to. So thanks for hitting ahead of it here. I know we have a lot of other ground to cover. So maybe Yaron, did you want to ask some of ITP?

Yes, absolutely. So let me move into the ITP and maybe just to -- by way of rehashing the prior data. The prior Phase II needed platelet levels about 50,000 on any of 2 or more visits on study -- in the main part of the study. ORR was 46. You then did an OLE with the same dose, the 10 mg, and it was 67% response rate in the OLE. The pivotal study though is now requiring platelet count of that threshold between -- I believe it's between weeks 19 and 26. And you need 4 out of 6 visits, right? So is the 67% OLE data, is that relevant to what we should expect or even the 46% relevant to what we should expect in the Phase III or is the upcoming Phase III? And I'm talking about the first data with the IV. Because the bar is so much higher, one would naturally expect a lower response rate in the Phase III.

No. Yaron, that's a great question, and it helps us to calibrate expectations for that important data readout. So what did we learn from the Phase II very quickly, guys, this is an IgG mediated disease. All patients have platelet associated autoantibodies. So if you do the test right, you detect these anti-platelet autoantibodies in all primary ITP patients. Secondly, in ITP, platelet counts really fluctuate. They go up and down all the time. And therefore, even in a placebo patient, they can accidentally hit that 50,000 platelet number, which is so important to the FDA and falsely register as a responder. So we'll be nicely unpacking that Phase II publication is that as soon as you build in some level of durability requirement, you quickly see a placebo signal disappear and the efgartigimod signal outstanding. So the way to think about the Phase III clinical trial is that we crafted an endpoint, which is really designed to make your placebo response as low as possible, as close to 0 as possible by building in that durability requirement of -- in at least 4 out of 6 consecutive visits. Between week 19 and 24, you need to hit 50,000 platelets per microliter or more. So don't focus too much on the 46% or 67%. Let's focus on a statistically significant separation between active and placebo where placebo should be as close as possible to 0. In the secondary endpoints, and the team did a fantastic job really building out a very strong secondary endpoint package, and we will be able to show you the full color of efgartigimod in terms of its real-world utility in ITP because, frankly speaking, that 50,000 platelet count number required by the FDA for registration, not too many people care about that number in the real world. So the way that they make treatment decisions is based on other platelet count numbers, typically 30,000. They're very curious to look at cumulative platelet counts and total platelet count numbers. We need to study bleeding events. We need to look at quality of life and safety. All of that will be unpacked in the secondary endpoints and will really give a handle to our commercial folks how to position efgartigimod in an ITP landscape.

Is there any difference in the event studies between the IV and subcu study in Phase III?

They're basically identical. So the only difference is one is an IV study, the other one is a subcu study. But basically, the design of the trials is identical. This is also the only indication, Yaron, where the FDA asked us to do 2 Phase III trials to compile that registration package in all other indications, which we announced so far, we will be getting away with one single study.

And do you know whether if you had a discussion with EMA, whether that study will be sufficient for EMA filing and also for PMDA?

We have mainly triangulated expectations with FDA and PMDA.

Okay. Terrific. And so the way we're thinking about it then is, are you hoping -- what is the bogey for you? Are you looking for 20% delta over placebo or 25%, 20% to 30%? Is that sort of the right benchmark, how to think about it, what's meaningful clinically?

I'm really looking for a static delta in the primary endpoints to satisfy regulatory requirements. And then what I will be really interested in is the secondary endpoints in terms of how do we do vis-à-vis platelet count numbers, which are relevant for the real world, how do we do in terms of cumulative platelet count compared to placebo, believing events and quality of life because, Yaron, the real important thing here is ITP is not so much a platelet count problem. It's a severe debilitating autoimmune disease where complaints, number one, from patients when you talk to them is debilitating fatigue, depression, anxiety. And then, of course, you have these infrequent bleeding events, which can be significant by the GI bleeding. It's pretty bad. I mean intracranial bleedings are very rare, but can be fatal. So all of that needs to be unpacked in the secondary endpoint. So I'm really looking forward to the second release.

Do you think you have enough power? Because that's usually one of the things you hear about is the powering of the studies that might not be robust enough, they're not big enough studies to look at bleeding.

This is a sizable ITP study, right? So it's a 150-patient trial, 117 need to be chronic ITP patients. The remaining portion can be persistent patients. The statistical analysis plan is sound and actually would allow us to unpack the qualities of the drug in a meaningful manner.

Okay. Okay. And what's -- assuming positive data in Q2 and then Q1 with the ven subcu, any sense as to when you might be able to file those study sufficiently? Or do you need to have more open-label extension for safety?

No. Again, the second ITP trial will be a Q1 event next year. Then we read out that trial, we will be able to give you clarity on likely time line to submission. But bear in mind, we need both studies, right? So we need to wait for that second study to read out before we can give you color on that.

Okay. [Operator Instructions] We're getting a few questions, one of which is how important is the subcutaneous data in general for the ultimate update of the brand -- uptake of the brand?

In its totality -- and I will let Keith comment on the MG market, specifically. In its totality, each indication is getting its own shot on goal rights. So I would be very careful extrapolating from a non-inferiority data point in MG patients to anything else to do with the subcu products in the other indications. We believe subcu is going to be a very important part of the efgartigimod franchise going forward given the fact that these autoimmune patients, a significant portion of these patients will want to have flexibility when it comes to dosing. And maybe, Keith, he can talk with most information on that topic for MG patients rights.

Yes. So Yaron, for MG patients, adding the subcu is just going to add another option not only for the patient on how they want to receive the product, but also for the health care provider. It also can put an option in there for how you go through reimbursement, whether you go through Part B or Part D. For us, we're agnostic as to which the patient and the health care professional choose. But we think in early discussions, that you probably will see the majority of the market would go over to subcu, but you have about 1/3 of patients that are going to still want to go get an infusion. That's here in the U.S. When I go outside the U.S., to Japan and to Europe, I think you're going to see the bulk of the business will go to subcu. And I mean a substantial amount of the business will go to subcu in those 2 marketplaces.

And with respect to the subcu study in gMG, the study was fully enrolled, 111 patients or so by December, so maybe even a little bit earlier. And it's an open-label study. And you've increasingly been designing all your new programs using the subcu, and it sounds like the data is coming out obviously in March. When you made those decisions to go to subcu, was it at risk? Or was it based on a calculated view on what -- on probability success in the ongoing study?

No, so we're a database company, Yaron. So first of all, just for the record, the MG non-inferiority study is double-blind. It's controllable blind. So we do not see this data. But where we get the data to triangulate from is the PK/PD model. So it's a very robust model. I mean, there is now a ton of data from all these different studies, which fed the model. It became very accurate in predicting PD curves. So we're really triangulating the 1,000 milligram flat dose from the model and then, of course, the in vivo experiment in healthy volunteers. And we do know that in a patient or a healthy volunteer, PD curves are comparable. So that's really a stand-alone decision we made for indications like CIDP, the second ITP trial and then pemphigus based on the data I just discussed. Each of these indications, of course, is getting its own independent show on goal. And we should be very careful just extrapolating from MG data point into other indications. They all have their own disease biology. We do not know for a fact how low you need to decrease IgGs, for how long to get a meaningful benefit, et cetera, et cetera. So it has all been informed by the PK/PD model and the healthy volunteer data. And the reason we choose to go with a subcu product first was basically instigated by the COVID situation. Remember, it was very difficult to continue to enroll these trials in the context of a global pandemic. And playing the subcu card first allowed us to give optionality to patients in terms of where they wanted to be dosed in these ongoing clinical trials. And I'm glad we did it because these trials probably slow down, but we did not have to pause or incur any significant delay in any of these studies.

Right. Brendan, over to you.

All right. Great. I did want to make sure we had a few minutes at least to touch on pemphigus as well. I know you guys offered a little bit of an update on the earnings call last week just about the Phase III study and some of the exposure in Eastern Europe. But I guess just for a little context, we -- obviously, in the Phase II, we saw about 93% of patients achieved disease control, 74% reached end of consolidation and almost 50% as you complete remission. But all that said, kind of looking ahead to the Phase III, given the pretty high CR rates that we see with Rituxan, really, where -- how are you kind of seeing -- internally, where do you see the bar for success in the Phase III study? And on top of that, what do you think are some of the more important endpoints that you guys are looking at beyond the primary endpoint that you think physicians will be watching for?

Brendan, I think pemphigus is a very exciting space. I mean there's a little attention given to it for the moment, but I think that is a very high unmet medical need and a competitive landscape, which is wide open after the Principia drug failed. So I feel we have the space for ourselves because you just have steroids. And we know steroids, right? I mean they act fast for sure at high dose. You cannot maintain that high dose for a long time. And patients need steroids with a passion, I can tell you. On the other end of the spectrum, you have rituximab. It's a slow-acting drug. It's completely taking out your B cells. And you're right that, ultimately, people have a significant chance to respond. It takes a lot of time, and there's a very high relapse rate. So the whole playing field between these 2 extremes is wide open. And I feel that the data, which we have shown in Phase II, are pretty spectacular and unique in terms of speed of onset of action, the speed by which we can close these lesions, very important for patients, the speed by which you can start to heal these lesions and go into a complete response. And then the durability of the response is very attractive. So I feel that we can occupy a significant space in the treatment landscape for pemphigus. On top of that, of course, the clean safety profile, which we recorded in the Phase II trial. So if this Phase III trial is successful and the endpoint is CR on minimum therapy, so achieving a complete clean skin in a very low background of steroids, I think that could be game-changing in pemphigus. And frankly speaking then, for those patients who do not respond to efgartigimod or who cannot go into long-term mission, ultimately, there can always be rituximab. But I feel we have an ability to transform the way we think about treating pemphigus patients.

Okay. I see. I see. So I mean, I think to your point, obviously, about the speed of onset here with efgartigimod, especially relative to rituximab, in a lot of conversations, we've had with physician, obviously, Rituxan works well in a lot of patients. But to your point, it can take months really to kick in. And naturally thereafter, you have the suggestion that you can potentially have some kind of bridging therapy, like you were saying, right? You kicked them into remission with efgartigimod and even those who want to be treated with rituximab, maybe for a longer-term emission afterwards. One, you can -- theoretical possibility. Is that something that you've had any kind of engagement with payers about that kind of possibility of co-treatment? Do you see any potential hurdle from that approach long term? Obviously, it's early days here, but just something we've been thinking about.

We certainly have not engaged with payers yet. I mean that's premature to do that. But Brendan, I would challenge the idea to use VYVGART or efgartigimod, I should say, in combination with rituximab. I hope the data are such that there is no need to think about such a combination. Why would you put people in a situation where they're completely losing their B cells if you can have such a spectacular response on VYVGART with a nice durability of its effect? So again, we think of chronic intermittent dosing like we do for MG, where, hopefully, we can control patients on something totally different than a B cell ablation therapy.

All right. Great. So it would be really about that, time to onset of drug action, that's really going to be most differentiated here from. Okay, great. Yaron, I'll kick it back to you.

Maybe shift over to the ADHERE study. I think we have about 3 minutes left. That data is expected still in Q1 of next year. Obviously, event-driven though. So that's your latest thinking. Based on the go/no-go decision from the first 30 patients, what makes you confident about ADHERE? And does everybody need to be IgG autoimmune positive in the study to be enrolled?

It's a great question, Yaron. Very quickly, you do not need to be positive for an autoantibody of the IgG type. We only know the autoantibody studies in about 40% of patients. So a correct diagnosis of CIDP was the important gating factor to come into the study. That we wanted to make sure we had active disease, that was the second gate. And then the third gate ultimately was showing that you respond to an IgG lowering agent. In this case, it was efgartigimod we use. So in a nutshell, we feel good about the study design. I think it's paying off dividends that we were so thoughtful about trial design. We had an ability to maybe tweak study criteria going through the go/no-go decision point. And we did not change anything to the study, so they can read from that. It's that we feel great about study design. We certainly did not regret putting these 3 filters in place. And the drug is positioned for first-line use. So you can be newly diagnosed. You can just be on steroids. You can be on IVIg. All the CIDP patients had an opportunity to enter the study.

And patients -- I mean, in this study, they'll be washed out of IVIg. Do they get washed out of steroids as well or they could stay on steroids?

So we derive you -- if you're on therapy during the running phase, we deprive you from your existing therapy, whatever it is. And you need to show a worsening within a certain time window of maximum 8 weeks. Once you show the worsening, we want to see that we can basically regain what you lost by putting you on efgartigimod. And then you can roll over into that placebo-controlled blinded randomized portion of the trial.

Yes. And so I totally understand, from regulatory authority, I mean you're asking patients to get washed out over therapy that potentially they're benefiting for. I can maybe understand for regulatory authority, they might -- the opinion IVIg is not approved. It's a huge seller of label. Here is a chance to actually get something officially registered and officially tested. What's in it for patients though in terms of rolling off IVIg?

So IVIg is approved for CIDP. And maybe Keith, you want to briefly comment on how we look at competing head-to-head with IVIg rights.

Yes, happy to. So yes, IVIg is approved for CIDP. If you talk with patients, they like it. And they like it because it's the only alternative that they really have. But we're going to compete on 3 areas: clinical efficacy, safety and convenience. And so clinical efficacy, let's wait and see the data and make sure that we're at least as good as IVIg. Safety, we are seeing a similar safety profile. Although the data is blinded, you know that we are -- our global patient -- our global PV team is always looking into patient safety, and so the safety profile. IVIg, these patients are still associated with the headache and hangover the day after. Finally, last thing, Yaron, really quick convenience. You're talking a quick at-home 30-second single subcu injection compared to 5 hours sitting in a chair having IVIg run. I think we've got a compelling story provided the data comes out well.

Okay. Terrific. And by the way, IVIg is approved globally or just in the U.S. for CIDP?

It's approved. It's actually approved globally.

Globally. Okay. Thanks for the clarification. Well, thank you so much for joining us. As usual, it's great to see you, and we'll continue to follow very closely. I appreciate it.

Yaron and Brendan, thanks for having us. Much appreciate it.

Always a pleasure.