argenx SE (ARGX) Earnings Call Transcript & Summary

Good morning. My name is Rob, and I will be your conference operator today. I would like to welcome everyone to the call. [Operator Instructions] I'd like to introduce Beth DelGiacco, Vice President, Global Head of Corporate Communications and Investor Relations. You may now begin your conference.

Thank you, Rob, and to everyone for joining us today. A press release was issued this morning with the top line results from the ADVANCE subcu study of VYVGART Hytrulo in primary immune thrombocytopenia. We have a short slide deck to accompany our remarks this morning. We will not guide you through the slides in the script, but they are available on the Investors section of our website for your reference. Before we begin, I'd like to remind you 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 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; and Luc Truyen, Chief Medical Officer. We also have Karen Massey, Peter Ulrichts and Karl Gubitz, who will be available during the Q&A. I'll now turn the call over to Tim.

Thank you, Beth, and thank you to everyone for joining us today. By now, you've seen our press release from this morning and have been able to read and digest the results from the ADVANCE Subcu study. As you can imagine, we were disappointed that the study did not meet the primary endpoint of its sustained platelet count response in chronic ITP patients. Luc will share more details on this top line data in a few minutes. They're still very fresh to us, but it is important to be here today to communicate what we know and where we stand, recognizing that many analyses remain ongoing. I want to start with gratitude. First, our internal ITP team who worked so hard to manage and enroll the study. I also want to thank the patients who participated in the study and their families and the trial investigators. We note and share in our disappointment today. We have heard firsthand from patients and physicians, the need for a new treatment option that are both safe and effective and we remain committed to the ITP community to continue to advance the understanding of this complex disease. When we initiated the ADVANCE trials in ITP, we did so based on a strong biology rationale. The role of IgGs in ITP is well documented in the literature and [ Bio-Plex ] and immunoadsorption data as well as the outcome of our first ITP trial, which was successful. The question we have from our second study is why the efficacy results did not match those of the first. We don't have a full understanding yet, but I want to share what we know today. This was a well design trial. There is now a standardized way to run an ITP study, and we stay true to it with validated endpoints and consistent inclusion/exclusion criteria. We had a very refractory patient population once again. We knew it would be a challenge to enroll 2 large ITP studies in an overlapping fashion. So we were not surprised to get a heavily preceded population which is more difficult to drive into response. We saw a smaller treatment effect in the second study, which we can't fully rationalize but does align with the high intrinsic friability that is often seen with refractory patients. We also saw a significantly higher placebo response, much higher than the first study and historic trials. We use the primary endpoint that is meant to knock placebo down close to 0, but simply did not happen. We are learning that ITP is a very complex disease to study and to treat, but both successes and setbacks contribute to our deeper understanding of FcRn biology. We have been fortunate to have 4 out of 4 wins in proof-of-concept studies and 4 out of 4 in Phase III, but we know that will not always be linear when it comes to building an exceptional drug like VYVGART. We will face attrition, and this is part of pioneering a new class of medicines. This also underscores our approach to launch multiple indications in parallel so that we can follow the data and invest where we will have the most patient benefit. We want to transform outcomes for patients globally in as many diseases as possible as quickly as we can. This type of optionality positions us well for success. And we believe that we have it in place across VYVGART and other broader immunology pipeline. I'll now turn the call over to Luc to walk through the trial design and results. Luc?

Thank you, Tim. I also want to share my gratitude to the ITP patient community and our investigators for their support with this trial. Before I get to the results, I will remind everybody of the trial design, which was the same between the 2 ITP studies. ADVANCE subc was a double-blind placebo-controlled global trial evaluating the efficacy and safety of VYVGART Hytrulo in adult patients with primary ITP. We randomized 207 patients into the study, including 192 chronic and 15 persistent ITP patients. In order to enroll, patients had to have a platelet count of less than 30,000 at least twice the new screening period. They could be on stable concomitant therapy or a watch and wait approach of therapy. The baseline demographics between the 2 advanced trials were generally consistent, and our second trial includes a very refractory patient population with 75% of patients having been on 3 or more prior ITP treatments. All patients received a fixed weekly subcutaneous injection for the first 4 weeks, after which they had the option to switch to biweekly dosing depending on platelet counts. The primary endpoint was measured in the chronic population, starting at week 19. And patients were classified as sustained responders if they achieve a platelet count of 50,000 in 4 out of the last 6 visits. We did not see a significant result on the primary endpoints. 13.7% or 17 out of 124 Hytrulo treated patients with sustained platelet count responders at week 24 compared to 16.2% or 11 of 68 placebo patients. The patients who did respond on Hytrulo were typically earlier in the diagnosis and not on concomitant medication. However, this was not a patient type who comprise the majority of the study but even more notable and what primarily drove the negative results, was a placebo effect that was 3x larger than the first study. To better understand our high placebo response, particularly on an end point has proven effective in managing placebo in the past. We looked at sustained platelet count response by subgroups to see if it could identify any learnings. There were notable regional differences in placebo response, including in regions and countries, which were not part of the first study. We did not achieve significance in the secondary endpoints either including the additional endpoints, which performed well in the first study, like the International Working Group score, the onset of response and the mean platelet count change from baseline. Importantly, we looked at the available pharmacodynamic data in ADVANCE-SC and this result was consistent with the first ITP study and all prior clinical trials. Hytrulo treated patients achieved mean IgG reductions of the same magnitude as prior trials and mean placebo patient levels remain unchanged. Safety and tolerability data also be consistent with previous clinical trials and with the confirmed safety profile of VYVGART and VYVGART Hytrulo. Our safety database clients was more than 1,400 patients from clinical trials and more than 6,000 patients on commercial drugs globally. In our full data analysis ADVANCE-SC will be important for us as we determine next steps. We are currently seeking approval for VYVGART in ITP in Japan, but will also assess its positioning in other markets where the regulatory plans and access makes sense. We know there's a real unmet need for ITP patients who face high relapse rates and significant side effects from current treatments as they seek better management of their disease. I thank you for your time today, and I will now turn the call back to Tim for closing remarks.

Thanks, Luc. You can see that we still have a lot of questions to answer, which will require time, but we look forward to presenting full results at a future medical meeting, including data from the open-label extension. Before we get to Q&A, I want to close with a few final sentiments. First, these are times when we've really embraced who we are as a company, one that is granted in both innovation, but also humility. We have a significant opportunity before us in pioneering the FcRn space, and it is important we learn from each data set as we navigate this new field of medicine. We take our responsibility seriously on behalf of patients and the broader autoimmune community to continue to earn revenue biology with VYVGART based on its potential relevance in more than 100 serious autoimmune diseases. We are fortunate that we are well positioned for success and have launched a strategy for VYVGART that is focused on the value creation and transforming outcomes for patients. We expect to be active in at least 15 indications by 2025, running trials in parallel with multiple product presentations because we recognize that optionality is crucial to maximize the potential of this opportunity. And last, we had a lot of exciting milestones ahead of us, including data points from pemphigus and Bullous Pemphigoid in the next few weeks. You can be confident as a shareholder that we don't celebrate long in our successes or dwell for long on our setbacks. It is right back to work because that is what is required to execute on our ambitious strategy. I want to thank you all for the time and for the support on this innovation mission. We will now take your questions.

[Operator Instructions] And your first question today comes from the line of Derek Archila from Wells Fargo.

So maybe just 2 brief ones actually. So first, I just wanted to know in terms of like how you think this data today impacts the Japanese filing an ITP and I guess, looking forward, is there actually a scenario where you don't pursue ITP in the U.S. and the EU at all? I guess if I look at the range of indications that you're pursuing now, not many, but maybe only ITP or in hematology. And with FcRn being so derisked now, is that an option on the table as well?

Thank you, Derek. Thank you for being with us today. I will give your first question to Luc in a minute when it comes to how we proceed with the Japan filing for ITP. In general terms, I would like to make the following comments on your second question. First of all, we're still in full data analysis, but it's a ton of data, and we're still completely trying to understand the totality of the data. But what you should know is that we will be responsible stewards of capital and that we will make data-based decisions. So if you have this level of optionality in front of you, you can take the position that the data should guide resource allocation. Luc, do you want to comment on anything we can say today about our ongoing Japan submission?

Yes, absolutely, Tim, and thanks for the question. Yes. As you know, the PMDA is in active review of our IRD submission and we took the step this earlier today to reach out to PMDA and alert them to the press release and the top line findings of the subcu study. And we will continue to provide them with data as they become available to us that would help them in their closing the review on the IV.

Your next question comes from the line of Tazeen Ahmad from Bank of America.

Tim, could you just elaborate on how big you think the Japan market is in terms of number of patients relative to Continental Europe or U.S. And then can you just clarify what Europe has said for needing to run 2 studies? Is it the same feedback that you got from the U.S.? Or do you think that there could be a different path in Europe?

Yes. Thank you for these questions, Tazeen, and thanks for spending the time with us today. In terms of market size in Japan, I think the incidents and prevalence of ITP, primary ITP in Japan is comparable to Western Europe and United States. So I think you can extrapolate from the U.S. data, which you have on file to triangulate what the potential opportunity could be. And then when it comes to EMEA, they have given similar guidance unlike the PMDA, similar guidance to the FDA that actually they want to see 2 independent registrational trials executed for ITP. So that's the same story as for the FDA. Thank you for the questions.

Your next question comes from the line of Yatin Suneja from Guggenheim Securities.

This is Eddie on for Yatin. Just 1 from us. Can you provide any other color on how the drug performed in the U.S. versus international sites? Is this driven by placebo responses only? Or do the active arm perform differently? And were there any specific countries or sites that were out of sync?

Thanks for the question. Luc, do you want to talk about some of the early regional differences, which we seem to distill from the data sets.

Yes. So while the response on active was also somewhat lower than expected, but still in the range like observed with Fostamatinib, for example. What really stood out to us was the high placebo response. And that makes you think about many things, but one of this is looking at all the subgroups. And we indeed found that certain regions had a highly variable response on placebo on the platelet counts and ultimately, also on the region sustained responder status. In that sense, there is a -- if you ask about the U.S. that doesn't show that picture, but the sample size is rather low, but we will dig in every patient profile to figure out what's the basis of this.

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

James Gordon, JPMorgan. My question is about the read from this ITP result today to the ongoing PV trial and latest confidence in PV success. So do you see a risk that we see a strong placebo on performance in PV or the reasons that we might have a placebo arm that is more predictable in the PV trial. So how do you expect placebo to perform there, and any read or not? That will be the question, please?

Yes. Thank you, James, and I would like to hand over that question to Peter Ulrichts, our CSO.

Yes. Thanks for the question. I think there's a fundamental difference between the [indiscernible] study and the ITP study, not only on the protocol, where there is [indiscernible] involved in the pemphigus trial, but also in terms of patient population where there's an ITP trial, there was a high refractory population with -- lot of patients having [indiscernible] or more previous treatments. This is not the case in pemphigus where there is a substantial proportion of patients, which will be newly diagnosed in terms of concomitant medication, there's only 1 variable which...

So I would say, James, it's a distinctly different biology. It's a distinctly different clinical trial. So we don't see any read through just like [indiscernible]

Your next question comes from the line of Danielle Brill from Raymond James.

I guess, Tim, I'm curious, do you think this is primarily a conduct issue? Or do you think the biology of the disease evolved and was no longer primarily IgG driven in the enrolled population in this study. And then as a follow-up to that, did those that were less heavily pretreated, perform better?

Yes. We have been diving deep into that question, Danielle. It is true that the patient population you study today is a totally different patient population than for example, you would have studied in the days of the TPO receptor agonist. I mean, this is basically now the patient population, which is refractory to splenectomy, watch and wait, steroids, rituximab 1 or 2 or 3 TPOs and sometimes fostamatinib. So you just wonder to what extent the biology is still representative of the biology, which we picked up in the literature. I think that is one. There is another element which we pick up in the data, but it's probably too early to really draw from conclusions. It is true that if you respond on efgartigimod and actually, we have some real clear nice responders with a robust and sustainable response that typically earlier in their disease, and they're typically also on fewer concomitant medications. So this is a data point which we need to double click on and further unpack.

Your next question comes from the line of Yaron Werber from TD Cowen. Yaron Werber, your line is open.

Yes. Can you hear me?

Yes, we can hear you now.

Great. So I just -- we're getting a lot of questions when you look across studies and even in your data in the Phase I healthy volunteer, you looked at the max mean IgG reduction and I believe in the ADAPT Phase III gMG study, you look to total IgG reduction. What -- can you just give us a sense, how are those 2 different from each other and kind of mean maximal versus total IgG reduction. And also, if you recall, did you ever release the 6- to 8-week data on mean max IgG reduction in the healthy volunteers? I'm just comparing across drugs. This is not about ITP, obviously.

Yes, Yaron from a PD point of view, that is not really anything there. But when we compare the data across studies, you basically see consistent PD effect from VYVGART IV or VYVGART Hytrulo. So that's not really the corner that you have to go and look. I would refer to the Phase 1 application for all the details on the PD effect in healthy volunteers. And of course, we have plenty of work in Phase IIs and Phase IIIs to go back to. But that's not exactly -- but I think we should look. When we looked at the data, this was a nice clean robust PD effect. So we think it's something which must have to do with disease biology and of the specific experiment we have been running. Thank you for the question.

Your next question comes from the line of Joon Lee from Truist.

Tim, you mentioned several times that ITP is a complex disease basically ADVANCE ID trial, was there a correlation between the magnitude of IgG reduction and response? In other words, but greater IgG reduction be able to overcome this complexity of ITP?

Yes, this is an excellent question. We need to look into that. So I think what we have been able to do so far is look at the data on the population level. Now is the time to go into the data on a patient-by-patient level. But we felt that we had to disclose this top line data now. There's, of course, a ton of analysis going on in the background, and we will talk about the data in the not-too-distant future.

Next question comes from the line of Matt Phipps from William Blair.

Was there any difference in the speed to onset of platelet response as you saw in the -- versus the IV trial or percentage of patients who switched to Q2 redosing.

Yes, thanks for the question. It's again early days. I think it's fair to say we see -- we still see patients switching to every other big dosing, but because the response rate is somewhat lower, you'll also see that reflected in the switch to every other week dosing. In terms of speed to platelet response, we're still looking into that to be honest. So stay tuned. There's a ton of data to unpack here. Thank you.

Your next question comes from the line of Sam Semenkow from Citi.

This is Eric on for Sam. How does this impact your thinking about the role IgG plays in disease pathology across your pipeline? Are there any other indications where our understanding the biology could be overemphasizing the role IgG plays.

It's an excellent question. So I think we're learning here about ITP whilst we digested data. Every disease, of course, is different. I mean, here in the case of ITP, we do know that pathogenic IgG antibodies drive disease in terms of optimizing platelets and mediating the clearance of platelets and also attacking the megakaryocytes. We do have a ton of patients in this study, which actually stopped responding to anything. So even rescue medication doesn't work in these patients. So then the question is, what is that remaining disease biology and what are the pathways which are really in place. And you know that we're building a biology rationale for each and every indication. So if you look at MG and CIDP, I think we have been very clear about how we triangulate from the IgG biology, plasma exchange data, Immunoadsorption data, also passive transfer models, which, by the way, were beautifully well in ITP. So I think we're looking at something which must be disease specific. And once you're very advanced in disease, the question is what pathways are actually in place. It's a key question we have.

Your next question comes from the line of Joel Beatty from Barratt.

For any future trials in ITP, do you see a potential to kind of identify or preselect which patients may be likely to respond to VYVGART?

We're still going through all the lessons learned, Joel, I think it's a very fair question. I asked the same question to the team, if you were to read you a clinical trial in ITP, just conceptually, what would you change? It's not an easy question. I think from an inclusion, exclusion criteria point of view, we were state-of-the-art. When you look at the endpoint, this is a well-accepted end point. And the reality in an ITP space is that patients actually have been on multiple lines of therapy and are actually in quite a few concomitant medications. So I think that ITP space has evolved and it is something to take into account when you design your clinical trial, clearly.

Your next question comes from the line of Alex Thompson from Stifel.

And Tim, maybe as a follow-up to your last point there, would it be feasible to run a trial where you were to cap patients on more than or equal to 3 prior therapies. Is that something that you would think about in the future?

Yes, you're balancing a few forces that there's a regulatory question and there's an enrollability question. Maybe, Luc, do you want to briefly comment on that without speculating.

Yes. I think based on what we've seen, based on also what the requirements are, it would be very hard to run a trial tailored more towards where we find VYVGART responders at first blush. That would take an inordinate amounts of time and engagement from patients to run. It's very tough. We've got some external views on this, too, and it's basically -- the perfect trial may not be possible to be run anymore given the background -- the availability of background treatments.

Your next question comes from the line of Douglas Tsao from H.C. Wainwright.

Just as a follow-up on that last point. Would you -- when you go through the additional data, be able to sort of identify sort of which treatments or number of treatments that placebo versus active patients were on to just get a better understanding of how much noise that may have contributed to this trial result.

No, thank you for the question. We have exactly the same question. It's a method of going through the patient profiles 1 by 1 and really try to understand at an individual patient level, what happened. Is that an impact of concomitant medication, if yes, which one? And how long the patients already stay on that type of therapy. We already touched on time since diagnosis, which clearly is a factor. We see that. So there's a number of questions we share here, and that's actually the task of the team, which is currently working through the data in detail. So stay tuned, we will communicate about it.

Your next question comes from the line of Rajan Sharma from Goldman Sachs.

Just are you able to kind of provide any initial thoughts on what were the difference in efficacy for the VYVGART relative to the IV formulation. Could there potentially be any difference as a result of the route of administration of the formulation. I'm just wondering if you think there's potential to run another IV study to support a filing here?

Yes. It's hard to imagine it because what we noted that the PD effects actually behave perfectly in line with expectations. The subcu formulation has shown non inferiority in the MG trial and spectacular data in CIDP. So that I think is speculation. I think we will take a deep dive into the data I think our current thinking is going in the direction of disease biology, but it's too early to be firm on it because we like to be databased, okay.

Our next question comes from the line of Xian Deng from UBS.

Two, please. The first one is just sort of a confirmatory one. Apologies if I missed it earlier. But did you mention the subcu population is more refractory than the IV trial population? And second one is on the IV trial, you have shown the data on the average changes in platelet count over time, where we sort of see a very nice separation between the VYVGART arm and the placebo arm. So just wondering what does that curve actually look like for your subcu trial. Just wondering, do you still see the nice separation of curves but with very large arrow bars on top of overlap or you don't see the separation at all. So I'm just trying to understand where that key value come from, whether it's sort of just a small difference or it actually come from some very large variance from the subcu trials potentially from the difference, as you alluded to, the difference in regional differences.

Yes, thank you for these excellent questions. Luc, do you want to comment on how comparable both patient populations are from the degree of refractory disease? And secondly, regional differences in the placebo?

Yes, thanks for the question. So there is a slightly higher proportion of refractory patients in the subcu trial. As we said, 75% in the IV trial, it was around 68%. I'm not sure if that would fully explain the difference. But clearly, the placebo response, which is the main difference and the main reason for noted operation shows that we have regions where the profile is as expected. And then we have regions where due to high placebo variability, platelet counts and making it through the engage where placebo response seems inordinately high. And we have to unpack that. What are the difference in practices, et cetera, in these different regions. So again, something to be done and talked about for the future, but to us that placebo response differential across the regions is one of the main differences between the trial.

[Operator Instructions] Your next question comes from the line of David Seynnaeve from Degroof Petercam.

I was wondering, can you comment perhaps on what the implications are of today's news on the regulatory filing strategy and commercial time line in China? And then perhaps also secondly, with the setback in hand, will this make you be prioritized in any way, future indication selection for subcu?

Thank you, David, for the 2 questions. So for China specifically, we work in partnership with Zai Lab. So the first thing we need to do is bring Zai Lab on board, share the data and then discussion of potential implications for the potential regulatory path in China. We are in control of the Japan track, and that's where we're going to double down with our internal team. So stay tuned on the China question. And in terms of biology rationale for future indications, that's not changing. I mean we will each time be very transparent about what are the published scientific data, which we think have value in underpinning the IgG-mediated nature of these diseases and explain what we think are the risks in the clinical experiment and how we think we can mitigate these risks in the clinical trials clearly being new from the Phase II and the first Phase III that's an unexpected placebo response could be in the cards. That's also why we borrowed that validated Phase III primary endpoint. And in this specific experiment, it did not do the job. And that is one of the questions to the team, why do we have the placebo activity, which we have in the study. Thank you for the 2 questions.

And there are no further questions at this time. This does conclude today's conference call. We thank you for your participation.