argenx SE ($ARGX)

Hello, and welcome back to the Bank of America Healthcare Conference. I'm Tazeen Ahmad. I'm one of the biotech analysts here at the bank. Our next presenting company is argenx. Sitting up here on stage with me is the new CEO, Karen Massey, congratulations, Karen, on the recent promotion. We're going to be spending time, I think, focused a little bit on the pipeline because there's a lot going on.But maybe we can start off by talking about what your vision is for the company now that you're helping all the major decisions and how you think about strategy going forward?

Yes. Thank you so much. It's great to be here and a great conference. And I appreciate the opportunity. I mean I would say we have laid out our growth strategy for argenx, and that's Vision 2030. And so that gets us to patients by the end of the decade, 10 labeled indications and 5 molecules in late-stage development. So we have, I would say, we've had that plan in place, and we continue to execute on that plan. But as I think about my strategy and where we want to take argenx over the decade even beyond that. The vision for argenx has always been to be an immunology innovation company. And so the first leg of that was building Vive VYVGART and establishing VYVGART. And we've -- and I think we've demonstrated the ability to do that. We want to continue that leadership in FcRn. So the first leg of the next part of the strategy is extending our FcRn leadership for decades to come. So we have 2 next-generation FcRns and we're investing in an oral a big part of the vision for the company. But the second part is how do we also build a non FcRn portfolio that is as meaningfully contributing to argenx as the FcRn portfolio. And that's really all about hopefully what we can talk about today. pipeline beyond VYVGART.

Okay. So since you mentioned them, let's maybe spend a couple of minutes on those next-generation assets that you're looking at for the gMG and CIDP indications as well as the oral of CRM. So until recently, you were heading up the commercial organization. So you can talk to this in real time. What do you think theoretically would be the benefit of, let's say, having an oral of CRM versus the various different methods that you have of delivery now, everything from IV to Hytrulo to prefilled syringe.

Yes. I mean, our strategy from the beginning with VYVGART and we'll continue with FcRn is that we want to transform these diseases that have significant unmet need. And with VYVGART, what we can -- we believe we can deliver in MG, what we're seeing we deliver also in CIDP is really strong efficacy, but importantly, safety across the broad indications. And then as you said, the convenience for patients. So we launched with infusion, we bought subcutaneous and then prefilled syringe. Taking that playbook across all of the indications allows us to start to patients being treated earlier in their disease. So we're really expanding these indications, expanding these markets. It's a big part of our strategy and will be a big part of our strategy for future indications. And the oral helps us to do that, so -- as well as our next gen. So 2 on 3, one of the next-gen FcRns moves to 4-week dosing. So it's a step forward in convenience. And potentially with the oral, you can imagine that's another step forward in convenience, but still maintaining that efficacy and safety profile of FcRn. When you think about FcRn from an MOA, we know that there are many, many indications beyond what we already have approved in MG, CIDP and ITP. And so we think by having multiple next-generation options, we have the opportunity, yes, to provide more convenience in the indications that will already be approved in, but we can also start to continue to push the boundaries of the biology of FcRn and even further expand those indications beyond.

Yes. So it seems though that you've done a good job of moving patients into front line. I remember, I think our first version of the model when the drug first launched had a much lower peak sales penetration. And I think part of the reason for the constant revision upward is that the company has been able to move higher in the lines of therapy. So as you think about in a world where, let's say, auto-injectors are much more commonly used because of, let's say, the GLP ones, the company is developing an auto-injector pen. So as you think about the incremental benefit from moving to a prefilled syringe to an auto-injector to an oral, how much of a meaningful impact do you think you're going to be seeing with each of those iterations?

I mean, I think, for each of these innovations, we do see it as a step forward and driving the majority of our growth. I mean if you think about the step that we took going from subcutaneous to prefilled syringe, and as you said, the continually increasing the revenue and the projections, that's being driven by prefilled syringe because what you see is that we've been able to expand the prescriber base significantly beyond where we thought it would be when we launched VYVGART significantly expand the addressable market because of the simplicity of being able to use a prefilled syringe at home rather than having to go into -- for an infusion. So it is a step forward. I think the auto-injector is less of a step change because the big shift was being going from HCP administered to patient administered with the prefilled syringe the auto-injector will still -- assuming approval and we get through the regulatory framework, we'll still be patient administered. It helps because it's easier to handle. It helps because if patients are needle phobic, but it won't be as much as a step forward. But it is -- but it will continue to be a differentiator for us. And then you can imagine the oral, as you say, I mean, we'll see how it plays out with the GLP-1s. But I think you can imagine that going from an injectable to an oral opens up a different pool of patients for whichever indication you're looking at.

Okay. So maybe let's talk about a couple of the near-term data catalysts that you have upcoming late stage. Let's start with myositis. So just remind us when is that Phase III reading out. And you were looking at 3 different subtypes. I think there's been some questions about what the company thinks is going to be the biggest value drivers. So maybe talk to us about those items.

Thank you. It's exciting. We have the data reading out in Q3. And yes, so we see myositis is our next growth frontier, our next growth opportunity. And we see the addressable market as around 70,000 patients. So to put that in context, that's similar to where we see the MG market addressable market right now. So you can think of it as an MG like opportunity from that perspective. We designed a clinical trial that allows us to explore 3 of the different subtypes. So we have IMNM; we have DM, dermatomyositis; and then PM. And from my perspective, each of the subtypes has a clear biology rationale, and we can go through what that is. I would say we're very disciplined at argenx at always starting with the biology and science. So we have a clear biology rationale for each. And we designed a clinical trial that is very thoughtful and that it allows us to look at the overall population, but also the subsets so that we can really explore and we have multiple paths to success depending on data that we see. In terms of the value driver from my perspective, and certainly, as a commercial person, I'm really excited about M&M, and that's what we've been talking about. As we've been doing our homework to really understand the commercial opportunity, what you see in IMNM, there's nothing else approved. This is a completely white space indication. We see there's around 20,000 patients. So that's bigger than the TAM for CIDP. It's bigger than the addressable market when we launched and you'll remember that with myositis, it's weekly dosing, so CIDP like dosing. So being able to go to a space where there is a huge unmet need there is no competition, including competition on the horizon. And there's also quite a bit of overlap in IMNM. It's -- if you think about the treatment -- the treating physicians more neurology and rheumatology. And obviously, we have strength [indiscernible]. So the overall opportunity is a big value driver for us. We have a lot of belief in the biology for all of the different subtypes, but if you had to ask me to prioritize and where I'm most excited about, because of the patient unmet need, I think IMNM is going to be really exciting.

Okay. And to say that you're most excited about is not the same thing as less bullish about DM. Correct?

That's exactly right. I would not say that. I mean I think in DM, it's just a different dynamic. I'm also I'm excited about the overall Myositis opportunity. In DM, we have a strong biology rationale. The difference from a commercial perspective is the dynamics. It's more heterogeneous. So we know that there's more at play in driving the disease and there is more competition, but it's a larger patient population. We think that that's a 40,000 TAM. So look, I think that's also an exciting opportunity. It's another one where it's bigger than the CIDP TAM at launch. So yes, it's certainly a big value driver. There's a good biology rationale. And I look forward to seeing that actually the data play out for each of the different subtypes because I think they each have their own unique opportunity.

So when you -- when it comes time to showing the data in the press release, like give us a sense of what level of granularity we're expected to see.

Yes I mean [indiscernible] style that we have is that we like to be transparent, and we want to share as much data as possible. our first entry into rheumatology and some of the medical congresses and conferences with rheumatology are a little more strict. And we want to make sure that we have the opportunity for -- to make a big splash with this data because when it reads out. So we'll definitely share the top line and as much detail on subtypes we can. But we'll just have to -- once we see the data, we'll have to determine what the right path forward is there. But we like to be able to give transparency, and we'll be able to give a good sense of where we think we're going with this indication.

Okay. Now because of the different prevalences of the 3 different subtypes, how should we be thinking about the balance of each of the subtypes that finally enrolled into the study?

Yes. So the way that we designed the study, if we maybe just take a step back, it's a seamless Phase II, Phase III. And when -- and we did not cap any of the subtypes. So we let the enrollment run both for Phase II and then also for Phase II. So you can imagine that it's not an equal distribution across all the different subtypes. But it enrolled based on, I would say, unmet need and as well as the the disease characteristics. So we haven't shared the underlying sort of the number of patients across subtypes, but we'll be able to do that, I would say, a top line.

Okay. But there isn't a concern internally that you enrolled too few people in one of the subtypes, and therefore, it wouldn't be like strong enough to support an application?

No. I mean the trial -- it's a basket design. So we're able to look at from a statistical analysis plan perspective, the total population as well as the subtypes.

Okay. And one other common question we're getting lately is what are your discussions with the FDA on the subtypes? Like is there flexibility to look at the data and then decide if you want to apply for a full label for all 3 or a subset of them?

Yes. I mean, as always, we're engaged very closely with the FDA on -- especially on such an important study. And as always, it will come down to let the data speak, and then it will be a review decision. But I think we have multiple paths forward.

Okay. And then in terms of commercial organization, assuming that you move forward in some capacity with this indication, what changes would you need to make, if any, to the field force?

Yes. So this is our -- potentially our first step into rheumatology. And so with this step and then, of course, we have on the horizon, Sjogren, another exciting potential rheumatology indication. So we do start to think about expansion so that we can cover more of the rheumatology. It's a different footprint. Also potentially different support services for patients so that you can compete in rheumatology versus neurology. So we can leverage a lot of the commercial infrastructure that we have with, let's say, some expansion so that we can make sure to have the reach that is needed to succeed.

Okay. So if this becomes, let's say, another potential vertical for the company, you just mentioned Sjogren. So maybe let's talk about that. You've got a study underway, which I believe reads out in some time in '27. So you wouldn't be alone in looking at Sjogren's. So maybe mechanistically, can you just talk us through why it made sense to invest the money in the time into looking into this.

Certainly. I mean I think one sort of takeaway that I think about with Sjogren and some of these rheumatology indications is there was always the auto antibodies were generally known. But it was always [indiscernible]that they were more of a buy standard or an outcome of the disease. And I think what the real shift has been is like is that no, in these rheumatology indications, actually, these IgGs could be driving the disease. And I think that's what we've seen in Sjogren. So the way we went about Sjogren's is the same sort of disciplined approach that we go about to choose any indication, look at the biology, and that's what we can look at and look at the development path and then what is the unmet need. The way our development plan, I think, was quite innovative and agile and reflects the argenx way. Our competitor did a big Phase II study, so we were able to leverage the data from that competitor in FcRn that really demonstrated that the biology rationale was there. And what we did was small, very focused Phase II study where we went deep to really understand the drivers of the disease and really understand how to run a clinical trial so that we were able to execute, and I would say, leapfrog ahead. And as you say, we have data coming out next year. And it's certainly an exciting indication. In terms of the third category that we always look at, Sjogren's, I mean, it's a big patient population, 300,000 patients. But what we see is especially in the sort of around 100,000 more severe patients. There's a real serious unmet need and patient need. It goes beyond just dry eyes, the systemic manifestations of the disease and that that we think will have the biggest benefit.

Okay. And the investments that you would theoretically be making now into rheumatology would be for all indications.

That's right.

And with the targeted physicians, we've talked about the overlapping, let's say, of neurologists who treat CIDP and gMG. So we make the decision into moving into various rheumatology indications, is it too simplistic to say that any rheumatology indication would be something that the community position of community rheumatologists would be trading? Or are there specializations within that?

I think it will -- we still need to do the work up, but it will be -- I would say it's more -- it will be more specialized than that. Even when you look at neurology, we have over 5,000 neurologists that are writing VYVGART. And so there are a lot of breadth. That's not all of neurology. There are some neurologists that mostly treat migraine. So as an example, so we're not targeting them. It will be the same in rheumatology. And so what we'll be able to do once we have the data and once we -- as part of our launch preparation is really target what's the -- where do we need to focus our energy to get the best return on investment.

Okay. Let's maybe move on to MNM, which is another pivotal study that's going to read out in the fourth quarter, I believe. And it's going to be your first foray of a late-stage study that's not efgartigimod. It's going to be with EMA. So maybe talk to us about the excitement that you guys have internally about this particular program because it could open the door to many other indications for this different drug.

Yes, absolutely. We're very excited about empasiprubart. When I talked earlier about the long-term strategy for the company, it is to become a leader in immunology. And so this is our next medicine as the target and MMN as the first indication. And when you look at MMN, I think it's a very argenx-like indication. It's very clear biology rationale for C2 with MMN a really strong development path that we can unpack a little bit more in terms of a head-to-head versus IVIg based on very strong Phase II data. and importantly, a very high unmet need. I mean it's another place that there hasn't been innovation for decades and in MMN. It's a progressive disease. IVIg is the only option and patients continue to progress even with very high doses of IVIg. So this is a great first indication. But empasiprubart is a pipeline in a product. So we see more indications coming. And one of them that we've announced is obviously CIDP, but there's even more beyond that.

Can you maybe just talk to us about the trial design for MMN and what we should be looking at in particular?

Yes, absolutely. So the trial design is a head-to-head versus IVIg. And the reason for that is because we have such confidence based on the Phase II data that we can design a Phase II study -- sorry, a Phase III study noninferiority versus IVIg. The primary -- it's a 24-week endpoint, and the primary endpoint is on grip strength. And that's important because what we've learned in CIDP is that grip strength is a really meaningful endpoint to prescribers and to patients, mostly because it's very easy to understand. I mean, if you're losing the ability losing nerve function, and you can't pick up your coffee cup in the morning, if you can understand as a patient, as a layperson, I group strength is improving. And what we actually saw in the Phase II study is group strength was able to improve over time, not just slowing the decline. So it's an important endpoint that's meaningful to doctors, understandable to patients, and I think really shows functional improvement potential for empasiprubart.

And then what about quality of life? Like maybe talk to -- tell us about what patients feel they need to have that they don't have right now.

Yes. I mean this is another indication where at the very simplest level, a patient's immune system is attacking their nervous system. So they lose the ability to use their hands to walk to -- they lose strength. So from a quality of life perspective, group strength is a good -- is one of the -- is a good endpoint. We also have an endpoint MMN rods, which is more holistically looking at various quality of life measures to be able to assess the impact on the disease. One of the most important data points from Phase II that we saw was when you ask patients to compare how they felt on empasiprubart versus at their peak on IVIg. Nine out 10 patients said they felt better in empasiprubart. So there's a lot of secondary endpoints also of those qualitative quality of life outcomes.

And what -- which of those quality of life measures are you looking at or will you be looking at?

We have a very long list of secondary endpoints that look at physician-rated quality of life, patient-rated quality of life, MMN rod say so. So it's a deep study.

Okay. And then maybe just 1 more question on mechanism. C2 versus, let's say, C1. On the complement cascade, some might think of are those really that different from each other. But the work that argenx has done, maybe explain why might make more sense?

Yes, absolutely. I mean whenever we look at and identify targets for argenx, we always like to work with world-leading experts to really understand what are the -- what's the best target from an efficacy and safety perspective that's going to be able to open up this pipeline in a product. And for us, C2 is that in the complement cascade. And why is that. First of all, it's at the intersection between the classic and the lectin pathway. So you're able to capture indications that are driven by both of those pathways while leaving the alternate pathway to free if you will, which has an important safety benefit you can still mount an immune response to a bacterial infection. But there's also -- the other reason is for C2 in addition to having the indications opened up for the classic and lectin pathway is that we think that it's the safest place to intervene in that complement cascade and we've seen that with the strong safety and the data that we've generated in Phase II as well.

Yes. So you've focused in on safety, which was going to be my next question. I guess, in particular, is there any reason to think baseline assumption that any kind of black box warning would be part of what a label could theoretically look like?

Yes. I mean, with complement inhibitors, obviously, there's always the consideration of a black box warning around vaccinations and consideration. So in our clinic trials, yes, we do run the clinical trials with vaccination, but we're also working very hard in developing data packages alongside to demonstrate that you can still mount that immune response and -- so that we can start to work towards. And I think we're relatively confident that we should be able to get to a good place in terms of the vaccination requirement.

Okay. And then same question as before, what to expect at the top line level disclosure?

Yes. I mean here, again, we will be as transparent as we can and we'll balance that need for making sure that we can especially in this indication. I mean we are first in class in this indication. First innovation in decades. You can imagine how much excitement [indiscernible] the medical community. And so we want to make sure that we get a good -- are able to have a good [indiscernible] Congress as well as share the top line results when we get them. So we'll be as transparent as we can.

Okay. And what is the specialty that treats MMN?

It's neurology. So it's also a strong overlap with our current footprint.

Okay. So maybe in a couple of minutes we have left, I did want to touch upon IGAM because you will be beginning a program for 121. And I think some people find it interesting that the company wants to invest time and money into this just considering the view that it's becoming a quickly crowded space given the April and April BAFs that have launched, we'll be launching. So just quickly, mechanistically, why do you think there is still room for a new entrant like this?

Yes. Absolutely. So two things. One, when we looked at MG, whenever it was, and I remember I was -- when others looked at MG, they also felt like it was a competitive space and there wasn't enough room and look how much that's transformed. And so I think there's plenty of space in IgAN if we do the same thing as we have in MG, which is provide transformative outcomes. And I think we have the opportunity to do that because our IGA sweeper, what -- it's differentiated because it drops -- its targets only IgA and it drops them rapidly and sustained. And if you think of kind of this idea of time is nephron, then we think we can provide more rapid efficacy, and that's going to be important for these patients.

And what about on safety? There are some questions about risk of infection for the April BAFs and just theoretically, what do you think that profile could look like for 1:1?

Yes. I mean we'll have to see it play out. But I mean you have people that are walking around and from a genetic perspective don't have IgA and there's no risk infection. So we think actually targeting IgA is going to actually produce a good safety profile, and we'll allow us to compete there.

Okay. What is the status of the program, it's enrolling?

It's -- no, we're starting the program shortly.

So not necessarily data this year then?

No data this year.

Okay. Great. So with that, we're just about out of time. So I'll say thank you for making the trip all the way to Las Vegas. I know you travel a lot. So I'm not even sure where you might have traveled from to get here, but thank you. And thanks, everybody, for sitting and listening to the session.