argenx SE (ARGX) Earnings Call Transcript & Summary

Good morning. My name is Leila, 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 of Corporate Affairs. You may now begin your call.

Thanks, Leila, and welcome to everyone on the call. Earlier today, we issued a press release summarizing positive top line results from the Phase III ALKIVIA study of VYVGART Hytrulo in autoimmune myositis. The press release and the presentation for today's webcast are available on our website. Before we begin on Slide 2, 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 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 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 Karen Massey, Chief Executive Officer; and Luc Truyen, Chief Medical Officer. I will now turn the call over to Karen.

Thank you, Beth, and welcome, everyone. Let's go to Slide 3. Today is an important day for patients living with autoimmune myositis and an important day for FcRn Science, an exciting day for the rheumatology community and it is a proud day for argenx. Based on the strength and consistency of the ALKIVIA data that we shared this morning, I can say that I am personally committed to securing a VYVGART label for patients living with both IMNM and DM. In IMNM, we have breakthrough therapy designation, and we will move with urgency towards submission. In DM, the data establish a path forward, and we'll move with the same urgency to engage regulators on next steps. This is where the data lead us and more importantly, it's what patients deserve. For too long, patients with IMNM and dermatomyositis have lived with serious progressive diseases and too few treatment options. For those living with IMM, the consequences are particularly severe. IMNM progresses quickly, sometimes in a matter of months, leading to irreversible muscle damage yet no approved therapies exist. In DM, the burden extends beyond severe muscle weakness. Patients live with debilitating skin manifestations of the disease and many continue to struggle despite available therapies. The ALKIVIA data start to change that picture. Today is also an exciting day for science. 6 years ago, we shared the ADAPT data in gMG, the first registrational study ever for an FcRn. It established VYVGART and the FcRn class has a meaningful new approach in autoimmunity. At the same time, it was a breakthrough for patients and its impact continues today. Since then, each successful VYVGART study has strengthened our understanding of where pathogenic IgGs are not just by standards of disease, but rather they are driving it. ALKIIVIA is now our sixth positive first-in-class Phase III data set with VYVGART, and it validates that autoimmune myositis is IgG-mediated. It is also an exciting day for the rheumatology community. The years rheumatologists have cared for IMNM and DM patients without the right tools. This is our first Phase III data set for VYVGART in rheumatology. And if approved, it will be the first opportunity to integrate an FcRn into their practice of medicine. And because of all of this, it's also a very proud day for argenx. For us, it's not simply about introducing a new medicine. It's about advancing science and changing what patients can expect from their treatment. Slide 4. With that, let's dive into the results. What stands out most to me is the consistency of the data. We met the primary endpoint in the overall population with VYVGART demonstrating a statistically significant and clinically meaningful improvement in mean total improvement score versus placebo. What is particularly compelling is that this benefit wasn't confined to one subgroup or one aspect of the disease. We saw a similar magnitude of treatment effect in both IMNM and DM, consistent improvement across all 6 core set measures that make up the tests, including [indiscernible] and we saw benefits across both muscle and skin manifestations of the disease. We also saw the profile that has become a hallmark of VYVGART, rapid separation from placebo deep treatment effect and benefit sustained through 52 weeks. Importantly, all of this was achieved while maintaining the signature safety and tolerability profile of VYVGART. Slide 5. These results are particularly meaningful when you consider the burden these patients face every day. There is a real urgency to intervene early. Patients can experience severe and rapidly progressive muscle weakness. We heard at R&D Day from Dr. Agarwal that IMNM patients can go from diagnosis to a wheelchair in a matter of months. Hospitalization is common, irreversible muscle damage can occur if it's not brought under control. Despite the seriousness of the disease, autoimmune myositis has remained largely overlooked by the industry. And that is why these results matter. VYVGART is the first and only therapy to demonstrate clinically meaningful improvements across both IMNM and DM with benefits that span muscle strength, physical function and other aspects of the disease that directly affect patients' daily lives. In the study, patients maintain their benefit from VYVGART while [indiscernible] steroids which remains an important treatment goal for many patients and physicians. Early KOL feedback has been positive. They see these results as a meaningful step forward for patients who have historically had far 2 treatment options. Slide 6. ALKIVIA reflects the playbook that has guided us from the beginning, following biology to areas where we believe we can have transformative impact for patients. Along the way, we have translated FcRn Science into meaningful advances for patients with several firsts. We delivered the first major innovation in CIDP in nearly 30 years. And now we've achieved the first positive Phase III results in IMNM ever. VYVGART continues its leadership as the only FcRn medicine approved in more than one indication. And now we have the data to support 7. The potential for FcRn is expensive with an opportunity to transform the treatment paradigm in many more autoimmune diseases and in the process, reshape treatment outcomes for patients. Slide 7. With these data, we have the opportunity to build on the foundation we have established in urology and expand FcRn into rheumatology. If approved, VYVGART will be the first FcRn to reach rheumatologists with whom we have a tremendous opportunity to make a difference for patients. As we've engaged with rheumatologists, we've heard many of the same challenges we encountered in our early conversations with neurologists a need for therapies that work quickly, deliver durable benefit, reduced steroid burden and improve patients' daily lives. We are also seeing a growing recognition of the role pathogenic IgG autoantibodies play across a number of rheumatic diseases, creating increasing interest in the potential of VYVGART. While our immediate focus is on IMNM and DM, this is just the beginning. Our next major rheumatology milestone is the [indiscernible] Phase III readout expected in the second half of 2027. And our Phase II study in systemic sclerosis remains ongoing. With that, I'll turn the call over to Luc to take you through the ALKIVIA study results. Luc?

Thank you, Karen. Slide 8. I really want to echo your comments. It's an exciting day for the autoimmune myositis community who have waited a long time for meaningful innovation and targeted treatment options. I want to sincerely thank the patients we enrolled in our [indiscernible], the investigators and advocacy leaders who partnered with us and the argenx team who's scientific rigor made this moment possible. Slide 9. We designed ALKIVIA to reflect what the biology was telling us. My sites presents differently across subtypes, but IgG autoantibodies are a common driver and muscle weakness is a hallmark clinical feature. That gave us a scientific basis to study IMNM, DM and PM within a single operationally seamless Phase II/III basket trial with mean total improvement score or this as our primary end points to measure muscle strength, physical function and broader disease activity. We included a specific skin measure for DM as well. We made the decision to continue enrolling all subtype patients in the Phase III portion of the study based on the Phase II results. 175 patients ended Phase III and all patients had to demonstrate active muscle weakness to enroll. The Phase III duration was 52 weeks, allowing us to evaluate the response over a longer time period. We also introduced a mandatory corticosteroid table from week 16 to 44. It's a core part of design to pressure test the robustness of the treatment effect. This is especially important as it would provide confidence to taper in really. With that context, let me take you through the data. Slide 10. As you see on the left chart, the [indiscernible] primary endpoint of mean total improvement score this at week 52 in the combined study population of IMNM and DM with a p-value of 0.0011. You can see a clear rapid separation of the active versus placebo arm, sustained over the 52-week period and consistent with [indiscernible] profile. We saw a consistent treatment effect across both IMNM and DM across all core measures, which was consistent with the Phase II data, as you can see on Slide 11. From the baseline chart on the left side here, you can also see that consistent with Phase II, we did not have a balanced randomization by sub time. This led to a larger percentage of IMNM patients enrolled in the study. So looking at the prespecified subtype analysis for IMNM [indiscernible] meta primary endpoint with a p-value of 0.0048. At week 52, means this was [indiscernible] in active treatment arm compared with 30.24 in the placebo arm, resulting in a 14.81 treatment difference. And I want to pause here to reiterate. This is the first Phase III data set in IMNM, a milestone for the field. In IMNM, we are progressive muscle weakness creates real urgency and long-term steroid exposure remains significant concern. These results are exactly what we aim for. These data form a clear path towards bringing a new treatment to these patients as soon as possible. Moving to dermatomyositis. Patients treated with efgartigimod shows a clear clinical benefit with an identical magnitude of effect to what we've seen in IMNM. I mean this was 51.51 in the active arm versus 36.96 in placebo, demonstrating 14.5 points of improvement. However, the DM subcu did not reach statistical significance on the primary endpoint. This is a reflection of the smaller sample size rather than absolute treatment effect. In addition to muscle, we also saw a clear impact on skin disease in DM. The strength of these data compel us to engage with the FDA with urgency on the path forward. Altogether, we have a rich and compelling data set for ALKIVIA, which we look forward to sharing with you at a future medical confress. Slide 12. The safety and tolerability profile observed in ALKIVIA is consistent with the established safety profile of VYVGART, VYVGART Hytrulo as well as from previous clinical trials. The strength and consistency of the efficacy data, combined with a favorable durability profile creates a compelling benefit risk proposition. This strengthens our conviction in bringing this medicine to patients who urgently need better treatment options. And I will now turn the call back to Karen.

Slide 13. Thank you, Luc. We are ready to move forward with urgency to bring VYVGART to patients living with autoimmune myositis. Based on the Phase II and Phase III data, and the consistency of treatment effect we observed across both IMNM and DM, we believe we have a compelling regulatory package. In IMNM, where we have breakthrough therapy designation, we intend to move rapidly towards submission. In DM, we have strong conviction in these data and what they mean for patients, and we'll engage with the regulators on a path forward. Today's announcement reflects the top line results. Our next step is to share the full data set with the medical community at an upcoming congress. We look forward to presenting the depth and consistency of effect across endpoints, including both muscle and skin measures of disease and to engaging the rheumatology community with a data set that has the potential to change clinical practice. And finally, we're not waiting to prepare for the future. we're advancing our plans for a launch in one or both subtypes, and we continue to invest in the rheumatology capabilities that will support long-term leadership. This reflects our commitment to the myositis community and our ambition to build a lasting presence in rheumatology. Slide 14. We set a bold ambition to reach 50,000 patients with our medicines secured 10 labeled indications and advance 5 new late-stage molecules by 2030. Today, the ALKIVIA results strengthen our confidence that we are well on track to achieve that vision. What today's data reinforce is that our strategy is working. We continue to follow biology. We invest in areas of high unmet need and generate evidence that can change how diseases are treated. ALKIVIA is the latest example of this approach in action. As we look ahead, we are building on a strong foundation, continued expansion of VYVGART, a growing late-stage pipeline and an innovation model designed to create lasting impact for patients. Slide 15. We continue to unlock the full potential of VYVGART. Today, we have data supporting 7 potential labeled indications for VYVGART and a growing opportunity to reach many more patients. Empasiprubart continues to advance through late-stage development with our first Phase III readout in MMN expected later this year. We're also progressing [indiscernible] and ARGX-121 and looking forward to adding FB-102 to our late-stage pipeline following the close of the [indiscernible] transaction. What you see on this slide is that our growth story does not begin or end with any single molecule. We're broadening the reach of VYVGART today, while building the next generation of medicines that can shape the future of argenx. This is why I'm more confident than ever in our ability to continue to bring meaningful innovation to patients and create long-term impact in immunology. I want to say thank you again to the patients, investigators, physicians and agents may help make today's milestone possible. And we will now open the line for questions.

[Operator Instructions] Our first question will come from Tazeen Ahmad with Bank of America.

Congratulations on the positive update this morning. I was wondering if you could provide a little bit more detail on the steroid tapering benefit that you saw. This has been something that you've pointed to as a potential benefit. It looks like you did see that. How do you think it's going to compare relative to how physicians would want to see benefit? Is it simply lowering the amount of steroid? Or is there a minimal amount that they wanted to see? And do you plan on showing this and other level of data at upcoming medical meetings as well?

Yes, Tazeen, thank you for the question. And in terms of comparing across the different data sets, what I think is actually most compelling about this data set is the consistency of data even with the steroid taper. But maybe, Luc, I can hand it over to you to talk through that steroid taper.

Yes. Thank you, Karen, and thank you, Tazeen, for the question. So the steroid tapering was a real construct within the trial, where as of week 16 patients where depending on their level of steroid use coming in were tapered until week 44 with a target of 5-milligram or less of steroids. The reason that we wanted to do this in the trial was to see if indeed the treatment effect would be maintained on those conditions. And we achieved that as the robust endpoints show. There is observation that, in fact, placebo patients, there several of them had to use a rescue. The main goal for us was to make sure that indeed treatment effect is robust. And as I said in the remarks, hopefully, for the field, this will give some confidence that you can taper a patient that is benefiting of VYVGART.

And then, Tazeen, on your last question around Medical Congress, you can absolutely expect that we will be very transparent and share all of the data in the argenx way at an upcoming congress. And it certainly is a robust data set.

Our next question will come from Derek Archila with Wells Fargo.

And let me add my congrats on the data. So just one question from us. I was wondering if you could better characterize some of the benefits you're seeing on the secondary endpoints in DM and understanding the caveats of cross-trial comparisons, but how might those compare to [indiscernible]? Any any that you could see VYVGART, where they could be differentiated?

Yes, absolutely. I mean I think this is top line results. So we've shared with you what I think the primary end point and try to qualitatively so I've outlined for you what we see in the secondary results. And what's important there is the consistent across all of the core set measures that we see. So when we look at those 6 measures within the [indiscernible], and when we look at other secondary endpoints that measure also things like impact on skin in DM, then we really see consistent treatment effect and that consistency is across both IMNM and DM. So I'd say we're very pleased with that consistency of the data set.

Our next question will come from Akash Tewari with Jefferies.

By your math, if you group the Phase II and Phase III data sets in DM, VYVGART would have that [indiscernible] package. Can you confirm that's true? And did you disclose bundling boat trials when the FDA modified your original trial design earlier this year? And if I could sneak in one more. I suspect an effect size approaching 15 on [indiscernible] would have been static in Phase II. What led to the miss in Phase III, despite the larger end? It seems like there was a lot of underlying variability here or perhaps steroid rescue imputation.

Yes. Thanks, Akash. Great questions. Let me zoom out for a second. I think what you see, what is clear from the data is that we have a medicine that works across IMNM and DM. And we see that there is -- as you call out very well, consistency in the improvements that we see between Phase III and Phase II. Now obviously, there are some differences in the design between Phase III and Phase II, so mulling those wouldn't make sense. But I think you're really focused on the right thing, which is when you look at these -- the primary endpoint for Phase II and Phase III for IMNM and DM, it is clear that we have a medicine that works and it's the first time a medicine has demonstrated positive benefit for both of these patient populations. And I think we have a strong regulatory package to take forward.

Our next question will come from Danielle Brill with Truist.

I'll also add my congrats. So maybe a follow-up on the some of the secondary efficacy endpoint measures. I wanted to ask about the [indiscernible] 204060 thresholds specifically. I know many physicians view these as important measures of clinical relevance. Can you comment directionally on how FR performed across these response thresholds and whether the effect was consistent across IMNM and DM?

Maybe, Luc, you can comment on...

Well, we don't want to give too much detail away given upcoming presentations. What I can say is that we were very pleased with the rates of response to those milestones, you state, this 40, in particular, is recognized as an important one, and we had a very robust result there.

Your next question will come from Alex Thompson with Stifel.

I wonder if you could talk through kind of your next steps in DM in particular, do you plan to seek sort of regulatory alignment before filing? Or do you expect to file directly with these data?

Yes, I'll hand it over to Luc to comment on the pathways. But what I want to reiterate is where I started the call today, which is we do see that we have a medicine that works in both, and we are committed to getting a label expansion in both IMNM and DM. And as you point out, the pads do look different. So maybe, Luc, you want to talk to that?

Yes. So from the data set, it should be clear that the path to submission and consideration by the FDA is pretty clear, compelling data sets very robustly significant and so that's very clear. On the DM side, while we are very, very pleased with the results and the magnitude of the effect size, this has to be a discussion as to what they would require to see to be able to grant approval. And it's too early to speculate what that could be. And we will engage in that dialogue as soon as we can.

Your next question will come from Samantha Semenkow with Citi.

Let me also my congratulations on the great results this morning. I have a question on the -- just given the heterogeneity of this disease, are there any early signals that you can pull out that some autoantibody profiles responded better than others? Or are you seeing a pretty broad magnitude of benefit across patients enrolled?

Yes. I mean I think we've all used that word heterogenous nature of DM. I think what we see is that there is one common feature. And that's the autoantibodies are driving this disease and -- IgG autoantibodies. And so we see consistent impacts across secondary endpoints against across patient populations, and I think it really reinforces the value of VYVGART that population.

Your next question will come from Sarah Cai with TD Cowen.

Congrats on the amazing data. This is Sarah on for Yaron. The data seems to support filing in DM, as you had noted earlier, but -- just curious if the conversation with FDA maybe doesn't completely support finally in DM, would you then choose to run a smaller Phase III to have a confirmatory effect in the end? And then separately, are you thinking about maybe expanding into other subtypes of myositis. We've heard inclusion body [indiscernible] IBM mentioned as an interesting subtype of myositis that maybe [indiscernible] could also have an effect in. So just curious to hear your thoughts there as well.

Yes. Thanks for the question. I would agree with you, these are amazing data that we're seeing -- so yes, in terms of the path forward on DM, as Luc said, we will very urgently have a discussion with the FDA to be able to share what we see as a very compelling data package. And then I think that we can see that there are a few paths forward, either that we're able to move forward for a label expansion based on the strength of this Phase II and Phase III data package or we can think about the example of what we did with seron and the seronegative in MG where the agreement we came to with the FDA was to do a small follow-on study to be able to really demonstrate the benefit in that patient population. And so we have that as a path forward as well. Certainly from my perspective, what I want to repress is that we are working with urgency on this -- and we see a real need to get to patients as quickly as possible. They have really limited treatment options today, and this is a severe disease that progresses quickly. So our goal is the fastest path to patients possible. And then maybe, Luc, I could hand over to you to talk about our thinking on the other subtypes.

Yes. Now you mentioned IBM in particular there, the biology is somewhat more unclear. But you can rest assured that we are very committed with VYVGART or any of our other assets to make an impact for this community with our innovation, benefiting their unmet needs. So this is just in our mission.

Your next question will come from Thomas Smith with Leerink Partners.

Congrats on the data. I know these are just top line results, but anything in the ALKIVIA data that makes you more confident on the opportunities for FcRn [indiscernible] versus [indiscernible]?

Yes, it's certainly exciting that we are able to establish ourselves in rheumatology through this data before the Sogras readout. But maybe, Luc, you want to talk about your thoughts on...

Well, I think I would say, other than our commitment to rheumatology, there is not an immediate read through of these results [indiscernible]. For [indiscernible], we did our own a small study, given us confidence that there is a consistency in the biology that we can follow, but I wouldn't say that these data would further support that. .

Your next question will come from Rajan Sharma with Goldman Sachs.

Maybe thinking ahead a little bit, but just on the potential commercial launch, assuming there is an approval. I think in the past, you've always talked about 2 or 3 quarters to get sufficient coverage for they've got when there's been new indications. Just given the unmet need in IMNM and potentially even DM, is there any reason that, that could be a faster launch than you may have experienced in other indications?

Yes. Great question. We'll certainly be working as to get patient access as quickly as possible. But I think what we'll do is take the same approach that we've taken in neurology. And so it likely will, to your specific question, take a couple of quarters to get that access in place, but we don't see that access will be a major barrier for IMNM or DM. Thanks for the question.

Your next question will come from Gavin Clark-Gartner with Evercore ISI.

This is [indiscernible] for Gavin. Congrats on the data. So just a question on the Phase III eligibility. Can you remind us it looks like muscle weakness was required for each patient, but for the active skin enrollment is not mandatory. It only needs to make 1 of the 5 criteria. So based on this criteria, can you remind us how the resulting mix is going to compare with the real world in patients presented in the practice?

I can answer this. So yes, from the paradigm of a basket trial, we were looking for, as I mentioned, that was really common to all so that we can have a common measure of it. As I have indicated, we included in the specific skin measure, [indiscernible], but we didn't really require a specific level of activity on that. Nevertheless, I find and what I will say about the [indiscernible] result is that I find them very compelling for a treatment effect.

Your next question will come from Sean Laaman with Morgan Stanley.