On October 31, 2023 argenx SE (Euronext & Nasdaq: ARGX), a global immunology company committed to improving the lives of people suffering from severe autoimmune diseases, reported its third quarter 2023 financial results and provided a business update and outlook for the remainder of the year (Press release, argenx, OCT 31, 2023, View Source,the%20same%20periods%20in%202022. [SID1234636455]).
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"We continue to prioritize patient impact with VYVGART and VYVGART Hytrulo, broadening our two gMG products into earlier treatment lines and new geographies. VYVGART has now been used in thousands of patients over multiple treatment years, and its unique clinical profile has built patient trust and physician confidence in the brand," said Tim Van Hauwermeiren, Chief Executive Officer of argenx. "There is a significant opportunity before us to transform autoimmunity across multiple indications with VYVGART. Based on the successful ADHERE trial, we are ready to file the sBLA by the end of 2023 to bring our first-in-class FcRn blocker to CIDP patients as quickly as possible. We are also on track with two near-term pivotal readouts and an ambitious plan forward over the coming years as we continue to execute and drive innovation within our FcRn portfolio and across immunology more broadly."
THIRD QUARTER 2023 AND RECENT BUSINESS UPDATE
VYVGART Expansion
VYVGART is a first-in-class antibody fragment targeting the neonatal Fc receptor (FcRn) and is now approved globally in seven countries or regions (U.S., Japan, EU, UK, Israel, China, Canada) for generalized myasthenia gravis (gMG). VYVGART Hytrulo (subcutaneous (SC) injection) was approved in the U.S. in June 2023. argenx is planning for multi-dimensional expansion to reach more patients with gMG and other severe autoimmune diseases through additional global regulatory approvals.
Generated global net product revenues (inclusive of both VYVGART and VYVGART Hytrulo) of $329 million in the third quarter of 2023
Health Canada approved VYVGART on September 21, 2023, marking the seventh global approval for gMG
European Commission (EC) approval of SC efgartigimod for gMG expected in fourth quarter of 2023 following positive recommendation from Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA)
Japan approval decision regarding SC efgartigimod for gMG expected by first quarter of 2024
Japan marketing authorization application (MAA) filed for VYVGART for primary immune thrombocytopenia (ITP); approval decision expected in first quarter of 2024
U.S. supplemental Biologics License Application (sBLA) for VYVGART Hytrulo in chronic inflammatory demyelinating polyneuropathy (CIDP) on track to be filed by end of 2023
China approval decision regarding SC efgartigimod for gMG expected by end of 2024 through partnership with Zai Lab
Efgartigimod Research and Development
argenx is solidifying its leadership in FcRn blockade and demonstrating the broad potential of efgartigimod by advancing its clinical development programs of IgG-mediated autoimmune diseases. By 2025, efgartigimod is expected to be approved, in regulatory review or in development in 15 severe autoimmune diseases
Topline data from ADVANCE-SC (ITP) expected in fourth quarter of 2023; results from ADVANCE-IV study were published in The Lancet in September 2023
Topline data from ADDRESS (pemphigus) and GO/NO GO decision from BALLAD (bullous pemphigoid) both expected around year-end 2023
GO/NO GO decision expected from ALKIVIA (myositis) in second half of 2024
Topline data from ALPHA (post-COVID postural orthostatic tachycardia syndrome (PC-POTS)) expected in first quarter of 2024 and RHO (Sjogren’s syndrome) in first half of 2024
Pipeline Progress
argenx is advancing a robust portfolio of innovative clinical programs, including empasiprubart (C2 inhibitor) and ARGX-119 (muscle-specific kinase (MuSK) agonist). Both programs have the potential to be first-in-class opportunities for multiple severe indications.
Topline data from Phase 2 ARDA study of empasiprubart (ARGX-117) in multifocal motor neuropathy (MMN) expected in 2024
Phase 1 study of ARGX-119 ongoing in healthy volunteers; subsequent Phase 1b trial planned to assess early signal detection in patients with congenital myasthenic syndrome (CMS) and amyotrophic lateral sclerosis (ALS)
Immunology Innovation Program
argenx continues to invest in its discovery engine, the Immunology Innovation Program, to foster a robust innovation ecosystem and drive early-stage pipeline growth. argenx expects to nominate one new pipeline candidate in 2023.
THIRD QUARTER 2023 FINANCIAL RESULTS
argenx SE
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF PROFIT OR LOSS
Three Months Ended
September 30, Nine Months Ended
September 30,
(in thousands of $ except for shares and EPS) 2023 2022 2023 2022
Product net sales $ 329,097 $ 131,329 $ 816,432 $ 227,325
Collaboration revenue 692 6,652 3,047 9,262
Other operating income 10,050 8,508 31,275 26,565
Total operating income $ 339,839 $ 146,489 $ 850,754 $ 263,152
Cost of sales $ (35,999) $ (10,264) $ (78,358) $ (16,646)
Research and development expenses (191,755) (236,681) (553,119) (515,568)
Selling, general and administrative expenses (191,930) (108,181) (503,079) (336,845)
Loss from investment in joint venture (743) - (2,623) -
Total operating expenses (420,427) (355,126) (1,137,179) (869,059)
Operating loss $ (80,588) $ (208,637) $ (286,425) $ (605,907)
Financial income $ 30,049 $ 8,007 $ 67,078 $ 13,740
Financial expense (231) (785) (626) (2,916)
Exchange gains/(losses) (32,509) (39,609) (23,345) (92,991)
Loss for the period before taxes $ (83,279) $ (241,024) $ (243,318) $ (688,074)
Income tax (expense)/benefit $ 10,637 $ 5,982 $ 47,437 $ 17,096
Loss for the period $ (72,642) $ (235,042) $ (195,881) $ (670,978)
Loss for the year attributable to: -
Owners of the parent $ (72,642) $ (235,042) $ (195,881) $ (670,978)
Weighted average number of shares outstanding 58,128,233 55,203,655 56,512,254 54,049,119
Basis and diluted loss per share (in $) (1.25) (4.26) (3.47) (12.41)
Net increase/(decrease) in cash, cash equivalents and current financial assets compared to year-end 2022 and 2021 $ 993,035 $ 48,813
Cash and cash equivalents and current financial assets at the end of the period $ 3,185,583 $ 2,385,541
DETAILS OF THE FINANCIAL RESULTS
Total operating income for the third quarter and year-to-date in 2023 was $339.8 million and $850.8 million, respectively, compared to $146.5 million and $263.2 million for the same periods in 2022, and mainly consists of:
Product net sales of VYVGART for the three months ended and nine months ended September 30, 2023, were $329.1 million and $816.4 million, compared to $131.3 million and $227.3 million for the same periods in 2022.
Other operating income for the third quarter and year-to-date in 2023 was $10.1 million and $31.3 million, respectively, compared to $8.5 million, and $26.6 million for the same periods in 2022. The other operating income for the three and nine months ended September 30, 2023, primarily relates to research and development tax incentives and payroll tax rebates. Other income also includes $0.7 million in royalty revenue from VYVGART sales in China.
Total operating expenses for the third quarter and year-to-date in 2023 were $420.4 million and $1,137.2 million, respectively, compared to $335.1 million and $869.1 million for the same periods in 2022, and mainly consists of:
Cost of sales for the third quarter and year-to-date in 2023 was $36.0 million and $78.4 million, respectively, compared to $10.3 million and $16.6 million for the same periods in 2022. The cost of sales was recognized with respect to the sale of VYVGART and VYVGART Hytrulo.
Research and development expenses for the third quarter and year-to-date in 2023 were $191.8 million and $553.1 million, respectively, compared to $236.7 million and $515.6 million for the same periods in 2022. The research and development expenses mainly relate to external research and development expenses and personnel expenses incurred in the clinical development of efgartigimod in various indications and the expansion of other clinical and preclinical pipeline candidates.
Selling, general and administrative expenses for the third quarter and year-to-date in 2023 were $191.9 million and $503.1 million, respectively, compared to $108.2 million and $336.8 million for the same periods in 2022. The selling, general and administrative expenses mainly relate to professional and marketing fees linked to the commercialization of VYVGART and VYVGART Hytrulo in the U.S., EU and Japan, and personnel expenses.
Financial income for the third quarter and year-to-date in 2023 was $30.0 million and $67.1 million, respectively, compared to $8.0 million and $13.7 million for the same periods in 2022. The increase in financial income is mainly due to an increase in interest income on current financial assets and cash and cash equivalents attributable to higher interest rates.
Exchange losses for the third quarter and year-to-date in 2023 were $32.5 million and $23.3 million respectively, compared to $39.6 million and $93.0 million of exchange losses for the same periods in 2022. Exchange gains/losses are mainly attributable to unrealized exchange rate gains or losses on the cash, cash equivalents and current financial assets position in Euro.
Income tax for the third quarter and year-to-date in 2023 was $10.6 million and $47.4 million of tax benefit, respectively, compared to $6.0 million and $17.1 million of tax benefit for the same periods in 2022. Tax benefit for the nine months ended September 30, 2023, consists of $23.8 million of income tax expense and $71.3 million of deferred tax income, compared to $15.0 million of income tax expense and $32.1 million of deferred tax income for the comparable prior period.
Net loss for the three and nine-month periods ended September 30, 2023, was $72.6 million and $195.9 million, respectively, compared to $235.0 million and $671.0 million over the prior year periods. On a per weighted average share basis, the net loss was $3.47 and $12.41 for the nine months ended September 30, 2023 and 2022, respectively.
Cash, cash equivalents and current financial assets totalled $3.2 billion as of September 30, 2023, compared to $2.2 billion as of December 31, 2022. The increase in cash and cash equivalents and current financial assets resulted primarily from the closing of a global offering of shares, including a U.S. offering, which resulted in the receipt of $1.2 billion in net proceeds in July 2023, partially offset by net cash flows used in operating activities.
EXPECTED 2024 FINANCIAL CALENDAR
February 29, 2024: FY 2023 financial results and business update
May 9, 2024: Q1 2024 financial results and business update
July 25, 2024: Q2 2024 financial results and business update
October 24, 2024: Q3 2024 financial results and business update
CONFERENCE CALL DETAILS
The third quarter 2023 financial results and business update will be discussed during a conference call and webcast presentation today at 1:30 pm CET/8:30 am ET. A webcast of the live call may be accessed on the Investors section of the argenx website at argenx.com/investors. A replay of the webcast will be available on the argenx website.