On October 28, 2021 argenx (Euronext & Nasdaq: ARGX), a global immunology company committed to improving the lives of people suffering from severe autoimmune diseases and cancer, reported its third quarter 2021 financial results and provided a business update and outlook for the remainder of the year (Press release, argenx, OCT 28, 2021, View Source [SID1234592127]).
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"With three parallel regulatory reviews in our key priority territories of the U.S., Japan and the EU and the simultaneous build-out of our respective commercial organizations, we are well-positioned for the planned global launch of efgartigimod for the treatment of generalized myasthenia gravis. In order to optimize our strategy to make efgartigimod available to patients in need across the world, we are pursuing innovative partnerships, such as the strategic partnership with Zai Lab in China and the agreement with Medison in Israel which we are excited to announce today," said Tim Van Hauwermeiren, Chief Executive Officer of argenx.
"As part of our commitment to becoming a fully-integrated, global immunology company, we are expanding our efgartigimod development plan to be in at least 15 indications by 2025 while also advancing a series of additional high-potential programs emerging from our Immunology Innovation Program. This includes a first-in-class C2 inhibitor, ARGX-117, which is on track to begin the first Phase 2 trial in multifocal motor neuropathy patients by the end of this year. Our growing commercial infrastructure along with our expanding pipeline ambitions provide considerable opportunity for argenx to deliver long-term, sustainable growth," concluded Mr. Van Hauwermeiren.
THIRD QUARTER 2021 AND RECENT BUSINESS UPDATE
Three global regulatory reviews ongoing for FcRn antagonist efgartigimod for the treatment of gMG
Biologics License Application (BLA) under review with U.S. Food and Drug Administration (FDA) with target action date of December 17, 2021 under Prescription Drug User Fee Act (PDUFA)
Marketing Authorization Application (J-MAA) under review with Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) with anticipated approval in first quarter of 2022
MAA under review with European Medicines Agency (EMA) with anticipated approval in second half of 2022
Zai Lab on track with expected regulatory discussions with National Medical Products Administration (NMPA) for approval in China
Signed exclusive partnership agreement with Medison to commercialize efgartigimod for gMG in Israel; under agreement, Medison will also be responsible for seeking requisite regulatory approvals
Field teams onboard in U.S. and Japan, including 70 U.S. and 24 Japan sales representatives
New data from Phase 3 ADAPT trial of efgartigimod for the treatment of gMG presented during American Association of Neuromuscular and Electrodiagnostic Medicine (AANEM) Annual Meeting. Additional data to be presented at upcoming Myasthenia Gravis Foundation of America (MGFA) Scientific Session. Highlights of the new data points include:
Among acetylcholine receptor-antibody positive (AChR-Ab+) patients, minimal symptom expression or MSE (MG-ADL of 0 or 1) was achieved by 59.1% (26/44) of MG-ADL responders following efgartigimod treatment during first cycle and 44.4% (16/36) during second cycle, compared to 36.8% (7/19) and 0% (0/11), respectively, for placebo patients
Among acetylcholine receptor-antibody negative (AChR-Ab-) patients, MSE was achieved in 31.6% (6/19) of MG-ADL responders following efgartigimod treatment during first cycle compared to 15.8% (3/19) for placebo patients
gMG and pemphigus patients who were vaccinated for influenza and pneumococcus during and prior to efgartigimod treatment in recent clinical trials showed that the ability to mount an immune antibody response was not impacted
Consistent and statistically significant disease score improvements were demonstrated following efgartigimod treatment across ADAPT patient subtypes, regardless of concomitant medication or affected muscle domain (bulbar, ocular, respiratory, limb/gross motor)
Initial patient-reported data from MyRealWorld MG real-world evidence study (N = 144) showed that despite taking an average of 2.3 treatments to control symptoms, people living with gMG experience substantial negative physical, mental, social, and emotional impacts of the disease
92% of responders agreed there is a significant need for new gMG treatments and are hopeful for ones with fewer side effects (96%)
In a separate argenx-sponsored patient burden survey (N = 150), 51% of gMG patients stopped working entirely as a consequence of their disease
Efgartigimod is currently being evaluated in five ongoing registrational trials across four indications, including ADAPT-SC (gMG), ADHERE (chronic inflammatory demyelinating polyneuropathy or CIDP), ADVANCE (IV) and ADVANCE-SC (primary immune thrombocytopenia or ITP), and ADDRESS (pemphigus)
Enrollment complete in ADAPT-SC and ADVANCE (IV); topline data for both trials expected in first half of 2022
Full Phase 2 trial results of efgartigimod for treatment of pemphigus published in British Journal of Dermatology
Protocol finalized for registrational trial of efgartigimod for treatment of idiopathic inflammatory myopathy (myositis), following FDA consultation; trial on track to start in first quarter of 2022
Registrational trial of efgartigimod for treatment of bullous pemphigoid on track to start by end of 2021
ARGX-117, a first-in-class C2-inhibitor, has potential to be the next pipeline-in-a-product opportunity across multiple severe autoimmune indications
Phase 1 data showed favorable safety profile and potential for infrequent dosing schedules
Phase 2 trial for treatment of multifocal motor neuropathy (MMN) on track to start by end of 2021
Wim Parys, M.D. to retire as Chief Medical Officer (CMO) on March 31, 2022 and transition to member of Research and Development Committee of argenx Board of Directors
Succession plans underway for Luc Truyen, M.D., Ph.D., Vice President, Research & Development Operations at argenx, to assume CMO role in April 2022
DETAILS OF THE FINANCIAL RESULTS
As of January 1, 2021, the Company changed its functional and presentation currency from euro to U.S. dollar, which results in reporting financial highlights in U.S. dollar as compared to euro in prior periods. Historical financials have been converted at the average exchange rate of the related period.
Cash, cash equivalents and current financial assets totaled $2,534.0 million as of September 30, 2021, compared to $1,996.5 million on December 31, 2020. The increase in cash and cash equivalents and current financial assets resulted primarily from (i) the closing of a global offering, which resulted in the receipt of $1,092.1 million in net proceeds in February 2021, (ii) the net receipt of a $73.1 million non-creditable, non-refundable development cost-sharing payment received from Zai Lab as part of the strategic collaboration for efgartigimod in Greater China, (iii) the payment of $98.0 million related to the purchase of the priority review voucher from Bayer HealthCare Pharmaceuticals, and other net cash flows used in operating activities.
Total operating income increased by $446.9 million for the nine months ended September 30, 2021 to $494.6 million, compared to $47.7 million for the nine months ended September 30, 2020. The increase was primarily due to the recognition of the transaction price as a consequence of the termination of the collaboration agreement with Janssen, resulting in the recognition of $315.1 million and the closing of the strategic collaboration for efgartigimod with Zai Lab, resulting in the recognition of $151.9 million in collaboration revenue.
Research and development expenses increased by $136.9 million for the nine months ended September 30, 2021 to $413.3 million, compared to $276.4 million for the nine months ended September 30, 2020. The increase in the first nine months of 2021 resulted primarily from higher external research and development expenses, mainly related to the efgartigimod program in various indications and other clinical and preclinical programs. Furthermore, the research and development personnel expenses increased due to a planned increase in headcount and the increased costs of the share-based payment compensation plans related to the grant of stock options.
Selling, general and administrative expenses totaled $210.2 million for the nine months ended September 30, 2021, compared to $113.2 million for the nine months ended September 30, 2020. The increase resulted primarily from higher personnel expenses, including the costs of the share-based payment compensation plans related to the grant of stock options, and consulting fees linked to the preparation of a possible future commercialization of argenx’s lead product candidate efgartigimod.
The change in fair value on non-current financial assets amounted to $11.2 million for the nine months ended September 30, 2021, which is the result of the closing of a Series B financing round of AgomAb Therapeutics, for which argenx maintains a profit share in exchange for granting the license for the use of HGF-mimetic antibodies from the SIMPLE AntibodyTM platform.
Exchange losses totaled $36.0 million for the nine months ended September 30, 2021, compared to $65.3 million for the nine months ended September 30, 2020. As a result of the change in the Company’s functional and presentation currency, the exchange losses for the nine months ended September 30, 2021 are reflecting the unfavorable change in euro/U.S. dollar exchange rate, mainly attributable to unrealized exchange rate losses on cash, cash equivalents and current financial asset position in euro.
FINANCIAL GUIDANCE
Based on current plans to fund anticipated operating expenses and capital expenditures, argenx continues to expect its full-year 2021 cash burn to approximately double from 2020. The increased spend has supported the Company’s transition to an integrated immunology company, including the build-out of global commercial infrastructure and drug product inventory ahead of the expected launch of efgartigimod in gMG in the U.S, the advancement of its clinical-stage pipeline, including expected registrational trials of efgartigimod in six indications, and the continued investment in its Immunology Innovation Program. As argenx further expands its commercial infrastructure and differentiated pipeline of assets, it is expected that the spend associated with these activities will continue to increase.
EXPECTED 2022 FINANCIAL CALENDAR
March 3, 2022: FY 2021 financial results and business update
May 12, 2022: Q1 2022 financial results and business update
July 28, 2022: HY 2022 financial results and business update
October 27, 2022: Q3 2022 financial results and business update
CONFERENCE CALL DETAILS
The third quarter 2021 financial results and business update will be discussed during a conference call and webcast presentation today at 2:30 pm CEST/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.