On May 14, 2021 argenx (Euronext & Nasdaq: ARGX), a global immunology company committed to improving the lives of people suffering from severe autoimmune diseases and cancer, reported financial results for the first quarter 2021 and provided a business update (Press release, argenx, MAY 14, 2021, View Source [SID1234579972]).
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"We’ve had a strong start to 2021 with the acceptance for review of the BLA and J-MAA for efgartigimod in gMG by the regulatory agencies in the U.S. and Japan. The submissions in China and the EU are on track and we are well-positioned for a global launch of our first-in-class FcRn antagonist. We are building an exceptional team with significant launch experience in neurology and rare disease and hope to reach patients this year," said Tim Van Hauwermeiren, Chief Executive Officer of argenx.
"Efgartigimod has the potential to help people living with gMG as well as several other severe autoimmune diseases mediated by IgG autoantibodies. Our team is advancing registrational trials across four indications with plans to start enrollment in two additional efgartigimod indications this year. We are also broadening our reach within autoimmunity with our first-in-class C2 inhibitor, ARGX-117, from which we will have Phase 1 data mid-year. To complement our clinical pipeline, we continue to invest in our discovery capabilities through our Immunology Innovation Program and strategic technology partnerships that position us well to generate long-term value for shareholders. We are closer each day to building an integrated, innovative, global immunology organization with the goal of impacting the lives of patients," concluded Mr. Van Hauwermeiren.
FIRST QUARTER 2021 AND RECENT BUSINESS UPDATE
Commercial preparations on-track for global launch of IV efgartigimod for gMG, including regulatory submissions, initial salesforce hires and key stakeholder engagement efforts
Biologics License Application (BLA) for IV efgartigimod for treatment of gMG accepted for review by U.S. Food and Drug Administration (FDA) with target action date of December 17, 2021 under Prescription Drug User Fee Act (PDUFA)
J-MAA submitted to Japan’s PMDA and accepted for review with anticipated Japan commercial launch in 2022
MAA expected to be filed with European Medicines Agency (EMA) in second half of 2021
Zai Lab Limited to discuss potential accelerated regulatory pathway for approval in China with National Medical Products Administration (NMPA)
Commercial readiness activities on-track, including:
Continued build-out of global commercial organization, including hiring of U.S. regional business directors during first quarter
Launched pre-approval access (PAA) program in March 2021 in U.S., Canada and Europe to open availability of efgartigimod to people living with gMG who meet the pre-approval access program criteria
Immunology pipeline advancing with five ongoing registrational trials of efgartigimod and initial upcoming data from second potential pipeline-in a product candidate, ARGX-117
Enrollment ongoing in five registrational trials across four indications, including ADAPT-SC (gMG), ADHERE (chronic inflammatory demyelinating polyneuropathy or CIDP), ADVANCE and ADVANCE-SC (primary immune thrombocytopenia or ITP), and ADDRESS (pemphigus)
Go-forward decision confirmed in February 2021 in ADHERE trial evaluating subcutaneous (SC) efgartigimod in CIDP based on evaluation of interim safety and efficacy assessments that surpassed pre-defined threshold
Enrollment in trials for fifth and sixth indications to begin in 2021
Additional efgartigimod indications to be evaluated as part of collaboration with Zai Lab Limited
Data expected mid-year from Phase 1 trial of C2 inhibitor, ARGX-117; Phase 2 dosing plan to be identified for indications, including multifocal motor neuropathy (MMN)
Phase 2 trial of MMN on track to start by end of 2021
Combination trials of cusatuzumab remain ongoing for treatment of acute myeloid leukemia (AML) as part of global collaboration and licensing agreement with Cilag GmbH International, an affiliate of Janssen
Decision to initiate additional cusatuzumab studies under collaboration will be determined following review of all available data
Immunology Innovation Program (IIP) continues to grow pipeline through wholly-owned development, partnered opportunities, asset-centric spinoff companies and the addition of strategic technology capabilities
Preclinical work ongoing in early-stage pipeline, including ARGX-118, ARGX-119 and ARGX-120
15-20 discovery programs under evaluation at any point in time that have emerged from IIP
Initiated collaboration and license agreement with Elektrofi to explore new subcutaneous formulations for current and future pipeline candidates, including efgartigimod
Secured exclusivity for FcRn and one additional target
Ongoing development of ARGX-112 (LEO Pharma), ARGX-114 (AgomAb), ARGX-115 (ABBV-151, AbbVie) and ARGX-116 (Staten Biotech) by IIP collaboration partners
Strong balance sheet and expanded Board of Directors support transition into integrated, global immunology organization
Completed public offering of 3,593,750 ordinary shares in February 2021 with gross proceeds of $1.15 billion
Implemented transition agreement for Chief Financial Officer Eric Castaldi as part of evolution to commercial-stage company; recruitment efforts ongoing for U.S.-based successor
Proposed resolutions presented during Annual General Meeting of Shareholders were approved, including:
Appointment to Board of Directors of Yvonne Greenstreet, President and Chief Operating Officer of Alnylam
Re-appointment of Anthony Rosenberg to Board of Directors
Approval of new remuneration policy
argenx to host virtual R&D Day on July 20, 2021 to share long-term corporate vision, disclose additional potential efgartigimod indications and provide updates across immunology pipeline.
As of January 1, 2021, the Company changed its functional and presentation currency from euro to U.S. dollars, which results in reporting its 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 $2,907.4 million on March 31, 2021, compared to $1,996.5 million on December 31, 2020. The increase in cash, 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 in the form of newly issued Zai Lab shares received as part of the strategic collaboration for efgartigimod in Greater China, partially offset by (iii) the payment of $98.0 million related to the purchase of a priority review voucher from Bayer HealthCare Pharmaceuticals and other net cash flows used in operating activities.
Total operating income increased by $141.6 million for the three months ended March 31, 2021 to $167.4 million, compared to $25.8 million for the three months ended March 31, 2020. The increase was primarily due to 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 $17.7 million for the three months ended March 31, 2021 to $122.3 million, compared to $104.7 million for the three months ended March 31, 2020. The increase in the first three months of 2021 resulted primarily from higher external research and development expenses, mainly related to the efgartigimod program in multiple 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 $56.3 million for the three months ended March 31, 2021, compared to $27.6 million for the three months ended March 31, 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 efgartigimod.
The increase in fair value on non-current financial assets amounted to $11.2 million for the three months ended March 31, 2021, which is the result of the closing of a Series B financing round of AgomAb Therapeutics, for which the Company maintains a profit share in exchange for granting the license for the use of HGF-mimetic antibodies from the SIMPLE Antibody platform.
Exchange losses totaled $28.8 million for the three months ended March 31, 2021, compared to an exchange gain of $23.0 million for the three months ended March 31, 2020. As a result of the change in the Company’s functional and presentation currency, the exchange losses for the three months ended March 31, 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 2021 cash burn to approximately double from 2020. The increased spend will support 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 seven expected global trials of efgartigimod, and the continued investment in its Immunology Innovation Program.
EXPECTED 2021 FINANCIAL CALENDAR
July 29, 2021: HY 2021 financial results and business update
October 28, 2021: Q3 2021 financial results and business update
CONFERENCE CALL DETAILS
The first 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.