• Total Operating Income: $589 million in Q3 2024.
• Product Net Sales: $573 million, a 20% quarter-over-quarter growth and 74% growth year-over-year.
• Regional Product Revenue: $492 million in the US, $24 million in Japan, $46 million in the rest of the world, and $11 million from products supplied to Zai Lab in China.
• Total Operating Expenses: $575 million in Q3 2024.
• Gross Margin: 90% in Q3 2024.
• Operating Profit: $14 million for Q3 2024.
• Net Financial Income: $41 million, including $34 million from unrealized exchange gains.
• Profit After Tax: $91 million for Q3 2024; $59 million year-to-date.
• Cash Balance: $3.4 billion at the end of Q3 2024, increased by $272 million during the quarter.
• SG&A Expenses: $278 million in Q3 2024.
• R&D Expenses: $236 million in Q3 2024.
• Cost of Sales: $59 million in Q3 2024.

• Warning! GuruFocus has detected 4 Warning Signs with ARGNF.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Argenx SE (ARGNF) reported its 11th consecutive quarter of growth, with a 20% quarter-over-quarter increase in product net sales.
• The CIDP launch exceeded expectations, with over 300 patients on VYVGART Hytrulo, contributing significantly to revenue.
• VYVGART has shown strong efficacy and safety data, with over 8,000 patient years of safety data and no black box warnings.
• The company has a robust pipeline with multiple clinical programs, including Advancing Empasiprubart and ARGX-119, targeting various neuromuscular diseases.
• Argenx SE (ARGNF) maintains a strong financial position with a cash balance of $3.4 billion, allowing continued investment in innovation.

Negative Points

• The company decided to discontinue the development of Efgartigimod MN due to insufficient efficacy signals, impacting its strategic alliance with Zai Lab.
• Operating expenses increased by $40 million compared to Q2 2024, driven by higher SG&A and R&D costs.
• Despite strong quarterly performance, the company reported a year-to-date operating loss of $125 million.
• The CIDP market dynamics are challenging, with a significant portion of patients requiring prior IVIg utilization, which could impact growth trajectory.
• The company faces competition in the CIDP market, which could affect the uptake and long-term success of VYVGART Hytrulo.

Q & A Highlights

Q: Can you discuss the trajectory of the CIDP launch and any variables affecting it? A: Karen Massey, Chief Operating Officer, explained that the CIDP launch has been relatively linear without a bolus of patient starts. The dynamics are as expected, with payer policies taking two quarters to establish. About 54% of commercial lives are covered, and the prescriber base is expanding. Metrics relevant to the launch's progress will continue to be provided, but not specific revenue or patient guidance.

Q: How long does it take for a CIDP patient to receive treatment from the time the prescription is written? A: Karen Massey noted that the time from prescription to treatment is in line with expectations and similar to MG. The process is smoother when payer policies are in place, and the team is working efficiently to support patients through this process.

Q: What percentage of CIDP patients are switching from IVIg, and what about those who aren't? A: Tim Van Hauwermeiren, CEO, stated that about 85% of CIDP patients are switching from IVIg, which aligns with expectations. The remaining 15% are primarily coming from steroids or other immunosuppressants.

Q: Can you provide more details on the payer formulary coverage for CIDP? A: Karen Massey explained that payer policies generally require some prior IVIg or subcutaneous IG use, but not specific documentation of response rates. The policies are favorable, allowing for documentation of prior use at any time in the patient's history.

Q: How do you view the opportunity for ARGX-121 in IgA nephropathy compared to competitors? A: Tim Van Hauwermeiren expressed excitement about ARGX-121, highlighting its selectivity and precision in eliminating pathogenic antibodies. He believes it holds promise for superior clinical efficacy compared to current data from competitors.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.