Argenx's autoimmune drug Vyvgart achieved blockbuster status in just its second full year on the market. Now, the Dutch biotech is looking to expand use of the drug to treat more conditions.

Argenx on Monday reported positive results from a Phase 3 trial evaluating Vyvgart's efficacy in patients with immune-mediated necrotizing myopathy and dermatomyositis, known as IMNM and DM respectively. Both are autoimmune muscle diseases that can be treated, but not cured.

Across both patient groups, a subcutaneous injection of Vyvgart drove a 15.4-point gain on a 100-point total improvement scale. Improvements were observed early and sustained throughout the study, with a "consistent treatment effect" in both diseases, Argenx said.

The biotech's U.S.-listed shares jumped 16% to $990.74, on pace for a record closing high, according to Dow Jones Market Data. Argenx first listed its American depositary receipts in May 2017.

The company's success in recent years was driven by Vyvgart, a biologic medication approved to treat patients with generalized myasthenia gravis-an autoimmune disease that causes muscle weakness-starting in 2021.

A subcutaneous version of the drug, Vyvgart Hytrulo, is approved for chronic inflammatory demyelinating polyneuropathy, a condition where the body mistakenly attacks the myelin sheaths around nerve sells. Vyvgart Hytrulo was at the center of the latest trial.

After Monday's readout, a multibillion-dollar opportunity appears to be taking shape, albeit with a few caveats. The smaller DM cohort failed to reach stand-alone statistical significance on its own, though the drug showed clear clinical improvements across the combined trial population.

With this in mind, William Blair analyst Matt Phipps expects regulators to grant Vyvgart a priority review in IMNM, but require another study in DM patients. However, the consistent benefit across both Phase 2 and 3 trials "could lead to some regulatory flexibility in DM patients, accelerating the time to approval," Phipps wrote.

Citi Research analyst Samantha Semenkow previously noted that DM is a larger indication, affecting an estimated 40,000 patients in the U.S. alone. Although it is a significantly more crowded and competitive space, Semenkow believes high unmet need leaves room for multiple blockbuster therapies.

The latest results may not diminish the revenue opportunity significantly.

"IMNM is a blockbuster indication on its own," Semenkow wrote. If Vyvgart Hytrulo is approved for this indication, she projects it could generate $1.9 billion in peak annual U.S. revenue.