argenx SE (ARGX) Earnings Call Transcript
September 17, 2020
Earnings Call Speaker Segments
Good morning, everyone. Thank you so much for joining us today. Today, with us is Tim, CEO of argenx; Tim cofounded argenx and has served as CEO since April 28 -- 2008, and he has more than 20 years of general management experience across the life sciences and consumer good sectors. Good morning, Tim, how are you?
I'm fine. Thank you. Thank you for having us today.
Yes. So maybe before we get started and dive deeper into the company's pipeline, can you give us an overview of your company and maybe highlight some of the recent developments?
Sure, very happy to do so. So we are a late-stage biotech company, getting ready for our first commercial launch next year, where we're trying to reach patients with myasthenia gravis with our lead asset called efgartigimod. And we're planning to launch first in the United States in 2021, followed by Japan and Europe. So we're building out a global commercial infrastructure. Now efgartigimod is a true pipeline in the product, not only did we report positive Phase III data from our ADAPT trial, showing a very robust efficacy, safety and tailored patient data dosing in MG, we also already showed convincing Phase II proof-of-concept data in 3 indications. Basically, we're steaming forward in these indications in Phase III global registration trials in ITP, in CIDP and in pemphigus vulgaris and foliaceus. We are also on track to launch a fifth indication, which we will announce later this year. In addition to efgartigimod, we also have a strategic alliance with Janssen for our lead oncology asset called cusatuzumab. Cusa is targeting CD70 and is currently being evaluated in the indications of acute myeloid leukemia and high-risk myelodysplastic symptoms. Both efgart and cusa did very well in the global therapeutic franchises we are building. One is the neuromuscular franchise and the other franchise is our hem/onc franchise. And frankly speaking, with the wealth of opportunity we have with these assets, there is the possibility of creating a third franchise, which could be either in skin or kidney. In addition, we have ARGX-117 in early development in the clinic. It's a novel complement targeting antibody. And again, the indications we are contemplating there nicely fit these franchises. So building out global commercial capability as we continue to build the pipeline. All of this is fueled by a solid balance sheet of about USD 2 billion.
Great. So we saw ADAPT study early this year of efgartigimod in myasthenia gravis and the data was very meaningful, like you said. And based on our doctor check, the doctors really like the profile that efgartigimod has shown in myasthenia gravis. So as you're preparing for the BLA filing later this year, can you talk about where we are in terms of the preparation? And I guess, what are the most important key factors that you need to line up for the preparations -- for the filing later this year?
So in a nutshell, we are on track to file before the end of this year with the FDA, keeping us on track for a 2021 launch in the United States. With regards to gating factors, we had successful pre-BLA meetings with the FDA, one on the CMC section of the filing and the other one on the nonclinical and clinical sections. So we now triangulated exactly on the database with the FDA will want to see in the submission, both with regards to safety and also some final stability data on the CMC front. So on track, waiting for the final data points to then hopefully submit a high-quality file before the end of the year. Just as a reminder, after we submit with the FDA, we're going to turn around and start to finalize the submission for the PMDA, which should happen then in the first half of 2021.
Okay. So the patients in ADAPT were rolled over into the LTE, the ADAPT-Plus portion. Maybe just one on when could we see the longer-term safety data and also efficacy data from that extension portion? And is that important for the filing later on? Where is that in terms of the BLA filing?
So you're spot on. I think the open-label extension study is serving multiple purposes, one of which is actually to complement the safety database, which is quickly building now, both on the ADAPT data and the other indications. So first of all, it's serving the purpose to complete the safety dossier, the safety database for the filing. And then, of course, we are extracting other very useful information from that study with regards to real-world redosing with this drug. So this information will be disclosed at the typical medical conferences. So stay tuned. First, we're going to give you a deeper dive into the ADAPT data. And then we will give you stepwise insight into the data from the open-label extension study. It's also information we intend to use with payers because the information on the real-world dosing of patients with efgartigimod is also going to be very valuable in establishing the value dossier.
Okay. So that's a good segue into the -- your interaction so far with payer. So you now have the market access team in place in the U.S. What are some initial feedback that you have received so far? Do you have a sense where payers will put -- you want to put efgartigimod in the paradigm? Just want to see how they're thinking about where efgartigimod will fit into the paradigm with C5 and also steroids, where would this fit in?
So a couple of points here. So first of all, you're right that the full market access team is in place. So far, we now had interaction not only with the national payers, but also with the regional payers. And the feedback that we have gotten from them is, a, very consistent and, b, extremely positive. I think they're pleased to see that another alternative is being brought forward to patients suffering from myasthenia gravis and basically the individualized dosing, which we all remember to be an important wish of the patients, also turns out not to be an asset in the discussion with the payers because, frankly speaking, they don't want to pay for something that the patient doesn't need. So we designed the ADAPT trial with this in mind, and from a positioning point of view, the trial design has also tried to position efgartigimod broadly across the treatment paradigm. You know that we have been positioning the drug on top of standard of care. And basically in the ADAPT study, we did not see any difference between patients who were just on one line of medication or 2 lines or 3 lines. So we believe we generated the data evidencing that efgart has the right to play across the treatment paradigm very broadly. That means as early as on the back of steroids, trying to taper steroids faster and maybe trying to delay or avoid use of ISTs and for sure, the right to play in the refractory patient population where today, chronic IVIg or Soliris would play. Now all of this is, of course, going to be dependent on the label we can secure and with the regulatory authorities. So let's do first things first. Let's see what label we're going to end with. And then we can turn around and make the value case with the payers, how we think the drug should be positioned. But let it be clear, we're going for a broad positioning, trying to maximize access to the drug for MG patients.
Okay. And how are you thinking about the strategy to distribute? So in the last earnings call, you said that you're now collaborating with Cardinal Health as a logistical partner. How do you envision your strategy to launch? And can you walk us through from the time of the -- a doctor writing a script what are the steps from that point to the drug actually coming to spend?
You're right that we disclosed that the Cardinal Health is our U.S. third-party logistics partner. We're actually in the process of building a strategic and patient-centric network of specialty pharmacy and specialty distribution partners to, again, ensure broad access. And just as a quick refresher, drug substance is manufactured by Lonza. Drug products is being made by [ Dadash ]. And then, of course, the drug product goes into our 3PL, Cardinal, to then flow into specialty distribution and finally, infusion centers. And after the physician prescribed the products, and you know there is quite some physician education ongoing and required between now and launch, of course, we also need to go to the necessary steps of benefit verification and managing co-pay and out-of-pocket costs. So there is a whole patient support system, which is still being built in order to facilitate a seamless transition from prescription to dosing.
Okay. And maybe going back to your ADAPT study that will be reported later this year -- I mean presented this year at a medical conference, what are the potential venues that we should look for the data?
You will shortly see a communication from the company announcing that we're going to go and give you a deeper look into the ADAPT data. I believe that the scientific sessions of the MGFA and the AANEM Conference will be the podiums where actually we will do so. But there is a press release coming shortly, which is going to detail that type of update information to our shareholders.
Okay. And so there have been some exciting news in the space. The M&A -- in terms of M&A activity recently. So I guess, how do you see the competitive landscape developing in this MG space? You'll clearly be the first one to launch in this space of FcRn antagonist, but are there advantages either with safety or dosing that other companies could theoretically have?
Right. I think what you're calling out is very important. Of course, it's differentiation. We believe that the MG market is a substantial market opportunity, and it could take several players to really develop such a market to its full potential. So you want to play that and win in a differentiated fashion. And we believe that the initial clinical data bode very well from a differentiation point of view. You know that the ADAPT data that was the largest and most ambitious MG trial ever performed and is actually putting the bar extremely high from an efficacy point of view. And in addition, I think it's already getting clear that from a safety point of view, efgart could be well differentiated. And interestingly, in the ADAPT study, we witnessed a safety profile, which was comparable to placebo, it's remarkable. There is no other drug out there in the MG space, which can claim that. And secondly, we certainly do not see any signs of headaches or drops in serum albumin, which have been reported for some of the colleagues in the FcRn space specifically. From a dosing point of view convenience, I think we're the only company which is really developing a powerful IV and subcu products, simultaneously. We believe we want to serve all segments of the markets. And therefore, you need both an IV and a subcu product. I think from a convenience point of view, the individualized dosing is quite innovative and I think will set us apart from competition. Secondly, I think we're the only company with a simple, fast, effortless subcu injection, thanks to the exclusive [ access to the ] technology. So really building on that differentiation, hopefully, for the long-term success of efgart in the MG space.
Okay. So maybe I switch gear to the other indication, ITP and CIDP. So maybe on ITP, you're in ongoing discussion with the agency to try to bring forward the subcu formulations for ITP. You did mention that there are -- there have been some challenges to unroll in the COVID environment. So maybe just on -- can you talk about how that could potentially change your initial strategy for ITP? And what are the goals of these discussions with the FDA?
Absolutely. So COVID-19, in contrast to the ADAPT study, where actually, we were lucky to have the data secured before the global pandemic broke out, and therefore, probably the gap with competition is widening. It's true to say that the ongoing trials in ITP and CIDP are experiencing delays just like anybody else due to COVID-19 complications. What you need to know is that in the ITP indication, the FDA typically requires 2 independent registration trials. So unlike MG or CIDP, where we basically got permission to work with 1 single study, we do need 2 registration trials. And that is the reason why we had an IV study, which is ongoing, flanged by a smaller IV confirmatory study and then an IV induction subcu maintenance study. So we wanted to play in ITP with both IV and subcu from the get-go. What we're discussing here is how we can streamline the second smaller IV study and the IV induction subcu maintenance study to try and bring the number of studies down and bring subcu forward in such a way that it would facilitate patient enrollment. So dialogue with the regulator is going on. And as we promised, as soon as we have clarity, we will communicate to the shareholders in one of our upcoming quarterly earnings calls.
And in terms of subcu, so this will be enhanced formulation work for the ITP indication, right? So do you plan on rolling out the enhanced formulation for myasthenia gravis as well?
So we haven't been public on what subcu product presentation we're going to use for the streamlined strategy in ITP. You are right that actually the subcu products we are pushing forward for MG is the same subcu product, i.e., equipped with the enhanced technology from Halozyme as we're already successfully using in our CIDP trial. So this product exists, it's being used. Actually, it's at full commercial scale manufacturing today, and that's the one we're pushing forward for MG.
Great. And then for your fourth indication, CIDP. Can you just remind us maybe how big the market is? I know that you host a KOL event late last year. So maybe you can just remind me -- remind us the market size and also what are the current undermet needs in this new indication?
We believe that CIDP is an important opportunity for efgart, there is a bad need for new innovative therapies in a space, which, frankly speaking, has only been served by IVIg. And from an IVIg sales point of view, I think CIDP is the single largest indication in the United States, selling USD 1.7 billion and globally, probably more than USD 3 billion. And frankly speaking, that product leaves ample of room for improvement. Not just on the efficacy side of things, but also on the tolerability and convenience front. And I want to remind you that people need very frequent cycles of IVIg. That's why it's such a big consumer of IVIg. And the administration requires typically premedication then the better part of your day in an infusion chair, and you need to do that, by the way, every 3 to 4 weeks. So that's a significant burden. And in addition to the flu-like symptoms and the headaches, which are reported after infusion, there is a number of patients out there, which actually cannot tolerate such a big influx of protein. So we're feeling good about the opportunity to enter that space and effectively compete with a drug like efgartigimod.
Okay. And how important is CIDP for the whole efgartigimod franchise for argenx?
Well, we believe that all indications we have been launching are important because they can basically help us establish the beachheads and substantially expand. So from a commercial opportunity point of view, they're all important, but we would position CIDP at the same height as myasthenia gravis. It is an important commercial opportunity.
Okay. And since now that J&J will be in the FcRn space. How do you think that their entry could influence what future indications you want to look at? Maybe just remind the caller that argenx is actually will be -- plan on releasing the fifth indication sometime later this year. And maybe back to Tim is that -- how do you think that J&J may also move into other nonorphan markets? What are the -- what is the potential of that as well?
Well, let me start by pointing out the analogy which we often make to the TNF alpha space, right? I mean if you look at the TNF alpha space, retrospectively, we learned that this pipeline in a product opportunity actually catered for multiple blockbuster drugs and multiple companies being successful in the TNF alpha space. And I would even argue that it needs several players to build out a marketplace of that potential to its full or fullest potential. So multiple players actually could drive the market quicker to its full potential. It's not unlikely that J&J may venture into indications they find important and which may not necessarily belong to the orphan space. But that does not mean that we are going to deviate from our strategy. We like to play in high unmet need indications of an orphan nature. We like to pick and select our indications based on, first of all, a rock-solid biology rationale; secondly, a proven feasibility of running clinical trials in that indication from a clinical endpoint and an approval endpoint point of view; and then third, of course, indications which represent a fair return on investment and a good fit with our franchises. So we don't see any reason to deviate from that strategy. That being said, we're a nimble organization. In case somebody else [ finds value ] in other indications which we did not initially consider, we can always reconsider strategy and pivot around. So that's the current thinking around the space and the recent entry of J&J.
Okay. So we have also gotten a few questions on your cusatuzumab program with J&J. Recently, especially on -- based on the J&J's decision to purchase Momenta. Of course, it's hard to say that they didn't buy argenx because they didn't like the oncology data enough, but what do you say to investors who may want some reassurance that the oncology candidate is still competitive?
Yes, we can, of course, not comment on any specific strategic dialogue. And the only thing I can say is that the strategic rationale for partnering cusa with Janssen Oncology was to expand and accelerate the global development plan. And I think you see that global development plan in action. And we basically have initiated studies in both AML and high-risk MDS. Of course, COVID-19 made us pass in some of these studies and have been now restarting the venetoclax combination studies. But if you just look at the global development plan, we basically did not leave any option unturned. We did start a trial where we combined with just Vidaza, the current standard of care, anticipating a not-so-good outcome of AbbVie's VIALE-A study where they were testing in Phase III venetoclax with Vidaza. But in parallel, we already started studies where we combined cusa with venetoclax with or without Vidaza on top of it in anticipation of a positive VIALE-A trial. Now that the data card has been turned. And actually, the VIALE-A data held up, they were pretty strong. We know that a fast path based on a single-arm study to accelerated approval for the cusa/aza combination is no longer viable. And therefore, we [ based ] our joint resources to the venetoclax combination study. So I think that's a rational data-based decision. And I think we need to make decisions based on these data. So I think we're in good shape to identify the place of cusa in the treatment paradigm and the data need to speak now.
Great. So maybe one question is from our audience this morning. The question is, does the J&J Momenta deal increase in forms that you secure a strong core marketing deal with large pharma over efgartigimod?
Well, we always look at our strategic options. I mean argenx is a company which is constantly creating and evaluating options. And the only filter we can look at -- or look through is the filter of shareholder value creation. I think we're on a steep value creation path, which we will closely execute on and guard, and we will consider partnerships if and when we think they could help us unlock shareholder value faster. One of the things we're currently looking at is whether from a geographical point of view, we should not contemplate partnerships because we have a full plate going after our indications in the U.S., in Japan and in some of the European Union markets. And it does make sense to think about teaming up from a geographical point of view to bring efgartigimod to peak sales faster. So this is work in progress. And think of argenx as a company which will constantly create these options and evaluate them. So no change there.
Okay. So maybe just last few minutes, I just want to touch on your earlier stage pipeline, the 117 compound. So in your Phase II that you're about to start in MMN, the multifocal motor neuropathy, can you just talk about what does success look like in MMN? And maybe if you can give us a little bit of color on the market opportunity there, that would be great as well.
You're as impatient as I am, I would love to start the Phase II tomorrow, but we first need to navigate a pretty ambitious Phase I study. So we're going to be busy probably up to the first half of next year executing the IV and subcu healthy volunteer study, where we will also try to establish the dosing regimen of loading dose and maintenance dose based on a very powerful and a very simple biomarker being [ TC2 ]. Once we have this data in hand, we can easily venture them into [ allocated Phase II ] studies. And you're right, MMN is indication number one. We like it because it looks and feels like CIDP. These MMN patients basically suffer from an autoimmune attack on the peripheral nerve system and symptoms which are as debilitating as for CIDP and the only standard of care out there for MMN is IVIg. From an IVIg consumption point of view, our data suggest that MMN is an equal opportunity to myasthenia gravis. So it's a substantial opportunity, a substantial unmet medical need and the competitor which we start to understand better and better i.e., IVIg.
Okay. So we're almost at the end of our 40 minutes together. So maybe just one last question for you is, what are the key things that investors should look for, for the remaining of the year this year?
So I think we're going to unveil more detail looking to the ADAPT data during the upcoming conferences I just mentioned, you will not be as surprised by any means that you will find further evidence on the robustness of the data sets and the claim we make as a company that we most likely have set the efficacy bar very high. So I would watch out for these data. The other thing to watch for, of course, is the start of the pemphigus Phase III trial. Our company is on track to initiate a trial and also to announce the fifth indication. And then of course, there is a dedicated team working very hard on the high-quality submission of the BLA filing to the FDA before the end of the year. So I think these are the key elements to watch for the remaining part of the calendar year.
Great. Yes. We definitely look forward to all these catalysts that are upcoming for argenx. We have unfortunately reached the end of our time together this morning. Tim, thank you so much for joining us today. Thank you.
Thanks for having us. I appreciate it. Thank you.
See you soon.
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