Argenx continues growth spurt, investors not convinced

Argenx achieved a turnover of $ 398 million in the first quarter with the sale of its drug Vyvgart, but costs are also rising. The biotech company is also stopping one of the Vyvgart studies. Investors react negatively.

Vyvgart, the goldcrest of Argenx

, has only been available in the US since last year and immediately took off there. This year, the medicine continues its growth trajectory unabated, according to the first quarter figures.

Vyvgart’s sales increased by 82 percent, in line with expectations. On average, analysts expect Vyvgart to generate around $1.8 billion in sales this year.

However, investors are not convinced, they sent the share down about 7 percent at the opening of the Brussels stock exchange.

While turnover is increasing rapidly, costs are also rising. The company does not sit still and is conducting numerous studies into new applications for Vyvgart and follow-up medications.

Research and development costs increased by a third to $224 million, while expenses related to the growing organization and sales force also increased by half to $236 million.

All this led to an operating loss of $93 million, slightly better than last year, but a lot worse than the analyst consensus.

Management does confirm that the entire cost package for the full year will amount to a maximum of $2 billion. CEO Tim Van Hauwermeiren does not immediately have to worry about financing all the research and the growth of the organization. At the end of March, Argenx still had $3.1 billion in cash in its bank account. Management expects to use half a billion dollars of that this year.

Vyvgart is currently marketed in the US and about thirty other countries for the treatment of the autoimmune disease myasthenia gravis. Later this year, on June 21, the American pharmaceutical watchdog FDA will decide whether it can also be used for the muscle disease CIDP.

Analysts believe that Vyvgart could eventually become one of the best-selling drugs in the pharmaceutical industry. Argenx believes that the drug has multiple uses and has plans to test the drug in about 15 disease areas.

It is also working on other drugs that are in an earlier stage of development. For example, this year Argenx expects results from a phase 2 study for empasiprubart (research project ARG-117) for the treatment of multifocal motor neuropathy (MMN). This is a nerve disease that leads to progressive muscle weakness. Empasiprubart, like Vyvgart, can potentially be used for many diseases.

“We have made significant progress in the implementation of our business plan since the beginning of this year,” says Van Hauwermeiren.

Last year, the Ghent biotech company had to take a hit. First there were the disappointing results of a study in patients with the blood disease ITP. Argenx was then forced to stop research into the skin diseases pemphigus vulgaris (PV) and pemphigus foliaceus (PF) because those study results were also insufficiently convincing.

When you pioneer, you are always faced with surprises,” CEO Tim Van Hauwermeiren responded at the time. ‘These are sometimes nice surprises, sometimes unpleasant ones. That’s just the business we’re in.’

Based on these setbacks, Argenx has now also decided to no longer invest in Vyvgart for the treatment of ANCA-associated vasculitis (AAV), a disease in which inflammation of blood vessels leads to progressive damage to organs such as lungs and kidneys.