Argenx Earnings: Maintaining Our Valuation as Vyvgart Sales Expand

Argenx ARGX reported solid second-quarter results, with sales of the firm’s foundational autoimmune disease drug Vyvgart growing 24% quarter over quarter to reach $269 million. We’re maintaining our $574 fair value estimate and continue to expect Vyvgart sales to surpass $1 billion in 2023, with sales of more than $10 billion annually by 2032. The vast majority of sales are still in the U.S., although international approvals continue to roll in, and the firm is the process of securing reimbursement in multiple markets. In addition, the new subcutaneous version of the drug, Vyvgart Hytrulo, has been approved in the U.S. and is likely to gain approval in Europe, Japan, and China by the end of 2024. While sales are exclusively in myasthenia gravis, we expect the firm to file for approval in several new indications in the coming years, led by positive recent pivotal data in a neurology indication (CIDP) and upcoming pivotal data in hematology and dermatology indications later this year. Argenx has a long runway of trial readouts through 2024 and continues to start new trials, and we think the firm is in the process of building an economic moat. The firm also has plenty of cash to support further development, with $2 billion in cash and equivalents at the end of the quarter and an additional $1.3 billion equity raise following the CIDP data this month. However, we’re keeping a close eye on competition in this nascent market, as other FcRn inhibitors are launching (like UCB’s Rystiggo) and J&J and Immunovant are advancing in trials.