Argenx Earnings: Solid Vyvgart Sales and Upcoming Trial Readouts Support Our Fair Value Estimate

Argenx reported 2023 revenue for its autoimmune disease drug Vyvgart of nearly $1.2 billion, in line with our expectations, and we’re maintaining our $466/EUR 425 fair value estimates. While we expect Argenx to continue to generate a net loss in 2024, we think the Vyvgart’s strong growth trajectory and $3.2 billion in cash and investments as of the end of 2023 put the firm in a solid position. While sales to date have been focused on the drug’s first approved indication in myasthenia gravis, Vyvgart is on track to launch in a second indication (chronic inflammatory demyelinating polyradiculoneuropathy) in the US in the second half of 2024 if approved on schedule in June. The drug could also launch in immune thrombocytopenic purpura, or ITP, in Japan this year, if approved in the first quarter. Vyvgart’s failure in another ITP trial in November and two dermatology trials in December likely reduces the potential breadth of future indications for the drug, but we still see $8 billion in annual Vyvgart sales by 2032, with more than $5 billion of this stemming from the two indications that have been well validated in trial results (MG and CIDP). We think shares look slightly undervalued at recent prices, with investors not fully appreciating the opportunity surrounding new Vyvgart indications and the firm’s expanding pipeline.