Argenx Earnings: Maintaining Our Fair Value Estimates as Vyvgart Is Approaching CIDP Approval

We’re maintaining our $466/EUR 425 fair value estimates for Argenx following first-quarter results that were in line with our expectations, with sales of the firm’s immunology drug Vyvgart amounting to $398 million. We think this puts Argenx on track to surpass $1.8 billion in Vyvgart revenue for the full year, largely from the first approved indication (myasthenia gravis) but also with limited sales expected in CIDP, which could receive US Food and Drug Administration approval in June. While we think CIDP data has been impressive, we expect a slower launch in this indication, given many patients are already established on immunoglobulin treatment. We think Vyvgart sales in both indications combined will surpass $5 billion annually by the end of our 10-year forecast, with another roughly $3 billion in sales coming from potential new indications, including thyroid eye disease (in phase 3) and Sjogren’s disease (entering phase 3) as well as indications that should have data later this year, including post-covid postural orthostatic tachycardia syndrome (data expected by the end of June) and myositis (data in the second half of the year). 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. However, we do not yet assign Argenx an economic moat, given the uncertainty around the breadth of the drug’s potential as well as its profile relative to emerging competition. Competition in the FcRn space is likely to intensify, with UCB’s Rystiggo already launched and promising recent data from J&J’s nipocalimab (positive phase 3 data in myasthenia gravis and phase 2 data in Sjogren’s disease in February 2024) and Immunovant’s IMVT-1402 (entering registrational studies over the next year with a high efficacy and convenient at-home injection).