Company Reports

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.

Argenx’s autoimmune drug Vyvgart Hytrulo has failed to improve responses over low-dose steroids in two related dermatology indications—pemphigus vulgaris and pemphigus foliaceus—and we’ve lowered our fair value estimates to $466/EUR 425 from $539/EUR 490. This disappointing news comes on the heels of the drug’s November 2023 failure in a key trial in a hematology indication (idiopathic thrombocytopenic purpura). The failure also adds to our confusion over the potential breadth of indications for Vyvgart, which had positive data this year in the poorly understood neurology indication of CIDP, where we had assigned a lower probability of approval, but was seen as much more likely to offer improvement over existing treatments in ITP and pemphigus, due to the role of IgG autoantibodies (and Vyvgart’s ability to lower IgG) in these diseases. We think this failure could also hint at potential failure for another dermatological indication currently in a pivotal trial: bullous pemphigoid. Following the pemphigus failure on Dec. 20, Argenx management has decided not to take an interim look at the potentially registrational trial in this indication, opting to complete the full trial and also likely implementing some trial design changes.

Dutch biotech Argenx is hoping to build a portfolio of autoimmune treatments around Vyvgart, which received FDA approval in 2021 as a treatment for myasthenia gravis. We think the drug will see peak sales of more than $8 billion if approvals can extend into new autoimmune indications in neurology, hematology, dermatology, and nephrology over the next several years, although competitors in testing and uncertainty around future clinical trial results for Vyvgart prevent us from assigning the firm an economic moat.

Dutch biotech Argenx is hoping to build a portfolio of autoimmune treatments around Vyvgart, which received FDA approval in 2021 as a treatment for myasthenia gravis. We think the drug will see peak sales of more than $10 billion if approvals can extend into new autoimmune indications in neurology, hematology, dermatology, and nephrology over the next several years, although competitors in testing and uncertainty around future clinical trial results for Vyvgart prevent us from assigning the firm an economic moat.

Dutch biotech Argenx is hoping to build a portfolio of autoimmune treatments around Vyvgart, which received FDA approval in 2021 as a treatment for myasthenia gravis. We think the drug will see peak sales of more than $10 billion if approvals can extend into new autoimmune indications in neurology, hematology, dermatology, and nephrology over the next several years, although competitors in testing and uncertainty around future clinical trial results for Vyvgart prevent us from assigning the firm an economic moat.