argenx SE (ARGX) 2024 Q1 法說會逐字稿

Good morning, my name is Rod, and I will be your conference operator today. I would like to welcome everyone to the call. (Operator Instructions) I'd like to introduce Beth DelGiacco, Vice President, Global Head of Corporate Communications and Investor Relations. You may begin your conference.

Thank you. A press release was issued earlier today with our first quarter financial results and recent business update. This can be found on our website along with the presentation for today's webcast.

Before we begin, I'd like to remind you on slide 2 that forward-looking statements may be presented during this call. These may include statements about our future expectations, clinical developments, regulatory time lines, the potential success of our product candidates, financial projections and upcoming milestones, actual results may differ materially from those indicated by these statements.

Argenx is not under any obligation to update statements regarding the future or to conform those statements in relation to actual results unless required by law.

I'm joined on the call today by Tim Van Hauwermeiren, Chief Executive Officer; Karl Gubitz, Chief Financial Officer, and Karl Gubitz, Chief Operating Officer. I'll now turn the call over to Tim.

Thank you, Beth and welcome, everyone. At the beginning of the year, we shared an ambitious plan to maximize patient impacts over time through our key innovation horizons. First, bringing VYVGART to more patients by employing a multidimensional launch strategy.

Second, advancing our clinical pipeline, including empasiprubart and ARGX-119, which has potential across multiple indications with high unmet needs. And third, leveraging our IIP to bring forward the next wave of novel targets to the clinics. Today, I am pleased to share that our execution over the quarter puts us perfectly on track with this plan.

Slide 4, let's dive into some of our recent accomplishments, beginning with the team's success in delivering another quarter of solid revenue growth. We now have 7,500 patients on VYVGART and VYVGART subcu globally, which does not include China, where over 2,700 patients started on therapy in the first quarter alone.

This means we surpassed the 10,000 patient mark, and we continue to reach new patients and prescribers each quarter gaining market share among all and gMG treatments. We have two key drivers of revenue growth in the first quarter.

First, we saw a 34% increase in patients on VYVGART subcu in the US. The majority of these patients were naive to VYVGART so the subcutaneous product is expanding the market in the way we planned. Second, we saw 46% growth in patients on treatment on in Europe, driven by strong demand in Germany and new launches in Italy and Spain.

And while it's still early days in the ITP launch in Japan, we are pleased to see patients already start therapy in our second indication. Looking ahead to next month and the expected FDA decision for CIDP, we are making the right choices today with our gMG growth strategy that should serve us well for a CIDP launch in the scenario of an approval.

We shared at the beginning of this year that advancing our prefilled syringe in both gMG and CIDP is a top priority for us, and we have a positive update for you today. We have successfully collected all necessary data points from our bio equivalence and human factor study and are on track to file with the FDA by the end of June.

Our goal is to have the broadest product offering available to patients recognizing that different patients and prescribers have a different treatment preferences. With the prefilled syringe. We continue to innovate on the patient experience, and we'll seek self-administration in the label, which we expect will help us reach patients earlier in the treatment paradigm.

On the clinical front, we made important progress in advancing our next set of indications to Phase 3 and now have studies underway in powered eye disease anti-acetylcholine receptor antibody negative gMG population.

The seronegative study is designed to enable a label expansion into 15% of the broader gMG population beyond those patients we can serve today. We are also advancing Phase 3 plans for efgartigimod in Sjogren's and empasiprubart in MMN based on Phase 2 results in both indications.

And we still have additional data readouts ahead this year in PC-POTS and three subtypes of myositis, which all could jump start registrational studies depending on the outcome. The development of our earlier pipeline programs all remain on track, including patient studies of ARGX-119 and our upcoming INDs across four molecules as we rapidly work to advance the next wave of novel targets.

Slide 5. Last month, we presented important data to the neurologist community during AAN, furthering our confidence in the opportunity we have with VYVGART. In the absence of a cure, the best we can achieve for patients is deep and sustained functional improvements, not just managing symptoms, but getting to the heart of the disease to deliver a better outcome than patients have at current treatments.

In gMG, this is a minimum symptom expression or MSE and we demonstrate that across studies and various dosing regimens, approximately 50% of patients are able to achieve MSE. This comes without compromising safety and in fact, we show that patients can meaningfully take steroids post graft treatments, reducing treatment burden and improving the overall experience.

We also presented new ADHERE data at AAN specifically on functional improvement showing that some CIDP patients were able to improve more than three or four points of INCAT, which to put it into perspective, can mean the difference for a patient between being wheelchair bound and walking without support.

Slide 6. During the first quarter, we announced our decision to advance efgartigimod to Phase 3 in Sjogren's disease following the outcome of the signal finding RHO study. We are confident in moving forward based on the consistency of data across clinical and biomarker endpoints.

This was a relatively small trial, just 34 patients predominantly could look patient by patient and how these endpoints moved together. We had two objectives with the RHO study. First to gain confidence to invest in further development and second, to thoughtfully shape the Phase 3 study.

We achieved both and see a clear opportunity ahead for VYVGART in this disease where there is significant unmet need, specifically in those patients with moderate to severe systemic disease who can experience dry eyes and mouth, fatigue, joints pain, and even organ damage.

Slide 7, we are leading this new field of medicine with FcRn. And at the end of last year, we made a commitment to apply key learnings from the ADDRESS and ADVANCE subcu trials to all ongoing and proposed indications.

The first trial in focus was the BALLAD study of efgartigimod in bullous pemphigoid. We stopped enrollment in the Phase 2 and are currently waiting for data to mature across all patients. We will be ready to communicate a path forward to see whether to change the study design and the normal Phase 2 advance to Phase 3 or some development in BT altogether.

We also completed a through risk assessment of all of the programs across efgartigimod and Empa, recognizing the need to be disciplined in where we invest our capital and time. Based on our evaluation, we have decided to discontinue development in ANCA-associated vasculitis or AAV and to focus instead on a newly nominated indication, systemic scleroderma.

We determined the risks did not outweigh the benefit in AAV given the potentially unmanageable interference of background medications. All other indications are advancing forward with trials underway in MN, LN and AMR for efgartigimod and DGF and DM for empasiprubart. We have plans to nominate additional indications for both assets later this year.

Our opportunity to transform autoimmunity remains strong. The more data regenerate in the clinic and translationally the more informed forms we can get in our R&D investments and selecting indications where we can win.

This is the best format for long-term value creation and is a perfect transition to Karl to talk about our financials.

Thank Tim. Slide 8. The first quarter 2024 financial results are detailed in the press release of this morning. I will highlight the key points here. Total operating income in the first quarter totaled $413 million. This reflects $398 million in product net sales and $14 million in other income and collaboration revenue, including $2 million in royalty income from Zai Lab for VYVGART sales in China.

Product net sales of $398 million, represents 83% growth plus $118 million compared with the same period in 2023. Here is a regional breakdown along with key drivers. $347 million in the US with notable expansion of patients VYVGART Hytrulo. $18 million in Japan, indicating strong volume growth, offset by a recent 8% price decrease.

EMEA has an excellent quarter with net product revenues of $31 million. The majority of sales still come from Germany, where we had strong volume growth, offset by higher accruals due to the planned reassessment of the German price, which will be finalized in 1Q 2025.

We saw meaningful revenue contributions this quarter from Italy and Spain, and these launches are just ramping up. We also saw our patient reach expand in Eastern European countries like Poland and exiting new countries like Saudi Arabia and Switzerland through named patient sales.

We expect these sales to be an important source of growth going forward as we finalize pricing and reimbursement discussions. We also had $2 million in product net sales to Zai Lab for the launch in China.

Slide 9. Operating expenses in Q1 were $506 million, a decrease of $51 million compared with Q4 2023. Excluding the $102 million impact of a priority review voucher in Q4 2023 for operating expenses increased by $51 million. The increased expenses reflect our continued conviction in the long-term opportunity we have for value creation.

SG&A expenses were $236 million in Q1, which is an increase of $27 million compared to Q4 '23 due to incremental investment in the commercial infrastructure, most notably expanding our customer facing organizations in the US to capitalize on the gMG opportunity and prepare for potential CIDP approval. R&D expenses for the first quarter were $225 million.

Excluding the impact of a PRV from the fourth quarter, we had an increase in the underlying spend of $21 million. This increase reflects our continued investment in our pipeline, and we currently have 48 clinical trials across 19 indications and 3 pipeline candidates.

Our net cash burn for the first quarter was $75 million. We continue to have a strong balance sheet with $3.1 billion in cash, cash equivalents and current financial assets. Our financial guidance for 2024 remains unchanged.

I will now turn the call over to Karen, who will provide details on the commercial front.

Thank you, Karl. Slide 10. I'm proud of the continued momentum of the VYVGART launch, expanding our impact to give more gMG patients, the opportunity to return to the activities they love and preparing to do the same to the CIDP patient community ahead of our June to do today.

Before I get into details on the quarter, I want to highlight two things. First we are changing the gMG treatment paradigm with VYVGART. Our ambition is to enable patients to live without the constant reminder of their disease, and we can achieve this with VYVGART in a majority of patients.

We now have extensive real-world evidence and clinical trial data extending out beyond nine treatment cycle. That data consistently show approximately 50% of patients are able to achieve MSE or minimum symptom expression.

This translates into a very strong value proposition because patients report quality-of-life measures that are comparable to a healthy population. This is what paradigm changing means for patients, for physicians, and for the society in which we operate.

Second, we're making decisions today that will benefit us for the CIDT launch and beyond. We are planning to the long-term sustained growth and want to ensure that everything we do today can be leveraged to support that growth. We believe we have the right strategy in place and now with our expanded customer facing team we will be even better placed to reach new patients.

Slide 11, our launch momentum continues with nine consecutive quarters of revenue growth. We have year-over-year revenue growth of 83%, and we see consistent growth across every region with more than 10,000 patients on treatment globally. This is an incredible achievement, and we are very happy with the momentum we continue to generate from our launch strategy.

Even with this sustained growth, we are still at the beginning of what we want to achieve, and we are broadening our patient impact through our multidimensional expansion strategy. First, we want to reach patients earlier in the treatment paradigm by innovating on the patient experience with formats like the pre-filled syringe. Second, we wanted to expand our reach by seeking regulatory approval in new geographies and third, we want to expand our label with new indications.

Slide 12. In the US VYVGART Hytrulo was a key driver of our growth this quarter. So let's start there because it's also an important strategy of how we will leverage momentum for the CIDP launch. As of January 1, we had payer policies and a dedicated J-code in place and we saw a strong uptake of Hytrulo over the quarter with 34% growth from Q4 in patients on our subcutaneous products.

The majority of these patients are brand new to the VYVGART franchise, which reflects the opportunity we have to expand within gMG addressable market with VYVGART Hytrulo.

With the backdrop of new innovation coming to market. Our total market share across IV and subcutaneous increased over the quarter, and we continue to expand the breadth of our prescriber base to now 2,700 neurologists using VYVGART or VYVGART Hytrulo in the US.

The first quarter of the year is notoriously challenging, and we were not immune to the impact of recertifications, holidays, and weather. Taking the seasonality into consideration, I'm very pleased with our performance. The underlying fundamentals of our business are strong and have confidence that we are well positioned to maintain our growth momentum in gMG as we look ahead to the additional drivers this year.

Slide 13. The contribution from our ex-US markets was another key driver in the quarter, and we saw 46% quarter-over-quarter growth in patients on therapy in Europe specifically. We are encouraged to see this growth materialize is consistent with our expectation that Europe will represent an increasingly larger proportion of the opportunity over time.

The volume growth can be attributed to meaningful uptake in Italy and Spain following pricing and reimbursement negotiations in those countries, but also the impact of the approval and launch of VYVGART subcutaneous. Whereas in the US, the strategy with subcutaneous is market expansion. In Europe, we see both the patient switch and the market expansion strategy. This is reflected in the growth this quarter.

Moving to Japan, it has been a very busy quarter. In addition to delivering continued growth in gMG and securing approval for VYVGART subcutaneous, we received the first global approval for our second indication, ITP.

This is an important milestone to VYVGART and an important moment for ITP patients where there is a clear unmet need in the market. This was reflected in how quickly after approval, ITP patients in Japan began treatment on VYVGART.

And finally, in China through our partner, Zai Lab, we reached an additional 2,700 patients in the first quarter alone, driven by VYVGART inclusion on the NRDL. Demand has been very strong. You can see that our global launch efforts have steadily progressing. We are expanding our reach into new countries and new indications and expect to further accelerate growth as more opportunities come online.

We are on track to receive VYVGART decisions on approval this year in Australia, Switzerland, Saudi Arabia and South Korea. And with VYVGART subcutaneous in China. And we have filed our CIDP regulatory submissions in Japan and China with the EU to follow.

Slide 14. Moving to indication expansion with CIDP, we expect a decision on approval in the US next month and preparations are well underway to expand our commercial engine to support this launch. CIDP patients continue to face a significant burden despite the availability of current treatments. The unmet need is high with patients failing to see meaningful innovation in the last 30 years.

Our data suggests that 88% of patients on current therapy still experienced residual symptom and patients are constantly balancing the trade-off between efficacy and the treatment burden. A couple of weeks ago, the team had the chance the firsthand accounts from patients suffering from CIDP. One story really struck me with the patient saying what hurts the most is not having the treatments we deserve.

All I want is to get back to the things that make me feel alive. This patient is on a high dose of IVIG, which typically require the two-day administration period. She cannot afford to be away from work to this time. So she consolidates a treatment into one day, which is not sufficient to address any and it leads to disease progression.

Our goal with VYVGART Hytrulo is to provide the convenience of a 30 to 92 second injection without compromising on safety or efficacy. And we believe it is possible from the ADERE data, which we shared with the neurologist community AAN.

This is the largest trial in CIDP ever run, enrolling 322 patient data demonstrated a consistently strong response regardless of prior therapy and we also saw data that showcase the real-world impacts of CIDP patients.

We successfully demonstrated efgartigimod's accountability to drive a sustained improvement in functional strength across prior therapy group, including almost 30% who improved three or more points on the INCAT scale. As Tim mentioned, a three-point improvement can signify the difference from using a wheelchair to walking. This is what a transformational outcome looks like in CIDP.

Slide 15, we are well positioned to capture the CIDP opportunity in front of us. And as I said earlier, we are making decisions today to support our future success, leveraging our learnings and capabilities from the gMG launch and applying them to CIDP. We will take a consistent approach with each of our stakeholder groups to maximize its potential, early engagement with payers, disciplined execution to reach the right prescribers and always putting patients at the center of our innovation mission.

We have already started our work on enabling broad access for patients. In MG, we partner with payers so that they could see the value VYVGART creates for the health care system. And we will take the same approach in CIDP.

We have a strong value proposition based on the ADHERE data and the open label extension study. But it takes about two quarters after approval for payer policies to kick in, which will have an effect on new patient stuff during 2024.

With prescribers, we have expanded our customer facing team to maximize growth in MG, while also delivering a successful launch in CIDP. CIDP is an improved indication for IVIG, so this will be a competitive market, but we are equipped to meet the challenge. And last as saw in MG patients in their communities will play an incredibly important role.

In our market research, we've seen that as a big step for CIDP patients to consider switching their treatments. Our goal is to raise awareness and to empower patients so that they can become advocates for their own care. It will take some time at first. But once the community subset experienced the impact of VYVGART I'm confident it will happen. I'll now turn the call back to Tim

Thank you Karen. Slide 16, I'm truly proud of the Argenx team through relentless execution. We achieved an incredible milestone of treating over 10,000 patients globally. Our commitment to innovation on all fronts has supported this phenomenal growth from generating new data in the clinics that strengthens the use case for VYVGART to our sales team moving deeper into the community setting to meet early line patients.

We will continue to intelligently invest in and execute across our business to maximize the opportunity ahead of us. It is an exciting time for the company as we actively prepare to bring a game changing alternative to the CIDP community, while staying focused on advancing our pipeline.

With notable size, we plan to uncover new opportunities to elevate treatment expectations and create value over the long run for autoimmune patients.

I would now like to open the floor for questions. Thank you.

(Operator Instructions) Tazeen Ahmad, Bank of America.

Okay. Thanks. Good morning. Thanks for taking my question. Tim, can you just give us a sense about how you're thinking about competitive landscape because that seems to be an increasing question that we're getting maybe just for gMG. You have talked about on increased players in this space in the time that those have been on the market, how can you talk about the market share that you've had? Have you seen any market share loss as a result of increased competition? And where would you think most of the competition is coming from. Thanks.

Thank you Tazeen. Thank you for joining us on the call today. And I think this is an excellent question for Karen to address. So I'm going to hand over to Karen straight away on the competition.

Yeah, thank you Tim. I guess Tazeen the first question you asked was around, the competitive landscape and what we're seeing and what we expected is increased competition and increased entrants into the market. And what we're seeing in our performance is really strong underlying fundamentals, despite those competitors coming to market.

You asked specifically about market share, but we think what we've seen quarter over quarter is our market share growing amongst biologics and the majority of that growth is coming through Hytrulo and it's coming from new patients directly coming from orals to VYVGART. So at this point in time, we're not seeing significant impact on competition I think because of the value proposition that we have with this VYVGART and VYVGART Hytrulo.

We've set about really mind in terms of efficacy. We continue to show in the real world that our favorable safety profile plays out. And of course, with both VYVGART and Hytrulo we have that lower treatment burden. So the whole package as well as our team is competing really well and of course, what we see in MG, across the board that we're just at the beginning of the opportunity. And I think, the more innovation that comes to market, the more the biologic share overall is going to grow and the more that we'll be able to lead within that biologic share.

Okay. Thanks so much. Karen.

(Technical difficulty) Goldman Sachs.

Hi. Thanks for taking the question. Just on the PFS. filing and maybe relates to that competition question, could you sort of walk us through the steps to approval from here? Have you had any initial interactions with the agency or shed any data and is there anything you can say about the potential regulatory review process as a fast-to-market opportunity, for example? Thank you.

Yeah, thank you for the question. The PFS, of course, isn't a centrepiece in our strategy for VYVGART overall. Remember, we're patient-centric and ultimately we think the prefilled syringe is going to be an important addition to the toolbox to serve patients in the most complete fashion possible.

The meaningful update today, and I'm delighted to give that update actually is that we did succeed in compiling stellar data from a bioequivalence point of view and of course, the human factor study. Remember, these were the two key data sets we need to compile in order to submit the dossier. So we're on track to submit a dossier with the FDA before the end of June, which is great.

And then, of course, it's going to be in the hands of the FDA, the exact that review time remains to be seen, but I'm confident in the quality of the data and the strength of the data which we have submitted. So I would say stay tuned and we'll keep you informed on the progress we make with the prefilled syringe.

Thanks for the question.

Derek Archila, Wells Fargo.

Hay, good morning and thanks for taking the question. So this one's for Karen. You cited some market research on CIDP in patients, potentially switching Wells VYVGART. So we were wondering I guess from that research, what percent of patients said they would actually switch in? What's the biggest reason behind the decision to switch? Thanks.

Yeah, thanks for the question. And we've been learning a lot about the CIDP market as we as we prepare to launch. According to our market research, what we see is that about 88% of patients still experience residual symptoms despite their ongoing treatment.

But as you can imagine, and as I shared previously, the patient willingness to switch off their current therapy, it's a big step for them. It's a progressive disease, it's a serious disease and so it takes a lot for a patient to take that step to switch to another therapy.

What we're putting in place, I would say is a comprehensive launch plan that focuses on educating the neurologists so that they understand our data so that they see the advantage of VKYGART as well as empowering patients so that they can advocate for themselves and for their health care and that they can really see the difference.

What we see across the board both with the health care providers as well as with patients, is that the most meaningful part of our dataset are, I mean, first of all, the fact that, it is the first innovation to come to the market in many, many years. It's the biggest trial ever run in CIDP. And what they find compelling is the broad response rate that 70% response rate in stage A. as well as the efficacy that's seen in stage B and Tim shared during the call, in particular, the improvement on function that is really compelling.

And then of course, the package is round out by the safety profile and the low treatment burden. So overall, what both health care providers and patients like about VYVGART, is the fact that they don't have to balance between -- trade-off between efficacy and treatment burden. So we have strong conviction over the long term that we'll be able to have a lot of patients on VYVGART.

James Gordon, JPMorgan.

Hello, James Gordon, JPMorgan. Thanks for taking the question. My question is about VYVGART and CIDP labelling. So we've seen the ADHERE data presented, but I don't think we've seen open-label extension data yet. So is your hopefully your expectation that we get that data on the label in June? And is the thinking that would allow for intermittent dosing as well based on the OLE and that's how you'd address the potentially quite high price in CIDP.

And also just on pricing integrity, am I right if patients in MG use a lot more than the average patient that the pricing has capped? Are there mechanisms, you would potentially be able to cut the price in therapy because one of the questions I've had is how pricing could work in CIDP and whether that could be a priority?

Thank you, James, for the question, and thank you for joining us on the call today. I will hand over in a second the pricing question to Karen. From a labelling point of view, James, of course, we need to wait and see how the conversation is going to go with the FDA. I cannot put myself in their shoes.

But I think it's reasonable to assume that given the randomized controlled trial was done with weekly subcu dosing, that the label would be reflecting that and the data you referred to or you allude to in the open-label extension where we go to less frequent dosing, that could actually have a meaningful impact in our payer conversation. And that's a nice segue Karen into the pricing question.

Yeah. Happy to address this is, it's an important one. So as you said, the price was set with MG the price per vial. But at the time with an eye towards the CIDP launch and potential CIDP launch. So the approach that we'll take setting price aside to ensuring access for patients is the same approach that we took with MG.

And you mentioned during that part of that approach with value-based arrangements through discussions with payers. And so we'll take a similar approach, most importantly, when we have discussions with payers and what our commitment is, is the companies that we want to create value for the health care system, I think we've demonstrated that we can do that with MG and that's reflected in the favorable payer policies we have, whether you look in the US.

Other favorable payer policy, when you look in Canada with the recent catalyst description that we've got is dominant over IVIG or even the progress in Europe with the reinvestment that we're getting across the board, you can see that VYVGART is creating value for healthcare systems and our approach is creating value.

And so we'll take the same approach with CIDP to make sure that we get broad access for patients and, I'd say in terms of preparations for the launch of discussions are on track and our commitment to broad access CIDP patients that remains the same.

Akash Tewari, Jefferies.

Hey, thanks so much. So looking at the geographic breakdown, it looks like US VEGARD patient as they're starting to sequentially flatten out. That said, you mentioned 50% of your new patient adds are now from patients getting off the orals as we think about 2025 and beyond. Do you think that MG will remain a growth market for VYVGART? And have you seen any signs of uptake in the 70,000 patients upstream to the 17,000 that are currently not well controlled by steroids. Thanks so much.

Yes, thanks for the question. And I would say actually, I'm very confident that we're just at the beginning of the growth curve with MG, we actually see quite consistent new patient starts that are coming on board. As you said, we've -- generally coming from the orals over 50% of those are coming from directly from oral. And as part of that, we're advancing our market share amongst biologics.

In particular, high to low is really helping us to advance into those earlier lines of treatment and to expand the breadth of our prescriber base. So we have about 2,700 prescribers now the majority of that 34% growth in new patients for Hytrulo, then naive to VYVGART. So those are the new patients. So the way I see it, we're at the beginning of the curve overall, the biologics in MG are small percentage of the market well leading that biologic share is growing and we have a long way to go ahead of us and a lot of opportunity.

And in addition, a [cash] to what Karen just said, we also announced the start of the seronegative MG trial, which is going to be a label expanding a trial, right, about 15% of MG patients are estimated to be seronegative. So that will also be a meaningful addition as to the label in case this trial is successful.

Yaron Werber, TD Cowan.

Great. Thanks for taking my questions. So, maybe one that's related to the pipeline. And I think in the past, you've talked about potentially doing an R&D day kind of at some point this year, maybe in the summer and the fall. What would you want to cover, you know, if you were to do such an R&D day.

And then secondly, on the decision to move to systemic scleroderma, it sounds like with anchor sources like of vasculitis, there's too much variability background meds. What do we know about scleroderma?

How homogeneous is it? What percentage of patients are autoantibody positive? If you can give us any sense? Thank you.

Thank you for these questions. So you going and thank you for joining us. So it looked as Tom and his company to talk about when you organize an R&D day. So we will have to make choices and we've carefully listening to the customer of such an R&D day for sure.

A central piece will be the full data presentation on MMN, which Univision is the lead indication for Empa. But we also received strong feedback about the continuous need to be educated on some of these new indications, which we started to talk about.

So stay tuned, I think that we'll be communicating in the not too distant future about the date and the agenda of the R&D day, on a systemic scleroderma this is an indication which was always high on the list. And you remember that we always start from a very strong biology rationale, still talking about a strong biology rationale in systemic scleroderma.

We have a very good understanding of the auto antibodies of the [gMG] type and these auto antibodies actually and work very well in passive transfer models with antibodies from patients transferred into animal models actually caused the phenotype of the disease.

We also know a number of the auto antigens. So if you immunize these animals with the other antigens and develop the typical symptoms of the disease. And then, of course, plasma exchange works IgG works. We took some app is approved in Japan.

So there's a very solid body of evidence this is an IgG driven disease. There are useful clinical end points with no real approved medication outside of protection type in Japan. So we will have to impact, of course, with the regulators and calibrate expectations on endpoints.

But in terms of biology rationale, unmet medical needs and feasibility of doing the clinical trials, this was an indication which made it higher on the list. And of course, we double-click on it just like we did on all other indications in the portfolio review to really understand the potential impact of background medication on auto antibody levels, taking the learnings into account of the clinical trial. Thanks for the questions.

Thomas Smith, Leerink Partners. Your line is open.

Hey, great. Thanks. This is Brian Connolly on for Tom Smith. Couple of questions on the TAD program. So with respect to your Phase three studies, can you talk about how you see efgartigimod fitting into the competitive landscape there.

Any specific differentiating aspects you would highlight from the way you design your Phase three assets had studies on competitors and competitors and are you contemplating pursuing broader development in chronic TED? Thanks.

So as we announced the Phase three study ad campaign is open, we are enrolling whilst we speak, this will be a global trial also involving our partner VYVGART in China.

And it's a sizable market opportunity. And I think in the current treatment paradigm, it is becoming and clearly know what the shortcomings of the currently available medications. And it's a relatively seamless patient population, which we are enrolling in our studies as compared to the Petro studies that, of course, have also involving a capped number of patients which can have seen it depends on in their lives.

And that's where we're going to stick with the update today on TED. And I think we will be ready to talk more about it when we're deeper into the studies. But the big news today is studies, life and is also using, by the way, the PFS.

Alex Thompson, Stifel. Your line is open.

Hey, great. Thanks for taking my question. I guess I wanted to ask about self-administration and first, the CIDP, the expectation for potential self-administration at launch or whether the PFS is really the route to achieving self-administration on the label for both CIDP and gMG? Thanks.

Yes, I think thanks for the question. We think self-administration as a really important step forward overall as we continued with our expansion strategy because we've got a we've got a tool. So the label for if that is approved in CIDT will be some of the current types of labels.

So that would be that HCP administration. But as we shared earlier in the call, we're excited about the progress we're making with the prefilled syringe and the pump there according to the plan that we've laid out is that we will have discussions around self-administration, and we think that there's a good a positive path forward there after both gMG and CIDP, but of course, it's going up to the FDA and a review issue.

Xian Deng, UBS. Your line is open.

Hi, Xian from UBS. Thank you for taking my question. Just a general question, a general question on Sjogren, please. And so Sjogren has traditionally been a challenging disease formable biologics. So just wondering what gives you the confidence in bed count increased three.

Do you think it's a mechanism or, you know, FcRn as a target of some biomarker data, you have collected all the primary end point, we know [DRD] or use the credit composite endpoint, which is arguably more comprehensive than some others.

But on the other hand, in the showings, you're probably also going to have quite some patients with a lot of prior medications. So just wondering, yes, any thoughts on that would be great? Thank you.

Yeah, thanks for the question on Sjogren. So the Phase two signal-finding study serve two big purposes. Purpose one was to establish confidence in the disease biology and our understanding of the biology and objective to us and to really learn about dose and dose for the Phase three clinical trial design.

So let's start with objective. Number one, I think we see a very convincing and a biological signal here that by blocking FcRn, you're effectively eliminating the circulating immune complexes, which we think are the triggers of the disease and by clearing the circulating immune complexes to basically see a downstream effect in how the immune cell infiltration is going down in the glands and how systemic and signs are actually at improving and improving across multiple clinical scales.

And so consistently now that's exactly what we wanted to see in addition to a positive Phase two trial as announced for nipocalimab by our colleagues from gMG.

Secondly, we learned a great deal about, you know, potential impact on background medication and how to mitigate that the imperfections of the currently used end points. So I think all in all, we have conviction in the dataset and we are actually equipped to now go into our end of Phase two meeting with the FDA to discuss our proposal for 50. Thanks for the question.

Vikram Purohit, Morgan Stanley. Your line is open.

Hi, good morning. Thanks for taking our questions. So we just had two on the pipeline first on them as we prove out for MMN, which just curious if you could talk a bit about what that Phase three study could look like and just kind of how you're characterizing that commercial opportunity.

And then number for pipeline readouts for this year. How are you thinking about the potential outcomes for the ALPHA and ALKIVIA datasets?

And what would constitute some strong outcomes there from your perspective? Thank you.

Thank you for all these questions. And I think MMN isn't is a sizable opportunity. But of course, it's a rare disease and it is a decision of which is, I think underdiagnosed and undertreated. As we know, the only available therapy out there is IVIG.

And similar to Microsoft, for example, gMG. I would not be surprised to see this market general growth substantially with real innovation coming in. And I think from a trial design point of view, we're very well equipped to get ready for Phase three because the main objective of the Phase two clinical trial, of course, next to establishing proof of concept was to establish a dose response range where we can basically populate our PK/PD model and predict the Phase three dose and dosing regimen.

I think we'll be very close to that point. We also had a very rich trial here in terms of clinical endpoints. And we already said it all clinical endpoints really moved in sync with each other. So we will be able to have a view, educated discussion with the FDA about which endpoint we would suggest and why they would be suggesting that endpoint out of the many loans which we tested.

So I think we will have we will be in a strong position to indication that end of Phase two and a discussion with the FDA and relatively soon, in terms of other outcomes this year. And we are, of course, waiting now after the positive Phase two data for children's.

We are waiting for the PC-POTS data we should come in before the middle of the year. And then of course, the three myositis trials, which will come in during the second half of the year and similar to and shared PC-POTS will be really looking for proof of biology.

And whilst we should be thinking of the go, no-go decision point in the myositis studies in a similar fashion as we designed them for the CIDP study. So we will want to see a signal which is visibly to the expected stronger than what a possible and a signal could be in order to advance in one two or three of these subsets of myositis, and we will be communicating about this goes at the same time for all three indications.

Thanks for the questions.

Danielle Brill, Raymond James. Your line is open.

Yeah, good morning. Thanks so much for the question. I have I want to circle back to the CIDT launch based on recent data checks, it seems like many patients may have already been earmarked for therapy has been garnered.

I'm wondering what feedback you're encountering in your market research and is there any reason at this point to think that the launch cadence won't be similar to what we saw in gMG? Thank you.

Well, thanks for the question, Danielle, and I will say something similar in market research in one way is that there is excitement amongst prescribers and patients about this and the potential. We are not seeing that there's a bolus of patients that are waiting.

And in particular, the prescribers have the same question that many of us have, which is when will the payer policies come online and we know that payer policies generally take a couple of quarters come online after an approval.

And so I think that the uptake on combined with the payer policies coming online, that patient stickiness to IVIG that I talked about a little bit earlier, as well as the fact that IVIG is approved in this indication and will be a strong competitor.

I think that means that so we can expect to see maybe a little bit of a slower uptake versus gMG. However, once we start to get the patients which is happening and once we start to shift the market. Then I think that I'm confident that over the long term, this is a big opportunity, even if it won't be easy in the first days. Thanks for the question.

Suzanne van Voorthuizen, Kempen. Your line is open.

Hi, It's Karen, I'm on behalf of Suzanne. So out of curiosity, again, on the drop of the anchor program, which was replaced by SPC. I was wondering how those two indication compare in terms of efforts, trial design time lines or anything that you wish to highlight? Thank you.

Roughly speaking, I would I would buy them in the same ballpark in terms of size of opportunity and size of investment and the unmet medical need in a the substantial the biology, by the way is very strong. Actually, the disease is called after these auto antibodies, and we saw a recent case report published with spectacular data for both cards and in the hands of physicians in the world.

The real issue for, I think, is a confounding factor of the background medication and the mandated the use of high dose of steroids is actually going to blow the effect of the car. And we looked at it from multiple angles, but there is no credible way to go through that a steroid despite a high unmet medical need, that is quite different and in systemic scleroderma.

So equally high unmet medical need equal number of patients and equally strong biological rationale. But I think in a more straightforward path and in clinical development, that's how I would call it.

Samantha Semenkow, Citi. Your line is open.

Good morning and thank you for taking the question. My question's just on the uptake of high true low. Is the growth that you highlighted in the prepared remarks.

Is that a recent uptake or has it been steadily climbing over the last several quarters? And then as you think about introducing PFS as an approved option formulation, would you expect a similar trajectory of growth for the PFS or would you expect it to be a sharper uptake? Thank you?

Yes. Thanks for the question, Samantha. I'll take that. We actually did see an acceleration in the uptake of high to low in Q1, and there were specific reasons for that namely that the payer policies were up were in place and the J-code was established at year end in Q1.

So we did see an acceleration. We expect that to continue and it's important to note just into just talking about it with the CIDT launch It did take about two quarters for those payer policies to come into place with high to us so we've seen that now moving forward.

I think we're very excited about the prefilled syringe and being able to offer an even broader product presentation options to patients. I do think it's a significant advancement on the current gen one of high to low, and I do think it will it will it enable us to further move up to earlier lines of treatment with vigor and further events or expand our prescriber base as well. So we do see that that PFS will be another engine for growth if you will [forget] it. Thanks for the question.

Gavin Clark-Gartner, Evercore ISI. Your line is open.

Hey, thanks for taking the question on Empa in the pipeline. I believe you've noted there's been no cases of lupus arm in the ongoing MMN study, but I also wanted to ask about rates of ANI tighter elevations specifically on any other markers such as the DNA.? Thank you.

Yeah, that's a great question. And a potential differentiator actually foresee two versus the C1 at no, we did not see any increase of such status. And at least from a theoretical point of view, we have always believed this is this could be one of the advantages of an anti CD2 antibody. So none of these signs and a great opportunity for me to remind everyone on the call.

But the Phase one data, both for IV and [subcu] came out you know, with [spec] and [Span] safety and tolerability data. So far, so good. Thanks for the question.

Yatin Suneja, Guggenheim. Your line is open.

Hey, a quick one for me and on we've got. Could you comment on what you see in terms of discontinuation rate is at that 20% range? And then anything you are able to say on number of cycles that you are able that patients are getting? Thanks.

And thank you for the question on discontinuation. As you know, 20% of the patients from the ADAPT study did not respond. So you would expect the discontinuation to be 20% plus because there are also other reasons and what we see in the real world is a lot in line with our expectations, and that has been consistent since launch in terms of a number of cycles, the number of cycles for IV as also being consistent and were bad.

And it's around five, as we previously said. So there's been no change. Thank you.

Victor Floc'h, BNP Paribas. Your line is open.

Thanks for taking my question. And if I may, then a couple of questions on my side. First, I was wondering if it's fair to say that the SG&A cost phasing we've seen this quarter is reflecting higher need to build that awareness that I've learned since CIDP than what than what was needed for gMG back in the day. So if you could just remind us the key challenges until people go to MD would be would be appreciated.

And my second question is about CIDP and so I was just wondering if you could update us on your efforts to potentially expand the CIDP opportunity beyond Japan.

So I don't know what is in the balance to take any decision if you could commit to any timing, but any color on that would be very much appreciated. Thanks.

Thank you for the question. I will give the floor in a minute to Carl, who is going to comment on the increase in SG&A expenses in preparation of the CIDP launch, Karl, you will be able to give some color there. Thank you for your question on CIDP, we are, of course, delighted to see the PMDA approval for CIDP.

We see and the first patients coming on product very quickly, underscoring, I think the unmet medical need, which is and present it in CIDP. And I think it's fair to say that throughout the interactions with the PMDA we also gain a number of insights we can use to actually give it back to the FDA and for a follow-up conversation, and that's exactly what the team is preparing.

I think we are equipped now to go back to the FDA for a dialogue to see whether we can make progress on the equity front. And so stay tuned. I certainly don't want to over-promise, but I think we're going to make an extra effort Dash, which I think we owe to ITP patients.

Karl, would you mind commenting on the SG&A step-up?

Okay. And SG&A increased by around $27 million in Q1 '24 versus the end of last quarter in '23. That increase is largely driven by the incremental infrastructure we put in place in the US versus customer-facing colleagues, which will be promoting gMG today.

And as we said previously, we believe that the gMG opportunity is bigger than what we originally thought. And now we're expanding that footprint. That same footprint will also be used for the CIDP launch subject to approval later this year.

Also, part of that increase is the geographical expansion. You have heard us talk about certain markets like Italy and Spain and other European markets where we're starting to have sales. We've been very disciplined to gauge any expenses in those markets until we have pricing and reimbursement in place.

And as we start seeing sales in both markets, we are investing in both markets. So it is the US and the geographical expansion, which is driving that increase. Thank you for the question.

Joel Beatty, Baird. Your line is open.

So thanks for taking the question. With Q1 typically being a challenging quarter, how does the trajectory of record sales change over the course of the quarter and the early Q2?

Yeah. I think to the question, as you said, Q1 is notoriously challenging and in particular in the US with holidays and recertifications and weather, et cetera, we're really pleased with the growth quarter on quarter growth that we delivered in the US as well as a year-on-year growth of 76% year-on-year growth for the year.

What we're seeing and what we feel is confidence that the underlying fundamentals of what we delivered in Q1 were very strong. And I went over a few of those. When you look at new patient growth where the patients are coming from. We're advancing market share all of those factors, and we're seeing that continue into Q2. So we're confident in the remainder of the year.

Emmanuel Papadakis, Deutsche Bank.

Hi, thanks for taking my question is basically on the key learning that you do took away from the exercise we did across indications and which led to the discontinuation of ARGX-119 escalators and how do some of those learnings extend to Empasiprubart? Thank you.

Thank you. It's a great question. Actually, when we did the portfolio review, we did not only limited to a particular month. We immediately included also the Empire indications. So we did a full review of all plants and ongoing indications as we gain confidence for all and by indications, which are currently on the rails, but also the ones which we're planning.

In addition to that, actually we can master the impact of the background medication. So I feel very strong about the big efforts all the teams did in such a short period of time following the pemphigus data with following the double click on trial designs, understanding impact of background medication and whether or not you're actually equipped to deal with those.

So exercise has landed and actually most indications remain on track with the exception of a AVV where we no longer feel. It's an responsible allocation of capital to take such a risk from a communication point of view. Thanks for the question.

Myles Minter, William Blair. Your line is open.

My questions. Two quick ones. First, on the human factor studies, did you use CIDP patients in that study? Just wondering if somebody with reduced grip strength would be suitable for self-administrated PFS? And then I guess following the potential CIDP approval, given what you said about the payer policies, would you plan to provide some kind of free drug program given the underlying patient interest and demand?

Yes. Thank you for the two questions, and I will hand over the second question in terms of launch preparation to Karl, although I suspect we will not be showing at too much of our car seat from a human factor study point of view, you're absolutely right.

I mean we'd be targeting at the prefilled syringe as for both gMG and TED patients. So you can imagine that in the human factor studies, both patient groups were actively involved and we feel very strong about the data which we achieved.

And we feel very strong about the submission, which is now in the works and before end of June. Karen question two, please?

Yeah, happy to without going into too many details exactly on that. On what our plans are maybe the best way to answer that is we're taking the same approach to the CIDP loan separation as we did with MG and the way that I would characterize that is that we've been really thinking very innovatively about how we want to go to market, how we want to empower patients, how we want to educate prescribers and we'll also be thinking in a very disciplined way around our execution and how do we make sure that we're making the right capital investments are the right the right use of our capital, I'm making the right investments. So we'll take that same approach after the CIDP launch that we did for gMG.

Douglas Tsao, H.C. Wainwright. Your line is open.

Hi, good morning. Thanks for taking the questions. Just a quick one for me. I'm just curious ultimately when we think about the different presentations of efgartigimod. I mean, where do you see the prefilled syringe ultimately falling on between the [subcu] and the idea? I mean, do you think that this could ultimately become the sort of dominant presentation that's utilized? Thank you.

Yeah. Thank you for the question. And so you know, we are a patient-centric company and it's our ambition to serve the needs of the individual patient segments as completely as we can. We believe that especially in the US market, the IV product will always be important because a subset of patients but also actually physicians do prefer an IV infusion added.

The interesting thing about the car had to know today is that as actually a very clean and easy execution, which is to resolving under mainly, I would say Medicare Part B, whilst the PFS with the self-administration is mainly going to target, I think or sit in the Medicare Part D channel so.

If you think about a market leaders who is patient centric, I think the PFS will be the closing piece in the totality of the public offering. Maximally serving, I think different needs and preferences of different market segments. Thanks for the question.

And we have now reached the end of our question and answer period. This concludes today's conference call. Thank you for your participation. You may now disconnect.