argenx SE (NASDAQ:ARGX) Q2 2023 Earnings Call Transcript

argenx SE (NASDAQ:ARGX) Q2 2023 Earnings Call Transcript July 27, 2023

argenx SE misses on earnings expectations. Reported EPS is $-3.81 EPS, expectations were $1.69.

Operator: Good morning. My name is Sarah, and I will be your conference operator today. I would like to welcome everyone to the call. [Operator Instructions]. Thank you. I’d like to introduce Bell — sorry, Beth DelGiacco, Vice President, Global Head of Corporate Communications and Investor Relations. You may now begin your conference.

Beth DelGiacco: Thank you, operator. A press release was issued earlier today, with our half year 2023 financial results and the second quarter 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 development, 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 Karen Massey, Chief Operating Officer. I’ll now turn the call to Tim.

Tim Van Hauwermeiren: Thank you, Beth, and welcome, everyone. I’ll begin on Slide 3. This has been an incredibly exciting time at argenx, and we are so happy to be delivering good news to the gMG and CIDP communities. And patients sitting with autoimmune disease more broadly. We have successfully achieved several key milestones that we laid out at the beginning of the year, bringing us one step closer to our mission to transform treatment for people living with severe autoimmune diseases. Transformation to us means patients living their lives with minimal interruption due to their disease, so they can have more time to do things that they enjoy. We see this as a sign of hope for patients who have been waiting many needs for meaningful innovation.

Slide 4. At the beginning of the year, we outlined an ambitious plan to create value for our key stakeholders by driving sustained growth across the business. Commercially, our commitment was to expand into earlier gMG patient segment and broaden into new geographies. We have made progress across both of these goals, which Karen will talk about later in the call. From the clinical side, we said we would advance [indiscernible] programs forward to demonstrate the power of our FT fragments and the time line and a product opportunity. Our conviction in this opportunity has only grown following the positive CLP data last week, and we expect more momentum later this year with 2 Phase III leaders in ITP and [indiscernible]. We’re also committed to continued investment in innovation.

This includes both our early stage programs and [indiscernible] and ARGX-119 but also our pipeline expansion through our immunology innovation program. I’m proud to say that we are right on track with our goals for 2023, having achieved the milestones we laid out and the [indiscernible]. Slide 5. Very quickly, I would like to recap the recent clinical news in CIDP and MMN. Last week, we announced positive end year results. We studied a broad patient population and saw a 67% response rate in Stage A supporting our long-standing hypothesis that CIDP is an IgG mediated disease. In Stage B, the study medicine probably endpoint with an impressive p value demonstrating that VYVGART Hytrulo reduces the risk of relapse by 61% based on time to first adjusted INCAT deterioration.

We had several conversations with neurologists following our announcements, which were highly encouraging around the potential for these data to create a paradigm shift. The team is now preparing for an upcoming interaction with the FDA on the data, while simultaneously working on the SBLA. Slide 6. In June, we also shared Phase II data of empa for MMN. The key highlights are: we are advancing forward with ARDA studies. This decision follows a planned safety review by an independent data monitoring committee of 22 patients in Cohort 1, including 9 who completed the full 15 big treatment period. The IBMC confirms a favorable safety and tolerability profile, consistent with results from the Phase I study and be able to go ahead to move forward.

Based on this recommendation and an internal efficacy assessment, we believe we have established proof of concept in MMN and will be advancing to a second dose cohort. We plan to report top line results from the full study next year. MMN management is just the first indication for empa, but we believe this could be our second pipeline in a product opportunity. We are on track to start a Phase II study in DGF later this year and in terms of my guidance earlier next year. Slide 7. The addition of our leadership in the neuromuscular space is quickly emerging. And you can see the puzzle pieces coming together with each quarter of revenue growth from VYVGART and VYVGART Hytrulo and the key data led us from our clinical programs. We have generated almost $500 million in net forecast sales this year-to-date, driven by consistent quarter-over-quarter growth.

VYVGART Hytrulo was approved in June. So we now have 2 approved commercial products for gMG patients honoring our long-term commitment to this community. With ADHERE, it’s important to consider what is positive outcome means to the neuromuscular community. This was the largest CIDP trial ever run and the first that included several unique design features. We hope that we will set the bar for what CIDP trials look like going forward to ensure the right patients are getting into the study. Beyond the impressive efficacy and safety we also uncovered important biology insights showing CIDP IgG-mediated. This is what we want leadership to look like for all of our indications, doing what is best for patients, physicians and to further our fundamental understanding of disease biology.

The next [indiscernible] of readouts within our neuromuscular franchise will be myositis where we are also innovating with our [indiscernible] . — by including 3 unique subsets, macro timing, antisynthetase and dermatomyositis. These subsets are unified by muscle deterioration associated the progression of the disease that can present very differently with other physical manifestations in the joints, lung, skin or other compartments. Each subset is also characterized by the own unique IgG autoantibodies. And we believe the field is ready to use the IgG auto antibody signature to reclassify myositis. We expect a GO/NO GO decision next year, which will inform us whether to advance all these subsets into the Phase III, and will provide clear underlying biology insights into the broad treatment of myositis.

We are also building up our pipeline opportunities with empa and ARGX-119. We are thrilled to have proof of concept in MMN that have also published significant ventilation data on the underlying biology. From a franchise perspective, MMN [indiscernible] squarely into the core capabilities we are building. We are currently in the Phase I healthy volatile study with ARGX-119, and for which we will be evaluating its potential income general in [indiscernible] syndrome and [indiscernible] as part of a Phase Ib patient cohorts. Our commitment within neuromuscular extends across our business. First, the relation is per building commercially with the neuromuscular community, including patients, physicians and other entity groups. We are also building a reputation clinically in how we design clinical trials to be patient-friendly, and unlock key translation biology insights.

And all of this is included in the scientific foundation we are building in the space, partnering with leading neuro disease biologists, and seeking out opportunities to innovate and expand our pipeline going forward within neuromuscular. And with that, I’m going to turn the call over to Karl to talk about our 2Q and half year financials and our recent equity rates.

Karl Gubitz: Thank you, Tim. Slide 8. Our second quarter 2023 financial results are detailed in our press release from this morning, so I will only highlight the key points here. The continued momentum of our launch is well reflected in our second quarter revenues, we generated $281 million total revenues, including $269 million global net product sales and $12 million in collaboration and other revenues. In looking at the regional breakdown of our global product sales, you can see that $244 million was from the U.S., $13 million from Japan and $12 million from Europe and our distributor markets. The launch in Europe is largely Germany. Remember that beginning in March, we started to accrue revenue in Germany at a projected negotiated price, which we will learn in September.

This accounts for the lower quarter-over-quarter growth in Europe. Other markets will start to contribute in Q3 onwards, following our launch in Italy. Our total expenses were $383 million for the second quarter, indicating an operating loss of $102 million for the quarter. We ended the quarter with $2 billion in cash, cash equivalents and current financial assets. This excludes gross proceeds of approximately $1.3 billion from the global offering we completed last week, which will allow us to execute on the many opportunities ahead, specifically on the heels of positive at year data and our growing conviction in VYVGART and the rest of our pipeline. We are still in the process of reviewing, how our increased ambition level will change our operational spend.

So, as of today, we are not able to confirm our prior cash burn guidance of $500 million. I will provide an update at a later date. I’ll now, hand the call to Karen for a commercial update.

Karen Massey: Thank you, Karl. Let’s go to Slide 9. We started the year with a clear and simple vision commercially to reach more patients with VYVGART globally. We plan to do this by driving multidimensional expansion in gMG, including geographic expansion, the launch of our subcutaneous product and by driving usage into earlier gMG treatment lines. We also look ahead to the multiple data readouts expected this year, and how this would drive expansion into new patient segments over time. I’m going to talk today about the continued strong performance from our gMG launch, but also about the pivot point we are facing, as we look ahead to the evolving opportunity before us. The outstanding results for mid-year have strengthened our conviction that we will be a leader beyond MG in neuromuscular.

And that we can start to leverage the launch capabilities we have built to prepare for multidimensional expansion across product presentations, new geographies and towards a portfolio of indications. Slide 10. Starting with our recent commercial performance. We had a great first half of the year, generating $489 million in net VYVGART sales, over the first 2 quarters. This impressive revenue number translates to more patients getting access to VYVGART and more opportunity for us to change patients’ lives. We are incredibly happy with the results. We can point to several key drivers of the momentum we saw in the second quarter. First, we are seeing consistent growth looking at month-over-month new patient starts. We are reaching patients in earlier lines of therapy, though we’re still at the front end of reaching the 17,000 patients, we believe we can address the VYVGART.

The task before us is to shift into earlier lines of treatment and overcome neurologists inertia. This will take time, as neurologists gain deeper experience with VYVGART and will also require persistence from our field teams. We have seen consistent prescriber growth, both in terms of breadth and depth. We now have more than 2,100 prescribers in the U.S. and a greater percentage of them each quarter are moving beyond that first script and putting additional patients on treatment. We also think that VYVGART Hytrulo will help with this shift. Slide 11. We’re now a couple of weeks into the Hytrulo launch, and have received our first scripts and shipped our first vials. We will say specifics through our third quarter call, but I was very impressed by the team’s readiness at the time of approval to get drug into the channel, and to patients as quickly as possible.

Our goal with VYVGART Hytrulo is to honor our long-term commitment to the gMG community with a second product option, now subcutaneous. And also to drive growth into early line patients by simplifying or democratizing the treatment of gMG. We believe our positioning should be first line after oral therapy, and that will require further expansion into community practices. The diagnosis and treatment of MG patients can be complex, and can be associated with a trial and error approach or a battery of tests. Current treatment options often come safety and tolerability challenges, which require the patients to decide between symptom control, emerging side effects or long-term safety concerns. This all requires close management from a gMG specialist, which is why patients are often referred to specialist centers.

Our conviction is that with the efficacy of VYVGART, established safety and tolerability and now 30 to 90 seconds injection with Hytrulo, we can expand usage deeper into the community of patients and prescribers. And the more experienced community prescribers gain, the more expert they will become a diagnosing MG and treating VYVGART. Now that we have the results of the VIB trial, we can take many of the same themes that we’ve seen with gMG and apply them to CIDP as well. The CIDP community has been waiting for innovation for over 30 years. And with these data, we believe we can bring transformational change to patients. For me, one of the most compelling data points from ADHERE was the 91% of eligible patients, who rolled over into the open-label extension study including patients who relapsed in Part B and were given the option to go back to their prior therapy or to stay on VYVGART.

We see this as a good indication that the patient experience with VYVGART is different. We know that there will also be unique challenges associated with the CIDP market based on the comfort level and loyalty associated with current treatment. But, we also see the opportunity to raise the bar on what a treatment can offer, taking into account the full patient experience, efficacy, safety and the burden associated with administration. Slide 12. Before I wrap up and turn the call back to Tim, I want to shift to the progress we’re making with our global geographic expansion. We’ve had 3 key updates, since our last call and still more ahead this year, demonstrating the speed at which we are executing on our global launch strategy. First, we received approval for VYVGART in China through our partner Zai Lab at the end of June.

This means we will be eligible to apply to the NRDL in 2024, which is important from a timing perspective because it will open the opportunity to patients who are not privately insured. Zai Lab also submitted the BLA to [indiscernible], and it was accepted. Earlier in July, we also successfully completed reimbursement negotiations in Italy, marking the second country within Europe to have officially launched VYVGART. I’m incredibly proud of the team expanding access for Italian patients just 11 months after European approval. And last, we finalized the commercial and distribution agreement in South Korea with Handok a team with a great track record as a commercial partner. Similar to our other distribution agreements Handok will take the lead on all regulatory and commercial activities associated with VYVGART in South Korea.

Slide 13. I want to close with the wide behind all of our expansion strategies, which are the patients who are living with severe autoimmune disease. On the heels of another strong quarter, and a positive outcome in CIDP, we are more motivated than ever to drive a paradigm shift in how autoimmune is treated. Current autoimmune treatments come with many trade-offs and now is the opportunity for transformative change. We want to take the full patient experience into account; efficacy, safety and treatment burden and give patients more days within not reminded of their disease. It’s the right time to meaningful change, and we believe we have a unique medicine, patient-centric strategies and a talented team to deliver. I’ll hand it back to Tim.

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Tim Van Hauwermeiren: Thank you, Karen. Slide 14. Coming back to where we started which is to look back at the plan 3 set forth at the start of the year. We have delivered on our promise to execute and drive sustained growth across our business. I’m incredibly proud of the team for these achievements. They do not come without a lot of hard work. We continue to show in all that we do, our commitment to involve innovation and execution on the hand of patients. Our work is now done, and we still have a lot to look forward to by end of 2023, on our path to transforming treatment of [indiscernible] autoimmune diseases .

Q&A Session

Operator: [Operator Instructions]. Your first question comes from the line of Tazeen Ahmad with Bank of America.

Tazeen Ahmad: Maybe, I just wanted to focus on one of the two data catalysts that you have in the fourth quarter, specifically for the pemphigus readout. Maybe, Tim, can you frame for us what to expect in terms of the top line results that you’re going to be presenting? And in terms of feedback that you’ve gotten from physicians, what would be considered good data? .

Tim Van Hauwermeiren: Thank you for the time for this question. It’s some of the key catalysts, I think, of the remaining part of the year. In pemphigus, the primary endpoint is mainly [indiscernible] around showing a statistically significant delta versus placebo. So we’re testing a [indiscernible] versus placebo in a background of steroid tapering. So the idea is to show statistically significant win on the primary endpoint, on an endpoint, which is complete remission on minimum therapy, that means a minimum dose of steroids. In the key secondary end points, we’re going to unpack elements which are really critical to patients. That means now, what is the extent to which we can take steroids. It’s very important, that’s what patients care about.

And also, what is the speed to disease control, that means stopping the formation of new lesions and then followed by the closing of the lesion. So this is in a nutshell, the key end points blending what the regulators care about and what patients care about. Thanks for the question. .

Operator: Your next question comes from the line of Derek Archila with Wells Fargo. .

Derek Archila: I actually have two brief questions, if I may. So first, I was just hoping you could talk a little bit about the sales momentum for VYVGART. You talked about some of the ex U.S. geos coming online. You’ve launched Hytrulo now, and this push into earlier lines. So I guess, as you think about the second half, which of these do you think is going to be the biggest incremental contributor to sales growth And then the second question, you stated in the PR, you’re going to start the TED trial for VYVGART. Given what we’re seeing with Tepezza’s recent performance in the thyroid eye disease market, mean has your optimism around that commercial opportunity changed at all? And when will you communicate the full details of that trial design? .

Tim Van Hauwermeiren: Thank you, Derek, and thanks for being us today. I’ll give your question 1A to Karen, and then I will take your question 1B, okay?

Karen Massey: Thanks Tim. Thanks for the question. And as you say, I think we continue to see strong momentum and I’d say consistent momentum in the launch of VYVGART. And actually, I would say that in the second half of the year, we’ll continue to see that consistency across all of the factors that you mentioned. I think, we continue to see that we’re penetrating earlier lines of treatment and expanding that prescriber base. I see, no reason why that won’t continue through the year. We have pricing reimbursement discussions ongoing in Europe, and so we believe those will continue through the year. And the Hytrulo only indications that we have positive feedback, and that will also contribute to our growth. So I think, one of the strengths that we have is that we are driving growth across all of those dimensions. And I think that should help us to maintain some consistent momentum. .

Tim Van Hauwermeiren: Thank you, Karen. On the TED question Derek, I can just invite you to be a bit patient. We are on track to start the trial once we’re there to vial trial design. I think they can also start to talk a little bit about how we think about positioning. We do believe that is an IgG-driven disease. We do believe the establishment of a linger correlation between the type of your auto antibody on the one hand, and your clinical symptoms on the other hand. And I think [indiscernible] is well placed to shine on all the dimensions of efficacy, safety and convenience. So stay tuned on the TED story. Thank you. .

Operator: Your next question comes from the line of Yaron Werber with TD Cowen.

Yaron Werber: Congrats on a great quarter. Maybe, as we look into the [indiscernible] GO/NO GO decision early next year, it’s in Q1 now, can you give us any parameters at all, as to what you’re looking for from a powering perspective in those first 30 or 40 patients? And what is the actual GO/NO GO metric?

Tim Van Hauwermeiren: Yes. Thank you, Yaron. I mean the best anology to draw is actually the anology [indiscernible] trials. So I think we need to see a minimum level of response in these first 40 patients, which give us conviction that this is not a placebo response, we’re seeing. And that actually which confirms that this is a true IgG-mediated diseases, we believe. So think of a seamless Phase II, Phase III, where we need to meet a minimum criteria from an efficacy point of view. Of course, we will look at the totality of the data, including safety, but it’s a seamless Phase II/III design in order not to lose time in order not to have white space between Phase II and Phase III. You know that we have conviction in — we think that configures actually serves to a certain extent as a derisking step for [indiscernible] .

And we believe, based on all the homework, this is fully IgG-mediated disease. Very exciting indication actually to focus on — very high unmet medical needs, very little innovation and the safety profile, I think the VYVGART will turn out to be even more important with the valuable than it will be [indiscernible] . So we’re very much looking forward to the decision for us. Thank you.

Yaron Werber: And is it just based on placebo? Or are you thinking a little bit on the corollary of some of the competition out there? There isn’t necessarily a time but some of it is showing robust responses? Or are you sort of — do you have that in your sights as well into the GO/NO GO decision? .

Tim Van Hauwermeiren: The GO/NO GO will basically look at the initial picture, which is emerging. I mean, we are not positioned there to look at long-term effects of the drug. Maybe you’re alluding to the long-term clinical benefit we have seen in some of the [indiscernible] in Phase II, where we actually did change is the course of disease. These are the data which we will also collect in the BP trial but they will not be part of the GO/NO GO decision point. Okay? .

Operator: Your next question comes from the line of Danielle Brill with Raymond James. .

Danielle Brill: I have a follow-up on the growth outlook for VYVGART in the second half. I’m just curious, from a modeling perspective, how we should think about the growth momentum. You’ve been seeing a consistent mid-20% quarter-over-quarter growth in the U.S. Is it fair to model that moving forward? And what kind of impact, if any, should we expect from the recent march of UCB’s CRM?

Karl Gubitz: Danielle, it’s Karl. Thank you for your question. I mean, I think that as the dollar numbers become bigger, we cannot expect a continued 20% growth quarter-over-quarter, of course. Also we invite [indiscernible] launch, I think it’s really important that we are patient while we get those payer contracts in place. It will take a quarter or 2 to get back. Remember, that’s how long it took us with VYVGART, 18 months ago. In terms of competition, yes, we now do have competition in terms of [indiscernible] . And of course, I think there comes a daily C5 later on. So the market is getting more competitive and also — we have another C5 who has started a TV campaign and it’s getting a little bit more crowded. Overall, of course, we still expect to grow, but I think the growth will probably be tempered as we look into the second half of the year.

Operator: Your next question comes from the line of Thomas Smith with Leerink Partners.

Thomas Smith: And let me add my congrats on a great quarter. Just wanted to ask a little bit of a high-level question. You have a really strong balance sheet, pretty incredible launch momentum in gMG. Can you just comment on how you’re thinking about strategic priorities here, given your significant cash balance, how you’re thinking about investment between commercial infrastructure or VYVGART indication expansion or early pipeline development? Are you considering any other BD opportunities .

Tim Van Hauwermeiren: Thomas, thank you for the question, and thank you for being with us today. The answer is that we’re going to fire from all cylinders. So, the effect that we have such a strong cash balance puts us in a position to fully invest in the commercial dimension. We’re leaving nothing on the table of the immense opportunity we have in front of us. . We do have an incredible pipeline. We have more than 60 clinical trials running now, but there’s a massive volume, where we see a sense of urgency to move forward with innovative trial designs and unpacking the clinical potential of our drugs. You can see that ARGX-117 has proven to be a drug with the first efficacy data in MMN and ARGX-119 is swiftly dose escalating to the Phase I study, so a lot to come.

And we have a wave of innovation, which is progressing through big clinical towards the clinic. So firing from all cylinders. That also means that we are in a position of strength, I think there’s a ton of innovation, which we’re bringing forward from our platform through our pipeline and into the marketplace. But we are, of course, always externally focused looking carefully for opportunities which we like that we’re entrepreneurial as a company. We also do not suffer from the [indiscernible] syndrome. So if and when we see things, it’s [indiscernible] light. — we will, without any doubt, enter into partnership conversations. Remember that our discovery model the IIP program, the immunology innovation program by definition, is a partnership model.

So partnering is in the DNA of the company.

Operator: Your next question comes from the line of Myles Minter with William Blair. .

Myles Minter: Just a question on the potential self-administration of VYVGART Hytrulo. Did you have those conversations during labeling when the product got approved for myasthenia gravis and what it would take data-wise to get self-administration in the label? Would the ability to potentially self-administer in the open-label extension efforts here be sufficient to get a self-administration option on that label for both CIDP and myasthenia gravis. .

Tim Van Hauwermeiren: Thanks for being with us today, and thank you for the question. Just a quick recap on the MG situation. I think here for the first-generation subcu, we’ve seen a combination of relative complex interface, a few steps you need to do with specifics of the disease indication like double vision, limited dexterity, muscle weakness and the combination of the 2 made it probably 2 high barriers for self-administration in the United States. Remember that the discussions are still ongoing in Japan and in Europe on the label, and we need to see what they will deliver. It’s too early to get ahead of ourselves, I think for CIDP, we need to go for a pre-BLA meeting with the FDA calibrating expectations. We need to prepare the SBLA file submitted — and as part of these conversations, I think we will also tackle the topic of self-administration.

Importantly, you need to know that we’re working very hard on the second generation of the subcutaneous product presentation of [indiscernible]. That is a prefilled syringe. That is a simplification of the user interface. And I think there, we have, again, a real goal to go to self-administration. But stay tuned step by step. I think the current VYVGART Hytrulo was already a significant step forward, helping us to penetrate on the market because it’s decoupling the patient for the infusion change so with avoiding infusion chain bottlenecks, and we are simplifying access for the patient to the drug because now any ACP can administer the drug anywhere. Thank you for the question. .

Myles Minter: Congrats on the quarter.

Operator: Your next question comes from the line of Yatin Suneja with Guggenheim Partners. .

Yatin Suneja: Just two quick ones for me. In terms of the patient mix currently on the drug, can you just comment, where are we in terms of refractory patient — and what percentage of the patients are getting retreatment and at what frequency? And then, the second question is thoughts on providing revenue guidance now that you have over a year worth of experience with the launch.

Tim Van Hauwermeiren: Yes. Thank you, Yatin, and thanks for being with us — and I will give the question on percentage of reflective patients and numbers of the treatment to add to Karen. And then may be Karl can very quickly comment on your revenue question.

Karen Massey: Yes. Thanks for the question. So I would say the patient mix and in particular, refractory, we at the early stages of launch, we were seeing a lot high usage in the refractory patients when physicians are just starting to get experience with the medicine. And what we’ve seen over time is consistent movement into those earlier lines of treatment, and we continue to see that shift and that momentum, as we execute on our plans. On the — in terms of the retreatment of frequency, what you can imagine is, of course, it’s a bell curve, some patients are — it’s individualized dosing. So some are very frequent, some are less frequent. But what we see in the data is that it’s right in line with what our assumptions were and what we provided before, which is around 5 cycles for a patient that has significantly changed. .

Karl Gubitz: Yatin , it’s Karl here. Thank you for your question. In terms of finance guidance, I mean, we’re not ready yet. I think, there are still too many variables. The German price will be really important. The China launch, we have omnichannel launching the subcu. So I think we need to see a few quarters of that, then we’ll get back to you on finance guidance. Thank you. .

Operator: Your next question comes from the line of Vikram Purohit with Morgan Stanley.

Vikram Purohit: So we just had one on the recent launch of subcu VYVGART into myasthenia gravis. Understanding it’s early, but is there any color you could provide on the demand trends you’re seeing from prescribers and patients towards subcu versus IV and — and if you’ve been able to green any trends at this phase of the launch on the types of patients that are leaning more towards subcu. And on that same topic, are you able to provide any commentary at this point on how you’re finding early receptivity towards the subcu option from payers. .

Tim Van Hauwermeiren: Yes. Thank you, Vikram, I’m going to try and limit the question to one. I mean, Karen, can you comment on subcu launch dynamics and any trends which we would see.

Karen Massey: Yes, absolutely. I mean it’s really too early to tell, any of the details that you asked about. But what we are seeing, we believe we have a strong value proposition and the outlook is strong. We are getting early positive signals. Those are mobile from when we’re out speaking with neurologists and the feedback we’re getting from our field force. Obviously, it takes a while, as Karl said, to get the payer policies in place. We have had one policy to be point but we need to continue to work on those. So that impacts the uptake rate at this moment. But we are seeing enrollments come in. We are seeing positive feedback, and we strongly believe we still have the conviction that the 30 to 90 seconds is a real advantage for patients and will really start to open the market up for community neurologists. And we’ll keep you updated as we learn more.

Operator: Your next question comes from the line of Allison Bratzel with Piper Sandler.

Allison Bratzel: Maybe, just a follow-up on an earlier question on the prefilled syringe. Could you just remind us of the expected cadence of updates on the subcu prefilled syringe. It does look like you’ve been enrolling out a Phase I bioequivalence trial in healthy volunteers for the PFS for a few months based on clintrials.gov, just curious, though, what other clinical work would need to be carried out for that to be fileable? And if you could just outline the expected data flow and development path there, that would be helpful.

Tim Van Hauwermeiren: Allison, thank you for being with us today. And I’m going to comment on the question. So there are a couple of data [indiscernible] which need to be generated in parallel in order to faster the PFS. So we have the bioequivalent study which you currently call out to be ongoing. We have the human factor studies, you need to complete. But then, of course, there’s a whole invisible train of CMC work, which seems to happen with our CDMOs. So it’s when these three come together and generate all the data, including stability data that you’re actually ready to submit. We will be getting more granular on time line over the course of next year, but the prefilled syringe really is the priority for us because we think it’s going to be an enabler of the long-term rollout of VYVGART and of course, a key enabler for cell administration. So stay tuned, once we work through these three data team generations. .

Operator: Your next question comes from the line of Alex Thomson with Stifel. .

Alexander Thompson: I guess I had a quick follow-up on pemphigus. As we think about steroid tapering in the drug arm, what does good look like there in your view? Is it no steroid? Or what is a good dose of steroids in these patients look like to be clinically meaningful?

Tim Van Hauwermeiren: Alex, thanks for that question. And just to get it clear, it’s not just on the drug arm that we do steroid tapering. We actually test active versus placebo. And in both arms, the background is steroid tapering protocols. So all patients start on the same amount of steroids. And then, with a predefined protocol, you need to step down in your steroid use and the endpoint actually is a complete remission that means that your free of skin lesions on the minimum dose of steroids and there’s a minimum dose the way it is used in pemphigus. So it’s a very stringent endpoint to reach. And actually, you need to be at 8 weeks in CR on minimum dose of steroids in order to effectively hit the input. So the bar is very high.

We cannot expect to a very high response rate in active, but it’s really designed to push placebo as close to 0 as possible. So let’s look for the delta, the statistically significant benefit between active and placebo. And this will mean on the primary end point — in the secondary endpoint is acceptable unpack other information, which actually is very relevant for patients in terms of total cumulative use of steroids, and the ability to effectively taper meaningfully and then, of course, speed to disease control and absolute of formation of new lesions. So that is the full extent, which we will be able to impact in the top line data.

Operator: Your next question comes from the line of Akash Tewari with Jefferies. .

Amy Li: This is Amy on for Akash. Just two from us. First, on non-COVID pops. Do you envision as far taken not to be given chronically as long-term maintenance? Or would it be more of a onetime treatment — and then finally, on your expectations, could you revisit your expectations for when you’ll reach profitability? .

Tim Van Hauwermeiren: Thank you,. And again, this is two questions for the price of one. So — but I’ll give the second question very quickly to Karl, but let me comment on pops first. This is a key question in non-COVID pop. So if my colleague and Chief Medical Officer, look would be here on the call, he would say, look, we need to learn whether it’s sufficient to cleanse the body in a one-off treatment sign or VYVGART to then be symptom-free or indeed, when you need to go into a more chronic dosing in non-COVID pops to basically effectively take care of the patients — this is one of the key questions we need to address next to the biology question in this Phase II proof-of-concept trial — and so stay tuned to all years to learn about that. And Karl, would you mind briefly commenting on the question on 1B? .

Karl Gubitz: Thank you, Amy. Yes, part to profitability, I mean, we’re not going to comment on that in terms of timing. What I will say is that we are a sustainable company. We stand on legs. And yes, I think that’s all we will say for now. Thank you. .

Operator: Your next question comes from the line of Joon Lee with Truist Securities. My apologies. Your next question comes from the line of Rehan Sharma with Goldman Sachs.

Rajan Sharma: It’s Rajan. Just on CIDP and posed data, is it safe to assume that you’re going to be positioning VYVGART got as a first-line option there to compete directly with IgG. And then, what kind of additional work do you think you need to do to convince the treating community that there is more pathogenic IgG activity in the disease than they may have previously assumed?

Tim Van Hauwermeiren: Yes. Thanks for that question. I think there will be just like for MG, a lot of education going on, educating our audience on the fact that it is in IgG-mediated disease based on to data in hand. And I think, you correctly called out that the way the trial is designed and the way the data panned out is that there’s no need to niche this product into a refractory line or a line of IVIg phases. I think the drug was equally effective in patients which were on a steroid background therapy, which has been on IVIg or SCIg and background therapy, all of which were either newly diagnosed or even in the last 6 months. So equal efficacy equal to respond to the drug across the board. So we do not see any reason to actually go and actively reach ourselves in what we think is a sizable opportunity. .

Operator: Your next question comes from the line of Joon Lee of Truist Securities.

Joon Lee: Congrats on the progress. With CIDP data on hand, how are you thinking about commercial competitiveness of [indiscernible] versus IVIG and CIDP and at steady state, how do you think — how do you see the breakdown of IVIg versus FcRn targeted products in CIDP?

Karen Massey: Yes. Thanks for the question, and I can take that. It’s a little bit too early for us to comment on sort of IVIG versus FcRn market share, if you will. We still need to continue to do the work up on the commercialization plan. But what I can say to your first question, we see a really strong value proposition, when we look at the holistic — the holistic picture of VYVGART in CIDP. When you think about the efficacy, and Tim just talked about the strength of the data there. With safety and tolerability, I think, was incredibly impressive. We — it was weekly dosing — and we feel that the safety profile continues to hold up. The tolerability is really clear. And then obviously, the 30 to 90 seconds injection. So we believe that we have a full package that we’ll be able to compete really well in the market, and we have conviction in the product, and we’ll do the work up and share some of our thoughts around what that might look like versus IVIG in the coming months.

Operator: Your next question comes from the line of Samantha Semenkow with Citigroup.

Samantha Semenkow: Just a follow-up on pemphigus. Assuming the data is positive on the primary and some of the secondary endpoints and the read on the fourth quarter. How do you envision VYVGART fitting into the treatment paradigm? Just curious, with your conversations with physicians and how you design the trial and if there are any barriers, you would have to overcome with current treatment patterns?

Tim Van Hauwermeiren: I’m excited about our opportunity in the autoimmune listing disease space. The interesting thing about pemphigus is that actually, it’s an area which is wide open. So the only thing in option these patients have today is actually steroids, which they hit with a passion and then rituximab which has a slow onset of action, significant side effects and actually a real-world efficacy, which is significantly lower than what they have shown in the clinical trials. . So if you now look at the Phase II clinical data for [indiscernible] patient with a very fast onset of action, a very high response rate and an unexpected durability it’s not difficult to see that you can start to drive a wedge between steroids and rituximab.

And so, I think there’s a unique opportunity here to go and rethink into the treatment paradigm, but let’s not get ahead of ourselves. Let’s wait for the Phase III data because they will inform us about the best way to position the drug going forward. But excited about the opportunity, and thank you for the question.

Operator: Your next question comes from the line of Joel Beatty of Baird.

Joel Beatty: What’s — for the patients starting on Hytrulo, what’s the mix of patients you’re seeing switching from IV VYVGART versus patients for which the Hytrulo is there are first experience with [indiscernible] .

Karen Massey: So, I think I heard your question that it was around switches from Hytrulo or from VYVGART to Hytrulo. And it’s just too early to tell. We haven’t seen the data on that yet, but I don’t see we’re getting strong feedback on the value proposition of Hytrulo.

Tim Van Hauwermeiren: Joel, it would be disappointing within this would just be a switch dynamic. Yes, Karen? .

Karen Massey: Yes, absolutely. I can comment on that. I think we’ve commented on that before. The strategy here is not that we’re switching to a VYVGART to VYVGART Hytrulo, but rather, we’re trying to open up access for patients in the community and elsewhere where the 30 to 90 second injection is a better option for fitting into their lives. So yes.

Operator: Your next question comes from the line of Douglas Tsao with H.C.Wainwright. .

Douglas Tsao: Just following up on Hytrulo. You’ve obviously spoken about the opportunity now to get into the community more. I’m just curious, as you’ve been in the field more, what percentage of the market does this now open up, meaning how many patients were sort of community-based and we didn’t really have great access to VYVGART for whatever reason. .

Karen Massey: Yes. Look, it’s a great question. I mean, I think the — we still see the addressable market of VYVGART and VYVGART Hytrulo as that 17,000 that we shared before. And we think Hytrulo allows us to really penetrate more into the community, get closer to being used after the oral, and so really opened up that segment as a market. But the way that I would think about it is that the addressable market is $17,000. And we’re on the front end of that, as we — at this point in launch. .

Operator: Your next question comes from the line of Leland Gershell with Oppenheimer.

Leland Gershell: With respect to empasiprubart, as you look forward to the Phase II second cohort MMN next year, is there a particular bar you’re looking to meet? Or is that the data merely to inform next steps? And I also want to ask with respect to that asset, are you expecting to start either both of the POC studies in DM or kidney this year? .

Tim Van Hauwermeiren: Yes. Thank you. I mean empasiprubart pronounced the name of empa. I mean, I would like to recall that. So empa is an excited molecule — the Phase II trial is redesigned to generate PK/PD data and efficacy and safety data to inform our model. Ideally, the two dose cohorts give us sufficient information to triangulate what the dose should be. What we have said publicly is that on a dose cohort number one, we not only passed an independent data review committees are blessing from a safety and tolerability point of view. But I think, we also saw confining efficacy allowing us to venture into dose cohort 2. The ideas that we see a separation between the 2 dose cohorts. So the PK/PD model is fully informed. But, I believe that based on the efficacy we have seen already, we think we have a drug in MMN.

The remaining question is what is the dose going to be for Phase III, contingent document, of course, safety — and yet this is a pipeline product opportunity and the management exciting as an indication. But for the other two indications, which we’re lining up are equally exciting. We are on track to start both trials, as we line out in the press release. So soon this molecule will be playing already in 3 indications, and we think there is more to unpack in terms of opportunities. So please stay tuned. Thank you for the question.

Operator: [Operator Instructions]. Your next question comes from the line of Xian Deng of UBS.

Xian Deng: So you have quite a few catalysts coming up, BP, pemphigus TED, et cetera, and there are many more indications in the pipeline. Just wondering, with so many indications, is there anyone that you would like to highlight, I think if there’s any one that’s higher risk others or if there’s anyone that if you make it, that will be much bigger than others in terms of commercial opportunities. Yes, anyone that you would like to highlight in particular?

Tim Van Hauwermeiren: Yes, that’s a really challenging question to me because I’m equally excited about all the indications. And it’s very difficult to tell you which one is going to be ultimately the biggest one. But I know that when I sum them up, this is going to be in its totality, a very sizable 500 product — let me quickly call out ITP will be wrong track to get our marketing authorization in Japan. So soon, we’ll have two indications on the market then I’m very excited about our myositis trial, which is very innovative. It’s a basket trial, the first one where legal [indiscernible] distinct subpopulation in myositis where these people are in very high unmet medical needs is not really effective treatment options at all.

So we’re really looking forward to the myositis trial, and I’m paying close attention to it. I’m very excited about the universe of opportunity in the autoimmune listing diseases it both pemphigus and bullous pemphigoid progressing very well. And then, of course, they have a whole third wave of indications. But frankly speaking, we’re not taking on more biology risks. We still in all in the sweet spot of the drug where there is strong conviction on biology, clear and feasibility from a clinical [indiscernible] execution point of view and reveal commercial opportunity to transform the last of these patients. So this is the universe opportunity, which we’re approaching. Thank you for the question.

Operator: As there are no further questions at this time, this will conclude today’s conference call. Thank you for joining us. You may now disconnect your lines.