RF Industries Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
February 29, 2024

There are 17 speakers on the call.

Operator

Good morning. My name is Rob, and I will be your conference operator today. I would like to welcome everyone to the call. At Thank you. I'd like to introduce Beth Del Jocco, Vice President, Global Head of Corporate Communications and Investor Relations.

Operator

You may now begin your conference.

Speaker 1

Thank you. A press release was issued earlier today with our full year 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 development, regulatory timelines, the potential success of our product candidates, financial projections and upcoming milestones.

Speaker 1

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 Vanharemiren, Chief Executive Officer Carl Gubit, Chief Financial Officer and Karen Massey, Chief Operating Officer. I will now turn the call over to Tim.

Speaker 2

Thank you, Beth, and welcome, everyone. I'll begin on Slide 3. It has been an overview of incredible execution by the Agenus team, setting us up to build on this momentum for the year ahead. At the core of everything we do is our mission to transform the lives of patients suffering from autoimmune diseases. And today, we are in a better position than ever to deliver on this mission, reaching more patients globally with our 1st in class innovation and bringing hope to the autoimmune community on what a novel treatment can offer.

Speaker 2

We see multiple opportunities to expand our patient impact this year and are investing across our business to do so. These innovation horizons serve as a roadmap for how we will build long term value by expanding the gift card opportunity, advancing our pipeline and bringing the next wave of IND candidates into the clinic. On today's call, I would like to highlight recent news and walk through upcoming milestones in the context of these horizons. Slide 4, let's start with the business opportunity. We had an incredible second year of launch driven by the ambitious strategies and seamless execution of our commercial and medical teams and we are still at the beginning of what we hope to achieve.

Speaker 2

1st and foremost, the launch trajectory demonstrates the significant unmet need that still exists with gMG and the opportunity for an innovation like Vipguard to deliver differentiated outcomes for patients. As a part of our commitment to the broader MG community, we will initiate a registration trial in seronegative patients this year, which if positive could allow us to visit the 15% of GMG patients who are not served by our current label. Beyond MG, we continue to demonstrate the breadth of possibility for FcRn across autoimmune indications and we have launched preparations underway ahead of anticipated regulatory decisions in ITP in Japan in March and in CIDP in the U. S. In June.

Speaker 2

We will be ready to tackle these anticipated opportunities as we leverage our key learnings from our launch playbook to best position ourselves for success. Slide 5, TUKA continues to make headway in the clinic. The Phase 3 TED study is able to start this quarter and will be the first to utilize our prefilled syringe from the onset. We are expecting relapsed from 5 Phase 2 studies, including insurance, post COVID POTS and 3 subtypes of myositis. And we expect to provide an update on our plans in full of stentagol later this year once the team has had the opportunity to analyze the data from patients who are involved in VALORATE Stage 8.

Speaker 2

This is part of our commitment as a learning organization and our ongoing work to double click on the clinical feasibility of current and future efgartigimod studies based on the insights from ADVANCE SC and ADDRESS. This will be another year where we learn more about the broad potential of FcRn through our next wave of indications, advancing our leadership of the class and unraveling important findings about the underlying biology of these autoimmune diseases. Today, we will focus on our expectations of success around children's as that will be the first of the 5. The ROLLE study has a target enrollment of 30 moderate to severe patients randomized to 1. The study is not powered for efficacy, so it will rely on the depth of data we will gather from each patient looking at various endpoints including CREST, SDI, SPREE and biomarkers across patients.

Speaker 2

We have a few objectives with the signal finding study. First, to confirm the role of IgG autoantibodies in mediating disease in sugarcans. 2nd, to evaluate a combination of efficacy and biomarker data to gain sufficient confidence to move forward in this indication. And third, to inform potential patient selection and endpoints to design a winning registrational trial to amplify any signal we observe in Phase 2. We plan to employ a similar approach in our evaluation of PARP looking at the depth of data across the enrolled patients to make an evidence based decision to move into a Phase 3 study.

Speaker 2

With myositis, we have a seamless Phase twothree design, which will expedite the transition from the first 30 patients of each subset into a registration study of 1 or more of the successful proof of concept has been established. Wrapping up on efgapricumab, I'm very proud of all that we have accomplished in pioneering this new class of medicine. Proof of concept has now been demonstrated in 9 out of 9 indications across the CRM and we believe this is still just the beginning of the broader opportunity. Slide 6. Turning attention to our next horizon of innovation, I want to briefly touch on our pipeline progress.

Speaker 2

NPAP is our 2nd pipeline in a product opportunity from which we have showed compelling MMN data from the first patient cohort earlier this year. This is a program that emerged from our IIP and perfectly demonstrates how we like to build opportunity from our discovery engine into our pipeline and now towards a registration trial in its first indication. In collaboration with Professor Eric Hacks, we built what we believe is the 1st in class and best in class treating antibody against C2 and have conducted translational work to highlight where targeting C2 could have the most impact. Out of this, we identified that complement activation in MMN happens upstream in the complement cascade. We designed an innovative trial and in the first quarter we demonstrated a 91% reduction in the need for IVIg rescue compared to placebo.

Speaker 2

We are now awaiting results of the 2nd cohort to inform the final design of the registrational trial and look forward to sharing the full Phase 2 data set this year. The MLM opportunity fits perfectly within our expanding capabilities in neurology as does ARGX-one hundred and nineteen, our 3rd pipeline program. This molecule will go more into focus this year as we move beyond healthy volunteers into CMS and ALS patient studies. Of note, we recently initiated natural history studies in both CMS and MMN to engage each of their respective patient communities. This falls in line with our strategy to better understand the real world experience of patients and will help us identify potential participants in upcoming studies.

Speaker 2

Slide 7. Finally, and core to our sustainable growth is our 3rd innovation horizon, our immunology innovation program. The track record of success of our IAP goes well beyond efgartigimod and ENPA with 9 programs tested in humans since inception. We demonstrated the efficiency of this pipeline engine by nominating 4 new molecules last year, all are on track to be filed with IMDs by the end of 2025. We will continue to invest in our internal discovery engine and technical capabilities, combining our antibody engineering and clinical development expertise with the knowledge of leading scientific collaborators as we advance our next wave of molecules.

Speaker 2

I will now turn the call over to Carole. Thank you, Tim. Slide 8. The Q4 2023 financial results are detailed in the press release from this morning. I will highlight the key points here.

Speaker 2

Revenue in the 4th totaled $418,000,000 This reflects $374,000,000 in product net sales and 43,000,000 in our income and collaboration revenue. Our collaboration revenue includes a $30,000,000 milestone payment from AbbVie for advancing ARGX-one hundred and fifteen to Phase 2 as well as royalty income from Zai Lab of CAD0.7 million for VifGuard sales in China. The breakdown per region of a 374,000,000 in product net sales is 326,000,000 in the U. S, dollars 17,000,000 in Japan, dollars 24,000,000 in EMEA and $7,000,000 in China. Globally, we saw growth of 14% or $45,000,000 in our product net sales from Q3 2023 to Q4.

Speaker 2

Operating expenses in Q4 were $556,000,000 This is an increase of $136,000,000 over Q3 2023, driven primarily by the recognition of a priority review voucher we submitted with SBLA filing for CIDP. This impact of the PRV was $102,000,000 and brings total R and D cost for the quarter to $306,000,000 Net loss for the quarter was $99,000,000 bringing the full year loss to $295,000,000 We continue to have a strong balance sheet with $3,200,000,000 in cash, cash equivalents and current financial assets at the year end. The financial guidance for 2024 is as follows. Based on our current operating plans, we expect the combined research and development and selling, general and administrative expenses in 2024 will be less than $2,000,000,000 and we expect to utilize up to $500,000,000 of cash in 2024 on our anticipated operating expenses as well as working capital and capital expenditure, including investment in our supply chain. I will now turn the call over to Karen, who will provide details on the commercial front.

Speaker 1

Thanks, Karl. Slide 10. Echoing Tim, I'm thrilled with the impact VIV Guide is having on patients and their loved ones. With over 6,000 patients on therapy, the response from the patient community has been tremendous and we have set the bar high for what a novel gMG treatment can offer. I want to first thank the team because the success of our launch can only be achieved through tireless dedication and a firm commitment to our mission to transform the lives of autoimmune patients.

Speaker 1

Today, I would like to focus on 3 key areas, which I believe will advance Zivgard's leadership and maximize the impact we can have on patients globally. 1, reaching new gMG populations with Zivgard 2, leveraging our know how from gMG as we prepare to potentially launch in CIDP and ITP and 3, building a commercial engine that can reliably and repeatedly maximize value creation and patient impact. Slide 11. Let's begin with our MG launch. We closed out 2023 with $1,200,000,000 in revenues, including over $1,000,000,000 in the U.

Speaker 1

S. Alone, which is a remarkable feat in just our 2nd year of launch. Importantly, this tells us that patients place a high value on innovative treatments such as VIVGAT to meet the demand for safe and effective treatment alternatives in the gMG treatment space. We continue to see double digit quarter over quarter growth and we contribute this momentum to several factors, including a broader prescriber base, the continued shift to patients earlier in the treatment paradigm and additional regulatory approvals and launches in our ex U. S.

Speaker 1

Markets. We see consistent growth of our prescriber base having breadth and depth amongst neurologists and further reach into community centers. Prescribers are becoming increasingly comfortable with efficacy and safety of Zivgard, which is supported by a body of real world evidence demonstrating the consistent value Zivgard can deliver to patients. As an example, we see rates of minimum symptom expression in the real world that mirror the data from our clinical trial, indicating that patients have the potential to achieve quality of life scores that are comparable to healthy populations. And we have over 4,000 patient years of safety follow-up with efgartigimod, which continues to support our consistent safety profile and with physicians this is a key differentiator.

Speaker 1

We are observing increased utilization of both VIVGAR and VIVGAR HYTULO in earlier lines of therapy with an impressive 55% of patients coming to VIVGAR directly from orals and we only expect this trajectory to continue. Although, VIVGAR still comprises the majority of prescriptions, we are seeing more traction with Hytrullo likely supported by access dynamics. Favorable payer policies that mirror Vivgart and a dedicated J code in place. We are committed to innovating on the patient experience even further by advancing the development of our pre filled syringe or PFS this year. The PFS will allow us to introduce VIVGAR to a new patient population with an increasingly easy to use interface.

Speaker 1

It is our goal to make a pre filled syringe available for both MG and CIDC. And importantly we believe this will move us one step closer to the possibility of self administration in the U. S. Slide 12. The momentum ex U.

Speaker 1

S. Has been strong with multiple launches and approvals already underway for 2024. The majority of our current sales are still in the U. S. But over time we expect global markets to make increasingly larger contributions to total revenue, especially as the speed at which we bring VIVGAR into new territories is picking up.

Speaker 1

I'm very proud of the team in Europe who's been working hard to secure reimbursement at a record pace in Germany, Italy, Spain and recently Belgium, with patients receiving access to VIVGAR in half the average time historically needed by orphan drugs. We're also seeing credible uptake in China through our partnership with Zai Lab driven by our recent inclusion on the NRDL. We are still at the front end of reaching patients who could benefit from VIVGAR and we remain committed to deliver on our promise of reaching the broader set of MG patients possible. We also know that the MG opportunity continues to expand with competition and innovation driving growth of the overall market. With a robust knowledge of FcRn and one of the most expansive sets of clinical and real world data generated to date, we are in a position of strength to continue to lead this market.

Speaker 1

Slide 13. We're excited by the opportunity to expand our patient impact beyond MG this year with 2 upcoming regulatory decisions in ITP and CIDP. Today, we're going to focus on the CIDP opportunity. CIDP is a debilitating disease and one where patients continue to face significant burden, both from the symptoms of the disease, but also the demands of the available treatments. Our strategy will be to leverage the learnings and infrastructure we built with MG and apply them to the unique dynamics of the CIDP market to best position ourselves for success.

Speaker 1

The key learnings and overlapping strategies between MG and CIDP give us more confidence in the long term potential of VISCAR HYTULO as a transformational treatment in CIDP. But we also recognize there will be some unique challenges that may impact launch trajectory. First, as standard with most launches, we will need to wait approximately 2 quarters for payer policies to come into place. 2nd, IVIG is well entrenched and on label for CIDP patients. CIDP is a progressive disorder with many patients fearful of symptom regression who may not want to change from their existing therapy.

Speaker 1

Having said that, we're very motivated by the strength of our AGEAR data to bring a new treatment option to the CIDP community, which would be the first real innovation in decades. And we'll be prepared with thoughtful strategies at the time of the FDA's decision on our submission. Slide 14. Before I turn the call back to Tim, I want to talk about the commercial engine we're building as we think ahead on how we can reliably and repeatedly maximize the value we offer to autoimmune patients. We continue to learn about the unique challenges and resulting gaps in treatment that patients suffer with autoimmune diseases.

Speaker 1

Most notably, there's an overall lack of innovation. Bold entrenched therapies are considered sufficient. Patients take a long journey to get to diagnosis and often that diagnosis does not result in clear answers. Finally, there are high barriers to access even when innovative treatments become available. At argenx, we're making a long term commitment to these communities that we hope extends well beyond the treatments we can deliver.

Speaker 1

Some of the areas of focus for us include generating awareness of the disease and the challenges that patients and their supporters face whether through online communities, our DTC campaigns or our advocacy efforts. We want to raise the bar on treatment expectations. Our goal is not just to replace old treatments, but to reset expectations. We want to move the goalpost so that patients aim to regain function or going back to things they enjoyed before their diagnosis. We want to drive innovation beyond the molecule and on the patient experience in the form of new product presentation and a best in class support system.

Speaker 1

And we're delivering on our commitment by providing broad and simple access to patients. These are the types of investments we want to make as we grow and expand into new patient populations because we're in the business of transformation and advancing beyond incremental change. We're making a long term commitment to deliver repeatable, sustainable, comprehensive value to patients, their care teams and to the broader autoimmune community. And with that, I'll turn the call back to Tim.

Speaker 2

Thank you, Karen. We laid out an ambitious plan for the year and at 2 months in, we are already in a great position to deliver on our goals. We are energized by the incredible cadence of opportunities that remain ahead and will continue to approach these argenx way with relentless execution. Before we turn the call over to Q and A, I want to take a moment to thank the individuals who drive our success. We would not be where we are today without the tireless efforts of the argenx team.

Speaker 2

I also want to thank all the patient communities and physicians who inspire our efforts to bring better outcomes to those suffering from autoimmune diseases. Thank you and we look forward to your questions.

Operator

Your first question comes from the line of Tazeen Ahmad from Bank of America. Your line is open.

Speaker 1

Hi, good morning. Thanks for taking my questions. Just a couple based on your prepared remarks. Regarding the CIDP launch, if we assume that it launches, let's say, in early July, you've talked about taking a couple of quarters to really get full insurance reimbursement. So just directionally, how should we be thinking about any type of contribution from CIDP sales in calendar year 'twenty four?

Speaker 1

And then I have a follow-up. Thanks for the question, Pazeen. It's great to hear from you. So maybe I'll provide a few thoughts on CIDP launch and what we're learning. And Carl, do you want to make any comments from the financial perspective?

Speaker 1

So we're in launch preparations as you mentioned for CIDP and the more that we learn through market research, I'd say the more confidence we have in the value that we're going to bring to patients in this market. It's a debilitating disease and there certainly is a really a very high unmet need in this patient population. We're very confident. As you said and as we shared in the prepared remarks, there's a few things that will impact the uptake this year. There's the payer policies getting in place and the fact that this is a debilitating disease, a progressive disease.

Speaker 1

So there's some what we call stickiness likely of the patients remembering that IVIG is on label for those. So we could so we're not expecting a rapid uptake in the latter part of the year. But Carl, do want to comment on any further than that?

Speaker 2

No, I think you've said it all. I think the payer contracts, which will take a quarter or 2 to put in place, will definitely delay some of those revenues into 2025.

Speaker 1

Okay. Thank you. And then also, a comment from your press release about price decrease in Germany. I know historically in Europe, there is just naturally price deterioration. But are you calling out this particular decrease because it's a bigger price decrease than you would have normally expected, just to give a little bit of color?

Speaker 1

Thanks.

Speaker 2

Yes. So thank you. We had a really successful launch in Germany and we of course had a really good price in Germany. That actually meant that we exceeded the threshold for the classification of an orphan drug, which automatically triggers a price renegotiation with the German authorities. We have now entered into that negotiation and we have to assume a lower price.

Speaker 2

We don't know what that price will be. We're negotiating it. We will only know by the beginning of 2025, Q1 2025, but we will be accruing for that lower price from 1 January 2024 as the difference between old and new price will have to be a rebate back to the government. So Tazeen, I mean, this is the course we were so successful and exceeding that threshold of $30,000,000 which is also in drought designation.

Speaker 3

Okay. Thank you.

Speaker 4

Thank you

Speaker 2

for your question.

Operator

Your next question comes from the line of Derek Archila from Wells Fargo. Your line is open.

Speaker 5

Hey, good morning and thanks for taking the questions. Yes, just 2 from us. So I just wanted to understand the percent of the 2,300 prescribers for MG that currently treat CIDP patients. And then also, I guess you had a comment in the prepared remarks around new patients that you'll be able to access with the prefilled syringe. So I just want to understand who those patients are specifically that you can't really access right now with IV and Hytrullo?

Speaker 5

Thanks.

Speaker 1

Thanks for the question. I'll take them 1 by 1. So what we're learning as we look into the CIDP market is that there is significant overlap between the prescribers. As you said, the 2,300 prescribers that are prescribing VIVGAR for MG and potential future prescribers for CIDP. CIDP is treated much more in the community is what we're learning.

Speaker 1

And as you well know, one of our strategies for MG and one of the things that we're seeing is that out in the community, we're seeing a lot more confidence with using VIVGOT for MG based on the real world efficacy. We're seeing real world efficacy that reflects the clinical trial efficacy. The safety that continues to hold, we have over 4000 years of patient safety data now. So we see so there is significant overlap in those in that prescriber base. In terms of the new patients that you asked about with the prefilled syringe, I would say this just continues the momentum towards our strategy of moving earlier into the treatment line.

Speaker 1

So in MG, we stated that the goal is that we believe MG should be used after orals. We're seeing 55% of our patients coming directly from oral. The IV having the subcutaneous like true option and then moving into the prefilled syringe will just allow us to continue to execute on that strategy.

Speaker 2

Thanks for the question.

Operator

Your next question comes from the line of Rajan Sharma from Goldman Sachs. Your line is open.

Speaker 6

Hi. Thanks for taking my question. Just looking ahead to thyroid eye disease, where you're initiating the Phase 3, and I realize that we'll probably see the clinical trials, entry relatively soon. But could you perhaps just talk about how you're thinking about positioning relative to incumbents in that market? And maybe related to that, could you just comment on what underpins your confidence in moving to Phase III?

Speaker 6

We've obviously seen some competitive proof of concept data. But just wondering if there's anything beyond that, that is driving the decision here. Thank you.

Speaker 2

No, thank you. So I will take this question. The conviction in TAD, of course, is driven by biology that's done based on the internal homework, but also peer reviewed data from another player in the SCN class. There are now 9 indications out of 9 for the class. You know where we have seen successful group of concept, TED is one of them.

Speaker 2

So the base we are marching based on that combined prediction. And differentiation, we hope will come from different modes of action. So we are convinced TD is an IgG auto antibody driven disease. We think that by lowering these auto antibodies, we could have the most profound effect on the disease, but we also of course can leverage a very clean safety profile and a very competitive way of presenting the product. So these are the 3 pillars to try and be competitive in the TD markets.

Speaker 2

Thank you for the question.

Operator

Your next question comes from the line of Yatin Suneya from Guggenheim. Your line is open.

Speaker 7

Thank you for taking question. I have

Speaker 8

a question on the Sjogren disease. Could you just talk about the disclosure that you expect to make? And given the composite nature of CRAS, will you decide to move forward even if you don't see a strong signal or even if you just see a signal on other domains? And then maybe along the same line, like from a regulatory standpoint, is there a well defined regulatory path here or is there an endpoint of choice from registration standpoint? Thank you.

Speaker 2

Jatin, this is a great question. Thank you for asking it. And I want to call out that Sjogren's is a signal finding study where we will look at the totality of data across multiple clinical endpoints, not just CREST, but also actually Clinadry and S3 and then a string of biomarkers, which we're carefully monitoring. And what we want to see is consistency between the clinical endpoints and the biomarkers in order to get conviction and march forward. And from a regulatory point of view or endpoint point of view, we will need to have, of course, an interaction with the regulators.

Speaker 2

But mind you that there are a number of Phase 3 registration trials running, where actually the primary endpoint is SDI. So we assume this is the endpoint the FDA would like to see and CREST is relatively new. So stay tuned if and when we will have positive signal data and we will entertain a conversation with the FDA on this topic and afterwards communicate. Thanks for the question.

Operator

Your next question comes from the line of Jaron Werber from TD Cowen. Your line is open.

Speaker 2

Right.

Speaker 9

Tim, maybe just a follow on on Yatin's question also on Sjogren. So your study is 36 patients, J and J were in 3 arms, you have 2 and they obviously had 163 patients. So they obviously had a much bigger study and sounds like it was stat sig as you mentioned. The endpoint is a little different, but you have a composite that includes their endpoint. So I guess my question is, it's a pretty good trial design.

Speaker 9

And so give us a little bit of a sense, is it completely under power to show any statistics at all? And is there a certain threshold of an effect that you want to see that you consider to be positive to move forward? Thank you.

Speaker 2

Yes. I want to call out as an overlap between our endpoints and the J and J endpoints. The reason, of course, they're doing free arms because they still need to sort out a dose which is not something which we have to do. You know that you can dose this card at full power without paying the safety penalty. And we will be able to look at consistency of data.

Speaker 2

So it is defined what a clinically meaningful improvement is on an entire score, on a CREST scale, on an SP scale. And then of course, we want to see the biomarkers move in the right direction. The biomarkers are a combination of biomarkers from the circulation, but also from the biopsy. And it is important to see the needle move on a clinical endpoint but we're going to pay special attention to what's happening in the biomarkers section, what's happening in the biopsy and are these moving in a consistent fashion. So conviction on biology, we have also stratified for high and low IgG levels.

Speaker 2

About 50% of Sjogren's patients have high IgG types, 16 grams per liter or more. I think it's a very interesting stratification factor. The other way we look at the data is looking for patients which are positive for the raw antibody or not. So I think it's going to be a small sample with a very deep look into patients and a very rich look. So way beyond the p value on an endpoint.

Speaker 2

Thanks for the question.

Operator

Your next question comes from the line of Allison Bredzel from Piper Sandler. Your line is open.

Speaker 10

Hey, good morning and thanks for taking my question. So just to follow-up on some of the discussion on the prefilled syringe, could you just expand on the expected cadence of updates on that this year? And just what gives you confidence and potential approval of the prefilled syringe in 2024? And then just more broadly, given competitive updates in the field, how important do you see self administration via syringe or auto injector in determining your competitive positioning in a market with multiple FcRn agents approved? Thanks.

Speaker 2

Thanks, Allison, and thank you for the question. So I'll take the first one and I will hand over to Karen to explain how we seek to continue to lead the space also from a patient's exogenous point of view. But first, at EPFL syringe, it is high on the strategic agenda of the company this year. You know that we decided to launch the 1st generation subcu as fast as we could with the patient in mind. This is our 2nd generation of pre filled syringe and of 2 important data sets we need to collect in order to be ready to submit the dossier with the FDA.

Speaker 2

The first data set is a bioequivalence study. The second data set involves a human factor study and we are on-site to give you an update during the first half of this year in terms of the progress we are making with collecting these data points. But it is a high priority for the company to be in a position to submit this year with the FDA. And maybe, Cam, you can continue on part 2

Speaker 1

of the question, please. Yes, absolutely. I'm really excited for the prefilled syringe and the potential to bring that to patients. Look, we talked earlier about there's a significant unmet need in this market and we can see that patients are looking for innovation. And I think our revenue last year demonstrates that in just our 2nd year of launch.

Speaker 1

MG patients want to get their lives back and PFS and self administration help them to do that. So I think that's the real reason that the innovation of PFS is important. And then and I think for us from a Vistar perspective, it just reinforces our leadership in the market. So first thing FcRn, I talked earlier about how we're demonstrating that real world efficacy, continued safety and then this just brings another product presentation potentially to the market. So we're confident that we're bringing the innovation to the market that the patients really need.

Operator

Your next question comes from the line of Vikram Parodi from Morgan Stanley. Your line is open.

Speaker 11

Hi, good morning. Thank you for taking our questions. We had 2. First on bolus pemphigoid, just curious for the decision you're contemplating internally, what are some of the key considerations at play right now? And what do you see as the potential scenarios that could result from the update you're planning on providing us later this year?

Speaker 11

And then secondly, based on market research you might have done for MMN, I was curious to see how you segment this patient population and which segment of the patient base you think efgartigimod could be I'm sorry, empaziprutibart could be a viable therapy for? Thanks.

Speaker 2

Yes. Thanks, Vikram. Then I will take question 2 on our NMM patients. For buuspemcivoid, I think the data analysis is ongoing as we said. And the key consideration is going to be what is the impact of the background medication on the disease causing all antibodies And is there a clinical trial design conceivable where actually efgartimod can still shine because it is knocking down autoantibodies like health, but are you still able to show a delta over the background medication.

Speaker 2

And there is a thread and deal between what we want to achieve as a company and what regulators actually will want to see as a minimum background therapy. So I think we are well advanced with the homework. We will do again consult with our experts during AAD in the coming weeks. And I think we will be ready to think through a couple of scenarios based on that feedback. So stay tuned.

Speaker 2

This is an important discussion internally for the company. And we believe that unmet need in BP warrants is very thoughtful consideration. Thank you.

Speaker 1

Yes. And on the topic of MMN, MMN is the type of disease I think that we say that we like at argenx because it's characterized by the fact that there's an enormous unmet need in these patients. There's been limited innovation and these patients continue to progress despite treatment today. So they are of all of the diseases that we're studying, we get the most calls from MMN patients that are asking for innovation to come to the market. So these are the types of diseases that we like because we think we can really raise expectations and reframe what patients can expect.

Speaker 1

We think we'll do that with impasseprovat. In terms of what the market research is telling us beyond that, We're not breaking down our clinical trial design as yet, but beyond that, but rather just thinking about what's the broadest patient benefit that we can create.

Speaker 2

Vikram, remember that in MMN at least 85% of the patients share that pathogenic autoantibody that IGM autoantibody against a GM1. We actually think that 100% of the MMN patients have that auto antibody, the disease causing antibody, it's a sensitivity detection issue. So we think that the underlying biology is pretty much unifying for all MMM patients. So I think we're in a good position.

Operator

Your next question comes from the line of Joel Beatty from Baird. Your line is open.

Speaker 6

Hi, thanks for that question. Are you seeing or anticipating any meaningful differences in the frequency of dosing between IV and subcu and then soon prefilled syringe and eventually auto injector?

Speaker 1

Thanks for the question. No, we're not seeing any differences between the formulations. It's really about product presentation for patient convenience.

Operator

Your next question comes from the line of Danielle Brill from Raymond James. Your line is

Speaker 5

open. Hey, guys. This is Alex on for Danielle. If I recall correctly, it looks like you updated prevalence estimate for CIDP, which are higher than your previous projection. Just curious what factors you saw that are attributed to the TAM growth as it pertains to diagnosis rates, treatment rates and potentially life expectancy?

Speaker 5

Thanks so much.

Speaker 2

Yes. I wouldn't read too much into it. I think previously we shared a number from official sources specifically for U. S. And EU5.

Speaker 2

We now gave you the accurate number what we think is accurate for the key markets in which we play, but our view on prevalence actually has not really changed. We try to feed with as much accurate information as we can representing the markets in which we play. Okay? Thank you.

Operator

Your next question comes from the line of Simon Baker from Redburn. Your line is open.

Speaker 4

Thank you for taking my question. If I can go back to Sjogren's, please. I'm not sure if I missed the answer, but I just wanted to check if you did say what the form of the disclosure of that Phase 2 data would be. I'm guessing it would be an announcement that study has worked and you will proceed followed by disclosure at a clinical conference. But I just wonder if you could confirm that and suggest a potential conference where that would be disclosed.

Speaker 4

And just putting the cart before the horse a little and thinking about Phase 3 design. Tim, I think you mentioned the likely regulatory endpoint is changed in clinical SDI score. It also looks like 48 week duration looks like a typical length for Phase 3 study in the indication. And from other studies, it looks like 300 to 400 patients is a typical size. Can you comment on the legitimacy of those assumptions?

Speaker 4

Thanks so much.

Speaker 2

Yes. Thanks for both questions. So yes, we're looking for the signal. And of course, when we see it, we will share it with some level of detail surrounding the go decision or the no go decision. And assuming a go decision, you're correct in your understanding that then we would show more detailed data at the lead time medical meeting.

Speaker 2

So that understanding is correct. From a Phase 3 assumptions point of view, I think you're spot on. This is indeed what you can see from other Phase 3 registrational trials in children's. There are not many. But I think that's going to be subject of the conversation with the FDA.

Speaker 2

With the data in hand, we will need to go with our proposal into an end of Phase 2 meeting and basically triangulate expectations for that Phase 3. So for the time being, I would also build on the other assumptions looking at the other registration process. Thank you.

Speaker 4

Thanks so much.

Operator

Your next question comes from the line of Susanne Van Voorheesen from VLK Kempen. Your line is open.

Speaker 12

Hi, team. This is Susan Van Voorheesen. Thanks for taking my question. I wanted to ask if you can speak a bit about your early stage molecules, specifically the ones with the disclosed targets, the IL-six target of 109 and FcRn target of 213. What can you tell us at this moment about these 2 molecules?

Speaker 12

And how do you think about development from here? Thank you.

Speaker 2

Thank you, Susan. And that's a great question to put the spotlight on the 4 IND candidates, which are underway to IND before end of 2025. ARGX-one hundred and nine is a best in class IL-six antibody. It has spent a lot of potency with a half life of at least 60 days, so it's equipped with our proprietary technologies. And that is, I think, a phenomenal antibody, but we were always a little bit questioning what is the central role of IL-six biology in certain diseases.

Speaker 2

The reason that we gave that molecule the goal is because we have seen several indications where we think we see now a clear involvement of IL-six biology as the driver of disease, not just the bystander but really driving the disease. And they're the type of indications which we like to know. They would fit the franchises we're building and they would basically also be the size of indications, which we think we can master very well. On the second SRM antagonist, people have been asking us what's wrong with VIBGYVE, what are we trying to improve? It's very difficult to improve upon VIBGYVE, but what we see is that there is just more opportunity than we can handle with 1 molecule.

Speaker 2

I I mean, this card will have an ending life either from an IRA point of view and or an LOE point of view. And we just want to make sure we have a second very competitive molecule in the race to take on all the abundance of opportunity, which we see in front of us. And therefore, we think about the long term presence in the class, long term leadership role in the class and that's exactly what that one of you will serve. Thanks for the question.

Operator

Your next question comes from the line of Alex Thompson from Stifel. Your line is open.

Speaker 5

Yes, great. Thanks for taking the question. On CIDP OLE data, I wonder if you could talk a little bit about expectations around when you will present that data. And then how much of it so far has been included in your filing with the FDA? And is there a chance that anything around dosing every other week dosing would be included in that filing?

Speaker 5

And if not, at this point, could that potentially delay any timelines here? So thanks.

Speaker 2

So for CDP, we said that these are such important data that we wanted to showcase them at one of the major upcoming neurology indications. So stay tuned. This announcement is waiting for us around the corner. And it's an important presentation, of course, because it's the first real innovation in CIDP for a very long time. Secondly, I think the question number 2 relates to, I think a review issue with the FDA.

Speaker 2

We will need to see how they look at the data. It is true that randomized controlled portion of the trial was weekly dosing. In the opioid extension we do have every other dosing. But whatever is going to show up on the label, I think ultimately this will be a conversation with the payers. And there you have to expect that argenx will take a position, similar position to what we did for MG.

Speaker 2

We will want to price transparently and responsibly

Speaker 13

and aim

Speaker 2

for broad access for patients to digitalization. So stay tuned, we will be talking about it in the near future. Great.

Operator

Your next question comes from the line of Samantha Simenka from Citi. Your line is open.

Speaker 3

Hi, good morning. Thanks for taking our questions. I think you recently kicked off a direct to consumer advertisement for CIDP in preparation for the launch. I'm wondering if you could characterize how you expect this to impact the early launch for CIDP based on your learnings from the MG launch? And then just secondly, I think you're targeting dermatomyositis with 2 assets, efgartigimod, of course, in the one of the OPKEVIA cohorts and then EMPA in a Phase 2 study.

Speaker 3

Can you just talk to the rationale for each drug in DM and how you're thinking about the types of patients that could be addressed with each mechanism of action? Thank you.

Speaker 2

Thank you, Abbas. I'll be taking question 2. I think Karen has got to comment to talk about our recent DTC campaign. Yes, absolutely. Thanks for

Speaker 1

the question. As I said, we're getting more and more confidence in the unmet need in CIDP as we approach launch and the more that we learn about this market. And certainly from a perspective of preparing for that launch, As you said, we recently launched an unbranded campaign to really raise the awareness of the burden of PIDP in the community. And that campaign is ongoing. It leverages the learnings that we had in the MG launch.

Speaker 1

But to educate patients and to activate patients is incredibly important in these autoimmune diseases that are underserved, under diagnosed and undertreated. And that's the real goal of the campaign. Thanks for the question.

Speaker 2

Thank you, Karen. So dermatomyelitis took this as a very high metabolic lead indication, pretty complex biology. When we did the homework on the biology including studying the skin biopsies, you see 2 distinct subsets of patients. And that is one subset of patients where you clearly see the involvement of pathogenic autoantibodies of the IgG type. So that is actually a perfectly fit for efgartigimab.

Speaker 2

There's also a subset of patients that you see in the skin biopsy type complement deposition and activation without the role of recruiting auto antibodies. So we think both most of deserve a short on goal in the end. And I think the way we do the studies is there's a ton of biomarker data involved. So maybe we further unravel this disease biology and we learn how to triage patients based on the driving disease biology which is relevant to them. Thanks for the question.

Operator

Your next question comes from the line of Gavin Clark Gartner from Evercore ISI. Your line is open.

Speaker 1

Hi, this is Yasha on for Gavin. Thanks for taking our question. We were just wondering what you make of the ULTOMIRIS discontinuation in dermatomyositis and if you see any read through to your ongoing trial? And then I have one follow-up.

Speaker 2

Yes, it wouldn't be unusual to see a C5 blocker failure in an indication, but then other complement intervention works. And complement is not one size fits all. Complement is a very complex system. There are multiple pathways involved. And depending on the disease, different arms of complement are involved and at different stages.

Speaker 2

So MMN, for example, is an example in case. And C5 blockade failed in MMN, C2 blockade is a homer. So the same I think is valid for DM. And so because of C5 blocker fails, there's an upstream complement blocker defect would fail. So we did a homework on the biology.

Speaker 2

We think the complement activity is upstream of C5 and therefore I think we need to do this experiment without all proprietary Cp work. Thanks for the question.

Speaker 1

Awesome. And then one quick follow-up. Just could you comment on any relative design differences between your Phase II and Phase III and then the ULTOMIRIS trial, if you happen to know?

Speaker 2

Yes, we don't have enough details about the ULTOMIRIS trial to really do a head to head comparison between study details. So we don't have that information and I'm not in a real position to comment on that, Jessa. Thanks for the question.

Operator

Your next question comes from the line of Myles Munter from William Blair. Your line is open.

Speaker 14

Hi. Thanks for taking the question. Just back on the ROE study, I think we've seen like 50% SDI response rates in prior Sjogren's trials at Phase 2 on placebo. Just wondering whether that's the expectation for the 12 patients that you have on placebo in that trial. And then also, how important is it to show efficacy on the totality of data at the 24 week endpoint versus efficacy over the entirety of the trial, again, just pointing to recent trials in the space that have shown variability between 20 24 weeks on efficacy?

Speaker 14

Thanks very much.

Speaker 2

Yes. It's an excellent question, Miles. So yes, we have been studying precedent trials. There is some consistency in placebo response. It's about a 40% response.

Speaker 2

You have an outlier study, but we think we understand why there is an outlier. So I think you do see a reasonable consistency in historical placebo responses and that is the incoming assumption for our trial 2. In terms of endpoint, we have an endpoint to choose, well, we are actually looking at multiple endpoints, okay? So it's a 24 week study, but we have multiple time points where we will basically assess the patients and look at the dynamic evolution of the disease symptoms and the biomarker. So it's not just going to be a photo finish at week 24.

Speaker 2

We've been looking at the evolution of the data over time. Thanks for the question.

Speaker 14

Very helpful. Thank you.

Operator

Your next question comes from the line of Xian Deng from UBS. Your line is open.

Speaker 15

Hi, it's Tian from UBS. Thank you for taking my question. So I have a question on 119 in ALS please. I was just wondering if you could elaborate a bit more about the biological rationale for ALS, please. I mean, given ALS is a very complex disease, I mean, there's like protein degradation, autoimmune, genetic factors involved.

Speaker 15

So we're just wondering for benign, are you coming from the angle that mask is sort of a key factor in neuromuscular synapse formation? And if that's the case, I'm just wondering, are you after disease modification here or it's more sort of like a symptom relief, a bit like levodopa in Parkinson's? Thank you.

Speaker 2

Yes, it's an excellent question. So, Muscular is a very interesting target. It's not just organizing the formation and the maturation and the functioning of the neuromuscular junction and the signal also goes in the other way. So mouse can signal through LRP4 back to the neuron. And one of the hallmarks of ALS is that in the initial stage, we go through a phase which we call a phase where we have repeated denervation and renervation.

Speaker 2

And there must be communication between the nerve cell and the muscle cell in that process. And we think that happens through retrograde signaling musk to LRP4 to the neuron. So if you can keep the innovation longer through activating musk we think that will have a meaningful impact on ALS patients. So there's quite some biology thinking going on behind the program. We do realize ALS is high risk, but also high reward.

Speaker 2

And therefore, there's a ton of translation biology going into the ALS thinking. Also the way we set up the initial clinical experiment is such that we will have a very deep look into these patients, almost happens on that innovation, the innovation process. So stay tuned. It's an exciting experiment and we're looking forward to seeing the first data.

Operator

Your next question comes from the line of Joon Lee from Truist Securities. Your line is open.

Speaker 7

Good morning. This is Asim on for Joon. Thanks for taking the questions. On the TED trial, I believe it was previously slated to begin in Q4 last year. So just wondering what was behind the delay.

Speaker 7

And then my other question is on the pre fill syringe, just wondering if you could just provide some details on your manufacturing capacity or your preparations? Thank you.

Speaker 1

Yes. For the TED trial, thanks for the question. For the TED trial, we made a decision to wait to start that trial so that we could use the PFS and that trial is on track now. And for the second question, we've invested in manufacturing capacity and a confident in the manufacturing capacity for IV, subcutaneous and PFS at this stage.

Operator

Your next question comes from the line of Douglas Tsao from H. C. Wainwright. Your line is open.

Speaker 13

Hi, good morning and thanks for the questions. I'm just curious in terms of how you're thinking about reimbursement in CIDP or just sort of contracting with payers. I suspect you had some early conversations and just given the fact that IVIg is already on label, the dosing frequency is greater in CIDP. Do you see the same opportunities to have access and that you do the same success with access that you had in my MG and will it sort of have different outlines and same offerings for value based reimbursement? Thank you.

Speaker 1

Yes. Thanks for the question. We think a lot about how do we maximize access to patients through our innovation. We're thinking deeply about it for the CIDP launch. What I can share is that we'll take the same approach that we did with the MG launch.

Speaker 1

We'll be transparent once we have a decision and we'll make responsible decisions that really give patients the greatest access to our innovation that we can. So more to come. Thanks for the question.

Operator

Your next question comes from the line of Andy Chen from Wolfe Research. Your line is open.

Speaker 16

Hey, thank you for taking the question. Can you talk about empasibruvart a bit and the sequencing of indications? I know you have named 3 indications, but how were these chosen and prioritized? Are these the best indications commercially or are these the best indications scientifically given the mechanism and disease pathogenesis? And obviously, what are the key decision making factors when you choose the next few indications?

Speaker 16

Thank you.

Speaker 2

Yes, this is the typical way argenx works. We always start from the biology. So we're not going to force fit biology with what looks like a great commercial opportunity to then fail in the clinical trial. So we follow biology and the 3 indications we've public on our MMN, first we showed recently data where we believe the pathogenic RGM autoantibody is actually the driver of the disease and actually the truing complement and we have shown we can block that very effectively. The second indication is delayed graft function.

Speaker 2

That is actually in the kidney transplant setting. And there's again very compelling evidence the classical and the lectin pathway is in play if you look at the kidney biopsy. And therefore, C2, which is at the nexus of both pathways is an ideal target to block delayed breast function, which actually leads to significant kidney loss in the transplant setting. So the value of that organ is very high. It's a high medical need, so it's an effective commercial setting.

Speaker 2

And then the 3rd indication is dermatomyositis, which we already touched on. We have more indications in the works, but we always start from biology. Then we will actually look at the ability to do a clinical trial experiment in terms of availability of clinical endpoints, approvable endpoints, ability to enroll the trial, also ability to show the signal despite TEGNA medication. And then finally, of course, we take a careful look at unmet medical needs and the ability to shape the treatment paradigm, which are 2 pillars to formulate the commercial rationale. So all the indications have been carefully selected based on these filters and more indications are underway.

Speaker 2

So we think this is our next pipeline in the product.

Operator

This ends our question and answer period and does conclude today's conference call. Thank you for your participation. You may now disconnect.

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Earnings Conference Call
RF Industries Q4 2023
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