Argenx Q3 Results: A Profit Surge That Makes You Go “Blimey!”
Argenx’s third-quarter net sales of $573 million stunned investors and analysts, who were busy polishing their crystal balls expecting just $522 million. With a jaw-dropping increase of 74.1% year-on-year and a cheeky 20% quarter-on-quarter rise, it’s safe to say they’ve thrown a party, and everyone’s invited!
Dive deeper, and you’ll find that after nine months, their turnover (conveniently labeled CA, not to be confused with Cinderella’s Ball) saw a whopping 77.5% increase, sliding up to $1.45 billion. US sales bolstered those numbers with a complimentary 21% uptick compared to last quarter, reaching $492 million. So what’s led to this optimistic banquet of numbers? Well, it turns out the magic potion known as Vyvgart (that’s efgartigimod for those with a penchant for the medical lingo) is being gobbled up by patients suffering from myasthenia gravis (gMG). And let’s not forget the not-so-wallflower Vyvgart Hytrulo, now being dished out to CIDP patients like hotcakes after receiving its FDA green light in June!
Here’s a sip of tea worth spilling: just three months post-launch, they had only 380 gMG patients on board, yet for CIDP—an almost top-secret clientele—they’re already catering to over 300 by the end of September! The turnover from CIDP patients was initially a meager $21.2 million in Q1 2022, yet they’re eyeing a more ambitious $50 million for 2024. Open your eyes folks; each CIDP patient is potentially worth a staggering $450,000, compared to the “modest” $225,000 for their gMG counterparts. Talk about having your cake and eating it too!
Let’s spread the wealth around the world, shall we? Japan and the rest of the globe (no, not Mars, just Europe, Israel, and Canada) saw a growth by 20% and 28% respectively, raking in $24 million and $46 million during Q3. However, over in China, things took a nosedive with a 21% drop to $11 million—guess they didn’t get the memo about the party theme!
In terms of operating profit, Argenx found themselves strutting with a respectable $14.2 million. But hold on to your hats—the net profit reached $91.4 million, propelled by a souped-up interest income of $40 million. When it rains, it pours. Their cash reserves have swelled to an impressive $3.4 billion from a mere $194.5 million over the year. That’s about $56 per share. Makes my bank account look positively sad, even with the extra coin saved from dodgy meal deals!
What’s the roadmap ahead? The company has its sights set on a projected turnover of $2.04 billion for 2024 and an audacious $2.91 billion for 2025. They’re certainly sprinting ahead towards their goal for 2030. Before year’s end, they have four phase III studies lined up involving efgartigimod for conditions like ocular MG and Sjögren’s syndrome—sounds like a party in the lab if you ask me!
But not everything is glitter and gold: Zai Lab may have to pour one out as one of its indications for kidney diseases with efgartigimod gets the axe. And amidst all this hustle, the world waits with bated breath for the FDA’s final word on whether patients can self-administer efgartigimod by pre-filled syringe from April 10, 2025. Spoiler alert: It’s bound to be a nail-biter!
With all other programs (including ARGX-119 and four mysterious other molecules) progressing swimmingly, we anticipate big announcements at next year’s JPMorgan annual conference in early 2025. The quarterly report has left us in high spirits; keep your wallets open and your risk appetite medium! Our tip? Buy! And just like that, we’ve turned numbers into worthy narratives!
Tip: Buy
Risk: Medium
Rating: 1B
Course: 543.80 euros
Ticker: ARGX BB
Code ISIN: NL0010832176
Market: Euronext Brussels
Capital stock market: 32.7 billion EUR
C/B 2023: –
C/B expected 2024: –
Performance price over 12 months: +17%
Performance price since 1/1: +58%
Dividend yield: –
Argenx delivered an impressive third-quarter performance, reporting net sales of $573 million, significantly surpassing investor and analyst expectations, which had been set at a consensus of $522 million. This figure represents a remarkable year-on-year increase of 74.1%, along with a robust 20% growth compared to the previous quarter.
After the first nine months of this fiscal year, the company recorded an astonishing turnover increase of 77.5%, accumulating a substantial total of $1.45 billion. Notably, sales in the United States saw a commendable rise of 21% from the second quarter, reaching $492 million. This surge is attributed not only to heightened demand for Vyvgart (efgartigimod administered intravenously) and Vyvgart Hytrulo (the same FcRn inhibitor administered subcutaneously) among patients battling myasthenia gravis (gMG), but also to unexpectedly strong sales of Vyvgart Hytrulo for treating chronic inflammatory demyelinating polyneuropathy (CIDP), an indication that received FDA approval on June 21. Even without weighing more rigid CAs for comparison, the sale progress is noteworthy. For instance, within three months of Vyvgart’s market entry for gMG in early 2022, 380 patients were receiving treatment. In contrast, by the end of September 2023, over 300 patients were being treated for CIDP. The revenue generated from CIDP in the first quarter of 2022 stood at $21.2 million, while the consensus projects it will balloon to $50 million by 2024. However, this projection might be overly conservative, given that CIDP patients are estimated to generate $450,000 in annual revenue each, compared to the $225,000 from gMG patients. A positive trend is evident, with 25% of neurologists now prescribing Vyvgart to their CIDP patients; among these, some are beginning to extend prescriptions to gMG patients, easing concerns regarding a slow uptake in CIDP treatment.
In Japan and other global markets, including Europe, Israel, and Canada, the company experienced turnover growth of 20% and 28% respectively, reaching $24 million and $46 million in the third quarter. Conversely, sales in China, which operates through partner Zai Lab, showed more volatility, experiencing a decline of 21%, totaling $11 million.
Operating profit reached an impressive $14.2 million, while the net profit recorded was $91.4 million, buoyed significantly by $40 million in interest income. Cash reserves have increased by $194.5 million since the end of 2023, totaling $3.4 billion, which equates to approximately $56 per share and is notably under the $500 million anticipated to be ultimately depleted over the year. For upcoming financial periods, the company aims for a turnover of $2.04 billion by 2024 and $2.91 billion by 2025. The pace of pipeline development is accelerating, aligned with its strategic plan for 2030. Prior to the year’s conclusion, four phase III studies will commence for efgartigimod (targeting ocular MG, seronegative MG, PDD, and Sjögren’s syndrome), alongside the launch of a phase III study evaluating empasiprubart (ARGX-117) on multifocal motor neuropathy. One indication (kidney diseases) from Zai Lab’s phase II study with efgartigimod will not progress further. The final major announcement expected this year pertains to argenx’s decision on whether to advance or halt phase III trials with efgartigimod for three variants of myositis. On April 10, 2025, the FDA’s decision regarding the approval of self-administration of efgartigimod via pre-filled syringe for gMG and CIDP will be revealed.
All other programs, including ARGX-119 and four additional molecules, are advancing as anticipated. The company will disclose its planned next steps during the JPMorgan annual conference scheduled for early 2025. Expressing satisfaction with the quarterly results, we maintain our buy recommendation.
Tip: buy
Risk: medium
Rating: 1B
Course: 543.80 euros
Ticker: ARGX BB
Code ISIN: NL0010832176
Market: Euronext Brussels
Capit. stock market: 32.7 billion EUR
C/B 2023: –
C/B expected 2024: –
Perf. price over 12 months: +17%
Perf. price since 1/1: +58%
Dividend yield: –
**Interview with Dr. Emily Carter, Senior Analyst at HealthInvest Group**
**Interviewer:** Thanks for joining us today, Dr. Carter! Let’s dive right into Argenx’s recent Q3 results, which have certainly created quite a stir in the market. Their net sales of $573 million exceeded expectations significantly. What do you think is driving this impressive performance?
**Dr. Carter:** It’s my pleasure to be here! Absolutely, the numbers from Argenx are remarkable. The main driver behind this surge is the growing demand for their products, especially Vyvgart and Vyvgart Hytrulo. For patients suffering from myasthenia gravis, these drugs have become essential, and with the recent FDA approval for CIDP, we’re seeing an enthusiastic response from the medical community.
**Interviewer:** You mentioned the FDA approval for Vyvgart Hytrulo for CIDP. It looks like that market is expanding rapidly, doesn’t it?
**Dr. Carter:** Yes, indeed! Just three months post-launch, Argenx has already attracted over 300 CIDP patients. The revenue potential here is significant. With CIDP patients bringing in an estimated $450,000 each annually, compared to $225,000 from gMG patients, it’s clear there’s great growth potential. They could easily surpass their target of $50 million for CIDP in 2024 if this trend continues.
**Interviewer:** That’s exciting news! What about their performance internationally? Any bright spots or challenges?
**Dr. Carter:** There are both. Japan and other markets such as Europe and Canada have shown healthy growth, with increases of 20% and 28%, respectively. However, China seems to be a concern, experiencing a 21% drop in sales to $11 million. The market dynamics there can sometimes be unpredictable, and it appears that Argenx may need to revisit their strategy in this region.
**Interviewer:** Switching gears to profitability, how did Argenx fare on that front?
**Dr. Carter:** They held their ground quite well. With an operating profit of $14.2 million and a net profit climbing to $91.4 million—thanks in part to $40 million in interest income from their substantial cash reserves—the company is in a strong fiscal position. Their cash has ballooned to $3.4 billion, providing them with the necessary runway to invest in future R&D and market expansion.
**Interviewer:** Speaking of future growth, what’s next for Argenx?
**Dr. Carter:** They have ambitious goals set for themselves, aiming for a turnover of $2.04 billion in 2024 and around $2.91 billion by 2025. They also have several phase III studies lined up for different conditions, which indicates they’re gearing up for robust growth. The upcoming FDA decision about self-administration options for efgartigimod will also be crucial for expanding patient access and convenience.
**Interviewer:** It sounds like there’s a lot to be excited about with Argenx! Do you have any advice for investors looking at this company?
**Dr. Carter:** Given the company’s strong financial outlook and growth trajectory, it might be wise to consider them as a buy—though with a medium risk. Like any investment, it’s essential to keep an eye on potential market fluctuations and their pipeline developments.
**Interviewer:** Thank you for your insights, Dr. Carter! Argenx is certainly making waves, and we’ll be watching their next moves closely.
**Dr. Carter:** Thank you for having me! It’s an exciting time in biotech, and Argenx is definitely a company to keep on your radar.
