Argenx SE (ARGX) Q4 2025 Earnings Call Transcript

Good morning. My name is Rahm and I will be your conference operator today. I would like to welcome everyone to the call. At this time, all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. Thank you. I'd now like to introduce Beth Del Jocko, Vice President of Corporate Affairs. You may now begin your conference.

Thank you. Two press releases were issued earlier today, one sharing the positive results from our Phase 3 ADAPT Oculus study and the other which outlines our fourth quarter and full year 2025 financial results and business updates. These can be found on our website along with the presentation for today's webcast. Before we begin on slide two, I'd like to remind you that forward-looking statements may be presented during this call. These names and statements about our future expectations, clinical developments, regulatory timelines, the potential success of our product candidates, financial projections, and upcoming milestones. Actual results may differ materially from those indicated by these statements. Argenix 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 Kerry Massey, Chief Operating Officer, Karl Gubitz, Chief Financial Officer, Luke Trojan, Chief Medical Officer, Sandrine Thuray-Girard, Chief Commercialization Officer, and Tim Van Hauer-Marin, Chief Executive Officer. I'll now send the call over to Karen.

Thank you, Beth, and welcome, everyone. I'll begin on slide three. 2025 was an incredible year of execution for Argenix. We reached 19,000 patients globally, driven in part by the successful launch of our pre-filled syringe for self-injection. We also continue to advance our deep and differentiated immunology pipeline, including four new molecules from our IIP, positioning us for sustained long-term growth. This progress is grounded in our commitment to patients, to innovate in ways that don't just improve care, but meaningfully change what patients can expect from their treatment. I'm speaking to you today from our U.S. national team meeting, where hearing directly from patients is a powerful reminder of why our work matters. One moment in particular stayed with me. We recently received a handwritten note from a patient thanking the team for the impact VivGuard has had on her life. We later learned that before starting treatment, she had been living with very severe MG symptoms that significantly limited her day-to-day activities. Today at the meeting, we saw a video of the patient about a year into treatment with VivGuard Hytrulo, sharing an update from a hike she was on. She is thriving. It's one individual story, but it reinforces the real-world difference VivGuard can make. Slide four. At the start of the year, we outlined our strategic priorities for 2026 that will guide our next chapter of growth towards Vision 2030. We want to impact more patients globally with VivGuard through broader patient adoption and label expansion. We're shaping the future of FCRN medicines with next generation molecules, delivery modalities and combination approaches, and delivering the next wave of immunology innovation, supported by a strong late-stage portfolio and a goal of at least one new pipeline candidate per Slide five. VivGuard is leading the growth of biologics in both MG and CIDP, and we're confident that we have the right strategies and milestones ahead to sustain this momentum. Today marks an exciting moment for ocular MG patients with the positive ADAPT Oculus results, which Luke will discuss shortly. Together with our progress in seronegative MG, we see a meaningful opportunity to broaden VivGuard's reach to patients who have historically had limited or no targeted treatment options. What's guided us here is a longstanding commitment to the MG community and to advancing our understanding of the underlying biology of the diseases we treat. Across MG populations, our data confirms that disease is driven by pathogenic IgG, regardless of antibody status. In seronegative MG, we demonstrated a clinically meaningful improvement in MG-ADL in the overall population, with responses becoming more pronounced with subsequent treatment cycles across all In ocular MG, we're seeing that same biology extend to another patient population, with Zwiftgart meeting its primary endpoint and driving clear improvements in ptosis and diplopia. Our zero-negative PDUFA date is May 10, and based on today's results, we see a clear path to expanding our label into ocular MG as well, positioning VivGuard to have the broadest MG label and to reach our target addressable population of approximately 60,000 patients in the U.S. In CIDP, we're also having a meaningful impact on patients, with clinical data showing functional improvement and these benefits increasingly reflected in real-world experience. VivGuard is driving a paradigm shift in CIDP. While there remains significant opportunity within the initial 12,000 addressable patient population, we're also beginning to see expansion beyond that population, a core focus as we build leadership in CIDP. Sandrine will speak more to this later in the call. Slide six. Over the next 12 to 18 months, we have multiple avenues for expansion beyond MG and CIDP, including autoimmune myositis and Sjogren's disease, which broadens Vivgar's footprint into rheumatology. In particular, our work in IMNM highlights a significant unmet need with an estimated 20,000 patients and no approved treatment options today. Meanwhile, our upcoming Q4 readout for impassapruvat in MMN marks an important milestone, positioning us to advance a second medicine to patients and extending our neurology footprint with a first-in-class C2 inhibitor. We have an opportunity to address a clear unmet need in MMN, with IVIG as the only approved treatment and symptom progression in 60% of patients. Slide seven. Lastly, we continue to strengthen the pipeline that will shape our long-term future. VivGuard is just the beginning of FCRN leadership that we aim to establish for decades to come. As part of this, we're advancing two next-generation assets, Argenix 213 and Argenix 124. We're investing in Epcotigamod-anchored combination approaches and new delivery modalities like the auto-injector and oral peptide capabilities. At the same time, we're seeing real momentum across our broader innovation platform, progressing first-in-class molecules like Igenix121, targeting IGA, and Igenix118, targeting Galactin-10. We are deliberately source agnostic in how we identify new biology during for both leading academic research and opportunities emerging within biopharma in 2026 we expect to progress three phase one programs including the program from our tensegrity collaboration reinforcing our ability to bring forward high quality science wherever it originates we have an exciting year ahead of us with a strong foundation in place and exciting progress across the pipeline let's turn into the data that's shaping our next steps.

Thank you, Karen. I'm excited to share the positive outcome of our Phase III adaptocular study, our second MG expansion milestone did it just months after we shared positive, seronegative data. Let's turn to slide eight. Together with leading global experts, our team designed the first registration study in ocular myasthenia gravis, filling a longstanding gap for the patient population that has historically been excluded from clinical trials. We leveraged the screening period to ensure patients had a confirmed diagnosis of ocular MG, defined as MGFA class 1, meaning patients had meaningful, measurable eye symptoms without evidence of generalized disease. Patients were also required to be on stable background therapy. 141 patients were randomized one-to-one to Vivgard-Hytrulo versus placebo. And in Part A, they received four-weekly injections. In Part B, participants received multiple cycles of Vivgard-Hytrulo. The primary endpoint of the study was the change in MGII patient-reported Oculus score from baseline to day 29. A measure focused on the key oculus symptoms of myasthenia gravis, diplopia, and ptosis. Slide 9. The study met his primary endpoint. Treatment with Vivgar Taitrudo led to a statistically significant improvement in MGII patient-reported oculus score at week 4 compared to placebo with a p-value of 0.012. Bidocard treated patients experience a mean 4.04 point improvement compared to a 1.99 point improvement on placebo, including clear improvements on diplocianthosis. Bidocard was well tolerated, upholding its consistently strong safety profile with no new safety signals. We will present a broader data set at an upcoming medical meeting. This is a big day for patients, Ocular MG strips people of independence. Many suffer from headaches and the persistent double vision and drooping eyelids don't just affect eyesight, they can take away the ability to drive, work and confidently engage in daily life, often with a heavy psychological burden and stigma. And today, too many patients are still relying on chronic steroids and symptomatic therapy, which comes with an unacceptable treatment burden over time. For the first time, we are bringing forward a therapy that specifically addresses the underlying pathological mechanism of ocular MG, and that is something we should all be excited about. Based on these results, we plan to file an SDLA with the FDA. Now, before I turn the call over to calm, I want to sincerely thank the investigators, side teams, and most importantly, the patients and families who make this study possible.

Thank you, Luke. Slide 10. The fourth quarter and full year 2025 financial results are detailed in this morning's press Product net sales are consistent with our pre-announcement in January at $1.3 billion for the fourth quarter and $4.2 billion for the full year, which represents a year-over-year growth of 90%. The regional breakdown of product revenue in Q4 2025 reflects $1.1 billion in the US, $63 million in Japan, $110 million in the rest of the world, and $26 million in product supply to Xilab in China. The product net sales in the U.S. grew by 68% from the fourth quarter of the prior year, reflecting solid patient demand and prescriber confidence driven by BFS. The growth to net adjustments and the net pricing in the U.S. are in line with the prior quarter. Next slide, slide 11. Total operating expenses in the fourth quarter are $955 million, representing an increase of $149 million compared to the third quarter. Cost of sales for the quarter is $115 million, as our year-to-date gross margin remains consistent at 11%. The combined R&D and SG&A expenses total $2.7 billion for the full year, which is in line with the financial guidance for 2025 discussed in your most recent earnings call. Looking ahead into 2026, operating expenses will continue to grow at a similar percentage as in prior years. SG&A growth will support the significant revenue growth in our current markets, as well as expansion into new patient populations. R&D expenses will increase due to our continued commitment to execute on your pipeline. Our operating profits of a quarter is $367 million and $1.1 billion for the year, which marks our first year of annual operating profitability. Tax for the quarter and full year reflects a net benefit. This is largely due to non-recurring tax items and favorable foreign exchange movements. Going forward, you should continue to expect an effective tax rate in the low to mid-teens. This brings us to the profit for the fourth quarter of $533 million and $1.3 billion for the full year respectively. Our cash balance represent by cash, cash equivalents and current financial assets $4.4 billion at the end of the fourth quarter, which represents a more than $1 billion increase over the year. The strength of our balance sheet allows us to invest with confidence in growing our commercial business as well as our pipeline. I will now turn the call over to Sandrine, who will provide details on the commercial Thank you, Carl.

Slide 12. I'm thrilled to be joining our journey for such a pivotal moment. What excites me most is the combination of bold science and a deeply patient-driven mission. what I often describe as science with purpose. I've spent time in the field already, met commissions and seen firsthand the real impact our science is having on patients' lives. With Vision 2030 as a roadmap, we have a clear path to meaningfully improve the lives of more than 50,000 patients. Slide 13. Echoing Karen, we enter 2026 from a position of strength holding a year of phenomenal execution. We closed 2025 with approximately 19,000 patients on treatment globally, reflecting consistent growth across all regions and all indications. We successfully launched the pre-food syringe, which has proven to be a key driver in increased overall safeguard demand. At the end of the fourth quarter, we had more than 4,700 prescribers, including 1,000 new prescribers since the PFS launch. This momentum underscores the execution strength of our field teams, the added convenience the PFS brings to patients, and the growing confidence in the safeguard among clinicians. As we highlighted at the start of the year, our next chapter is about applying a proven indication extension staybook to reach even more patients. MG and CIDP remain the cornerstone of our commercial strength, and we are well-positioned to build on the foundation as we scale. Slide 14. We entered the MG market with strong biology and a first-in-class therapy. Since then, we have redefined what patients and clinicians can expect with the highest MST and a favorable safety and tolerability profile. As a result, BitGuard is the fastest-growing and number one prescribed biologics in MG, with continued momentum driven by earlier line adoption. Six out of ten MG patients starting non-biologic start with this card. 70% of this card patients are already coming from orals, and we believe the PFS will continue to help drive near-term growth. We are now on track to reach 18,000 additional patients through two label-expanding opportunities, seronegative and ocular MG. Seronegative MG alone has the potential to move us towards the broadest possible MG label with our May-Pedufa just around the corner. An ocular MG gives us a chance to be the first to market in a patient group that has no precision treatment options. What gives us confidence here is that these expansions build on strong relationships we have already established with neurologists, many of whom are confident in regard to the experience treating generalized MG. Slide 15. We are earlier in the CIDP launch trajectory, but are delivering on the same discipline approach that has led to our successful market expansion in MG. Significant opportunity remains within the 12,000 patients who are not well managed on current treatment, and our focus today is on continued evidence generation, patient activation, and new prescriber adoption. Clinicians continue to respond to the meaningful functional benefit data and well-characterized safety shown in the ADER trial. The pre-filled syringe is further driving uptake by reducing the administration burden and offering more flexibility to patients. Worth noting, we secured an important access win for PFS in Q4 with UnitedHealthcare, broadening our covered lives to over 90%. CIDP is a highly heterogeneous disease, and we are committed to advancing the science to expand our reach to a broader set of patients. Our biomarker program is designed to better define responders and unlock earlier and broader use, and we are advancing empathy for BART in a head-to-head study against IVIG to further explore the bounds of efficacy. Together, these efforts position us to expand the CIDP population we can serve and continue shaping these markets over the long term. Slide 16. Our clinical pipeline continues to broaden and deepen, providing a multi-year runway for commercial growth. I'm excited to join the company at this period of moment to help scale the organization thoughtfully and translate this pipeline into even greater patient impact. With that, I will now turn the call over to Tim.

Thank you Sandrin. Reflecting on where we stand, our GenX has never been better positioned and our leadership transition comes at the right moment as we enter our next phase of growth Karen is a right leader to take this forward she understands our innovation playbook leads with patients at the center of every decision and brings the operational discipline needed to continue executing against the vision 2030 and beyond I have complete confidence that she will nurture what has always made organic special while driving the next sector of growth for the company. My dedication to Argenix and to our mission remains as strong as ever. I look forward to supporting Karen and the entire leadership team as we continue to advance meaningful innovation and deliver for patients and shareholders alike. With that operators, we will open the call up to questions.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. We ask that you please limit yourself to one question only. Your first question today comes from the line of Tazi Namad from Bank of America. Your line is open.

Okay, good morning. Thanks for taking my question. First off, Karen, congratulations on the new role. We're looking forward to continuing to work with you. And Tim, what else can I say that thank you. You've set the example for everyone to follow, and we wish you the best in your new upcoming role as well. So my first question is going to be on the addition of both zero negatives as well as, based on today's results, assuming ocular MG to the revenue stream for VivGuard.

How should we think about, number one, what the average price would be for each of these subindications and can you talk to us about what proportion you've talked to us about how many patients there are but have you done any market data research to indicate what proportion of those patients are more likely to seek this type of treatment thanks well thank you Tazeem for your comments and also for your question it's a really exciting day for ocular mg patients and and And certainly for Argenix, as you call out, you know, it's important to think about the fact that we are now the first and only, or VivGAD is the first and only to have positive data for patients with ocular MG. So a really exciting day for patients. And as you called out, that combined with the seronegative data that just read out a few months ago, and we have the PDUFA date in May, really positions us well for continued sustained growth in MG and I think an expansion even further about our leadership position in MG. So we're very excited to share that data today. I'll let Carl talk to the price in a moment, but just on the second part of your question around the addressable market, we obviously have done quite a bit of market research and will continue to do so to prepare for how best to go to market, but the best numbers to look at are those that we've provided with the seronegative expanding the addressable market by 11,000 patients and ocular by 7,000 patients that we've provided before. That 7,000 patients in ocular MG, that's not the total ocular MG patient population. That's actually the portion that when we've done the research before, we thought would be eligible for VivGuard. So that's the number that I would stick with. Then obviously, as we get closer to, you know, as we unpack the data more, as we get closer to submission and hopefully approval, we'll be able to provide more colour on that. And then maybe, Carl, you could comment on the price.

Thank you, Karen. And Tazeen, thank you for the question. We still have to have the discussions with the players, of course. But I do want to mention that we have a strong capability in market access. It is an enabler of our launch, not a hurdle. and the value proposition of VivGuard is well understood and appreciated by all stakeholders. At this stage, I will say that we would expect to have broad access also for seronegative and ocular, and we can assume a similar price as MG, i.e. $225,000, the net benefit or the net price to our GenX. Thank you for the question.

Your next question comes from the line of Danielle Brill from Truist Securities. Your line is open.

Hi, guys. Thanks so much for the question. I think I'll ask a question on the CIDP opportunity. Karen, you mentioned in your prepared remarks that you're beginning to see expansion beyond the initial 12,000 patients that you were targeting. Can you elaborate a bit? Are you seeing a step up in frontline use? And then I think you also mentioned that you secured additional coverage, broadening coverage for PFS to over 90% of covered lives. What impact do you expect this to have on adoption rates in this setting going forward?

Thanks, Danielle, for the question and the interest in CIDP. We're really pleased with the continued growth in CIDP. So we laid out that the strategy was first to focus on that 12,000 patients that are treated that are already treated but continue to have symptoms and that is continues to be where we see the majority of our patients and the majority of our growth but you'll recall that our label does allow us to to be used in a broader patient population and there are some payer policies actually that also allow allow that so we are starting to see some use of VivGuard beyond just the switch from IVIG. In general, it's still about at 85% of our patients are being switched from IVIG, but there are some that are coming directly. I think as prescribers and neurologists get more experience with VivGut and see the impact in the real world, then over time we'll start to see that expansion even more. And as you said, continuing to expand access with the recent UnitedHealthcare decision and having 90% coverage, that also helps to contribute to our growth. So I would say what to expect in CIDP is that continued steady momentum. We're still early in the launch, and so I think we still have quite a bit of growth ahead of us. Thanks for the question.

Your next question comes from a line of Derek Arquilla from Wells Fargo. Your line is open.

Hey, good morning, and congrats on the progress in the Phase 3 win today. So, I had a question on, you know, do you think approval in ocular MG will drive more utilization in the less advanced MG patients? And I guess, is there anything in the dataset that you'll present in the future that could demonstrate prevention of progression to more generalized disease?

Yeah, thanks for the question, Derek. I'll comment on the first and then maybe, Luke, I can hand it to you for the data. So, certainly, I think that our hypothesis, I mean, we know that in MG, the majority of patients first do present with ocular symptoms, and then the majority of those ocular MG patients do transition into GMG. So a big part of our strategy is expanding the use of biologics to early-aligned uses of MG. We are already seeing that. Biologic use is growing in generalized MG. We are driving, we get six out of 10 of those patients that are first use biologics. So we're driving a lot of that earlier use and a lot of that growth. As you say, I think the ocular MG data will help us with that strategy and will provide a halo to that strategy. And then maybe, Luke, you could comment on the data and progression.

Yeah, thanks Karen and thanks Derek for the question, which is close to my heart. So with the data in hand, we show that we can meaningfully impact the current symptomatology of Ocular MG, which is not MG-like. It's a significantly debilitating state to be in. But of course, the excitement of continuing to collect long-term data as we are planning to do and compare that to what is known with the natural progression, which as Karen said is a high percentage, up to 80%, will allow us to make some statements on do we delay progression to generalized MG. So I would say stay tuned.

All right, thanks, Lynn. Your next question comes from a line, Avya Tinsanea from Guggenheim. Your line is open.

Hey, guys. Thank you for taking my question. Just with regard to the Q1 dynamics, could you point to us if there are any particular consideration that we should have for Q1 in particular?

Thank you.

Yeah, thanks for the question. And it's important as we're in Q1. So, obviously, across the industry, we can see the pattern that there always are Q1 dynamics around re-verifications and winter storms, of which we've had quite a few in the last couple of weeks. So, Argenix and VivGuard are, of course, privy to those same seasonal dynamics, and we saw that last year as well, if you recall. We did have a slowdown in Q1, and then in the end of the year, we delivered 90% full year growth. So I think you can recognize the pattern and expect that. But maybe Sandrine, you could comment on the underlying dynamics that we're seeing since you've joined.

Thank you, Karen. And this is something that I looked at before joining Argenix. What is the growth we are seeing? And year after year, we have been delivering consistent growth. And this is a pattern you can expect this year, full year, because the underlying dynamic is very healthy. I mean, when you look at the new patient starts, the provider and the prescriber expansion, when you look at our access, we just mentioned that, but also how strong we are and VivGuard is in leading the growth of the overall biologic market. These are all amazing underlying factors that will help us continue that growth. And then you have the PFS that was launched less than a year ago that drove a lot of momentum last year, plus the expansion of the labels that we are expecting both for seronegative and later for ocular. So all are good underlying factors that will help us continue that growth, as Karen mentioned.

Your next question comes from a line of James Gordon from Barclays. Your line is open.

Hello, James Gordon from Barclays. Thank you for taking the question. The question was on Vipcat for myositis. And my question was, what is the efficacy bar you're looking to exceed in the Phase 3, in myositis in Q3? What's a good result? Is there hope to be more efficacious than Pro-Avance-Brefo, so a Jack-Tick, and what they did in the Valor trial? Or is it more – a good result would be if you had similar efficacy and you were better tolerated as well? So what's good and what's really good? Could I also just squeeze in a clarification, not a question, but just normally there's an OPEX guide, but I didn't see a formal guide this year.

Should we assume a similar pace of OPEX growth this year as last year, the 25 similar pace to 26, and maybe more R&D and less SG&A? how do we think about spend this year please yeah thanks for the questions uh there uh james and so i'll i'll open i'll hand over to luke um to provide some more color on myositis and then carl on on opex but the first thing that i just wanted to frame is you know when you think about myositis it's right out of the the argenics playbook i mean there is so little uh options available to patients here, really limited innovation in the market. And so what we're looking for is a statistical significant benefit coming out of this study in the DM, in IMNM, there are no approved therapies available and you heard in the script that there are 20,000 patients with IMNM, so for them, any benefit I think is clinically meaningful. But maybe, Luke, you could talk about how we're thinking about the study.

Yeah, thanks, and also for laying it up that this is not a singular indication. So, this is a constellation of indication that each have somewhat different pathological drivers. We continue our phase three program based on the strength of a robust phase two, which gave us the confidence that we could provide meaningful benefit across the three subsets. Ultimately, the data will speak once we complete phase three. With respect to relative benefit compared to others, of course, studies are hard to compare. And the DM results of BREPO certainly is encouraging for the DM patients. But we believe that in DM, multiple modes of actions could play a role. And therefore, we will go on the strength of our own data.

In any event, positive data in these diseases is always good for the patient. and maybe Carl comment on the OPEX James thank you for the question in 2025 we spent around 2.7 billion dollars on combined R&D and SG&A that is around 30 0% increase over 2024 looking ahead you can expect the combined R&D and SG&A to grow at a similar rate with most of the growth in R&D because that is where we're going to invest to set the company up for the long run, investing in our very exciting pipeline. So thank you for the question, James.

Your next question comes from a line of Alex Thompson from Stiefel.

Your line is open. Good morning. Thanks for taking our question. Maybe on grades, I was wondering if you would comment on where you're at from a regulatory discussion perspective on starting the pivotal and whether you think that a single pivotal could be sufficient for an SPLA or whether you might need two studies.

Yeah, thanks for the question. We're excited about our GRAVES program and it's well underway.

Luke, do you want to comment on our strategy around the single study?

Well, I mean, the ability to run a single study as sufficient evidence of efficacy and be able to define a benefit-risk is actually not new. That always existed, but it was at the discretion of the individual divisions as to how much they accepted that or not. This particular division has asked us at this moment for two trials, which we are executing on.

Thanks for the question.

Your next question comes from a line of Matt Phipps from William Blair. Your line is open.

Thanks for taking my question here. It's on the quarter in progress here. I was wondering if you might be able to give us any more details on the auto-injector, how you can position that versus the PFS, and maybe if that can just continue the continued expansion you're seeing from that PFS launch across indications.

Yeah, thanks for the question. We're excited about the auto-injector, and I think it just reinforces our innovation playbook, right, just continually bringing more and more innovation as we drive leadership in the MG market. So auto-injector is on track. We have planned for 2027. and the way we've talked about it is it won't be such a step forward in the way that PFS was because if you recall the big step forward for pre-filled syringe was that we moved from HCP administration to patient administration and that was a meaningful and important step forward for many patients giving them the freedom to self-inject. So auto injector doesn't provide that step change but it does provide an important step for patients that provides a better experience for those patients and especially those that are needle phobic. Actually, we mentioned earlier, we're here at the US national field meeting. We had a patient just yesterday that was talking to our team and she was sharing that she wanted to wait for auto injector because the pre-filled syringe needle was something that she was a little nervous about. So it does provide value to patients, but it's not such a step forward that you should think of it as an accelerator in the way that the pre-filled syringe was.

Your next question comes from a line of Akash Tawari from Jefferies. Your line is open.

Hi, thanks so much for taking our question. This is Amy on for Akash. Maybe just a quick one on your two next-gen FCRNs, 124 and 213. Are you seeing an accelerated path to registrational study, and can you give us a sense of how you're thinking about the indication and then the size of these trials? Thanks so much.

Yeah, thanks for the question and the interesting future portfolio. Maybe I can start. The way that we think about our leadership of FCRN over the coming decades is that we know there is a lot of opportunity for FCRN. In fact, probably more than we can explore with VivGuard alone. And so we see the opportunity of having two next generation molecules as opening up the opportunity to provide a better patient experience in some of the indications we're already in, but also start to push the biology even further and expand the indications that we can, that an SCRN is making a difference to patients.

So I think that's the strategy that we're planning. We think each of the next generation molecules brings will bring that benefit to patients.

Thanks for the question.

Your next question comes from a line of Jiren Werber from TE Cowan. Your line is open.

Great. Thanks and congrats on the Ocular study. If you don't mind, maybe a couple of questions. For Impassion, you switched the primary input to grip strength. In the previous study in ARDA, you gave us sort of ranges of grip strength, so maybe help us understand how is it powered, is it superiority sort of head-to-head, what's clinically meaningful. And then secondly, Karen, we have a huge confidence in you and congrats on the role. So, Tim, we're just, you know, we continue to get questions on the timing. I know, obviously, Peter is retiring as chair. But maybe give us a little bit of a sense what drove your decision to kind of step up the chair. Thanks so much.

Thanks for the questions, Yerun. I'll hand it over to Luke first to talk about Impassion. And then, Tim, maybe you can take the follow-up question.

Yeah, so, in fact, this is a story of growing insights in data as they matured. As we looked at ARDA and ARDA Plus, so the phase twos, the signal we saw on grip strength gave us increasing confidence that this is really a real and patient-relevant outcome with an increasing separation over time or improvement over time, which in these patients was not seen before. And that's ultimately why in discussion with agency, we started utilizing this endpoint as the primary. You asked about superiority, the study is set up as a non-inferiority study, but with a pre-specified option that if non-inferiority is met, that we can formally test superiority. The data will ultimately drive that tree.

Thank you, Luke. And Tim, comment?

Thank you for the question. I think we're doing this transition out of a position of strength. I think now is the time to do the transition because the business and the organization is in a very healthy, in a very strong state. You have seen the pipeline. You know the profitability which we achieved, you know, during the course of last year. Very strong foundation of the business. Also from an internal candidate point of view, we already, Karen knows the innovation playbook. she's a very strong carrier of the culture of the company and she's ready to help us scale into our future because you know new therapeutic areas will come on back relatively soon so consider this as a proactive move based on a position of strength thanks for the question your next question comes from a line of Thomas Smith from larync partners your line is open hey guys good morning thanks for taking the questions um there's this one if you could provide a bit more color on the Phase 2a results for adamantabart in ALS.

Obviously a really difficult indication, very complex biology, but just wondering if there are any learnings from this study that could be applied to the Phase 3 CMS program or potentially other indications. Thanks so much.

Yeah, I'll let Lou comment on the data.

Yeah, thanks for that question, evidently not an outcome we were hoping for. We felt we had a moral obligation to explore ALS as an indication, given our mode of action, trying to, in this disease where there's very, very limited treatment options to see if we could move the dial. From our POC, the data unfortunately don't support progressing, but we learned a lot. Not in the least about how novel endpoints could be used, and we hope to share that knowledge with the field. With respect to impact and learnings on CMS, the context of treatments is fundamentally different. CMS is directly in the biology of this molecule with the DOC7 and other mutations affecting the mask receptor. And so that's a much more direct application of this molecule. So we don't think there's a read through. And on our SMA program, likewise, there is a backdrop of approved treatments. The gene therapies are very well established. And we are going to evaluate whether we can have an add-on efficacy there, which is a different situation than ALS altogether.

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

Hi, thanks for taking my question. I had just a question on VivGart growth dynamics through 2026. So just thinking about kind of the underlying growth outside of potential new indications, how should we think about growth across the various formulations of the drug? And if you could maybe just comment on competitor dynamics. I realize there's been a recent new approval in Mycenae Gravis.

Could you just talk to your confidence in the VivGart profile and to what extent do you think you may be impacted by that emerging competition? thank you great thanks for the question um what uh i'll provide just one comment which is uh one of the things that i think is incredible five years out from launch for vivgart is that what we're seeing is continued growth across all indications all geographies and all product presentations um and and i think that's uh that's a sign that the that there's space for all of the different uh product presentations uh and it's important that we're bringing those innovations But Sandrine, maybe I can hand over to you to talk about the growth outlook for MG and CIDP.

Yeah, thank you, Karen. And I can maybe also help answer the question on the competition, but that was the second question. So I think for MG, I mean, we have seen an amazing growth year on year. And we have, as I mentioned earlier, healthy fundamentals. I mean, our product is being used earlier and earlier. I mean, as I mentioned in the opening, 70% actually are coming from orals. And then on VivGuard, when you have 10 patients coming on Biologics, six of them are actually starting with VivGuard. So this shows that this is the molecule that patients start on when they are starting on Biologics. PFS is the one that has been driving and helping us drive strong growth last year. And as Karen just mentioned, we expect to continue to go across all the world of administration, including PFS. And then the level expansion, of course, is going to help us this year, starting with zero negative. If you look at CIDP I mean we have we are still early launch so we have launched roughly a year and a half ago and we are still have a lot of room within the 12,000 patients that are not fully well managed and beyond that we are working very very hard to lift any challenges either with payers or the inertia of prescribers to start earlier with So overall, very strong dynamics expected for this year, like we had in the prior years. So now going to your question on the competition, actually, we welcome competition, for me this is, and for us, this is a sign of progress, and this is a sign of innovation, and that's great for patients to have multiple options. This expands the overall market, and VidGuard benefits from a market expansion. I just mentioned that six out of 10 patients starting on Biologics could go on VidGuard, So the more the market expands, the better it is for us. And as we are a data-driven company, all the data we have generated support or confidence that VidGuard profile will help us continue leading that category and remain the number one prescribed biologics in MG. From an efficacy viewpoint, and we are the only one that can really show the strong MFC, the robust safety that fosters earlier use, the ability to meaningful reduce steroids and then as we mentioned multiple flexibility on either IV subcutaneous or PFS when you take that all together I mean we believe that we have a very strong profile for a continuing our leadership there great thanks Andrie and as a reminder and in the interest of time we ask that you please limit to one question only your next question comes from the line of Sean Lehman from Morgan Stanley your line is open

Hi. Thanks for taking your question. This is Morgan on for Sean. We have one on the financials. So with VivGuard delivering $4.2 billion this year in net sales and 90% year-over-year growth resulting in the first year of operating profitability, how should we think about the sustainability of this growth profile as penetration deepens in MG and CIDP throughout this year and next year thank you yeah thanks for the question Kyle maybe you want to talk about the growth profile yeah I think what we're building here is a long-term sustainable business as Sandrine already mentioned we see a lot of growth in MG and CIDP going forward and the way we look at the financials

long term is that revenue growth should exceed OPEX growth which basically will return operating margins, which will increase over time. That in itself, of course, is not the objective of a company. We have very clear capital allocation priorities, and we're executing on those priorities. But what we should see is that we're going to build on our very strong balance sheet. We currently have $4.4 billion of cash in the bank, and going forward, that number should increase. So I think you can look forward to a long-term sustainable and profitable business. Thank you for your question, Morgan.

Your next question comes from a line of Sophia Graf-Buhl-Nielsen from JP Morgan. Your line is open.

Thanks for taking my question. So, just on the phase three readout for Vivgar and myositis, could you clarify, would you have data to support approval by subgroup or will this largely be dependent on the overall data? I think you've been very clear on that, the high-end met need within IMM and the large patient population that could be addressed there and also the heterogeneity within DM. Given these dynamics, would you see these as relatively equally sized commercial opportunities despite the differences in addressable terms you've highlighted?

Yeah, thanks for the question. Maybe Luke you can talk to the basket trial and our approach and then I can comment on the commercial opportunity.

Yeah, so the phase three setup is indeed that we can make statements on all three subsets. And, of course, the ultimate reflection of that in label will be connecting the data with the regulatory discussion, but in principle, all three could be in scope.

Thank you, Luke. And then in terms of the commercial opportunity, the way I think about it, I mean, the total myositis population that we're studying, we think about in terms of it being an MG-like opportunity, but obviously there are the subtypes. And I like to think about the two bookends of the subtypes. So we talked, you mentioned IMNM, so IMNM, there are no other approved treatment options. There's about 20,000 IMNM patients. So what you can imagine there is that from a commercial perspective, you could imagine that we'll be able to gain a high portion of those patients because there are no other treatment options and the biology is so clear. On the other end of the spectrum, you can think of DM. There are more patients in DM, but it's also more heterogeneous in dermatomyositis. There's also more innovation coming to the dermatomyositis space. So that will grow that patient population. Innovation is good for patients. And I think let's see the data, how it reads out, but I think we should have a good value proposition to be able to compete in that population if the data reads out. So overall total population MG-like, but the subgroups provide quite different dynamics from a commercial perspective. Thanks for the questions.

Your next question comes from a line of Suzanne van Verthuizen from Kempen. Your line is open.

Hi, team. Thanks for taking my question. It's one on AMPA in MNMN in particular. There was a change in the dosing regimen between phase two and three, and the phase three is also a head-to-head. Could you elaborate on how you navigate the potential risks that these two changes introduce, what gives you comfort that the study can confirm EMPA's non-inferiority. And I'm also wondering if you can give some color on how you went about setting the non-inferiority margin in this progressive disease. Thank you.

Thank you. I think that's for you, Luke.

Yeah, thanks. Thanks for that question. And I can tell you a lot of thought went into that based on the data again from ARTA, where we tested multiple regimens and were able to model and look at an exposure-response relationship, which ultimately made us choose the dose regimen we went for. In terms of then choosing to go head-to-head, here the thinking was if we were taking placebo-controlled study, we could have a lot of events because people on placebo in this progressive disease, as you say, will need rescue. And therefore, we said, well, why not just do them straight head-to-head? So, that was that decision. The second one, how do you determine a non-inferiority margin? And this is actually also where the data on grip strength come in, because the only available data on IVIG are on grip strength.

So, that's why we used that measure to determine the non-inferiority margin.

Given the data we see from ARDAG, One of the features that is different is that we continuously seem to improve grip strength, something which is not seen in the experience with IVIG, and that gives us confidence that we can at least meet, but hopefully beat IVIG.

That's great. Thanks, Luke. And when you zoom out, I think what you can see with your answer is the approach that we take with our programs, strong biology rationale, de-risking with a phase two, and And I think we're well positioned for success commercially with this head-to-head data in the way that you've laid it out. So look forward to that data in Q4. Thanks, Luke.

Your next question comes from a line of Alison Bratzell from Piper Sandler. Your line is open.

Hey, good morning, guys, and thanks for taking the question. Just a follow-up on OcularMG and the potential for early treatment with VivGuard to prevent progression to generalize that these um is that something you're able to capture in part b of the oculus trial or just how long of a follow-up do you need to to confidently be able to make that claim um if there's any more color there would would be appreciated thank you yes thanks thanks for the question to allow me again to go on one of my favorite topics which is can we slow So, MG progression.

So the open-level extension following stage B, which we call stage B, is going to give us over two years of data, which if you look at extents, epidemiological data, et cetera, should give us enough window to capture these people progressing and whether or not it's to the rates that's there in the outside world. The caveat, of course, is this is non-controlled data, so any expression of this delaying might have to be in a publication or if the real-world evidence is deemed strong enough in a discussion with the agency.

I think that's what's exciting about this data, along with some of the other evidence generation that we're doing, a Phase IV study in early disease to be able to see that progression. But I think regardless, one thing that's important is with ocular MG is the symptom burden is significant, and the opportunity to transform lives of patients suffering from ocular MG is significant even without disease progression. So I think we can demonstrate that benefit in the short and the long term. Thanks, Luke.

Your next question comes from a line of Luca Issi from RBC Capital. Your line is open.

Oh, great. Thanks so much for taking my question. congrats on the progress uh maybe look if i take a back on ocular mystina gravis here again appreciate this is a fresh off the press but you know how should we think about the uh kind of clinical significance of the data here again in the context of p-value of a 0.012 and then maybe related to it can you confirm that the use of steroids or other therapy was relatively well balanced between the two arms so we can kind of definitively say that the benefit here is coming from vivguard and is not confounded by any other therapies. Thanks so much.

Yeah, thanks for that question. And, of course, we don't share too many detailed data because we want to make sure that the representation in an external conference isn't impacted by doing so. But to come back to the, yes, we have significant p-value, but that was driven by, in our mind, a very relevant treatment difference between active and placebo. Remember these endpoints range is between 0 to 18 and to show an active four point difference for that individual patient is certainly a relevant outcome. So we feel that in totality, this is a meaningful signal that we have shown. And with respect to balancing on steroids, steroids were allowed but had to be stable and we are confident that there's no imbalance in the outcome based on anything there.

And maybe just to add to your question on clinical significance, I mean, Luke mentioned in the script what, you know, when you think about what the impact that ocular MG has, what patients will tell you is that it strips them of their independence. They lose, because of the double vision, they lose the ability to drive, they lose the ability to work, work, and so it has a real impact on their quality of life. So there's no other treatments available other than steroids. So any benefit that we can provide, and certainly a four-point benefit that we've seen, is demonstrable benefit for patients and I think clinically very meaningful.

Your next question comes from a line of Justin Smith from Bernstein. Your line is open.

Thanks very much. It's just a very quick one, if you could talk about the commentary with regards to switching off the subcutaneous IG onto VivGuard and how that's changed over the last three months?

Yeah, I'm happy to. Well, I think what you're asking about is there was an FDA looking into real-world evidence around switching and CIDP worsening. Actually, we had good news that we We have completed that review and the label has been updated with some helpful guidance to HCPs around when switching from IBIG to VivGuard. So I think we're well positioned moving forward. That label update reinforces what we knew from it here and reinforces the risk benefit profile of VivGuard. Thanks for the question.

Your next question comes from a line of Samantha Semenko from Citi. Your line is open.

Good morning. Thanks very much for taking the question. Just one on the ocular MG opportunity, I'm wondering, can you speak to the mix of treating physicians that you're expecting for this patient population? Are they mainly managed by neurologists, ophthalmologists, or even neuro-ophthalmologists? And I'm wondering how much education you think you need on the opportunity to drive the great utilization in this segment? Thanks very much.

Yeah, thanks for the question. maybe Sandrine you can talk about that and also related to seronegative because we have the producinate coming up in May and just you know is there are there any changes for our field or the targeting strategy with this label with these potential label expansions thank you that's a great question actually we have a big overlap between the current prescribers and the target group we are visiting and the people that will be prescribing for MG in both seronegative and ocular so it's mostly a neurologist-driven disease so we don't expect to have to change our footprint and actually we increased our footprint early 2024. If you remember we doubled the footprint to be able to not only target academic medical centers but then to also be able to visit the community neurologists where we feel the majority of the patients are being taken care of.

So you want to change our approach there and with the big overlap we're confident we can target the majority of the potential and the prescribers thank you your next question comes from a line of Victor flock from BNP Paribas your line is open hey thanks for taking my question one question on Ardenix 213 so I believe the last time you've dated us on timelines where you were pointing out phase one results sometimes in H1 this year so I was just wondering whether we should expect you to discuss those data or to a broad extent your development program of that product later this year. Thanks so much.

Yeah, thanks for the question and again the interest in our next gen. We are excited. So we're moving forward with 213 and we shared that update previously and it is in the clinic. We're working on the indication strategy at the moment and our path forward and we'll certainly share that when we have an update to share. Thanks for the question.

And our final question today comes from the line of Douglas Sayle from H.C. Wainwright. Your line is open.

Hi, good morning. Hi, good morning. I'm sure I had a question. Sorry, I thought I might have been on mute. Just as OMG as a follow, we have heard from clinicians who have tried to use it in patients presenting with ocular symptoms, but they've had pushback from payers just given the fact it wasn't sort of on label, I'm just curious if you could provide some perspective on when you think it might start to become a contributor, will it be sort of getting it added to the label, or will there be a process where you need to also then talk to payers? Just sort of trying to understand the sequencing when we should think about this, because it does seem to be a fairly meaningful commercial opportunity for you. Thank you.

Yes, thank you, and I agree it is a meaningful opportunity for and a meaningful benefit for patients so what you can expect I mean we'll file as soon as we can based on this data and I think we have a well-oiled machine so we'll do that as soon as possible and then we'll see when the PDUFA date is assuming the the submission is accepted by the FDA what we normally guide to is because we will need to have conversations with payers and we will need to change those contracts we know what we usually guide to is that it takes about two quarters after approval to get those payer policies in place and to really start to see the impact of the opportunity. So we'll take it step by step, and step number one, we'll be preparing the filing as quickly as possible. Thank you.

And this concludes today's conference call. We thank you for your participation. You may now disconnect.