Argenx SE 6-K, filed Jul 27, 2023
Argenx SE (ARGX)
About this 6-K
Argenx SE filed this 6-K on July 27, 2023.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the Month of July 2023
Commission File Number: 001-38097
ARGENX SE
(Translation of registrant’s name into English)
Laarderhoogtweg 25
1101 EB Amsterdam, the Netherlands
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ⌧ Form 40-F ◻
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ◻
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ◻
argenx SE
On July 27, 2023, argenx SE (the “Company) issued a press release and unaudited first half-year financial results for 2023, which are further described in an Unaudited Interim Report for the Six Months Ended June 30, 2023, copies of which are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated by reference herein.
The information contained in this Current Report on Form 6-K, including the exhibits hereto, is incorporated by reference into the Company’s Registration Statements on Forms F-3 (File No. 333-258251 and S-8 (File Nos. 333-225375 and 333-258253).
EXHIBITS
Exhibit | | Description |
| | |
99.1 | | |
| | |
99.2 | | Unaudited Interim Report for the Six Months Ended June 30, 2023 |
| | |
101.INS | | Inline XBRL Instance Document |
| | |
101.SCH | | Inline XBRL Taxonomy Extension Schema Document |
| | |
101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| | |
101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| | |
101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document |
| | |
101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| | |
104 | | Cover Page Interactive Data File (formatted as Inline XBRL) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ARGENX SE | |
| | |
Date: July 27, 2023 | By: | /s/ Hemamalini (Malini) Moorthy |
| | Hemamalini (Malini) Moorthy |
| | General Counsel |
Exhibit 99.1
argenx Reports Half Year 2023 Financial Results and Provides Second Quarter Business Update
| - | $269 million in second quarter VYVGART® (efgartigimod alfa-fcab) global net product sales |
| - | VYVGART® Hytrulo now available in the U.S. with first vials shipped in July |
| - | Global VYVGART expansion continued with commercial launch in Italy and distribution agreement with Handok in South Korea |
| - | Topline results from ADVANCE-SC and ADDRESS expected in fourth quarter of 2023 |
| - | Management to host conference call today at 2:30 pm CET (8:30 am ET) |
July 27, 2023
Amsterdam, the Netherlands – argenx SE (Euronext & Nasdaq: ARGX), a global immunology company committed to improving the lives of people suffering from severe autoimmune diseases, today announced its half year 2023 financial results and provided a second quarter business update.
“We are thrilled to see the momentum continue across all aspects of our business, with a catalyst-rich first half of the year. For another quarter we saw consistent revenue growth with VYVGART, delivering on our promise to bring transformative change to the treatment of gMG and reaching more patients through global approvals and the launch of our SC offering. Now with the positive ADHERE data, we have strengthened our conviction in the potential of VYVGART for CIDP patients but also more broadly across IgG-mediated autoimmune diseases, motivating us to explore the full extent of the opportunity. Our ambition level is high and we are positioning argenx for long-term growth with VYVGART, empasiprubart, and our pipeline of immunology solutions. It is time to raise the bar for patients on what a treatment can offer and we are more inspired than ever in our pursuit to do so,” said Tim Van Hauwermeiren, Chief Executive Officer of argenx.
SECOND QUARTER 2023 AND RECENT BUSINESS UPDATE
VYVGART Expansion
VYVGART is a first-in-class antibody fragment targeting the neonatal Fc receptor (FcRn) and is now approved globally in six countries or regions (U.S., Japan, EU, UK, Israel, China) for generalized myasthenia gravis (gMG). VYVGART Hytrulo was approved by the U.S. Food and Drug Administration (FDA) on June 20, 2023, and is the first subcutaneous (SC) injectable for gMG. argenx is planning for multi-dimensional expansion to reach more patients with VYVGART through additional global regulatory approvals.
| ● | Generated global net VYVGART revenues of $269 million in second quarter of 2023 |
| ● | Launched VYVGART Hytrulo in U.S. and shipped first vials in July |
| ● | Launched VYGART in Italy in July following successful completion of reimbursement negotiations |
| ● | VYVGART approval decision in Canada expected in third quarter of 2023 |
| ● | Approval decisions of SC efgartigimod expected in Europe in fourth quarter of 2023, Japan by first quarter of 2024, and China by end of 2024 |
| ● | Marketing authorization application (MAA) filed in Japan for VYVGART for primary immune thrombocytopenia (ITP); approval decision expected in first half of 2024 |
| ● | Entered into VYVGART commercial and distribution agreement with Handok in South Korea |
Efgartigimod Research and Development
argenx is solidifying its leadership in immunology innovation by expanding the scope of IgG-mediated autoimmune diseases in development and further demonstrating the potential of FcRn blockade in ongoing clinical trials. By the end of 2023, efgartigimod is expected to be approved, in regulatory review or in development in 13 severe autoimmune diseases.
| ● | Announced positive topline results from ADHERE of VYVGART Hytrulo for chronic inflammatory demyelinating polyneuropathy (CIDP) |
| o | Primary endpoint met (p=0.000039); VYVGART Hytrulo demonstrated 61% reduction (HR: 0.39 95% CI: 0.25; 0.61) in risk of relapse versus placebo |
| o | 67% of patients in open-label Stage A demonstrated evidence of clinical improvement (ECI), indicating IgG autoantibodies play significant role in underlying biology of CIDP |
| o | Safety and tolerability profile consistent with confirmed safety profile of VYVGART |
| o | 91% (226/249) of eligible patients continued to ADHERE+ open-label extension study |
| ● | Topline data from ADDRESS (pemphigus) and ADVANCE-SC (primary immune thrombocytopenia) studies expected in fourth quarter of 2023 |
| ● | GO/NO GO decisions expected from BALLAD (bullous pemphigoid) in first quarter of 2024 and ALKIVIA (myositis) in second half of 2024 |
| ● | Topline data from ALPHA (post-COVID postural orthostatic tachycardia syndrome (PC-POTS)) expected in first quarter of 2024 and RHO (Sjogren’s syndrome) in second half of 2024 |
| ● | Studies ongoing in membranous nephropathy (MN) and lupus nephritis (LN) through Zai Lab collaboration |
| ● | Registrational study in thyroid eye disease (TED) and proof-of-concept studies in ANCA-associated vasculitis (ANCA) and antibody mediated rejection (AMR) in kidney transplant to start in fourth quarter of 2023 |
Pipeline Progress
argenx is advancing a robust portfolio of innovative clinical programs, including empasiprubart (C2 inhibitor) and ARGX-119 (muscle-specific kinase (MuSK) agonist). Both programs have the potential to be first-in-class opportunities for multiple severe indications.
| ● | Initiated second dose cohort in Phase 2 ARDA study of empasiprubart in multifocal motor neuropathy (MMN) |
| o | Independent Data Monitoring Committee recommended study continuation based on favorable safety profile observed in first dose cohort |
| o | Early efficacy signals support proof-of-concept in MMN |
| o | Second cohort to evaluate next dose of empasiprubart based on efficacy signals observed in first cohort |
| o | Topline results from both first and second cohorts expected in 2024 |
| ● | Phase 2 studies of empasiprubart in delayed graft function (DGF) on track to start by end of year and dermatomyositis in first quarter of 2024 |
| ● | Phase 1 study of ARGX-119 ongoing in healthy volunteers; subsequent Phase 1b trial to assess early signal detection in patients with congenital myasthenic syndrome and amyotrophic lateral sclerosis (ALS) |
Immunology Innovation Program
argenx continues to invest in its discovery engine, the Immunology Innovation Program, to foster a robust innovation ecosystem and drive early-stage pipeline growth. argenx expects to nominate one new pipeline candidate in 2023.
SECOND QUARTER 2023 FINANCIAL RESULTS
Three Months Ended | Six Months Ended | |||||||||||
(in thousands of $ except for shares and EPS) | 2023 | 2022 | 2023 | 2022 | ||||||||
Product net sales |
| $ | 269,313 | $ | 74,833 | $ | 487,335 | $ | 95,996 | |||
Collaboration revenue | 1,237 | 361 | 2,355 | 2,610 | ||||||||
Other operating income |
| 10,485 | 9,989 | 21,225 | 18,057 | |||||||
Total operating income | 281,035 | 85,183 | 510,915 | 116,663 | ||||||||
|
| |||||||||||
Cost of sales | (24,024) | (5,010) | (42,359) | (6,382) | ||||||||
Research and development expenses |
| (195,509) | (126,919) | (361,364) | (278,887) | |||||||
Selling, general and administrative expenses | (161,977) | (127,798) | (311,149) | (228,664) | ||||||||
Loss from investment in joint venture |
| (1,619) | - | (1,880) | - | |||||||
Total operating expenses | (383,129) | (259,727) | (716,752) | (513,933) | ||||||||
|
| |||||||||||
Operating loss | $ | (102,094) | $ | (174,544) | $ | (205,837) | $ | (397,270) | ||||
|
| |||||||||||
Financial income | 20,441 | 4,912 | 37,029 | 5,733 | ||||||||
Financial expense |
| (207) | (1,178) | (395) | (2,131) | |||||||
Exchange gains/(losses) | (2,001) | (46,169) | 9,164 | (53,382) | ||||||||
|
| |||||||||||
Loss for the period before taxes | $ | (83,861) | $ | (216,979) | $ | (160,039) | $ | (447,050) | ||||
Income tax (expense)/benefit |
| $ | (10,507) | $ | 8,229 | $ | 36,800 | $ | 11,114 | |||
Loss for the period | $ | (94,368) | $ | (208,750) | $ | (123,239) | $ | (435,936) | ||||
Loss for the period attributable to: |
| |||||||||||
Owners of the parent | $ | (94,368) | $ | (208,750) | $ | (123,239) | $ | (435,936) | ||||
Weighted average number of shares outstanding |
| 55,828,239 | 54,802,339 | 55,690,873 | 53,449,915 | |||||||
Basis and diluted loss per share (in $) | (1.69) | (3.81) | (2.21) | (8.16) | ||||||||
Net increase/(decrease) in cash, cash equivalents and current financial assets compared to year-end 2021 and 2022 |
| (195,580) | 260,665 | |||||||||
Cash and cash equivalents and current financial assets at the end of the period | 1,996,968 | 2,597,393 | ||||||||||
DETAILS OF THE FINANCIAL RESULTS
Total operating income for the second quarter and year-to-date in 2023 was $281.0 million and $510.9 million, respectively, compared to $85.2 million and $116.7 million for the same periods in 2022, and mainly consists of:
| ● | Product net sales of VYVGART for the three months ended and six months ended June 30, 2023, were $269.3 million and $487.3 million, compared to $74.8 million and $96.0 million for the same periods in 2022. |
| ● | Other operating income for the second quarter and year-to-date in 2023 was $10.5 million and $21.2 million, respectively, compared to $10.0 million, and $18.1 million for the same periods in 2022. The other operating income for the three and six months ended June 30, 2023 primarily relates to research and development tax incentives and payroll tax rebates. |
Total operating expenses for the second quarter and year-to-date in 2023 were $383.1 million and $716.8 million, respectively, compared to $259.7 million and $513.9 million for the same periods in 2022, and mainly consists of:
| ● | Cost of sales for the second quarter and year-to-date in 2023 was $24.0 million and $42.4 million, respectively, compared to $5.0 million and $6.4 million for the same periods in 2022. The cost of sales was recognized with respect to the sale of VYVGART. |
| ● | Research and development expenses increased by $68.6 million and $82.5 million for the three months and six months ended June 30, 2023, to $195.5 million and $361.4 million, respectively, compared to $126.9 million and $278.9 million for the same periods in 2022. The research and development expenses mainly relate to external research and development expenses and personnel expenses incurred in the clinical development of efgartigimod in various indications and the expansion of other clinical and preclinical pipeline candidates. |
| ● | Selling, general and administrative expenses for the second quarter and year-to-date in 2023 were $162.0 million and $311.1 million, respectively, compared to $127.8 million and $228.7 million for the same periods in 2022. The selling, general and administrative expenses mainly relate to professional and marketing fees linked to commercialization of VYVGART in the U.S., EU and Japan, and personnel expenses. |
Financial income for the second quarter and year-to-date in 2023 was $20.4 million and $37.0 million, respectively, compared to $4.9 million and $5.7 million for the same periods in 2022. The increase in financial income is mainly due to an increase in interest income on current financial assets and cash and cash equivalents attributable to higher interest rates.
Exchange gains/losses for the second quarter and year-to-date in 2023 were $2.0 million of exchange losses and $9.2 million of exchange gains, respectively, compared to $46.2 million and $53.4 million of exchange losses for the same periods in 2022. Exchange gains/losses are mainly attributable to unrealized exchange rate gains or losses on the cash, cash equivalents and current financial assets position in Euro.
Income tax for the second quarter and year-to-date in 2023 was $10.5 million of tax expense and $36.8 million of tax benefit, respectively, compared to $8.2 million and $11.1 million of tax benefit for the same periods in 2022.
Net loss for the three and six month periods ended June 30, 2023, was $94.4 million and $123.2 million, respectively, compared to $208.8 million and $435.9 million over the prior year periods. On a per weighted average share basis, the net loss was $2.21 and $8.16 for the six months ended June 30, 2023 and 2022, respectively.
Cash, cash equivalents and current financial assets totalled $2.0 billion as of June 30, 2023, compared to $2.2 billion as of December 31, 2022. Cash and cash equivalents and current financial assets decreased primarily as a result of net cash flows used in operating activities. The cash position as of June 30, 2023, excludes the $1.3 billion in estimated gross proceeds from the global equity offering, which closed on July 24, 2023.
With the closing of this transaction, argenx will review its cash burn expectations and provide an update accordingly.
UPCOMING FINANCIAL CALENDAR
| ● | October 31, 2023: Q3 2023 financial results and business update |
| ● | February 29, 2024: FY 2023 financial results and business update |
CONFERENCE CALL DETAILS
The second quarter 2023 financial results and business update will be discussed during a conference call and webcast presentation today at 2:30 pm CET/8:30 am ET. A webcast of the live call may be accessed on the Investors section of the argenx website at argenx.com/investors. A replay of the webcast will be available on the argenx website.
Dial-in numbers:
Please dial in 15 minutes prior to the live call.
Belgium32 800 50 201
France33 800 943355
Netherlands31 20 795 1090
United Kingdom44 800 358 0970
United States 1 888 415 4250
Japan81 3 4578 9081
Switzerland41 43 210 11 32
About argenx
argenx is a global immunology company committed to improving the lives of people suffering from severe autoimmune diseases. Partnering with leading academic researchers through its Immunology Innovation Program (IIP), argenx aims to translate immunology breakthroughs into a world-class portfolio of novel antibody-based medicines. argenx developed and is commercializing the first approved neonatal Fc receptor (FcRn) blocker in the U.S., Japan, Israel, the EU, the UK and China. The Company is evaluating efgartigimod in multiple serious autoimmune diseases and advancing several earlier stage experimental medicines within its therapeutic franchises. For more information, visit www.argenx.com and follow us on LinkedIn, Twitter, and Instagram.
For further information, please contact:
Media:
Erin Murphy
emurphy@argenx.com
Investors:
Alexandra Roy (US)
aroy@argenx.com
Lynn Elton (EU)
lelton@argenx.com
Forward-looking Statements
The contents of this announcement include statements that are, or may be deemed to be, “forward-looking statements.” These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes,” “hope,” “estimates,” “anticipates,” “expects,” “intends,” “may,” “will,” or “should” and include statements argenx makes regarding its plans for its global commercial expansion of VYVGART to reach more patients; continued investment in its Immunology Innovation Program to foster a robust innovation ecosystem and drive early-stage pipeline growth; the therapeutic potential of its product candidates; the intended results of its strategy and its collaboration partners’, including ongoing studies through its collaboration with Zai Lab; advancement of, and anticipated clinical development, data readouts and regulatory milestones and plans, including the (1) expected topline data from registrational ADDRESS and ADVANCE-SC studies in 2023, (2) expected GO/NO GO decisions from its BALLAD and ALKIVIA trials in 2024, (3) expected topline data from its ALPHA and RHO trials in 2024, (4) timeline of registrational and proof-of-concept studies in ANCA-associated vasculitis and antibody mediated rejection in kidney transplant, (5) potential of empasiprubart and ARGX-119 to be first-in-class opportunities for multiple serious indications and timeline of studies and results thereof and (6) planned nomination of a new product development candidate in 2023; the timing and outcome of regulatory filings and regulatory approvals, including the anticipated regulatory approvals of VYVGART in Canada and Japan and approvals of SC efgartigimod in Europe, Japan and China, and the number of autoimmune diseases for which efgartigimod is expected to be approved, in regulatory review or in development by end of 2023; and 2023 business and financial outlook and related plans, including the anticipated release of updated cash burn expectations and the timeline of future releases of financial results and business updates. By their nature, forward-looking statements involve risks and uncertainties and readers are cautioned that any such forward-looking statements are not guarantees of future performance. argenx’s actual results may differ materially from those predicted by the forward-looking statements as a result of various important factors, including inflation and deflation and the corresponding fluctuations in interest rate; regional instability and conflicts, such as the conflict between Russia and Ukraine, argenx’s expectations regarding the inherent uncertainties associated with competitive developments, preclinical and clinical trial and product development activities and regulatory approval requirements; argenx’s reliance on cllaborations with third parties; estimating the commercial potential of argenx’s product candidates; argenx’s ability to obtain and maintain protection of intellectual property for its technologies and drugs; argenx’s limited operating history; and argenx’s ability to obtain additional funding for operations and to complete the development and commercialization of its product candidates. A further list and description of these risks, uncertainties and other risks can be found in argenx’s U.S. Securities and Exchange Commission (SEC) filings and reports, including in argenx’s most recent annual report on Form 20-F filed with the SEC as well as subsequent filings and reports filed by argenx with the SEC. Given these uncertainties, the reader is advised not to place any undue reliance on such forward-looking statements. These forward-looking statements speak only as of the date of publication of this document. argenx undertakes no obligation to publicly update or revise the information in this press release, including any forward-looking statements, except as may be required by law.
TABLE OF CONTENTS
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
ARGENX SE
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
| | | | As of | ||||
| | | | June 30, | | December 31, | ||
(in thousands of $) |
| Note |
| 2023 |
| 2022 | ||
ASSETS |
| |
|
|
|
|
|
|
Non‑current assets | | | | | | | | |
Property, plant and equipment | | | | $ | |
| $ | |
Intangible assets | | | | | |
| | |
Deferred tax asset | | | | | | | | |
Other non-current assets | | 4 | | | |
| | |
Research and development incentive receivables | | | | | |
| | |
Investment in joint venture | | | | | | | | |
Prepaid expenses | | 5 | | | | | | — |
Total non‑current assets | | | | $ | |
| $ | |
| | | | | | | | |
Current assets |
| |
| |
|
| |
|
Inventories | | 6 | | $ | | | $ | |
Prepaid expenses |
| |
| | |
| | |
Trade and other receivables |
| 7 |
| | |
| | |
Research and development incentive receivables |
| |
| | |
| | |
Financial assets |
| 8, 18 |
| | |
| | |
Cash and cash equivalents |
| 9, 18 |
| | |
| | |
Total current assets |
| |
| $ | |
| $ | |
| | | | | | | | |
TOTAL ASSETS |
| |
| $ | |
| $ | |
The accompanying notes form an integral part of these unaudited condensed consolidated interim financial statements
2
| | | | As of | ||||
| | | | June 30, | | December 31, | ||
(in thousands of $) |
| Note |
| 2023 |
| 2022 | ||
EQUITY AND LIABILITIES |
| |
|
|
|
|
|
|
Equity |
| |
| |
|
| |
|
Equity attributable to owners of the parent |
| 10 |
| |
|
| |
|
Share capital |
| |
| $ | |
| $ | |
Share premium | | |
| | |
| | |
Translation Differences | | | | | | | | |
Accumulated losses |
| |
| | ( |
| | ( |
Other reserves |
| |
| | |
| | |
Total equity |
| |
| $ | |
| $ | |
| | | | | | | | |
Non-current liabilities |
| |
| | |
| | |
Provisions for employee benefits |
| |
| $ | |
| $ | |
Lease liabilities | | | | | | | | |
Deferred tax liabilities | | | | | | | | |
Total non-current liabilities | | | | $ | | | $ | |
| | | | | | | | |
Current liabilities |
| |
| | | | | |
Lease liabilities | | | | $ | | | $ | |
Trade and other payables | | 12 | | | | | | |
Tax liabilities | | | | | | | | |
Total current liabilities | | | | $ | | | $ | |
| | | | | | | | |
Total liabilities |
| |
| $ | |
| $ | |
| | | | | | | | |
TOTAL EQUITY AND LIABILITIES |
| |
| $ | |
| $ | |
The accompanying notes form an integral part of these unaudited condensed consolidated interim financial statements.
3
ARGENX SE
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF PROFIT OR LOSS
| | | | Six Months Ended | ||||
| | | | June 30, | ||||
(in thousands of $ except for shares and EPS) |
| Note | | 2023 |
| 2022 | ||
Product net sales |
| 13,14 | | $ | |
| $ | |
Collaboration revenue | | | | | | | | |
Other operating income |
| | | | |
| | |
Total operating income |
| | | | |
| | |
| | | | | | | | |
Cost of sales | | | | | ( | | | ( |
Research and development expenses |
| 15 | | | ( |
| | ( |
Selling, general and administrative expenses |
| 16 | | | ( |
| | ( |
Loss from investment in joint venture | | | | | ( | | | — |
Total operating expenses | | | | | ( | | | ( |
| | | | | | | | |
Operating loss |
| | | $ | ( |
| $ | ( |
| | | | | | | | |
Financial income |
| | | | |
| | |
Financial expense | | | | | ( | | | ( |
Exchange gains/(losses) |
| | | | |
| | ( |
| | | | | | | | |
Loss for the period before taxes |
|
| | $ | ( |
| $ | ( |
Income tax benefit |
| 17 | | $ | |
| $ | |
Loss for the period |
|
| | $ | ( |
| $ | ( |
Loss for the period attributable to: | | | | | | | | |
Owners of the parent | | | | | ( | | | ( |
Weighted average number of shares outstanding |
|
| | | |
| | |
Basic and diluted loss per share (in $) |
| | | | ( |
| | ( |
The notes are an integral part of these unaudited condensed consolidated interim financial statements.
4
ARGENX SE
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME AND LOSS
| | | | Six Months Ended | ||||
| | | | June 30, | ||||
(in thousands of $ except for shares) |
| Note | | 2023 |
| 2022 | ||
Loss for the period |
| | | $ | ( |
| $ | ( |
| | | | | | | | |
Items that may be reclassified subsequently to profit or loss, net of tax | | | | | | | | |
Currency translation differences, arisen from translating foreign activities | | | | | | | | ( |
Items that will not be reclassified to profit or loss, net of tax | | | | | | | | |
Fair value gain/(loss) on investments in equity instruments designated as at FVTOCI | | 18 | | | ( | | | ( |
|
| | | | |
| | |
Other comprehensive loss, net of income tax |
| | | $ | ( |
| $ | ( |
| | | | | | | | |
Total comprehensive loss attributable to: |
| | | $ | ( |
| $ | ( |
Owners of the parent |
| | | | ( |
| | ( |
The accompanying notes form an integral part of these unaudited condensed consolidated interim financial statements.
5
ARGENX SE
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
| | | | Six Months Ended | ||||
| | | | June 30, | ||||
(in thousands of $) |
| Note |
| 2023 |
| 2022 | ||
Operating loss |
|
|
| $ | ( |
| $ | ( |
Adjustments for non-cash items |
|
|
| | |
| |
|
Amortization of intangible assets |
| |
| | |
| | |
Depreciation of property, plant and equipment |
| |
| | |
| | |
Provisions for employee benefits | | | | | | | | |
Expense recognized in respect of share-based payments |
| 11 |
| | |
| | |
Fair value gains on financial assets at fair value through profit or loss | | | | | — | | | ( |
Loss from investment in joint venture | | | | | | | | — |
| | | | | | | | |
|
| |
| $ | ( |
| $ | ( |
Movements in current assets/liabilities |
| |
| |
|
| |
|
(Increase)/decrease in trade and other receivables |
| |
| | ( |
| | ( |
(Increase)/decrease in inventories | | 6 | | | | | | ( |
(Increase)/decrease in other current assets |
| |
| | ( |
| | ( |
Increase/(decrease) in trade and other payables |
| |
| | ( |
| | ( |
Movements in non-current assets/liabilities | | | | | | | | |
(Increase)/decrease in non‑current prepaid expenses | | | | | ( | | | — |
(Increase)/decrease in other non‑current assets |
| |
| | ( |
| | ( |
| | | | | | | | |
Cash flows used in operating activities | | | | $ | ( | | $ | ( |
| | | | | | | | |
Interest paid | | | | | ( | | | ( |
Income taxes paid | | | | | ( | | | ( |
| | | | | | | | |
Net cash flows used in operating activities |
| |
| $ | ( |
| $ | ( |
|
| |
| |
|
| |
|
Purchase of property, plant and equipment |
| |
| | ( |
| | ( |
(Increase)/decrease in current financial assets | | 8 | | | — | | | ( |
Purchase of current financial investments (1) | | | | | ( | | | — |
Sale of current financial investments (1) | | | | | | | | — |
Interest received |
| |
| | |
| | |
Investment in joint venture | | | | | ( | | | — |
| | | | | | | | |
Net cash flows (used in) / from investing activities |
| |
| $ | |
| $ | ( |
|
| |
| |
|
| |
|
Principal elements of lease payments | | | | | ( | | | ( |
Proceeds from issue of new shares, gross amount |
| 10 |
| | — |
| | |
Issue costs paid | | | | | — | | | ( |
Exchange gain from currency conversion on proceeds from issue of new shares | | 10 | | | — | | | |
Payment on employee withholding taxes related to restricted stock unit awards | | | | | ( | | | — |
Proceeds from exercise of stock options | | 10 | | | | | | |
| | | | | | | | |
Net cash flows from financing activities |
| |
| $ | |
| $ | |
| | | | | | | | |
Increase/(decrease) in cash and cash equivalents |
| |
| $ | |
| $ | |
| | | | | | | | |
Cash and cash equivalents at the beginning of the period |
|
|
| $ | |
| $ | |
Exchange gains/(losses) on cash & cash equivalents |
| |
| $ | |
| $ | ( |
Cash and cash equivalents at the end of the period |
|
|
| $ | |
| $ | |
(1) Due to the change in the maturity of the current financial assets during current year, the presentation has been changed from net basis to gross basis
The accompanying notes form an integral part of these unaudited condensed consolidated interim financial statements.
6
ARGENX SE
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY
| | Attributable to Owners of the Parent | |||||||||||||||||||||||
|
| | |
| | |
| | |
| |
| Share-based |
| |
| Total |
|
| | | ||||
| | | | | | | | | | | | | payment and | | | | Equity | | | | | ||||
| |
| | |
| | |
| | | | | income tax | | | | Attributable | | |
| | ||||
| | | | | | | | | | | | | deduction on | | Other | | to Owners | | | | | ||||
| | Share | | Share | | Accumulated | | Translation | | share-based | | comprehensive | | of the | | | Total | ||||||||
(in thousands of $) | | Capital | | Premium | | Losses |
| Difference |
| payments |
| income |
| Parent | | | Equity | ||||||||
Balance year ended December 31, 2021 |
| $ | |
| $ | |
| $ | ( |
| $ | |
| $ | | | $ | ( |
| $ | |
|
| $ | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Loss for the period |
| $ | |
| $ | |
| $ | ( | | $ | | | $ | | | $ | | | $ | ( | | | $ | ( |
Other comprehensive income / (loss) | | | | | | | | | | | | ( | | | | | | ( | | | ( | | | | ( |
Total comprehensive income/(loss) for the period | | | — | | | — | | | ( | | | ( | | | — | | | ( | | | ( | | | | ( |
Income tax benefit from excess tax deductions related to share-based payments | | | | | | | | | | | | | | | | | | | | | | | | | |
Share-based payment |
| | |
| | |
| |
|
| | | | | | | | | | | |
|
| | |
Issue of share capital | | | |
| | |
| |
|
| | | | | | | | | | | |
|
| | |
Transaction costs for equity issue | | | | | | ( | | | | | | | | | | | | | | | ( | | | | ( |
Exercise of stock options |
| | |
| | |
| |
|
| | | | | | | | | | | |
|
| | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Balance period ended June 30, 2022 |
| $ | |
| $ | |
| $ | ( |
| $ | |
| $ | | | $ | ( |
| $ | |
|
| $ | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Balance year ended December 31, 2022 | | $ | |
| $ | |
| $ | ( |
| $ | |
| $ | | | $ | ( |
| $ | |
|
| $ | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total loss of the period |
| $ |
|
| $ |
|
| $ | ( | | $ |
|
| $ |
| | $ |
|
| $ | ( | | | $ | ( |
Other comprehensive income / (loss) | | | | | | | | | | | | | | | | | | ( | | | ( | | | | ( |
Total comprehensive income/(loss) for the period | | | — | | | — | | | ( | | | | | | — | | | ( | | | ( | | | | ( |
Income tax benefit from excess tax deductions related to share-based payments | | | | | | | | | | | | | | | | | | | | | | | | | |
Share-based payment |
| |
|
| |
|
| |
|
| |
|
| | | | | |
| | |
|
| | |
Exercise of stock options |
| | |
| | |
| |
|
| | |
| | | | | |
| | |
|
| | |
Ordinary shares withheld for payment of employees' withholding tax liability | | | | | | ( | | | | | | | | | | | | | | | ( | | | | ( |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Balance period ended June 30, 2023 |
| $ | |
| $ | |
| $ | ( |
| $ | |
| $ | | | $ | ( |
| $ | |
|
| $ | |
Please refer to note 10 for more information on the share capital.
The accompanying notes form an integral part of these unaudited condensed consolidated interim financial statements.
7
ARGENX SE
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. General information about the Company
argenx SE is a Dutch European public company with limited liability incorporated under the laws of the Netherlands. The Company (COC 24435214) has its official seat in Rotterdam, the Netherlands, and its registered office is at Laarderhoogteweg 25, 1101 EB Amsterdam, the Netherlands.
argenx SE is a publicly traded company with ordinary shares listed on Euronext Brussels under the symbol “ARGX” since July 2014 and with American Depositary Shares listed on Nasdaq under the symbol “ARGX” since May 2017.
2. Basis of preparation
The unaudited condensed consolidated interim financial statements for the six months ended June 30, 2023 have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’ as issued by the IASB and as adopted by the European Union. The unaudited condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended December 31, 2022.
All amounts herein are presented in thousands of $, unless otherwise indicated, rounded to the nearest $ ‘000.
The unaudited condensed consolidated financial statements have been approved for issue by the Company’s Board of Directors (the “Board”) on July 25, 2023.
3. Significant accounting policies
There were no significant changes in accounting policies, critical accounting judgements and key sources of estimation uncertainty applied by us in these unaudited condensed consolidated interim financial statements compared to those used in the annual consolidated financial statements as of December 31, 2022.
4. Other non-current assets
| | As of | ||||
| | June 30, | | December 31, | ||
(in thousands of $) |
| 2023 |
| 2022 | ||
Non-current restricted cash | | $ | | | $ | |
Non-current financial assets held at fair value through profit or loss |
| | |
| | |
Non-current financial assets held at fair value through OCI |
| | |
| | |
Total other non-current assets |
| $ | |
| $ | |
Please also refer to note 18 for more information on the financial instruments.
5. Non-current prepaid expense
Non-current prepaid expense is related to prepaid inventory. Please also refer to note 6 for more information on inventory.
8
6. Inventories
| | As of | ||||
| | June 30, | | December 31, | ||
(in thousands of $) |
| 2023 |
| 2022 | ||
Raw materials and consumables |
| $ | |
| $ | |
Inventories in process |
| | |
| | |
Finished goods | | | | | | |
Total inventories |
| $ | |
| $ | |
The cost of inventories, which is recognized as an expense and included in the “cost of sales” on the unaudited condensed consolidated statements of profit or loss, amounted to $
As a result of the detection of a latent defect in the second quarter of 2023 in drug substance batches produced in 2022 at one of the facilities awaiting approval, the Company has decreased inventory with an amount of $
Included in inventory are products which could be used either for commercial activities, or for in-house preclinical and clinical programs, non-reimbursed pre-approval programs and clinical programs carried out by Zai Lab.
7. Trade and other receivables
Trade and other receivables are composed of receivables which are detailed below:
| | As of | ||||
| | June 30, | | December 31, | ||
(in thousands of $) |
| 2023 |
| 2022 | ||
Trade receivables |
| | |
| | |
Other receivables | | | | | | |
Interest receivable |
| | |
| | |
Total trade and other receivables |
| $ | |
| $ | |
The carrying amounts of trade and other receivables approximate their respective fair values. On June 30, 2023 and December 31, 2022, the Company did not have any provision for expected credit losses.
8. Current financial assets
These current financial assets relate to term accounts with an initial maturity longer than
| | | | | | |
| | As of | ||||
| | June 30, | | December 31, | ||
(in thousands of $) |
| 2023 |
| 2022 | ||
Money market funds |
| $ | |
| $ | |
Term accounts | | | | | | |
Total Current Financial Assets |
| $ | |
| $ | |
Please also refer to note 18 for more information on the financial instruments.
9
9. Cash and cash equivalents
| | As of | ||||
| | June 30, | | December 31, | ||
(in thousands of $) |
| 2023 |
| 2022 | ||
Money market funds |
| $ | |
| $ | |
Term accounts | | | | | | |
Cash and bank balances |
| | |
| | |
Total cash and cash equivalents |
| $ | |
| $ | |
On June 30, 2023, cash and cash equivalents amounted to $
Please also refer to note 18 for more information on the financial instruments.
10. Shareholders’ capital
On June 30, 2023, the Company’s share capital was represented by
Number of shares outstanding on December 31, 2022 |
| |
Exercise of stock options | | |
Vesting of RSUs | | |
Number of shares outstanding on June 30, 2023 |
| |
11. Share based payments
The Company has an equity incentive plan for the employees, key consultants, board members, senior managers and key outside advisors (“key persons”) of the Company and its subsidiaries. In accordance with the term of the plan, as approved by shareholders, employees may be granted stock options and/or restricted stock units.
11.1 Stock options
On April 3, 2023, the Company granted a total of
Stock options granted in | Apr-23 | |
Number of options granted | | |
Fair value of options (in USD) (*) | $ | |
Share price (in USD) (*) | $ | |
Exercise price (in USD) (*) | $ | |
Expected volatility | % | |
Expected option life (in years) | | |
Risk‑free interest rate | % | |
Expected dividends | | — |
(*) amounts have been converted to US dollar at the closing rate of grant date | | |
The stock options are granted to key persons of the Company and its subsidiaries. The stock options may be granted to purchase ordinary shares at an exercise price. The stock options have been granted free of charge. Each employee’s stock option converts
10
into
| ● | of the total stock options granted on the first anniversary of the granting of the stock options; and |
| ● | of the total grant on the first day of each month following the first anniversary of the date of grant of the stock options. |
Upon leave of the employee, consultant or director, stock options must be exercised before the later of (i) 90 days after the last working day at argenx, or (ii) March 31 of the 4th year following the date of grant of those stock options, and in any case no later than the expiration date of the option.
The total share-based payment expense related to stock options recognized in the unaudited condensed consolidated statement of income or loss totaled $
11.2 Restricted Stock Units (RSUs)
The RSUs are granted to key persons of the Company and its subsidiaries. The RSUs have been granted free of charge. Each employee’s RSUs converts into
The total share-based payment expense related to RSUs recognized in the unaudited condensed consolidated interim statements of profit or loss totaled $
12. Trade and other payables
| | As of | ||||
| | June 30, | | December 31, | ||
(in thousands of $) |
| 2023 |
| 2022 | ||
Trade payables | | $ | |
| $ | |
Short term employee benefits | | | | | | |
Gross-to-net accruals | | | | | | |
Other | | | | | | |
Total trade and other payables | | $ | | | $ | |
The carrying amounts of trade and other payables approximate their respective fair values.
Trade payables correspond primarily to clinical and manufacturing activities and include accrued expenses related to these activities.
Short term employee benefits include payables and accruals for salaries and bonuses to be paid to the employees of the Company.
11
The movement in gross-to-net accruals as of June 30, 2023 and as of June 30, 2022 was as follows:
| | | | | | Distribution | | | |
| | | Rebates and | | | fees, product | | | |
| | | charge backs | | | returns and | | | Total |
(in thousands of $) |
| | | | | other | | | |
Balance at January 01, 2022 | | $ | — |
| $ | — | | $ | — |
Current estimate related to the sales made in current year | | | | | | | | | |
(Credits or payments related to sales made during the year) | | | ( | | | ( | | | ( |
Balance at June 30, 2022 | | $ | | | $ | | | $ | |
| | | | | | | | | |
Balance at January 01, 2023 | | $ | | | $ | | | $ | |
Current estimate related to the sales made in current year | | | | | | | | | |
Adjustments for prior year sales | | | | | | ( | | | ( |
(Credits or payments related to sales made during the year) | | | ( | | | ( | | | ( |
(Credits or payments related to sales made during the prior year) | | | ( | | | ( | | | ( |
Balance at June 30, 2023 | | $ | | | $ | | | $ | |
13. Product net sales
For the six months ended June 30, 2023, the product gross sales was fully related to sales of VYVGART and amounts to $
For the six months ended June 30, 2022, the product gross sales was fully related to sales of VYVGART and amounts to $
Refer to note 14 for the breakdown of product net sales by regions for six month ended June 30, 2023.
14. Segment reporting
The following table summarizes our product net sales by territory of sales based on the country of the entity that recognizes product net sales:
| | Six Months Ended | ||||
| | June 30, | ||||
(in thousands of $) |
| 2023 | | 2022 | ||
Product net sales | | $ | | | $ | |
United States | | | | | | |
Japan | | | | | | |
EMEA | | | | | | |
Total |
| $ | |
| $ | |
We sell our products through a limited number of distributors and wholesalers.
12
The non-current assets of the Company, with the exception of the deferred tax assets, are geographically located as shown in the table below:
| | As of | ||||
| | June 30, | | December 31, | ||
(in thousands of $) | | 2023 |
| 2022 | ||
Belgium | | $ | |
| $ | |
United States | | | |
| | |
Japan | | | |
| | |
Germany | | | | | | |
France | | | | | | |
Italy | | | | | | — |
Total | | $ | |
| $ | |
15. Research and development expenses
| | Six Months Ended | ||||
| | June 30, | ||||
(in thousands of $) | | 2023 |
| 2022 | ||
Personnel expense | | $ | |
| $ | |
External research and development expenses | | | |
| | |
Materials and consumables | | | |
| | |
Depreciation and amortization | | | |
| | |
Other expenses | | | |
| | |
Total research and development expenses | | $ | |
| $ | |
16. | Selling, general and administrative expenses |
| | Six Months Ended | ||||
| | June 30, | ||||
(in thousands of $) | | 2023 | | 2022 | ||
Personnel expense | | $ | | | $ | |
Professional and marketing fees | | | | | | |
Supervisory board | | | | | | |
Depreciation and amortization | | | | | | |
IT expenses | | | | | | |
Other expenses | | | | | | |
Total selling, general and administrative expenses | | $ | | | $ | |
17. Income tax benefit
The Company recorded an income tax benefit of $
| 1. |
13
18. Financial instruments and financial risk management
The Company carried the following assets at fair value on June 30, 2023 and December 31, 2022, respectively:
| | At June 30, 2023 | |||||||
(in thousands of $) |
| Level 1 |
| Level 2 |
| Level 3 | |||
Non-current financial assets |
| $ | |
| $ | — |
| $ | |
Current financial assets | | | | | | — | | | — |
Cash equivalents |
| | |
| | — |
| | — |
Assets carried at fair value |
| $ | |
| $ | — |
| $ | |
| | At December 31, 2022 | |||||||
(in thousands of $) |
| Level 1 |
| Level 2 |
| Level 3 | |||
Non-current financial assets |
| $ | |
| $ | — |
| $ | |
Current financial assets |
| | |
| | — |
| | — |
Cash equivalents | | | | | | — | | | — |
Assets carried at fair value |
| $ | |
| $ | — |
| $ | |
Non-current financial assets – Level 3
In March 2019, the Company entered into a license agreement with AgomAb Therapeutics NV for the use of HGF-mimetic SIMPLE Antibodies™, developed under the Company’s Immunology Innovative Program. In exchange for granting this license, the Company received a profit share in AgomAb Therapeutics NV.
In March 2021, AgomAb Therapeutics NV secured $
In June 2022, AgomAb Therapeutics NV secured €
Non-current financial assets – Level 1
As part of the license agreement for the development and commercialization for efgartigimod in Greater China, the Company obtained, amongst others,
19. Related party transaction
The Company has a joint venture agreement with the University of Colorado Anschutz Medical Campus and UCHealth resulting in a separate legal entity, OncoVerity, Inc. During the first six months of 2023, the Company contributed $
20. Contractual obligations and commitments
The Company’s manufacturing commitments with Lonza, its drug substance manufacturing contractor, relate to the ongoing execution of the biologic license application (BLA) services for efgartigimod and its manufacturing activities related to the commercialization or potential future commercialization. In December 2018, the Company signed its first commercial supply
14
agreement with Lonza related to the reservation of commercial drug substance supply capacity for efgartigimod. In the aggregate, as of June 30, 2023, the Company has outstanding commitments for efgartigimod under the first commercial supply agreement of $
During 2022, the Company signed an agreement with Fujifilm, for activities relating to the large-scale manufacturing of efgartigimod drug substance. In the aggregate, as of June 30, 2023, the Company has outstanding commitments for efgartigimod under the commercial supply agreement of $
21. Events after the balance sheet date
On July 17, 2023, the Company offered
The Company generated its first commercial sale of Vyvgart Hytrulo in the United States during July 2023, which trigged a milestone payment of $
No other events have occurred after the balance sheet date that could have a material impact on the unaudited condensed consolidated financial statements.
15