argenx SE

Good morning. My name is Rob, 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. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again press star one. Thank you. I'd like to introduce Beth DelGiaco, Vice President, Global Head of Corporate Communications and Investor Relations. You may now begin your conference.

Thank you, Operator. A press release was issued earlier today with our third quarter 2023 financial results and business update. This can be found on our website along with the presentation for today's webcast. Before we begin, I'd like to remind you on slide two that forward-looking statements may be presented during this call. These may include 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 these statements in relation to actual results unless required by law. I'm joined on the call today by Tim van Harmeren, Chief Executive Officer, Carl Gubitz, Chief Financial Officer, and Karen Massey, Chief Operating Officer. I will now turn the call over to Tim.

Thank you, Beth, and welcome, everyone. Slide three. It is incredible to see what the Argenix team has accomplished this year, meticulously delivering on the ambitious plan they laid out in January. We are reaching more and more GMG patients around the world and brought a subcutaneous product to the market only 18 months after the IV launch. We reported stellar CIDP data and now have a path forward to approval next year. We advanced our pipeline with an important goal decision in MMN with Ambassi Brevard and are also keeping our promise to invest in the next generation of exciting preclinical assets which we will talk about next year. Stepping back, we are working on 13 indications for BibGuard alone with more slated to begin before 2025. We have accumulated extensive clinical trial and real world experience with our first in class F7 inhibitor and continue to publish and present on its differentiated efficacy and safety profile. All of this is furthering our leadership in the space and broadening our understanding of the potential of safeguard to change how we view autoimmunity. I would first like to share key highlights from the quarter and then move on to milestones ahead for the remainder of the year. The strength of our launch continues with double digit growth quarter over quarter. Karen will share additional details later in the call. but at a high level, I'm really pleased with where we are today. We continue to hear countless patient stories and testimonials about VivGuard, and this is motivating our teams to drive further growth. We focus our VivGuard expansion goals across three key areas, expanding within the GMG treatment paradigm, expanding geographically, and expanding into new indications. First on expanding within GMG, we are already seeing traction with new patients and new prescribers three months into the Hytrulo launch. We are the only GMG treatment that is available as an IV and a simple sub-Q injection, both offering a consistently strong clinical benefit. This choice in how and where patients want to be treated will help us move into earlier lines. Looking to our geographic expansion, we received VivGuard approval in Canada, have our first patients in Italy and China, and moved another step closer to bringing Hytrulo to patients in Europe with a positive CHMP opinion, including self-administration on the label. In addition to our commercial success, we achieved a key win for the CIDP community over the quarter and are planning ahead for indication expansion. We had a positive meeting with the FDA and can confirm we are on track to file our SBLA before the end of the year. As you will recall, the top-line results from our adhered trial were nothing short of game-changing. This was the largest global clinical trial for CIDP to date and we not only confirmed CRDP as an IgG-mediated disease, but also set a new standard for CRDP trials in the future. Efficacy was apparent across patient subtypes, and we saw a phenomenal 99% rollover into the open-label extension study. Given the high unmet need for a safe and effective treatment alternative, we feel a strong sense of urgency to bring our therapy to CIDP patients as quickly as possible. Therefore, I'm also pleased to tell you that we have notified the FDA of our intention to use our PRV with the CIDP submission. Slide four. Today, I'm speaking to you from ANEM in Phoenix, Arizona, where the Argenix team is presenting a significant amount of data on VidGuard. we have now dosed more than 1,400 patients, generating more than 1,000 patient years of data across all clinical trials. And in MG, we now have almost two years of real-world experience in approximately 6,000 patients. This has provided us confidence in the consistency of the data and a deep understanding of the clinical profile of our FC fragments. And why? the way in which it binds to FCRN, can lead to differentiated results. At the conference, we are presenting aggregated data from ADAPT, ADAPT SubQ, and the associated open-label extension studies, which extend out beyond three years and 19 treatment cycles. We see that responses are repeatable cycle over cycle, and that clinical benefit improvements are of a consistent magnitude. We also see consistent results on minimal symptom expression. In every data set, we are able to achieve approximately 40% MSC, which is an important part of our value proposition to patients. We also show in our data that patients who are able to achieve MSC have quality of life measurements comparable to healthy populations. which is why we believe this metric should be the goal that physicians seek to attain with their energy patients. 50 continues to be a key difference shift, and we show that across all indications and all dosing schedules, treatment emergent adverse events are mild to moderate and do not increase with longer exposure. And we do not see reduction in albumin or increase in cholesterol. The unique clinical profile that we confirm with this data can be linked to the unique design of F-cortisumab, which of course was born out of Dr. Sally Schwartz's groundbreaking immunology research on FCRN biology. Since that time, we have generated a new understanding of the role of FCRN beyond a regulator of IgG levels in circulation. We know that FCRN is important in the trafficking of antibodies into tissues, and that by binding FCRN, our fragment can reach the tissues and site of disease very fast. It is also involved in the autoantigen presentation process, which may explain the data we saw in Tempfigus in reducing autoreactive B cells. Lastly, given the natural way in which we bind FCRN, we can uniquely modulate the target, blocking IgGs from binding, but not derailing FCRN itself into the lysosome for degradation. This has allowed us to select doses and dosing regimens that optimize the clinical benefit of Elgatigemot without having to manage for dose-related adverse events. Our leadership in FCRN presents itself through our business. From the efforts of our commercial and medical affairs teams, to the ongoing translational work of our scientists, who are rewriting the textbooks of immunology. Slide five. Looking ahead, we are excited to advance our pipeline with two upcoming phase three readouts. The first readout will be the top line results from our ITP advanced sub-Q study, followed by our tantricus address study around year end. Let's begin with a high level overview of Hythrulo in ITP. Our goal for the sub-2 study is to replicate the phase 3 IV results, which were recently published in the Lancet. The study has the same design and endpoints, although we increased enrollment to give ourselves more room for success with a highly refractory patient population. The primary endpoint is challenging, so in terms of the threshold for success, we will be focused on the delta between treated and placebo. This endpoint is designed to meet the regulatory requirements, but we also will be looking at the fast onset of action, the IWG score, and safety. The IWG score is what we view as the most clinically meaningful endpoint, as it is based on how clinicians make treatment decisions in the real world. ITP patients are often very fit, but suffer from fatigue and anxiety due to the risk associated with an unexpected bleed. They typically cycle through multiple treatments in the trial and error approach, including through multiple TPO's. What we have learned in our conversations with the ITP medical community is that there is a real need for a new modality to treat ITP, particularly new modalities that come with a favorable safety profile, which is potentially where VivGuard could step in. Slide six. Next, we can expect to see data from the address study in Penficus around year end, meaning the data readout will fall right before or after the year end as we navigate the data analysis and communication around the holiday period. The phase three trial for Penficus was built on the adaptive phase two results where we saw a fast onset of action with 90% of patients achieving disease control after just one to two infusions, and a quick time to CR on a low dose of steroids. In the 50 study, we implemented an official steroid-taking protocol, and this is integrated in our primary endpoint. Similar to ITP, the primary endpoint is a challenging one. defined as the proportion of patients achieving complete remission on a minimum dose of steroids within 30 weeks. It combines reaching complete clinical remission, taping 2, and maintaining a low dose of steroids and sustaining this for 8 weeks. The current standard of care, including steroids and rituximab, leaves ample of room for a fast, new, durable treatment with few side effects. This will be especially important in a post-COVID setting, now that we have a better understanding of the detriments of long-term immune suppression. Slide 7. In 2024, we have multiple catalysts from our pipeline to look forward to. I'm particularly excited for the MMN top-line results to be shared next year. This is the first indication for our second pipeline in a product, EMPA, and is a very serious disease which fits perfectly within the infrastructure we are building for GMG and CIDP. We also have two upcoming go-no-go decisions, first in bolus panfugoides around the end of this year, and also in myositis, which is expected in the second half of 2024. Phase II POTS results are expected in the first quarter of 2024 and has the potential to be a sizable opportunity. This is a study where we will learn a lot about the role of IgGs in this growing indication. And Sjogren's results are expected to be shared in the first half of 2024. This is an exciting opportunity within rheumatology where we believe strongly in the role of IgGs as a disease driver. Lastly, we are focused on long-term sustainable innovation and know to achieve this, we need to invest in the growth of our early stage pipeline. We have several exciting programs through our IIP, which we will communicate as we get closer to INDs, but we are working from a strong track record of success. Every program in our pipeline, including those that we are developing ourselves, and those that are in the hands of others have all been co-created with a top-notch academic collaborator and are grounded in a breakthrough immunology innovation. The new programs will also have this characteristic feature of assets from our IIT.

I will now turn the call over to Karl. Thank you, Tim. Slide eight. Our third quarter 2023 financial results are detailed in the press release from this morning. I will highlight the key points here. The continued momentum of our launch is reflected in our third quarter revenues. We generated $340 million total revenues, including $329 million in global net product sales and $11 million in collaboration and other revenues. Other revenues include $700,000 in royalty revenues from VivGuard sales in China. The quarter three global product net sales of $329 million represents growth of 22% versus quarter two. The breakdown is as follows. The U.S. sales is $280 million, Japan $15 million, EMEA $26 million, and China $7 million. It is important to note two points on the risk card net product sales. First, in EMEA, Net sales includes a one-off positive impact of approximately $6 million as a result of a true-up for the German price. Remember that beginning in March, we started to accrue revenue in Germany at the projected negotiated price. The price was finalized in September, and the true-up reflected in the quarter-free results. Second, The product net sales to China of $7 million is revenue generated on the supply of commercial vials to Xilab, our first party collaborator in China. The sales to Xilab are at cost plus a nominal management fee. When Xilab sells the vials, Organics receives a royalty, which is reflected in the $700,000 mentioned earlier. Our total expenses of $420 million for the third quarter, resulting in an operating loss of $81 million for the quarter. We ended the quarter with $3.2 billion in cash, cash equivalents, and current financial assets. This includes the net proceeds of approximately $1.2 billion from the global offering completed in July. I will now turn the call over to Karen who will provide detail on the commercial front.

Thank you, Carl. Slide 9. I'm really happy where we are with our VivGuard launch, having rapidly and successfully brought a first-in-class medicine to patients across multiple markets. Today, I will share the details around the current launch dynamics and then highlight the ambitious plan ahead. Our goal is to continue to raise the bar for patients globally in what they can expect from a treatment for their autoimmune disease. changing what well-controlled means so that they don't have to weigh the trade-offs between efficacy and safety and can experience a low treatment burden that allows them to get back to their lives. Before we discuss the performance over the quarter, I want to visit the multidimensional growth strategy we have in place. We have a bold vision for VivGuard, bringing in innovative therapy to new patients, expanding our geographic reach, and maximizing the impact of new indications. We have already added HyTRULO to our product suite, and continue to develop future product presentations to support our plan to move earlier in the treatment paradigm. We are rapidly bringing VivGuard and VivGuard Hytrulo to market in new countries and have key pivotal readouts on the horizon, which will further help us realize the broad potential of VivGuard and FGuard Tigamon into new indications. Slide 10. First, I'm broadening our patient reach with VivGuard and VivGuard Hytrulo. With our third quarter results, we have now generated an impressive $816 million in net product revenues year-to-date. The large majority of this revenue is driven by VivGuard, and there are a number of metrics that we have observed that give us confidence in the trajectory of both VivGuard and VivGuard HyTRULO in the U.S. First, we're seeing VivGuard-naive patients comprise the majority of our HyTRULO prescriptions. So uptake is not being driven by a switch dynamic, but rather by expansion. By providing flexibility in how and where patients receive treatment, we are reaching a broader population, which is what we had hoped for. The initial feedback from doctors on Zivgard Hytrulo has been broadly positive, and they recognize the benefit of the simple 30 to 90 second single injection enabled by the unique Halazime N-Haze technology. We also continue to make progress shifting into earlier treatment lines, and Zivgard Hytrulo is contributing to this expansion. With physicians, we're focusing not only on expanding our prescriber base, but on also driving brand loyalty with our current prescribers. ZipGuard Hytrulo is helping with both of these goals, and we're still at the front end of the adoption curve with neurologists. The opportunity before us is extensive. In the U.S., injection sites are actively working to set up protocols to enable the injections. This takes time, and we're seeing consistent progress. The first hyperbolic payer policies are also being published. So between this and the sites becoming available for treatment and the high level of excitement from physicians and patients, we expect to see this pull through into new patient starts as well. Overall, we are right where we expect it to be. We're on the path towards maintaining the trajectory of our launch, consistent quarter-over-quarter progress towards reaching more GMG patients globally. Slide 11. Second, In terms of expanding our suite of product presentations, HyTRULO is our first generation subcutaneous, but our goal is to continue to innovate on the patient experience with future product presentations as well. Our second generation subcutaneous product is a pre-filled syringe, which is already in development. Our plan for the PFS is to enable self-administration in the US, given the simplified experience for patients. We will also aim to advance our PFS product forward for both MG and future indications, including CIDP, in parallel. The approval path includes bioequivalence and human factor studies, as well as stability data, and we expect to be able to share more information with you on timing early next year. Slide 12. Thirdly, we're delivering growth by moving into new markets with VivGuard. We are thinking about this both in terms of how we expand geographically and also as we look to repeat the success of MG in new indications. On our geographic expansion, starting with China, through our partnership with XyLab, after June approval, the first patients began VivGuard treatment during the third quarter. Xy also filed for an approval of subcutaneous Evgar-Tigamon, and we expect to hear back on an approval decision next year. We continue to make progress on pricing and reimbursement across the EMEA region, and have had very good outcomes so far with our negotiations. with reimbursement secured in Germany, Italy, and now Spain also recognizing the important value that VIVGAR provides to GMG patients and to healthcare systems. For subcutaneous FGAR-Tigamon, we received a positive CHMP opinion in September, which was a significant milestone for the region, and notably, the label in EMEA will include self-administration. We also received an approval in Canada during the quarter, and we're planning for a launch before end of year. Similar to Europe, the pricing and reimbursement discussions with the HCA in Canada have been going very well, and Vivgar has been recognized as better value than other entrenched biologics. This is an important win for patients in Canada. Slide 13. And finally, on our indication expansion. And here was the largest trial ever run in CADP, and the results were impressive. So we are busy preparing for a launch in CADP next year. As Tim already mentioned, we'll be filing our application with a priority review voucher because we recognize that patients are waiting for new innovation in CADP. Our priority now is to take the key learnings from the EMG launch and apply them to our CADP strategy while also thinking about where we can expand and improve. We're also investing for the long term, building out our launch capabilities in a very intentional and disciplined way to enable success across multiple indications down the road. It's certainly an exciting time to be at Argenix. I'll now turn the call back to Tim.

Thank you, Karen. Slide 14. As we conclude, let's go back to where we are today and where we are going. We are leaving from a position of strength, delivering on our commitment to bring transformative treatments to as many patients as possible. Through intentional launch strategies and relentless execution, We continue to reach new types of patients in new regions and make clear progress expanding into new indications. As innovators, we are looking forward and are incredibly excited about the opportunity ahead of us to lead what we believe to be one of the biggest drug classes ever. Thank you for your continued support as partners on this mission. I will now turn the call back to the operator.

At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We ask that you please limit yourself to one question and a follow-up, and then rejoin the queue for further questions. Your first question comes from the line of Yatin Sineya from Guggenheim Partners. Your line is open.

Hey, guys. Thank you for taking my question. The question on the PV study, could you maybe talk about what would you think you would like to show with regard to the semen efficacy endpoint? And also, have you disclosed the powering assumption? How should we think about placebo performing? Thank you so much.

Good morning, Yatin. Thank you for joining us in the call today. The authenticus study, which is on track for readout before the end of the year, will actually give top-line data in line with how we typically show data. They will be sufficiently complete and transparent to understand the clinical utility of the medication in this setting. It will center around the primary endpoint, where we will assess the delta between active and placebo on the primary endpoint of CR-min, where patients need to achieve CR on a minimum dose of corticosteroids, and that for at least eight weeks. We will also disclose the key secondary endpoints, which have to do with steroid tapering and speed to disease control, and of course, importantly, safety. So it will be a comprehensive top-line data set in line with how we have been showing top-line data in other indications before. We have not disclosed powering assumptions. We never do that. But you know by now that we're relatively conservative when it comes to powering the studies. Remember, this is the single biggest panthricus study ever with 222 patients involved. Thank you for the question.

Your next question comes from the line of Tazin Ahmad from Bank of America. Your line is open.

Hi, good morning, and thanks for taking my question. Tim, I just want to get a sense of how you're thinking about what the uptake of CIDP is could look like relative to the very steep uptake you had with GMG and are still having with GMG. Just want to set expectations for that.

Thanks. Thank you for being with us today, and thank you for your question on CIDP. Of course, we're delighted with the stellar data which we generated in the trial, and it is fair to say that the trial data put us in a position of strength. I will leave it up to Karen here with me in the room today to comment, you know, on some initial thoughts when it comes to takeoff in the CIDP market. Karen?

Yeah, thank you, Tim, and thanks for the question. We're certainly excited and getting ready for the approval of CIDP, and we're doing exactly that workup right now to really get a good sense, based on the real data that we have and the strong data that we have, to break down the market into the segments of neurologists as well as patients to really understand how quickly might the uptake be and how can we drive that to be as fast as possible. From my perspective, based on what we're seeing early on, I wouldn't expect it to be as fast as MG, as we've talked about before. IVIG is approved. I think we compete well versus IVIG. However, obviously there's some loyalty from the neurologists and from the patients in this progressive disease where shifting to a new medicine is something to be considered deeply. So we're working it up, and we're gonna do everything that we can. We'll leverage all of our learnings from MG. We'll leverage all of the work that we've done on MG to maximize the uptake, but I don't think it will be as fast as we've seen in MG.

Thank you, Karen. Thank you, Tazin, for the question.

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

Hey, good morning, and thanks for taking the question. Congrats on the progress. Maybe a question for Karen, just, you know, in terms of some of the checks that we've done more recently with physicians and, you know, really starting to position VivGuard earlier line, even as early as first line in MG. Is that something that's consistent with your comments earlier in terms of what you're seeing? And again, how do you kind of navigate the payers if that is the case? Thanks.

Yeah, absolutely. Thanks for the question. And that is consistent with what we're seeing and with what our strategy is of where we think we can provide the most value, which is we're seeing consistently moving since launch, moving earlier and earlier in the treatment paradigm as neurologists get more comfortable with VivGuard, more confident in the safety profile in particular. and they're really seeing the benefit to patients. Certainly from a payer perspective, related to that part of your question, we're not seeing any challenges to date. We have broad access in the U.S., and obviously we're securing pricing and reimbursement across Europe very successfully, so the value of VivGuard in MG, including in earlier lines, is really being recognized.

And most of the policies, payer policies that are actually stipulated that VivCut can be used either straight after methadone or methadone with steroids or methadone with steroids with one IST. So that is actually natural positioning to move upstream in the treatment paradigm. So it's the dynamic we had all hoped for, and which is happening, but it's happening in its own cadence, so it's going to take time. Thank you for the question.

Your next question comes from a line of Thomas Smith from Learing Partners. Your line is open.

Hey, guys. Good morning. Thanks for taking our questions, and congrats on the progress in the quarter. Just on the timing for the Bullis-Pempigloid go-no-go decision, can you comment on what's driving the accelerated timing there? Is that faster than expected enrollment, or is there some triangulating of this readout with the availability of Phase III Pempiglis data, or are there some other factors we should be considering there? Thanks.

Thanks for the question, Thomas. The Bullis-Pempigloid study is a seamless Phase II, Phase III study where we derived sufficient confidence from the pemphigus data to venture into this trial design. The 40 patients go-to-go decision points, so 20 patients on active, 20 patients on placebo, is actually on time and will be the gating event for us to then continue to scale this trial into the phase three part of the study. So very similar to CRDP. I'm very happy with the performance of the team. Again, this is a significant recruitment effort, and we're on track to show you the data as planned. Thank you for the question.

Your next question comes from the line of James Gordon from J.P. Morgan. Your line is open.

Hello, James Gordon, J.P. Morgan. Thanks for taking the question. Two questions on PV and the address trial, please. The first one is just the timing. So the trial is shown on clinicaltrials.covers having completed the primary on, I think it was August 22nd. So just in terms of further steps needed before you can reveal the headline results and what has been the cause of the slight delay announced today, because it sounds like now we might not get the data, at least the headline data, until early 2024. So why there has been that slight delay? And then the follow-up question was just also on the same trial. I understand there's some significant differences with Rituximab in terms of how quickly the drug... Has its efficacy come on? And then maybe also it has a steroid tapering. So do you think that the PenFix results from rituximab, where there was about a 30 percentage point placebo benefit, is a relevant comfort or is a smaller benefit than that still competitive? How should we think about that, please?

James, thank you for being with us today and thank you for your PenFix questions. Certainly an exciting indication and a very ambitious trial design. There is no delay in the PenFix study. Remember, when the study's fully enrolled, there's a substantial amount of time involved in follow-up of the patients. So we've been assessing whether we can push patients into CR-min within a 30-weeks time period, and then actually they roll over into the hope label extension study where we continue to collect data which will be important for a top-line data readout. In terms of comparing to the PENFIX trial, I would strongly advise against it. I mean, these are molecules with totally different modes of action. And therefore, the trial designs are totally different. The PENFIX endpoint was taken at a totally different time point. It has its own particular steroid tapering protocol in the background. We work with ours, which is specific. So I would not really compare the two. It's a totally different situation. What we're looking for, for such a stringent endpoint, CRM in for at least eight weeks, within a 30-weeks timeframe, that's unattainable for itiximab, by the way, is a statistically meaningful separation between active and placebo. That is basically the definition of the endpoint, the primary endpoint. And then in the secondary endpoint, we will unpack the clinical utility of the drug in more detail by looking at the speed to disease control, the amount of steroid tapering we can achieve. We will also look at the pemphigus fallacious patients, which is a subset of the study. And we're also going to look, you know, whether we can actually push people into complete remission of therapy as portion of the open-label extension study. So very exciting, very bold endpoints, which could represent a game changer in the pan-focus space. Thanks for the question.

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

Hi, this is Amy. I'm for cost. Thanks so much for taking our question. So one on PV, how do you expect the more severe patients in Phase III to impact CRMEN? Additionally, do you need B-cell drops to have sustained remission, or do you consider this as more of a bridge to Rituxan? Thanks so much.

Thank you for these two excellent questions. So first of all, we do not see any difference between milder or more severe patients in their ability to respond to VIVGARDS. Remember, we had both on trial in phase two. It's true that in phase three, we're recruiting a somewhat more severe patient population, but we had them in phase two, and they have an equal right to respond equally fast and equally deep and equally durable to VivGuard as the milder patients. So there's no real differentiation there. In terms of positioning of the product, you're correct in calling out that maybe we can go faster to VivGuard steroid tapering, which is something which patients badly want and need. You cannot continue these patients on a high dose of steroids for a too long period of time. And then, of course, we had this beautiful publication where we started to unravel the biology behind the durable clinical responses, which we have seen in phase two. As we tried to set in the prepared notes, FCRN is much more than just a receptor involved in IgG homeostasis. It is also involved in autoantigen presentation. And actually, we see not only a sustained reduction in autoantibodies, but also a sustained reduction in autoactive B cells in our pembricous patients, which basically means we've got this disease modifying and has the ability to either postpone or replace completely rituximab. Thank you for the question.

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

Hi, guys. Good morning. Thanks for the question. I also have a question on PV, sort of a follow-up to a prior question. I'm curious what endpoints do you think will dictate ASCAR's rank in the treatment algorithm? Specifically, what do you think it needs to show the leapfrog rituximab? And then how should we think about potential read-through to BP? Thank you.

Yeah, thank you, Daniel, for the questions. Of course, we have to be careful here and wait for the phase three data because they will ultimately dictate whether we have a drug in this indication and how to position safeguards within the PAMFICUS treatment paradigm. We did extensive work with the community, both physicians and patients. Actually, the entire global physician community is surrounding this trial. And, of course, we have been doing extensive work with the patient advocacy group What patients badly need is a fast response. They want to see stopping the formation of lesions, closing of lesions as fast as possible. They also want to taper steroids as fast as they can. They hate steroids with depression. So imagine we can repeat the Phase II data in terms of, you know, quick onset of action. Remember, 90% of patients in Phase II went into disease control within the first two weeks' time. And then we can keep them, you know, in a very low disease activity state of complete remission, whilst tapering the steroids, I think that will position VivGuard very well for positioning in the Benfica-Steven paradigm. But let's not get ahead of ourselves and wait for these data. Thank you.

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

Great. Thanks for including me, and congrats on another great quarter. So a quick also question for me for the ADDRESS study. So the study is including both naive and experienced patients, and if you look again at the Rituxim studies, the placebo varied between a 10% and a 28% response rate. I think a lot of the KOLs are kind of talking about a 30% to 40% delta. That was easily achieved sort of if you look at your CR rate from the phase two, sort of the 7 out of 10 at the optimal dosing. Can you give us a sense sort of in this study, the placebo, is the 10% to 28% relevant at all, or do you think it's going to be even lower just given the tightness of the endpoint? And are you expecting sort of 50-50 in terms of naive experience in the study? Thank you.

Thank you, Jeroen. From a patient population point of view, we expect a real world population. That means that the majority of the patients, of course, will have been on therapy, with maybe some naive patients in there as well. I would caution against extrapolating from rituximab trials in terms of endpoints, which are different, duration of treatment, which are different, background stereotyping protocols, which are different, And therefore, placebo behavior in their trial cannot just be extrapolated into our trial. The way we designed the primary endpoint is such, similar to ITP, by the way, that we try to really minimize any placebo response in the 30-week trial. So let's not extrapolate. Let's not assume similar placebo responses of delta between active and placebo. This is its own unique trial design. And we would be very happy to see a statistically significant delta emerge between the placebo arm and the active. It's a very aggressive endpoint. Thank you for the question.

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

Hi, thanks for taking the question. I think Halazone previously actually announced some data showing that they can get a 10-mil autoinjector in about a 30-second injection time. I know you're advancing a pre-filled syringe version of VipGov Hytrulo and that's in development. You can update us next year. But would that also potentially mean you'd introduce an auto-injector solution based on that Halozyme data? Thanks.

Yeah, thank you for the question, Marzen. If anything, it just shows you the power of the enhanced technology from Halozyme and it underscores again how important this technology is to win in the sub-Q setting. We're very happy to have the exclusive license to the technology which positions us in a position of strength. We're the only product out there which can deliver, you know, a single sub-Q injection with this volume of product. Auto-injector, of course, is in the works. As you know, Argenix is always planning for multiple steps ahead. So we were really feeling a sense of urgency to launch this first-generation sub-Q product ASAP because patients are waiting. you know that we are already working on the pre-filled syringe, and we have also been public on the fact that we are working on an auto-injector as a third generation. So the data from Helozyme are boiling very well, and they underscore the power of the Helozyme technology in order to delight patients in the sub-Q setting. So stay tuned, and more news will come next year. Thank you.

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

Hi. Thanks for taking the question. For the post-COVID POTS data in Q1, what would be good data, and could good data there be supportive of further development of VivGuard in other settings?

Yeah, this is an excellent question. So this is one of the few indications where actually we need to go for signal finding first. I think there's a strong hypothesis, which was delivered to us by the key opinion leaders in post-COVID POTS, that this is IgG-mediated. We need to establish a firm signal in what is a true phase two trial here in post-COVID pods before then we can think about venturing into the phase three trial. So we will be looking at the totality of data and we will see conviction that this is truly IgG mediated. So we have some fundamental answers to be given before we can go into phase three. We believe that post-COVID pods, based on the data we have seen, is not different from regular pods. But the experiment is ongoing, and we will need to show the data now. Thank you for the question.

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

Hey, thanks for taking my question. I guess a question for Carl. How should we think about the net price per patient for VivGuard now in Europe, now that we have the final German price? How should we think about modeling that moving forward? Thanks.

Thank you, Alex. Yeah, as a reminder, we launched in September 22, and we got the final price in August 23. We're very pleased with the outcome as it's recognized with clinical benefit. And that, of course, resulted in the $6 million throw-up, which I reflected earlier on. At the moment, our European business, of course, is largely Germany. And I do have to mention, I think, that in Germany, orphan drugs are subject to a full AMLOC process. and renegotiations if your annual revenue exceeds $30 million. And we have now exceeded that threshold. Basically, what I'm saying is that we will go back and renegotiate again. So we expect that price to drop during 2024. That said, we are pleased with the strong commercial performance which resulted in this. And we are pleased with our partnership with the German authorities and look forward to continued discussions with them. For planning purposes, of course, I think, Alex, you have to assume that the European price will be lower than the U.S. price. Thank you.

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

Hey, good morning. Thanks for taking my question and congrats on all the progress. Just one for you on the early experience with the VivGuard Hytrulo. I know it's early days in the launch, but just curious if you have any insight just on the profile of early adopters of the sub-Q format. You know, is initial uptake concentrated among neurologists who are already heavy prescribers of IV VivGuard? Or just what are you seeing there? And then I know you indicated that Hytrulo uptake is primarily in VivGuard and IV patients so far. But just as high to low coverage policies are put into place, kind of hoping you could walk us through what you would expect would be the major barriers preventing a patient from switching, just from IV to sub-Q. And then just second, separately, just a point of clarification. I think you talked about $7 million in product sales to Zylab. That was commercial supply related, I think. Could you just confirm that and how we should think about just modeling that this quarter and going forward? Thanks.

Thanks, Alison. I will give question two to Carol in a minute to comment about, you know, the transfer of goods to Zylab in China. But maybe, Carol, you want to comment first on the HyTRULO launch dynamics and, you know, patient phenotypes begin on drug.

Yeah, absolutely. Thanks for the question. We're really excited about where we are with the HyTRULO launch. I would say we are getting positive feedback from urologists, from patients, and as you mentioned in your question, payer policies are now going into place, and they broadly reflect IV policies. So it's clear that the market is responding well to this innovation that has been brought forward. You mentioned, and I'll just reinforce, the majority of patients that we're seeing are VivGuard-naive patients. So this is expanding the pool of patients that are considering VivGuard- And we are adding new prescribers with VivGuard HyTRULO as well. So if you go back to what we've talked about as this very intentional and very consistent approach to VivGuard and VivGuard HyTRULO, where we're focused on expanding quarter over quarter, the prescribers that have experience and confidence with VivGuard and VivGuard HyTRULO, expanding the patients to go in earlier line, and that's certainly what we're seeing. We're getting very positive feedback on HyTRULO. Of course, it's taken a little while for some of the logistics, let's call them that, to be set up. Some of the infusion sites, getting infusions in place is standard procedure. They need to get new protocols in place for doing an injection instead. But we've certainly seen that that's coming online now, and those injection sites are seeing the value of VivGuard as well. And then the last thing that I'll say is that not to forget that we did get self-administration in the EU and Japan. They've got high tool or, in that case, subcutaneous. So we're pleased with that as well.

Carl, question two?

Yeah, Alistair, thank you for the question. So the $7 million we've sold to China is to Xilabs. This is essentially stocking the country. This is inventory now sitting in the XyLab warehouses. That same amount, the $7 million, is both in revenues and in cost of sales. We only, of course, get our share of that in royalties, and that's the $700,000 I mentioned earlier, which is in other revenues. I think for planning purposes, you have to exclude the revenue and the cost of sales. It's a zero profit. Periodically, we will, of course, have to supply the China market, but we will always be transparent on that. But I would exclude it for payment purposes, please.

Thank you. Your next question comes from a line, Vikram Frohe from Morgan Stanley. Your line is open.

Hi, good morning. Thanks for taking our questions. We have two regarding the potential impact of competition in MG. What sort of impact have you seen at this point, if any, on physician views towards VivGuard and treatment options in MG more broadly in the past few months given approval of the competing therapy from UCB? And how is the messaging regarding VivGuard potentially changing in response to competition? And second, given there are additional treatments in development for MG, we'd be curious to understand your perspective on how you think the market settles out over the coming years and which factors you think are going to drive patient preferences, prescriber preferences towards one treatment choice or presentation versus another as the number of moving parts in the marketplace potentially increases in the next few years. Thanks.

Thanks, Vikram. I will hand over these two questions to Karen. Karen?

Yeah, thanks for the question. Look, the way that I would think about this and the way that we talk about it is that The MG market is still, let's call it quite immature. And as you said, there's a lot of competition, a lot of innovation coming to the market over the coming months and years. I actually see that and we see that as a good thing. Innovation is a great thing for patients. And certainly the real competition that we all face is inertia, that there's an assumption that patients are well controlled with these with these therapies from decades ago, and that's just not the case. So from my perspective, more innovation addresses that inertia and really expands the market over time. We've talked before about it maybe something similar to the MS market, where what you really see is an expansion in the treatment, the treatment rates, the diagnosis rates, and improved outcomes for patients along with that. So that's where we would see the direction of travel for the market. And within that, I think we, VivGuard, is really well positioned. We have a first-in-class. I think we have the best molecule with the fragment technology. It comes through in the efficacy in clinical trials, but also in the real-world efficacy that we're seeing. The safety profile continues to hold up and continues to be strong. And then obviously on the treatment burden, We started with the infusion, but with Hytrula, we've been able to decouple patients from the infusion chair. And Tim spoke earlier about the continued innovation that we're bringing as we think about PFS and auto-injector. So as these markets expand, I think they've got incredibly well-positioned and will continue to be intentional and disciplined, and we'll be investing for growth.

Thank you, Cam. Thank you.

Your next question comes from the line of Manos Mastarakis from Deutsche Bank. Your line is open.

Hi, thank you for taking my question. So just a quick follow-up on the CIDP and potential ITP launch in terms of Salesforce planning and expansion. If you can help us understand whether the new Salesforce will be, sorry, whether new Salesforce will be required with different types of expertise and what numbers are you looking to have deployed, at least in the US, of course, In other words, what will be the respective contribution of MG, ITP, CIDP to the overall sales force? And then secondly, for indications such as Bullis-Pensicoid, where potential competition could be much cheaper, for example, into Pixent on a manual basis could be a lot cheaper than what F-Cortegemo currently is. How do you think about positioning and pricing? Also, F-Cortegemo there. Yeah, that's it. Thank you.

Thank you for these two questions. Karen, I suggest you take question one, and then I will address the EPP question, please.

Yeah, certainly. Happy to. So I'll start where I left off on the last question, which is that we are investing for growth as we think about the opportunity in MG being larger than maybe what we had thought. Obviously, the opportunity with CIDP on the incredible strength of that data, and then we'll see where ITP, which you included as well as PV, come out. Without getting into details, what I would say is that we're working up, we are working up the details at the moment, but the way to think about it is that we're investing, that we'll leverage the field force and all of the capabilities and the infrastructure that we built for MG and that we're thinking about investing for growth as we move forward and we'll be able to share more of the details of what exactly that looks like over the coming months. But the goal for us is to maximize the opportunity and the value creation from VivGuard in the coming years.

Thank you, Karen. And then on the BP question, look, we're not in a different situation than we are in the other indications. Where it is true there is other medications out there, you know, which come with a cheaper price, the question is, of course, what value do they offer? So, we believe that bolus benfica is a very difficult disease to treat. There's actually very little competition or competitive activity in development going on for the moment. And just like pemphigus, this is an IgG-driven disease. This is IgG-mediated, and therefore we think that by hitting the disease in its heart, we can have a dramatic impact in these patients. And let's start with the clinical benefits, which we can demonstrate in these patients to then derive the value, because it will all center around the value we offer for these patients. So I think let's wait for the data. But if the data pan out in a similar direction as what we have seen earlier in pemphigus, I think we're in a very strong position to really transform the lives of these patients and be able to expect a coding value from that. Thank you for the question.

Your next question comes from the line of Douglas Hale from HC Wainwright. Your line is open.

Oh, good morning. Sorry about that. Thanks for taking the questions. I'm just curious, in terms of the early launch of Hysula, you've obviously mentioned that it's largely patients who have not switched as new patients to therapy. I'm just curious, what was necessarily holding them back, or was it just a matter of prescribers getting to these patients, or were some of these patients just not willing to go on to therapy with the IVs?

Yeah, thanks for the question. It's a good one. Look, I don't think there was anything holding them back necessarily. I think this is, we're early in the adoption curve still of Vivgard, even seven quarters in. And I think Vivgard HyTRULO gave the opportunity for new prescribers that might not have considered Vivgard before. Certainly we have the DPC campaign highlighting HyTRULO. Patients that perhaps they felt that an IV was for a more severe disease than they wanted to be on, so it opened up maybe some different patients. But overall, I would say the trajectory of the launch is just based on as prescribers and patients get more experience with VivGuard, they see the impact in terms of their quality of life. As I've mentioned a few times, the fact that the safety profile continues to hold up, and now we have these two routes of administration I think what we'll see is just that continued momentum and consistency in expanding with prescribers and patients. Thanks for the question.

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

Hi, and congrats on the strong quarter, and thanks for taking our questions. I have missed this, but are you still on track to start TET-12 by year end? Just didn't see, I might have missed out on the press release. Thank you.

Hi, John. Thank you for the question. Yes, it's simple. We are on track. So actually, we're on track with all of the clinical milestones, which we had promised at the beginning of the year. So very proud of the execution power of the team. We have a ton of work in front of us, but these are all very exciting indications. So yes, we're on track, and thank you for the question.

Your next question comes from a line of Suzanne Van Berthuizen from VLK. Your line is open.

Hi, team. Thank you for taking my question. It's more of a long-term using, but I wanted to ask your thoughts on the more recent development where CAR-T players are moving in autoimmunity. They seek to potentially cure lupus, but some players are also moving into indications not too distant from our genus, like myositis. So could you please elaborate a bit on how you look at this development? What are your thoughts on the position of this potential future modality versus gift card? Or if you have any other considerations that you think are relevant? Thank you.

Hi, Susanne, and thank you for being with us today and on the call. Yeah, of course, we're watching all sorts of innovation coming into the autoimmune space. I think it's an exciting time to be in autoimmunity these days with multiple innovative modalities coming in. We're looking at the CAR-T technology, of course. To be fair and honest, we need a bit more data. So I think we have all seen that small set of data in SLE patients. Let's see how these CAR-T data play out in the different indications. And I think everyone will be focusing, of course, on what will be the durability of the clinical response, which we can expect with this type of technology. So it's very early days. Let's wait for the data. And of course, we're closely monitoring that. Now, our ambition in autoimmunity, as Karen explained earlier in the call, is not to wait with expensive innovation until your last line patients, but to actually move with affordable innovation early in the treatment paradigms so we can hit the disease hard early and hopefully avoid these very bad relapsed refractory patients which are outfitted and nothing works anymore. So that is our mission in autoimmunity, bring that innovation as early as we can in the treatment paradigm to halt further progression of disease and prevent patients from getting in that final stage. Thank you for the question.

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

Hi, good morning. Thanks for taking the questions. Just a couple follow-up questions for me. Just from a timing perspective, should we expect both the pemphigus and the bolus pencegoi data to be read out at the same time, or is the guidance just they will be read out near each other around year end? And then also for pemphigus, you know, when we look at the Phase II data, about 20% of the patients, they seem to have achieved a CR-min endpoint within about the 30-week timeframe. Just recognizing that the F-retinoma dose and the dose schedule as well as steroid dosing was different in phase two than it is in phase three. How should we think about that translating into the readout for the ADDRESS study? Is that 20% around where you expect it to be or would you expect it to be different than that? Thank you.

Thank you for both questions, Samantha. So from a planning point of view, we're not going to get any more than what we have been disclosing publicly. Let the teams navigate the Christmas period. Let them do a thorough data analysis, and then we can come out of the gate with the data. But that will be close together. On extrapolating from Pantagos Phase II to Phase III, remember that the objective of Phase II was something taught at different rates. This is the only indication where we studied monotherapy of Vivgard. Then combination therapy at different doses and dosing regimens with low dose of steroids. And therefore, you cannot just look at numbers. I think what we did in phase two is fine-tune the dose, the dosing regimen, and the ideal combination with steroids to then take that ideal combination into phase three. So we did test drive the ideal combination with quite spectacular results, but it was relatively small patient numbers, and that's why now we do the proper phase three experiment. Thank you for the questions.

Sure. Next question comes from a line, Rajan Sharma from Goldman Sachs. Your line is open.

Hi, thanks for taking my question. So maybe just to follow on from the question on competition, could you just share your perspectives on early data from Immunovant's second generation FCRN antibody? I realize it's still very early, but it'd be helpful to get your thoughts on that, and specifically, I guess, how important you think an incremental IgG reduction is in driving clinical outcomes. And then given that Immunovant have been quite clear on which indications they're targeting initially. Does that change your thinking on the additional indications you may target with VivGuard or indeed how quickly you may pursue those?

Yeah, thank you for the question. So it's very difficult to comment on someone else's data, especially when that early phase one data. I would invite you to study the phase one data of VivGuard and the phase two dose finding data of VivGuard to compare and contrast. Our task as the leader in the space actually is to pioneer, to take what we think is a phenomenal FCRN antagonist into areas of high medical need and actually continue to pioneer the understanding of the biology behind VivGuard and FCRN biology. So the only thing I would caution against in this call is to just extrapolate VivGuard data to other molecules. VivGuard is a distinctly different molecular design with distinctly different properties. And I think we need to wait for Phase 2 data before we can start to compare and contrast. So we will continue to focus on the pioneering role we have, and we sharply focus on the patient needs. Thank you.

And we have time for one more question. Your final question comes from a line of Charles Pittman from Barclays. Your line is open.

Hi, guys. Thanks very much for taking my question. Just quickly on Ballard, can you just clarify and kind of highlight what it is that you're specifically looking for on the go, no-go decision, and to what degree is it expected to read out of Pembroke's progress as expected kind of? help you in terms of trying to set up the ongoing trial design post the go-no-go decision? To what degree is that design still adaptive to your impending learnings? Thank you.

Thank you for the question. You're right in your assumption that the go-no-go decision point would still allow us to tweak certain aspects of the trial. For example, sample size to adjust powering. This is a very demanding endpoint. It's a different endpoint than in pemphigus. In pemphigus, the endpoint is CR on a minimum dose of steroids for at least eight weeks. In bolus pemphigoid, the endpoint is even tougher. It is a complete response of steroids. So the go-no-go decision point allows us to triangulate, you know, were the in-going assumptions for the trial design correct, or do we need some tweaking? they will also give us an early visibility on the achievability, of course, of this primary endpoint. So that's the gist of the go-to-go decision point, and thank you for your question.

And ladies and gentlemen, this does conclude today's conference call. We thank you for your participation, and you may now disconnect.