argenx SE

Good morning. My name is Audra and I will be your conference operator today. At this time, I would like to welcome everyone to the Argenic second quarter 2024 financial results conference call. Today's conference is being recorded. 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 the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. At this time, I'd like to turn the conference over to Investor Relations, Beth Dalgiaco. Please go ahead. Thank you.

A press release was issued earlier today with our half-year 2024 financial results and second quarter business update. This can be found on our website along with the presentation for today's webcast. Before we begin, I would like to remind you 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 confirm their 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 Mathey, Chief Operating Officer. I'll now turn the call over to Tim.

Thank you, Beth, and welcome, everyone. I'll begin on slide three.

Last week, many of you joined us for our R&D day where we laid out an ambitious vision 2030 and shared a comprehensive overview of the growth opportunities ahead in our to achieve this vision. We are in a very strong position today to generate substantial value across our business, investing in our internal innovation engine, executing on our differentiated multi-asset pipeline, and building on the commercial success we have achieved in our first 10 quarters of launch. This is a team that delivers on our innovation mission time and time again, all towards our goal to transform autoimmunity and reach 50,000 patients globally. Given the recency of this update, we will aim to keep our prepared remarks brief and focus primarily on the second quarter dynamics. But first, I'd like to highlight key themes that emerged from the R&D Day in the context of our 2030 vision. Slide four. The first theme is around how we innovate, centered on a model of co-creation. This model has been core to our growth since our founding and still exists in the most obvious form today with our immunology innovation program. We have a strong track record of success in building out our differentiated pipeline, including eight out of 12 molecules that demonstrated human proof of concept and nine that are first-in-class targets. We have no shortage of opportunity with identifying novel targets and believe our overall approach sets us up to drive continued pipeline expansion for years to come. A second thing is the new standards we're setting with VivGuard in MG. We are currently de-leading advanced biologic in MG and have delivered 10 consistent quarters of growth since our initial launch. We are making excellent progress across all key indicators and are exactly in line with our internal long-term thinking of the MG marketplace. We think this is a big opportunity, and we have a strategic plan to reach more patients as we move into earlier lines of treatment and broaden to new populations through label-enabling studies in seronegative and ocular MG patients. We will use the same playbook for CIDP and are happy with the early days of the launch. We got the best possible label, which puts us in a strong position for continued growth as we work to get the access piece in place. Third, we laid out our next wave of indications and expect to initiate four new registrations trials this year across VivGuard and Palsy-Gubart. We set the bar high with a medicine like VivGuard, but we're thrilled to use R&D Day to put Mpassive Boupard more in the spotlight. This is his second pipeline in a product opportunity, and we were able to show phenomenal patient data in MMN, which we see as the first of many indications where we hope to drive transformational impact. Slide five. The progress we have made across our business over the quarter moves us another step closer towards achieving our 2030 vision to bring five molecules to phase three, advance our late stage pipeline to 10 labeled indications across our molecules, and to ultimately have 50,000 patients on an Argenix medicine by 2030. While ambitious, we believe we are well positioned to deliver on this goal with a continuum of innovation from discovery all the way to commercial. Underpinning our incredible success to date is the strong financial health of our business, which will enable us to continue delivering on our innovation mission, ultimately driving value for our patients and our shareholders.

With that, I would like to turn over the call to Karel.

Thank you, Tim. The second quarter 2024 financial results are detailed in the press release of this morning. Total operating income in the second quarter is $489 million. This reflects $478 million in product net sales and $12 million in other operating income. In the second quarter, $478 million in product net sales is attributed solely to MG patients. We received the CIDP approval on June 21st. and our teams were immediately in action the next day. It takes time at the start of a launch to get patients through the funnel from script to injection. So the first CIDP revenue will be a third quarter event. Product net sales of 478 million represents 20% growth quarter over quarter compared to Q124, which we know with a biologic is typically a more challenging quarter due to insurance re-verifications and loss of shipping days with weather and holidays. The product revenue breaks down by region to $407 million in the US, $20 million in Japan, $35 million in EMEA, and $14 million from product supply to Xilab in China. Operating expenses in Q2 of $535 million, an increase of $29 million compared with Q1 2024. SG&A expenses are $256 million in Q2, which is an increase of $20 million compared to Q1. The increase reflects a full quarter impact of the expansion of a customer-facing organization in the U.S. as well as incremental expenses to prepare for the CIDP launch. R&D expenses on the continued investment in your pipeline are $225 million in the second quarter, broadly in line with the previous quarter. The operating loss of a quarter of $45 million is offset by financial income of $30 million and the tax benefit of $44 million. The tax benefit is a result of a deferred tax asset recognized in your US legal entity due to intra-group inventory movements. It is a temporary timing difference and will reverse in future quarters. Overall, we saw a net profit for the quarter of $29 million and earnings per share of 49 cents. It is an important distinction, but the net profit was primarily driven by the recognition of a deferred tax asset, and we still had an operating loss of a quarter of $45 million. We are on a clear path to profitability, but we are not there yet. We continue to have a strong balance sheet with $3.1 billion in cash. Based on our year-to-date cash burn of $77 million, we are updating our 2024 cash burn guidance from approximately $500 million to less than $500 million. Our guidance on expenses remains unchanged. This puts us in a strong position to invest in innovation across our business. and we have many opportunities to do so there's a sizable opportunity in our current markets in new markets with our with card franchise with our current pipeline and through our immunology innovation program to expand our pipeline this is how we will set ourselves up for a sustainable future where we continue to generate significant value for our shareholders I will now turn the call over to Karen, who will provide details on the commercial front.

Thank you, Carl. Slide eight. I'm very excited by our Vision 2030, especially the ambition we have set for ourselves to impact the lives of 50,000 patients globally and their caregivers. To reach this goal, we will need to expand in a multidimensional way, getting more medicines approved across many indications, product presentations, and geographies. We have a strong commercial playbook in place that delivered in MG, and we'll be leveraging that same approach for CIDP, focusing on evidence generation that matters most to physicians and patients, empowering patients to demand more from their treatments, and last, the need to execute on our strategies with speed and urgency. We know that patients are waiting, and we also know that every day counts in building out our first-in-class leadership position. Slide nine. Starting with MG, I'm extremely proud of the team who worked really hard to expand our reach into new patients for our 10th consecutive quarter of revenue growth. We said this in Q1 and can reiterate it today that all key indicators of growth are performing well and the fundamentals to the commercial business are strong. Focusing on the key drivers of growth this quarter. We saw the seasonality impact in Q1 normalizing Q2 with the impressive 17% quarter-over-quarter growth. Within the U.S., HyTRULO continues to attract both new patients and prescribers to the VivGuard franchise. This is important for a few reasons. First, over 50% of new HyTRULO patients are coming from orals, and 60% are brand new to VivGuard, which is consistent with our goal to reach early-aligned patients and to expand new patients with HyTRULO. Second, we continue to expand our prescriber base for MG, many of whom have the potential to be CIDP prescribers. This will serve us well in our early conversations with physicians who have grown accustomed to the favorable safety and efficacy profile of Vizgard Hytrulo. Slide 10. We continue to gain traction outside the U.S. as well, where we are focused on securing broad access. We have strong momentum in EMEA, and VivGuard is now available in countries representing 82% of the GMG population in the region. We also continue to see strong growth in Japan, including positive early indicators on the launch of ITP. This launch rolled out rapidly, and 74% of HCPs were made aware of VivGuard in the weeks post-approval. It is clear that there is a need for innovation in ITP. which is why we are also launching an efficient label-enabling study with VivGuard IV in the U.S. after discussions with the FDA. Lastly, in China, we continue to be very impressed by patient ads each quarter, and now subcutaneous is also available following the approval earlier this month. Slide 11. Even with our strong performance to date, we believe that we're still at the front end of the opportunity in MG. We are seeing the MG market expand. a dynamic that we have seen play out in other rare disease markets when innovation enters the space. We believe that earlier use of advanced biologics will expand the addressable market significantly and that we can reach broader populations of MG patients with our label expansion studies in seronegative and ocular MG, each of which represents 15% of the total MG population. Based on these evolving dynamics, we have updated our addressable market in MG to 60,000 patients. Slide 12. Following our approval in June, we recognize that all eyes are on CIDP, and we share your excitement. We are thrilled with the broad label that we got, which will support use across the treatment paradigm. Now, we're leveraging our MG launch playbook to maximize our impact in CIDP, driving rapid adoption with neurologists based on the strength of our data, empowering patients, and working diligently with payers to put the necessary policies in place to secure access. as quickly as possible. Reception has been incredibly positive with physicians, particularly on the strength of the data in improvement in function. We've already reached 25% of our key targets within 14 days of launch, and 20% of the prescriptions we're receiving are from new prescribers to VivGuard. Many of the prescribers are starting multiple patients. Right now, our priority is to bring as many patients into the top of the funnel as possible. Once an enrollment comes in, Payer approval at this stage takes a few weeks, after which patients can be scheduled for their first injection. This shows the importance of getting payer policies in place quickly. And as this happens, the time from script to injection gets shorter. Based on where we are today, we're making good progress with payers, and we're tracking to plan. Slide 13. Looking forward, we have an ambitious plan to successfully execute multiple launches across our pipeline in order to reach 50,000 patients in 2030. We're on track to start multiple phase three studies before the end of the year, and each of these brings us a step closer to reaching new autoimmune indications where there is a high unmet need. The TED registrational study has already started, and we see an opportunity here to provide a differentiated and targeted therapy with favorable safety. We look forward to initiating a Phase 3 study in Sjogren's before year-end, following the positive signal we saw in our Phase 2 proof-of-concept study. There are no approved treatments for Sjogren's patients, and we know the disease goes well beyond sicker symptoms and can affect patients' ability to work and complete daily tasks, particularly the fatigue. This is a sizable opportunity, and while data will drive the specific target population, we know that there are 100,000 moderate to severe Sjogren's patients in the U.S. And last, we also look forward to decisions in myositis and BP on whether to advance to phase three later this year. Finally, before year end, we will start a phase three trial with our second molecule, impasseprobar, in MMN. This is an indication that fits perfectly into our neuromuscular focus and is another indication where the unmet need is high and IVIG is the only approved treatment. The data we generated in phase two were tremendous and very meaningful to patients. we demonstrated consistent improvement in grip strength. And in cohort one, 94% of patients felt better on impulsive Prubat than they did compared to their peak with IVIG. Similar to MG and CIDP, we believe this is an underdeveloped market, likely to grow over time as more innovation enters. Overall, This is an exciting time for the company. We've seen phenomenal growth to date, and we're eager to continue with this momentum as we enter into the second half of this year, applying innovation to every aspect of our business to reach even more patients. I'll turn it back to you, Tim.

Thanks, Karen. Slide 14. I'm proud of the Argenix team and their tireless commitment to changing the lives of patients through our science. We are perfectly positioned with the right team and the right approach to execute on the broad opportunity ahead of us. We will continue to lead with the strength of our data and deep knowledge to address the sizable MG opportunity ahead and will apply the same rigor with CIDP. And this is just the beginning. We are eager to raise the bar for how autoimmune diseases are treated as we continue to expand our horizons, embarking on new paths to create long-term value for patients and shareholders. Thank you for your time today.

I would now like to open the call for your questions.

Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your questions, simply press star 1 again. We'll take our first question from James Gordon at J.P. Morgan.

Hello, James Gordon, Katie Morgan. Thanks for taking the questions. Two questions, please. First question was on VivGuard performance in Q2 and the extent to which we can extrapolate that to Q3. So sales were up 79 million, which was a strong performance. But how much, if any, would you say was one-off phasing that we should take out if we're thinking about what the underlying performance would be? And if we're thinking about doing our Q3 modelling, how careful do we need to be about any reversals or seasonality? Or can we make quite a strong extrapolation from how well VivCard's done today. That's the first question, please. The second question was phase three initiation for ITP. And I saw a comment or heard a comment about this being an efficient trial. How might this trial differ from the previous two phase threes you've done in ITP? Can you expedite it if it's an efficient trial? And would it be going for like a smaller patient population in some way or a similar size population, just a different design?

Thank you, James. Thank you for asking these two questions. I would like to hand over to Karen to comment on the underlying dynamics of the business and how to see, you know, the overall trends in our VivCard MG business first. And then I will take the question on the ITP study in Phase 3.

Karen, why don't you go ahead with question one?

Thanks, Tim. And thanks for the question and for recognizing, I think, like you, I'm really pleased with the results of the quarter, this quarter. The way that I would think about it is that when you look at the first half of the year in totality, what you see is that we maintain that consistent momentum that we've had since launch. So we've had 10 quarters of consistent growth, pretty consistent growth. I would take that longer term view as I was looking to the future if I was you. And I'm confident that we will continue that consistent momentum. The underlying dynamics are strong. We continue to get early aligned patients. The majority are coming directly from the oral. We're growing both Vivgard and Hytrulo. And we are broadening that prescriber base, which also serves as well for the CIDP launch. So I would say think about consistent momentum and growth as we've seen over the last 10 quarters.

I'll hand it back to you, Tim. Thank you.

Thank you, Karen. And let me briefly comment on the ITP study. First of all, I would like to take a step back and remind the audience about the advanced IV study. But I think we had a very impressive efficacy with an IWG score of more than 50% in a pretty effective patient population and a physician community, which was excited also about the very clean safety profile. And we observed the patients in our open-label extension study They continue to do actually very well on ITP, and also the Japan launch of ITP is actually going according to plan. So the task we gave to the team was, you know, sit down with the FDA, you know, go through all the data, and propose a smaller confirmatory study in order to push the ITP indication over the finish line. And I think they succeeded in doing that. So by leveraging all the insights and the know-how we have on the disease, by actually proposing an alternative primary endpoint, which allows for a small confirmatory study. We think we are on track to start a small ITP trial before the end of the year, but I think we will be able to push the product over the finish line in that refractory patient population we have been studying all the way.

Thanks for the questions.

And just a reminder, we ask that you please ask one question to allow everyone an opportunity to ask a question. We'll go next to Tazeen Ahmed at Bank of America.

Hi, good morning, guys. Here's my one question. I just was curious about the PFS filing. I know you've talked about already having, you know, applied officially, but given that there's no PDUFA, we're just curious about how we should expect to... Think about communication from your team on what part of the application is in process and what back and forth there might be. And do you have an idea of when you would be able to get that salon approval, given that doctors in particular seem to be excited about having that as an option for patients? Thanks.

Thanks, Nazeena. Thanks for being with us this morning. Important question, simple answer. The filing has been submitted, is accepted and under review with the FDA. And I think we will have a better sense of approval timing, you know, when the process unfolds. So stay tuned.

We will keep you updated on the progress we make. Thank you.

Next, we'll move to Allison Brasso at Piper Sandler.

Hey, thank you for taking the question. Maybe just to follow up from the R&D day, could you help us understand just the scope of the data required by FDA, you know, that'll be needed for filing in seronegative and ocular MG patients? You know, I think you described an ability to leverage existing trial data and real-world data, at least for seronegative patients, but I've just been getting a bunch of questions on this. So, you know, any more color there would be helpful. Thank you.

Yeah, and thank you for the question, Alison. So remember that we printed strong results in seronegative MG patients, and that we already have an approval in Japan, but actually in the real world, the product is doing very well in seronegative patients, and we have impressive case reports out of Europe where people have been successfully using the drug in seronegative patients. So we made a commitment to the patient community. We would not give up, and we have been entertaining the dialogue with the FDA on seronegative patients in the background. I think where we could land with the FDA is, you know, a pretty fast, elegant study in seronegative patients with, as Luke called it during the R&D day, a somewhat relaxed p-value. So I think the FDA is taking the existing evidence into account and is allowing us, you know, to run such a trial. So we think there's a high demand. This is an elegant study, and we will do everything we can to enroll that study as fast as we can.

Thanks for the question.

We'll move next to Rajan Sharma at Goldman Sachs.

Hi. Thanks for taking my question. So, again, I just wanted to discuss kind of competitive landscape in Myasthenia gravis and how you see Vivgard kind of continuing to differentiate there. There's obviously a busy pipeline. We've got Iptacopan in a phase three. Plins is also in a phase three. So, yeah, could you just kind of discuss how you think Vivgard differentiates relative to those mechanisms, and then longer term, what gives you confidence that Vivgard and the FCRN class more broadly remains kind of the preferred treatment option in early-line patients?

Thank you for the question. I will first hand over to Karen to comment on how we see the overall dynamics of this market and how we're building it together. Maybe, Karen, you go first, and then I will briefly comment on your differentiation question.

Thank you.

Sounds great. Yeah, thanks for the question.

And I think building on what we shared at R&D Day last week, we believe that innovation coming to the MG market is good because it grows the impact that we can have for patients, expands the market, expands the number of patients that are treated with advanced biologics earlier as well. So we believe innovation is great for patients, and I think we're seeing that. And we believe we're very well positioned to continue to lead in that growing market uh and i think there's a few things that maybe i'll since you asked about the differentiation that i'll touch on one is around you know where first in class fcrn and it's clear that fcrns and certainly uh good gut are being used um early line i said earlier over 50 of our patients are coming directly from the oral so that's where the growth is and we're positioned well there i think we compete really well on our you know we have rapid um but also deep and sustained efficacy, and we have it across cyclical and biweekly dosing regimes. So I think that's a really strong position to be competing from. And don't forget about our real-world safety, the length of that real-world safety, the number of patients as the first mover advantage. And, of course, we have the low treatment burden. So we have both IV and subcutaneous. We have PFS plans. So overall, I think the dynamics in MG are positive. The market is growing, and we're well-positioned to maintain and even advance our leadership strategy. I'll hand it back to you, Tim.

Yeah, thank you, Karen. I much appreciate it. If you just look at the biology of the disease, you know, it is crystal clear that MG is an IgG-mediated disease. Remember the three most affectionate of these pathogenic antibodies, complement recruitment just being one of them. And that nicely translates into the clinical data, right? So let me remind you that 80% of this kind of patients achieve an ADL lower than 5, which is a threshold for entering a clinical trial. and that 50 to 55% of HIPGAR patients achieve minimum symptom expression. So there's always the need in the most effective line for alternative mechanisms of action because the drug only works in 80% of patients, but it's difficult to go into more detail in absence of data. So let's look at the data to then further understand how that biology really plays. Thanks for the question.

We'll move next to Derek Archula at Wells Fargo.

Hey, good morning and congrats on the progress. Thanks for taking the question. So just, can you discuss maybe how the time from payer approval to injection that you're currently seeing during the early part of the CIDP launch compares to what you saw in the early part of the MG launch? Is that similar or is it different? And maybe a little color on why.

Adam, would you mind taking this question, please?

Yeah, happy to take the question. Thanks for it. But first of all, just to start with saying we're really pleased with the strong and positive response we're having in CIDP. And to answer your specific questions, as enrollments come in, it does take a while for patients to get approved by their payers. And it's that period of time that can take a few weeks before they get injected. And that's standard for any launch. It's the reason that we're so focused on getting payer policies in place because once the payer policy is in place that process from script to injection can go more quickly. I would say we're exactly on track with where we thought we would be both in terms of that process as well as most importantly the discussions that we're having with payers around getting those policies in place. We're really pleased with the progress and the team's acting with urgency and I think we're right on track and pleased with where we're at. I'll hand back to you Tim.

Yeah, thank you, Karen. Now, we would like to ask a little bit of patience, Derek, because remember what we did for MG Rights. I mean, it took us two quarters to install broad and favorable policies. That was our commitment to the patient community, and that is fast. Guys, I mean, two quarters is really outstanding, an outstanding job done by the team, and we will seek to replicate that for CIDP.

Thank you.

Next, we'll take a question from Akash Tiwari at Jefferies.

Hey, thanks so much. So kind of on that point, on CIDP, you mentioned in the past, you're clearly seeing strong demand from doctors, but you wanted to see how that actually translated to patient impaired demand, given the label, the overlap in the prescriber base and the amount of IVIG experienced patients here. Would it be fair to say, you know, the CIDP launch should at least be half as good as GMG out to the first year? And maybe to that point,

do you think we will see this kind of inflection after two quarters with cidp like we saw with gmg i just uh wanted to double click on that point like that would would say thanks so much yeah and thank you for the question thanks for being with us today and it is tempting right to draw analogies between an mg launch and a cidp launch but what we're trying to say and explain is that you know that two distinctly different uh markets with their own dynamics launch dynamics And maybe, Karen, you want to dig a bit deeper into this question, right?

Yeah, I think that's right.

It's very hard to draw parallels. They each have their own dynamics. One thing that I would say around the inflection point that you mentioned after two quarters, I wouldn't think about an inflection point that the payer policies will come in sort of one by one over the two quarters. And what we like to think about is that sort of by the time you get to the end of two quarters, you might have sort of that critical mass where neurologists really can start to get confident that favorable payer policies are in place. So we do believe that there will be uptake, the same as that we saw in MG. And we think that it'll be consistent over the period of time.

But the dynamics between the two launches are very different for the reasons that you pointed out.

We'll go next to Alex Thompson at Stiefel.

Hey, great. Thanks for taking my question. I guess I wanted to ask about, you know, OpEx trajectory over the next couple years, how you're thinking about that as it relates to expansion into the, you know, additional phase three programs as well as thinking about commercial expansion beyond neurology. Thanks.

Thank you, Alex. I'll take both questions. In terms of SG&A, our infrastructure is now largely in place. As you would remember, we put that expansion in the U.S. in Q1. For the rest of the world, we have infrastructure in most of the markets. There's a few big markets still outstanding in Europe. I would expect SG&A from here on forward to grow, but if it grows, we'll be muted, and you won't see that rapid expansion. In terms of R&D, Again, I think that will grow quarter over quarter as we invest in all the new science which we talked about last week. I think we have a unique opportunity to invest in ourselves here to set us up for a long, sustainable future.

That's what we're going to do. Thank you for your question, Alex.

We'll move next to Thomas Smith at Laring Partners.

Hey, guys. Good morning. Thanks for taking the questions, and congrats on the strong results. For Vince Gard in MG, can you just remind us on the data that's being generated that could support chronic dosing in addition to the current cycle-based dosing, and whether you expect to get chronic dosing explicitly added into the label, or how important do you think it is for prescribers to have that chronic dosing flexibility in the label to facilitate access and reimbursement? Thanks.

Yeah, thank you for the question. And the answer is simple. We have chronic dosing in the label. The label is basically describing the use of VivGuard for the treatment of acetylcholine receptor antibody positive GMG patients. So we have cyclical dosing, but that is, of course, chronic use. And we're the only company which has already such a long timeline of chronic dosing of patients. But I think it is important to call out that the safety profile of the drug maintains consistency. and that we see a consistent minimum symptom expression over multiple years now in 50 to 55% of the patients. What we did do is we run an ADAPT-NEXT study, which was filling a data gap for those patients which, for example, are coming from chronic plasma exchange or chronic IVIG, patients which we really did not study in the ADAPT trial, because these patients cannot stand, of course, cyclical dosing. If you're on a weekly plasma exchange, you will need real intense chronic therapy. And within that next study, we have actually shown that every other week dosing with VidCard is as powerful as the cyclical dosing, both from an efficacy and a safety point of view. So in summary, I think we're the only company really with chronic dosing data, and we're the only company which can offer, you know, such a diverse set of dosing schedules.

Thanks for the question.

Next, we'll move to Yaron Werber at TD Callen.

Great. Thanks so much, and a really nice showing, Tim. Quick question. Just in Europe and Japan, you know, Europe is very tough these days, and Japan usually got lumpiness, as you noted, and obviously changes in pricing. But just any sense, kind of what should we expect there in terms of acceleration of sales? Thank you.

Now, Yaron, that is a great question, and thank you for zooming out on the global aspirations of the company.

This is a question I would like to hand over to Karen.

Yeah, happy to take this, and thanks for the question.

So maybe I'll break them out and talk about Europe first and then Japan. I would say in Europe we're on track. As you know, it takes a little longer, as you already called out, in Europe to get pricing and reimbursement in place across all of the different countries. We're pleased with the progress that we've made, and certainly in three of the big five markets, Germany, Spain and Italy. We have good reimbursement. We have strong clinical advocacy. And we're really seeing that consistent uptake with what we're seeing in the U.S. And what I mean by that is that we see a broader prescriber base, not just in the academic centers, at broader potential and really pushing towards early aligned use. So I think we're seeing consistent trends there. And as we open up new markets with pricing and reimbursement, then I think you'll start to see that consistent growth as well. So we're pleased where we are in Europe. We're on track. We take it step by step. It takes a little bit longer. In Japan, I just want to applaud the team. I think they've done a phenomenal job. I mean, if you look back quarter over quarter, it's just so incredibly consistent, the growth in Japan. And we see that again this quarter. I would imagine that you can see, you can imagine that outlook being consistent moving forward. We just recently launched Vivdura, which is the name for subcutaneous in Japan. And that, like in other mice, we're seeing that really expand the patient population that is open to VivGut, with those, again, opening up those earlier lines of treatment. So, again, I would say consistent growth, as you've seen for the last 10 quarters from Japan, that we can expect in the future.

Thanks for the question.

We'll move next to Matt Phipps at William Blair.

Thanks, Jay. My questions can draft on all the progress. Quickly, you mentioned a different endpoint in the next ITP trial. Is that just looking at a different timeframe for sustained platelet response, or can you use something like IWG responders as a primary endpoint? And then maybe just quickly on the launch of ITP in Japan, any sense yet on where VivGuard is being used in the treatment paradigm for ITP patients? Is it after multiple thrombopoietin agonists, or can you slot earlier in that treatment paradigm? Thanks.

Two great questions. Thank you for that. I will hand over question two to Karen. On the ITP trial, I think the reason why we can go with a significantly smaller study in a confirmatory mindset is A, because we can work with an endpoint which is looking for extent of disease control, and B, we can really leverage the know-how and the expertise we have developed in running ITP clinical trials. So I think this is going to be, roughly speaking, a trial less than half the size. of the global phase three trials, which we have done so far. And we think it's a responsible investment to make for a significant patient unmet need waiting on the other line. Adam, would you mind discussing the Japan question, please?

Yeah, happy to take that. I would start by saying the ITP launch in Japan is going really well. We've applied sort of the same launch playbook that we have in other launches, and we're seeing the same strong early performance. And what I would say is that it's clear that there's an unmet need in these ITP patients. So far, what we're seeing, to your specific question, is that the early experience is in later lines of therapy. And that's exactly what you would expect in any of these launches. The doctors want to try to get experience in those refractory patients, in those later line patients, get experience under their belt and then start to move earlier lines. But what we're seeing that I'm really pleased with is that there's a strong belief in the MOA, in the mechanism of action of FCRN. The hematologists are responding that they believe in the MOA, and therefore that they believe in the reason to try this gut. So I would say strong early results, exactly where we would expect them, and really important learnings that we're going to be able to take away from this Japan launch. as we think about the U.S.

and potentially other launches with the second study that we're planning. Thanks for the question.

We'll go next to Suzanne von Vorthusen at Kempin.

Hi, team. This is Suzanne from Kempin. Thanks for taking my question. I just have a small follow-up to last week's R&D day regarding Argenix-121, the IgA degrader that was revealed. Can you give some context to the indications where such molecule would fit well, how many indications you see, and also how you compare the opportunity in terms of size? Is there potential for this to be an opportunity of fifth-card size, or do you see more parallels to a drug like EMPA when looking at the commercial opportunity? Any thoughts or direction here would be appreciated. Thanks.

Thanks, Susanna. Thank you for this question. You know that when we take a product forward in the pipeline that it has got the right to play across multiple indications, so it's not a single indication asset. I think what we said on the podium during the R&D day is that there's a growing understanding of the pathogenic role IgA autoantibodies play in autoimmune disease. it's actually remarkable how little we know above and beyond pathogenic IgG. So this is a field which is completely emerging. We are very pleased that we can go in there and pioneer. That's the work we like to do. And then in terms of indications, we gave you a conceptual list of indications where we know that IgA autoantibodies drive disease. Of course, everyone knows about IgA nephropathy. I think that is a field which is just being built. I think it's a large market opportunity, which will support multiple generations of innovation and multiple innovator molecules, so that's an obvious one. We spoke about IgE vasculitis, but again, you know, from a biology point of view, that is in the bullseye of the disease. There are more indications, and at this moment, we will stay conceptual, you know, because we're still doing some background work on these indications, and the opportunity will unfold when we bring this molecule online in all these different clinical trials. So stay tuned. We think it's a significant opportunity, but I think we can follow the biology.

So we're very excited about the molecule. Thank you.

We'll go next to Yatin Sunita at Guggenheim Partners.

Hey, guys. Congrats on the quarter. Two very quick ones for me. Could you just talk a little bit more about the sub-Q and IV dynamic, like how is sub-Q, what sort of shares sub-Q has right now versus IVs that are growing in the market? And then just as we think about future with the launch of CITP, any thoughts on establishing guidance for us? Thank you.

Thank you for both questions, Shatin.

Let's start with question one, the sub-Q versus IV dynamic. Karen, would you mind commenting on the dynamic? I don't think we quantify, right? But maybe you can explain the dynamic.

Yeah, happy to.

Exactly. So we don't provide the specific breakdown, but what I would say that I think is helpful in terms of the dynamic, both VivGuard and HyTRULO are growing in terms of new patient starts and in terms of revenue. And And what we see and what the real value of HyTRULO is, is that I would say it opens really up new prescribers that might not be, for whatever reason, interested or comfortable with an IV option. So new neurologists that are more comfortable with injections. And that also opens up new patients that are seeing those neurologists or potentially there are patients that don't want to go have the IV injection. Maybe they think that their disease is not severe enough, that they need an IV option, but they're open to an injection option. So I would say by having subcutaneous, it aligns directly with our strategy of moving into early aligned treatment. And we see that very clearly. And it also aligns with our strategy of broadening the prescriber base for VivGut, which obviously also helps us with the ADP. The other important dynamic that I think I just want to highlight on HyTRULO is that Our goal and our strategy is not a switch strategy from VivGuard. So around 60% of the Hytrulo patients that are starting on Hytrulo are actually new to the VivGuard franchise. And that just demonstrates how we're really expanding the market, both in terms of prescribers and patients with the subcutaneous option. And I'll hand it back to you, Kim.

Actually, we had a cut in our line. If Yatin is still on, if you could just repeat his second question, that would be helpful.

Yeah, I'm online. So the second question was about guidance. How are you guys thinking about establishing guidance and when should we expect that?

Okay, that is clear. Thank you, Yatin, for repeating it. This is a question for Carl, right?

Yeah, thank you. Thank you, Yatin. I mean, we didn't provide guidance this year, revenue guidance, due to all the unknowns out there, in particular for the CIDP launch and the geographical expansions. So I think as a company matures, clearly we need to think about guidance. So we will listen to our stakeholders, including our investors and analysts, and this is something which we will consider. Maybe this is something we can do in January next year. But for now, we're going to focus on executing, and we have provided the expense guidance and the cash guidance, and I will leave it at that for now.

And we'll go next to Vikram Purohit at Morgan Stanley.

Hi, good morning. Thank you for taking our question. We had one on the commercial opportunity in ocular MG. So based on the neurologist feedback you received and just the experience you have in the space with this indication overall at this point, how distinctly do you think ocular MG is managed and viewed and treated versus more generalized MG? And based on that, how drastically do you think the cadence of patient ads could change based on a potential label expansion into ocular MG? Thanks.

Thanks for the question on ocular MG. So, by having been now in the MG space for some time, we have been hearing more about unmet medical needs in ocular MG, and it could be a wrong assumption that ocular MG is a milder form of MG compared to the generalized form of myasthenia. So, ocular MG patients are pretty debilitated and disabled because the double vision There's not too much activities of daily living you can do in terms of, you know, working on screens, driving, and then I'm not even talking about the headaches these people experience. Today, OQMG patients are basically only treated with steroids, and some of them actually do very well on steroids, but there's a subset of OQMG patients which badly need another tool in the toolbox. And after close consultation with the community, and the experts, we could crystallize, I think, a pretty elegant OQMG study. We had a successful interaction with the FDA, agreeing on trial design and endpoint. And in the real world, some of these OQMG patients are actually seen by ophthalmologists or neuro-ophthalmologists. And then when the symptoms start to spread, they're being referred to a neuromuscular specialist. So I think this is a significant opportunity and a nice addition if we are successful to our presence in the EMG space. Thanks for the question.

We'll take our next question from Charles Pitman King at Barclays.

Hi. Thank you very much for taking my question. Two from me. Just coming back to the potential risks from competitor readouts to your kind of dominant position in the second half of this year. I'm just wondering what metrics will you be looking at from these readouts to determine whether any of these really pose a risk to your increasing market dominance? And then just the second one on the kind of Chinese commercial opportunity. I mean, I understand Xilab's not going to be a report until the 7th of August, but just in terms of how you are thinking about this from an Argenix perspective, you know, how established are the treatments and what is the expected addressable market and pricing structure that you expect to benefit from going forward? Thanks.

Now, thank you for both questions, Karen. I will give the second question to you. I think on the first question, we can be relatively brief. In absence of data, I think we would find ourselves in an area of speculation, which we do not really like to do as a science-based company. The only thing I can do is remind you of how high we have set the bar in the MG space. I think we have the fastest onset of action. We have the deepest action. We have a very nice durability now over many, many years in our MG patients. And importantly, I think we have a very clean safety profile. And then from a product presentation point of view, I think we have by far the broadest portfolio of product presentations, which we will continue to aggressively expand. So let's wait for the data, but I think we're well equipped to compete. And Karen, do you mind taking on question two?

No, happy to take that question, Tim.

And look, I won't comment on Q2 results. Of course, we'll let Xi Lab comment on that. But what I will say is a few thoughts on, first of all, starting with the fact that I think Xi are incredible partners and they've done a great job with the launch of MG. And we see, and with them, a long-term partnership and I think a lot of opportunity in the future in China. Obviously, it's a big market. And what we've seen to date is a lot of volume coming in early on. Through Q1, you saw a big volume of new patients start in Q1. And I think that reflects the market opportunity in China. I think we've done a great job of not just getting the approvals, but also the NRDL listing. That has certainly helped with uptake. We expect that to continue. And more recently, we got the subcutaneous version approved in China. So I think Overall, between the volume of patients with MG in China alongside the great partner we have in Xilab, I think we're looking positively at the outlook for China.

I'll hand back to you, Tim.

Thanks, Karen. Thanks for the question.

We'll go next to Leland Gershell at Oppenheimer.

Great. Thanks for taking our questions. I just wanted to ask, Karen, you've been consistent in in moderating expectations for securing payer agreements for CIVP. Just wanted to ask if that process has been going in line with your expectations internally, and also wanted to ask if you've been facing any pushback from payers with respect to requiring a step-through from IVIG. Thank you.

I think this is an excellent question. Yeah, happy to take that. Yeah, thank you.

Yeah, sounds great. It's a great question. And we talked earlier about why it's so important to get these payer policies in place. I would say that, as I've said before, we're exactly on track with where we thought we would be. And I mean that in terms of both how the conversations with payers are progressing, which are progressing well, and also the conversations that we're having with payers in terms of what those policies should look like. In terms of IVIG, I think one thing that's important to remember about the CIDP market is that the majority of patients have been exposed to IVIG at some point. And we know from our clinical trial that we have equal right to respond, whether it's IVIG as background therapy coming off no treatment in the last six months or steroids. So we think we're well positioned with our data, and we think the payer discussions are going well. to get policies in place that will set us up for a successful and a strong launch over the coming quarters.

Anything to add, Kim? Thank you for the question. We're ready for the next one.

We'll go next to Samantha Semenkow at Citi.

Hi, good morning, and thanks for taking the question. Just one on the PFS for me. Now that you've filed and you're preparing for a potential launch of the PFS, I'm curious, how much more growth in GMG are you really thinking about that that formulation will drive? What patient segments do you expect to open or expand? Do you think this will be more of a switch market than what you've seen with high true low? And just how should we think about the magnitude of impact on revenue, assuming you have that approval in the near future? Thank you.

Yeah, thank you. That's a great question on BFS. And Karen, I think, why don't you explain why this will just continue that steady, strong trajectory into the MG population, please?

Yes, I think that's exactly it, Tim, and what I was going to say.

I would say this just continues to expand and reinforce the momentum as we continue. We started with IV, then we expanded into subcutaneous and then certainly expanding into PFS, it opens up different prescribers as well as different patients. And I think that's reflected in terms of how we explain the addressable market expansion at R&D Day. Certainly what we see is that there will be a growth in biologic share of market and that we will be well positioned within that growth. And certainly PFS helps us to maintain our leadership and certainly with the early aligned patients and the broader prescriber base. given the fact that we will have IV and PFS. So I would think about it as continuing to maintain our momentum and continuing in line with our strategy of early align and broader prescriber base.

Thanks for the question.

We'll go next to Jun Li at Truist Securities.

Hey, thanks for the update and for taking our questions. But the no-go decision on myositis by urine, are they all coming at once or one by one? And if f-carpitimab works in one but not in the other myositis subtypes, what would be some of the reasons for that? And what are you looking forward to learning from that to further enhance the choice of your future indications and maybe even reprioritize your existing pipeline indications? Thank you.

Thank you, Yun, for the question. And thanks for being with us. In this basket trial, where we combine three subtypes of myositis, the go-no-go decision point will all come at the same time. So, we're synchronizing the first 30 patients across the three indications to, you know, make one decision. Remember that this is an operationally seamless phase two, phase three trial. So, whilst these data are maturing, we are actually already entering into the phase three portion of the trial at risk. So technically speaking, the only decision we can make is a stop decision. And of course, the first 30 patients will be informative. So it will allow us to make stop decisions in one, two, or three of these indications. But it will also allow us to adjust sample size. Look, all three indications come out of the same Argenix mold. I mean, strong conviction in biology. I think a responsible, thoughtful clinical trial design, but not completely risk-free. So I think we did everything we could to design it and risk mitigate it. So I don't think there's any specific read-through of myositis outcome onto any other indication which we have loaded into the pipeline because they all follow the same blueprint.

Thanks for the question.

We'll go next to Gavin Clark-Gartner at Evercore ISI.

Hey, thanks for taking the question. A quick one on thyroid eye disease. Just wanted to confirm you're doing weekly dosing in the Phase 3s, and also just ask how enrollment is going now that you're about four months in. Thanks.

Thanks for the question on TUD. You're right that we're in weekly dosing. We're doing that with the pre-filled syringe already. And I think we're in a classical, typical trial execution mode. So stay tuned on how the study is doing. We will keep you updated over the coming quarters. but we feel very strong about the opportunity and the traction we're getting with this global clinical trial. Thank you.

Next, we'll go to Andy Chen at Wolf Research.

Good morning. Thank you for taking the question.

So I... ...this 450,000 pricing. I'm just curious if you can talk about how robustly this pricing can stay at 450,000 because... As you have payer contracts, there's a natural pressure for ASP erosion. So just curious if you can comment on the dynamics here. Do you see room for this number to go up over time in the next few years, or do you think this is going to stay the same at 450, or do you think this is going to go down? Thank you.

Yeah, so Andy, thank you for the question, which I'm happy to take. So let me first briefly comment on the 450 numbers. That number, of course, did not come out of the blue sky. I think it is the result of a thorough understanding of, I think, the value proposition which we have to offer. Careful calibration, of course, with PACE, where we socialize the Phase III data with them. And the data, actually, which resonates very well with PACE is the region of function data Karen was already alluding to. And especially, I think, the fact that the majority of the people who entered the trial wheelchair-bound we're able to leave the trial outside of the wheelchair. So these are pretty meaningful data, which represents significant value. We're now finalizing the pay agreements. So stay tuned. We also discussed that during the call. Look, I cannot predict the future. I think it is fair to assume that with more competition and more indications, there may be some pressure on your price. But I think as a company, we're pricing transparently and responsibly. And I think we're very well equipped

with our market access strategies to go into our future. Thank you for the question.

Next, we'll move to Joel Beattie at Baird.

Thanks, and congrats on the strong growth from Q1. Looking back, what led to the weaker Q1, and how much of that was seasonal in nature and would be expected to repeat versus any dynamics that might have been one time in nature?

Yeah, thank you for asking the question.

I think we alluded to that in the prepared remarks, but maybe, Karen, do you want to comment? When we look through the optics of Q1 and Q2, what the real underlying strength of the business is?

Yeah, absolutely.

When we look at the business, what we look at is those underlying drivers of growth. So are we adding new patients consistently? Are we moving earlier line? Are we broadening our prescriber bases? And we see those pretty consistently through Q1 and Q2. I would say those Q1 dynamics that you see across the industry, not just with VivGuard around re-verifications, weather, I'd say they're always going to be there. You know, whether they were worse in Q1 because the weather was worse in some parts of the U.S. or whatever you may have. I mean, I think we can all look back at that. But those Q1 dynamics are more, I would say, across the industry. the VivGuard performance and the KPIs, I would say it's pretty consistent throughout actually the 10 quarters of growth that we've had, and we would expect that to continue.

Thanks for the question.

We'll take our final question from Douglas So at HC Wainwright.

Hi, good morning, and thanks for taking the questions. Just a quick follow-up on ITP. I understand you think you have from a regulatory standpoint, an efficient way to move forward. I'm just curious what feedback you may have gotten from KOLs, as well as how you're thinking about the commercial positioning, just given the finding from the prior Phase III study in terms of the effect of low-dose steroids.

Thank you. I'm not sure we understood the question completely because the line was bringing up Would you mind briefly recapping the question, please?

Yeah, sorry. Can you hear me now, Tim? Yes, we can. Okay. So I was just asking, you know, so I understand you believe in ITP that you have an efficient path forward from a regulatory standpoint. I'm just curious in terms of how you're thinking about the product's positioning, if it has changed prior to the prior phase to re-results, and what feedback you may have gotten from KOLs, especially in terms of the efficacy or the apparent efficacy of low-dose steroids. Thank you.

We got it. So there is quite some excitement in the community about the data which we generated in the clinical trial. In this refractory patient population which we are targeting and in which we will be positioning third-line, right, after steroids and PPOs, in that patient population, not much is really working, and we showed, you know, a very high response rate and an unprecedented safety profile. And that is really important for the KOLs. They also continue to call us about how well their patients were doing in the study, their ongoing open-label extension. So there was quite some pull from the marketplace, I would say, for this product. And I think they were also very collaborative in helping us to think through the proposal we would make vis-a-vis the FDA. So positioning has not changed. KOL feedback is very positive. and that strengthens our determination to go forward. Thanks for the question.

This concludes today's question and answer session and today's conference call. Thank you for your participation. You may now disconnect.