argenx - Q2 2023

Transcript

Operator (participant)

Good morning. My name is Sarah, 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, please press star one again. Thank you. I'd like to introduce Sorry, Beth DelGiacco, Vice President, Global Head of Corporate Communications and Investor Relations. You may now begin your conference.

Beth DelGiacco (VP and Global Head of Corporate Communications and Investor Relations)

Thank you, operator. A press release was issued earlier today with our half-year 2023 financial results and a second quarter 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 2 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, but from those indicated by these statements. argenx is not under any obligation to update statements regarding the future or to conform those statements in relation to actual results unless required by law. I'm joined on the call today by Tim Van Hauwermeiren, Chief Executive Officer, Karl Gubitz, Chief Financial Officer, and Karen Massey, Chief Operating Officer. I'll now turn the call to Tim.

Tim Van Hauwermeiren (CEO)

Thank you, Beth, and welcome everyone. I'll begin on slide number 3. This has been an incredibly exciting time at argenx, and we are so happy to be delivering good news to the GMG and CIDP communities and patients living with autoimmune disease more broadly. We have successfully achieved several key milestones that we laid out at the beginning of the year, bringing us one step closer to our mission to transform treatment for people living with severe autoimmune diseases. Transformation to us means patients living their lives with minimal interruption due to their disease, so they can have more time to do things that they enjoy. We see this as a time of hope for patients who have been waiting many years for meaningful innovation. Slide 4.

At the beginning of the year, we outlined an ambitious plan to create value for our key stakeholders by driving sustained growth across the business. Commercially, our commitment was to expand into earlier GMG patient segments and broaden into new geographies. We have made progress across both of these goals, which Karen will talk about later in the call. From the clinical side, we said we would advance our efgartigimod program forward to demonstrate the power of our Fc fragment as a pipeline and a product opportunity. Our conviction in this opportunity has only grown following the positive CIDP data last week, and we expect more momentum later this year with two phase C readouts in ITP and pemphigus. We also committed to continued investment in innovation. This includes both our early-stage programs empasiprubart and ARGX-119, but also our pipeline expansion through our Immunology Innovation Program.

I'm proud to say that we are right on track with our goals for 2023, having achieved the milestones we laid out. The year is not over yet. Slide 5. Very quickly, I would like to recap the recent clinical news in CIDP and MMN. Last week, we announced positive ADHERE results. We studied a broad patient population and saw a 67% response rate in Stage A, supporting our long-standing hypothesis that CIDP is an IgG-mediated disease. In Stage B, the study made its primary endpoint with an impressive P value, demonstrating that Vyvgart Hytrulo reduces the risk of relapse by 61% based on time to first adjusted aINCAT deterioration. We had several conversations with neurologists following our announcement, which were highly encouraging around the potential for these data to create a paradigm shift.

The team is now preparing for an upcoming interaction with the FDA on the data while simultaneously working on the sBLA. Slide 6. In June, we also shared these two data of mPA for MMN. The key highlights are: we are advancing forward with the ARDA study. This decision followed a planned safety review by an independent data monitoring committee of 22 patients in cohort 1, including 9 who completed the full 16-week treatment period. The IDMC confirmed a favorable safety and tolerability profile, consistent with results from the phase I study, and gave us the go-ahead to move forward. Based on this recommendation and an internal efficacy assessment, we believe we have established proof of concept in MMN and will be advancing to a second dose cohort. We plan to report top-line results from the full study next year.

MMN management is just the first indication for EMPA, but we believe this could be our second pipeline in the product opportunity. We are on track to start a phase II study in DGF later this year and in dermatomyositis early next year. Slide 7. The vision of our leadership in the neuromuscular space is quickly emerging, and you can see the puzzle pieces coming together with each quarter of revenue growth from Vyndaqel and Vyvgart Hytrulo, and the key data readouts from our clinical programs. We have generated almost $500 million in net Vyndaqel sales this year to date, driven by consistent quarter-over-quarter growth. Vyvgart Hytrulo was approved in June, so we now have two approved commercial products for GMG patients, honoring our long-term commitment to this community. With ADHERE, it's important to consider what its positive outcome means to the neuromuscular community.

This was the largest CIDP trial ever run and the first that included several unique design features. We hope that ADHERE will set the bar on what CIDP trials look like going forward to ensure the right patients are getting into the study. Beyond the impressive efficacy and safety, we also uncovered important biology insights, showing CIDP is IgG-mediated. This is what we want leadership to look like for all of our indications, doing what is best for patients, physicians, and to further our fundamental understanding of disease biology. The next advancing of readouts within our neuromuscular franchise will be myositis, where we are also innovating with our trial design by including three unique subsets: necrotizing, anti-synthetase, and dermatomyositis. These subsets are unified by muscle deterioration, associated progression of the disease, that can present very differently with other physical manifestations in the joints, lungs, skin, or other compartments.

Each subset is also characterized by their own unique IgG autoantibody. We believe the field is ready to use the IgG autoantibody signature to reclassify myositis. We expect a go-no-go decision next year, which will inform us whether to advance all three subsets into a phase III and will provide key underlying biology insights into the broad treatment of myositis. We are also building up our pipeline opportunities with EMPA and ARGX-119. We are thrilled to have proof of concept in MMN. Have also published significant translation data on the underlying biology. From a franchise perspective, MMN fits squarely into the core capabilities we are building. We are currently in a phase I healthy volunteer study with our ARGX-119, after which we will be evaluating its potential in congenital myasthenic syndrome and ALS as part of a phase Ib patient cohort.

Our commitment within neuromuscular extends across our business. First, the relationships we are building commercially with the neuromuscular community, including patients, physicians, and advocacy groups. We are also building in the patient clinically in how we design clinical trials to be patient-friendly and unlock key translation biology insights. All of this is rooted in the scientific foundation we are building in the space, partnering with leading neurodisease biologists and seeking out opportunities to innovate and expand our pipeline going forward within neuromuscular. With that, I'm going to turn the call over to Karl to talk about our 2Q and half-year financials and our recent equity raise.

Karl Gubitz (CFO)

Thank you, Tim. Slide 8. Our second quarter 2023 financial results are detailed in our press release from this morning, I will only highlight the key points here. The continued momentum of our launch is well reflected in our second quarter revenues. We generated $281 million total revenues, including $269 million in global net product sales and $12 million in collaboration and other revenues. In looking at the regional breakdown of our global product sales, you can see that $244 million was from the US, $13 million from Japan, and $12 million from Europe and our distributor markets. The launch in Europe is largely Germany. Remember that beginning in March, we started to accrue revenue in Germany at the projected negotiated price, which we will learn in September. This accounts for the lower quarter-over-quarter growth in Europe.

Other markets will start to contribute in Q3 onwards, following our launch in Italy. Our total expenses were $383 million for the second quarter, indicating an operating loss of $102 million for the quarter. We ended the quarter with $2 billion in cash, cash equivalents, and current financial assets. This excludes gross proceeds of approximately $1.3 billion from the global offering we completed last week, which will allow us to on the many opportunities ahead, specifically on the heels of positive ADHERE data and our growing conviction in Vyvgart and the rest of our pipeline. We are still in the process of reviewing how our increased ambition level will change our operational spend.

As of today, we are not able to confirm our prior cash burn guidance of $500 million, and we'll provide an update at a later date. I'll now hand the call to Karen for a commercial update.

Karen Massey (COO)

Thank you, Carl. Let's go to slide 9. We started the year with a clear and simple vision commercially: to reach more patients with Vyvgart globally. We plan to do this by driving multidimensional expansion in GMG, including geographic expansion, the launch of our subcutaneous product, and by driving usage into earlier GMG treatment lines. We also looked ahead to the multiple data readouts expected this year and how this would drive expansion into new patient segments over time. I'm going to talk today about the continued strong performance from our GMG launch, but also about the pivot point we are facing as we look ahead to the evolving opportunity before us.

The outstanding results from ADHERE have strengthened our conviction that we will be a leader beyond MG in neuromuscular, that we can start to leverage the launch capabilities we have built to prepare for multidimensional expansion across product presentations, new geographies, and towards a portfolio of indications. Slide 10. Starting with our recent commercial performance, we had a great first half of the year, generating $489 million in net Vyvgart sales over the first two quarters. This impressive revenue number translates to more patients getting access to Vyvgart and more opportunity for us to change patients' lives. We are incredibly happy with the results. We can point to several key drivers of the momentum we saw in the second quarter. First, we are seeing consistent growth looking at month-over-month new patient starts.

We are reaching patients in earlier lines of therapy, though we're still at the front end of reaching the 17,000 patients we believe we can address with Vyvgart. The task before us is to shift into earlier lines of treatment and overcome neurologist inertia. This will take time as neurologists gain deeper experience with Vyvgart and will also require persistence from our field teams. We have seen consistent prescriber growth, both in terms of breadth and depth. We now have more than 2,100 prescribers in the U.S., and a greater % of them each quarter are moving beyond that first script and putting additional patients on treatment. We also think that Vyvgart Hytrulo will help with this shift. Slide 11. We're now a couple of weeks into the Hytrulo launch and have received our first scripts and shipped our first vials.

We'll save specifics for our third quarter call, but I was very impressed by the team's readiness at the time of approval to get drug into the channel and to patients as quickly as possible. Our goal with Vyvgart Hytrulo is to honor our long-term commitment to the GMG community with a second product option, now subcutaneous, and also to drive growth into earlier line patients by simplifying or democratizing the treatment of GMG. We believe our positioning should be first line after oral therapies, and that will require further expansion into community practices. The diagnosis and treatment of MG patients can be complex and can be associated with a trial-and-error approach or a battery of tests. Current treatment options often come with safety and tolerability challenges, which require the patient to decide between symptom control, emerging side effects, or long-term safety concerns.

This all requires close management from a GMG specialist, which is why patients are often referred to specialist centers. Our conviction is that with the efficacy of Vyvgart, established safety and tolerability, and now a 30 to 90-second injection with Hytrulo, we can expand usage deeper into the community of patients and prescribers. The more experienced community prescribers gain, the more expert they will become at diagnosing MG and treating with Vyvgart. Now that we have the results of the ADHERE trial, we can take many of the same themes that we've seen with GMG and apply them to CIDP as well. The CIDP community has been waiting for innovation for over 30 years. With these data, we believe we can bring transformational change to patients.

For me, one of the most compelling data points from ADHERE was the 91% of eligible patients who rolled over into the open label expansion study, including patients who relapsed in part B and were given the option to go back to their prior therapy or to stay on Vyvgart. We see this as a good indication that the patient experience with Vyvgart is different. We know that there will also be unique challenges associated with CIDP market based on the comfort level and loyalty associated with current treatments. We also see the opportunity to raise the bar on what a treatment can offer, taking into account the full patient experience, efficacy, safety, and the burden associated with administration. Slide 12. Before I wrap up and turn the call back to Tim, I want to shift to the progress we're making with our global geographic expansion.

We've had three key updates since our last call and still more ahead this year, demonstrating the speed at which we are executing on our global launch strategy. First, we received approval for Vyvgart in China through our partner, Zai Lab, at the end of June. This means we will be eligible to apply to the NRDL in 2024, which is important from a timing perspective because it will open the opportunity to patients who are not privately insured. Zai also submitted the BLA for SubQ, Hytrulo, it was accepted. Earlier in July, we also successfully completed reimbursement negotiations in Italy, marking the second country within Europe to have officially launched Vyvgart. I'm incredibly proud of the team, expanding access for Italian patients just 11 months after European approval.

Last, we finalized the commercial and distribution agreement in South Korea with Handok, a team with a great track record as a commercial partner. Similar to our other distribution agreements, Handok will take the lead on all regulatory and commercial activities associated with Vyvgart in South Korea. Slide 13. I want to close with the whys behind all of our expansion strategies, which are the patients who are living with severe autoimmune disease. On the heels of another strong quarter and a positive outcome in CIDP, we are more motivated than ever to drive a paradigm shift in how autoimmune is treated. Current autoimmune treatments come with many trade-offs, now is the opportunity for transformative change. We want to take the full patient experience into account, efficacy, safety, and treatment burden, give patients more days where they're not reminded of their disease.

It's the right time for meaningful change, and we believe we have a unique medicine, patient-centric strategy, and a talented team to deliver. I'll hand it back to Tim.

Tim Van Hauwermeiren (CEO)

Thank you, Karen. Slide 14. Coming back to where we started, which is to look back at the plans we set forth at the start of the year. We have delivered on our promise to execute and drive sustained growth across our business. I'm incredibly proud of the team for these achievements. They do not come without a lot of hard work. We continue to show in all that we do, our commitment to bold innovation and execution on behalf of patients. Our work is not done. We still have a lot to look forward to by end of 2023 on our path to transform the treatment of severe autoimmune diseases.

Operator (participant)

Thank you. We will now begin the question and answer session. If you have a question, please press star one on your telephone keypad. We ask that you please limit yourself to one question. One moment, please, for your first question. Your first question comes from the line of Tazeen Ahmad with Bank of America. Please go ahead.

Tazeen Ahmad (Managing Director in U.S. Equity Research)

Hi. Good morning, guys. Thanks for taking my question. Maybe I just wanted to focus on 1 of the 2 data catalysts that you have in the fourth quarter, specifically for the Pemphigus readout. Maybe, Tim, can you frame for us what to expect in terms of the top-line results that you're going to be presenting? In terms of feedback that you've gotten from physicians, what would be considered good data? Thanks.

Tim Van Hauwermeiren (CEO)

Good morning, Tazeen, thanks for being with us today. Thank you for your Pemphigus question. It's one of the key catalysts, I think, of the remaining part of the year. In pemphigus, the primary endpoint is mainly constituted around showing a statistically significant delta versus placebo. We're testing efgartigimod versus placebo in a background of steroid tapering. The idea is to show statistically significant win on the primary endpoint, on an endpoint, which is complete remission on minimum therapy. That means on a minimum dose of steroids. In the key secondary endpoints, we're going to unpack elements which are really critical to patients. That means to know what is the extent to which we can taper steroids. That's very important. That's what patients care about. What is the speed to disease control.

That means stopping the formation of new lesions, and then followed by the closing of the lesions. This is in a nutshell, the key endpoints, blending what the regulators care about and what patients care about. Thanks for the question.

Operator (participant)

Your next question comes from the line of Derek Archila with Wells Fargo. Please go ahead.

Derek Archila (Equity Analyst)

Hey, good morning, and thanks for taking the questions. I actually have two brief questions, if I may. First, I'm just hoping you could talk a little bit about the sales momentum for Vyvgart. You know, you talked about some of the ex-U.S. geos coming online. You know, you've launched Hytrulo now and this push into earlier lines. I guess, as you think about the second half, which of these do you think is going to be the biggest incremental contributor to sales growth? The second question, you stated in the PR, you know, you're going to start the TED trial for Vyvgart. Given what we're seeing with Tepezza's recent performance in the Thyroid Eye Disease market, I mean, has your optimism around that commercial opportunity changed at all, and when will you communicate the full details of that trial design? Thanks.

Tim Van Hauwermeiren (CEO)

Thank you, Derek, and thanks for being with us today. I'll give you question 1A to Karen, and then I will take your question 1B. Okay?

Karen Massey (COO)

Thanks. Thanks, Tim. Thanks for the question. As you say, I think we continue to see strong momentum and I would say consistent momentum in the launch of Vyvgart. Actually, I would say that in the second half of the year, we'll continue to see that consistency across all of the factors that you mentioned. I think we continue to see that we're penetrating earlier lines of treatment and expanding that prescriber base. I see no reason why that won't continue through the year. We have pricing reimbursement discussions ongoing in Europe. We believe those will continue through the year. The Hytrulo early indication that we have positive feedback, that will also contribute to our growth.

I think one of the strengths that we have is that we are driving growth across all of those dimensions, and I think that should help us to maintain some consistent momentum.

Tim Van Hauwermeiren (CEO)

Thank you, Karen. On the TD question, Derek, I just invite you to be a bit patient. We are on track to start the trial. Once we're there, you know, to unveil trial design, I think we can also start to talk a little bit about how we think about positioning. We do believe TED is an IgG-driven disease. We do believe there's establishment of a linear correlation between the titer of your autoantibody on the one hand, and your clinical symptoms on the other hand. I think efgartigimod is well placed to shine on all 3 dimensions of efficacy, safety, and convenience. Stay tuned on the TED story. Thank you.

Karl Gubitz (CFO)

Thanks, Tim.

Operator (participant)

Your next question comes from the line of Yaron Werber with TD Cowen. Please go ahead.

Yaron Werber (Managing Director andSenior Biotechnology Analyst)

Great, thanks for taking my question, and congrats on a great quarter. Maybe as we look into the BP go/no-go decision early next year, it's in Q1 now, can you give us any parameters at all as to what you're looking for, you know, from a powering perspective in those first, you know, 30 or 40 patients? What is the actual go, no-go metric? Thank you.

Tim Van Hauwermeiren (CEO)

Thank you, Yaron. I mean, the best analogy to draw is actually the analogy with the CIDP trial. I think we need to see a minimum level of response in these first 40 patients, which give us conviction that this is not a placebo response we're seeing. That actually, which confirms that this is a true IgG-mediated disease, as we believe. Think of a seamless phase II, phase III, where we need to meet a minimum criterion from an efficacy point of view. Of course, we will look at the totality of the data, including safety, but it's a seamless phase II, III design in order not to lose time, in order not to have wide space between phase II and phase III. You know that we have conviction in BP.

We think that pemphigus actually serves to a certain extent as a derisking step for bullous pemphigoid, and we believe based on all the homework we did, this is a truly IgG-driven disease. Very exciting indication actually to focus on, a very high unmet medical need, very little innovation, and the safety profile, I think, of this graph will turn out to be even more important in BP than it will be in pemphigus. We're very much looking forward to that decision point. Thank you.

Yaron Werber (Managing Director andSenior Biotechnology Analyst)

Tim, is it just based on placebo, or are you thinking a little bit on the corollaries of some of the competition out there? There isn't necessarily a ton, but some of it is showing robust responses. Are you sort of... Do you have that in your sights as well into the go, no-go decision? Thank you.

Tim Van Hauwermeiren (CEO)

The go, no-go will basically look at the initial picture, which is emerging. I mean, we're not positioned there to look at long-term effects of the drug. Maybe you're alluding to the long-term clinical benefit we have seen in some of the pilocytic patients in phase II, where we actually did change the course of disease. These are data which we will also collect in the BP trial, but they will not be part of the go, no-go decision point. Okay?

Yaron Werber (Managing Director andSenior Biotechnology Analyst)

Thank you.

Tim Van Hauwermeiren (CEO)

Thank you.

Operator (participant)

Your next question comes from the line of Danielle Brill with Raymond James. Please go ahead.

Danielle Brill (Biotechnology Analyst)

Hi, guys. Good morning. Thanks so much for the question. I have a follow-up on the growth outlook for Vyvgart in the second half. I'm just curious, from a modeling perspective, how we should think about the growth momentum. We've been seeing a consistent mid-20% quarter-over-quarter growth in the US. Is it fair to model that moving forward? What kind of impact, if any, should we expect from the recent launch of UCB's FcRn? Thank you.

Karl Gubitz (CFO)

Hi, Hi, Danielle. It's Karl here. Thank you for your question. I mean, I think that as the dollar numbers become bigger, we cannot expect a continued 20% growth quarter-over-quarter, of course. Also, with our Hytrulo launch, I think it's really important that we are patient while we get those payer contracts in place. It will take a quarter, a quarter or 2 to get that. Remember, that's how long it took us with Vyvgart 18 months ago. In terms of competition, yes, we now do have competition in terms of Rystiggo, and of course, I think there comes daily C5 later on. The market is getting more competitive, and also we have another C5 who has started a TV campaign, and it's getting a little bit more crowded.

Overall, of course, we still expect to grow, but I think the growth will probably be tempered as we move into the second half of the year. Thank you. Thank you for your question.

Operator (participant)

Your next question comes from the line of Thomas Smith with Leerink Partners. Please go ahead.

Thomas Smith (Senior Research Analyst)

Hey, guys. Good morning. Thanks for taking the questions, and let me add my congrats on the great quarter. Just wanted to ask a little bit of a high-level question. You have a really strong balance sheet, pretty incredible launch momentum in GMG. Can you just comment on how you're thinking about strategic priorities here, given your significant cash balance? How are you thinking about investment between commercial infrastructure or Vyvgart indication expansion or early pipeline development? Are you considering any other BD opportunities? Thanks.

Tim Van Hauwermeiren (CEO)

Thomas, thank you for the question and thank you for being with us today. The answer is that we're gonna fire from all cylinders. The fact that we have such a strong cash balance puts us in a position to fully invest in the commercial dimension, really leaving nothing on the table of the immense opportunity we have in front of us. We do have an incredible pipeline. We have more than 60 clinical trials running now. There's a massive volume where we feel a sense of urgency to move forward. The, you know, innovative trial designs, unpacking the clinical potential of our drugs. You did see that ARGX-117 has proven to be a drug with the first efficacy data in MMN, and ARGX-119 is swiftly dose-escalating through the phase I study, a lot to come.

We have a wave of innovation which is progressing through preclinical towards the clinic. Firing from all cylinders. That also means that we're in a position of strength, and I think there's a ton of innovation which we're bringing forward from our platform, through our pipeline, and into the marketplace. We are, of course, always externally focused, looking carefully for opportunity, which we like, you know, that we're entrepreneurial as a company. We also do not suffer from the not invented here syndrome. If and when we see things which fit and we like, we will, without any doubt, you know, enter into partnership conversations. Remember that our discovery model, the IIP program, the Immunology Innovation Program, by definition, is a partnership model, so partnering is in the DNA of the company. Thank you for the question.

Operator (participant)

Your next question comes from the line of Myles Minter with William Blair. Please go ahead.

Myles Minter (Healthcare Research Analyst)

Hey, just a question on the potential self-administration of Vyvgart Hytrulo. Did you have those conversations during labeling when the product got approved for myasthenia gravis and what it would take data-wise to get self-administration in the label? Would the ability to potentially self-administer in the open label extension effort here be sufficient to get a self-administration option on that label for both CIDP and myasthenia gravis? Thanks.

Tim Van Hauwermeiren (CEO)

Hey, Myles. Thanks for being with us today, thank you for the question. Just a quick recap on the MG situation. I think here for the first generation subQ, we're seeing a combination of, you know, a relatively complex interface, you know, a few steps you need to do, where, you know, specifics of the disease indication, like double vision, limited dexterity, muscle weakness, and the combination of the two made it probably two high barriers for self-administration in the United States. Remember that the discussions are still ongoing in Japan and in Europe on the label, we need to see what they will deliver. It's too early to get ahead of ourselves, I think for CIDP. We need to go for a pre, a BLA meeting with the FDA, calibrating expectations.

We need to prepare the sBLA file and submit it. As part of these conversations, I think we will also tackle the topic of self-administration. Importantly, you need to know that, you know, we're working very hard on the second generation of the subcutaneous product presentation of efgartigimod. That is a prefilled syringe. That is a simplification of the user interface, and I think there we have, again, a real strong goal to go to self-administration. Stay tuned, you know, step by step. I think the current Vyvgart Hytrulo is already a significant step forward, helping us to penetrate our market because it's decoupling the patient from the infusion check. We're avoiding the infusion check bottlenecks, and we are simplifying access for the patient to the drug, because now any HCP can administer the drug anywhere.

Thank you for the question.

Myles Minter (Healthcare Research Analyst)

Thanks for the questions. Congrats on the quarter.

Operator (participant)

Your next question comes from the line of Yatin Suneja with Guggenheim Partners. Please go ahead.

Yatin Suneja (Senior Managing Director and Biotechnology Analyst)

Thank you for taking my question. Just two quick ones for me. In terms of the patient mix currently on the drug, can you just comment, you know, where are we in terms of refractory patient? You know, what percentage of the patients are getting retreatment and at what frequency? The second question is, you know, thoughts on providing revenue guidance now that you have, you know, over a year worth of experience with the launch. Thanks.

Tim Van Hauwermeiren (CEO)

Thank you, Yatin, and thanks for being with us. I will give the question on percentage of refractory patients and numbers of retreatment to Karen, and then maybe Karl can very quickly comment on your revenue question. Thank you.

Karen Massey (COO)

Yeah, thanks for the question. I would say the patient mix, and in particular, refractory. At the early stages of launch, we were seeing a lot higher usage in the refractory patients when physicians were just starting to get experience with the medicine. What we've seen over time is consistent movement into those earlier lines of treatment, and we continue to see that shift and that momentum as we execute on our plans. In terms of the retreatment, the frequency, what you can imagine is of course, it's a bell curve. Some patients, it's individualized dosing, so some are very frequent, some are less frequent.

What we see in the data is that it's right in line with what our assumptions were and what we provided before, which is around 5 cycles for a patient. That hasn't significantly changed.

Tim Van Hauwermeiren (CEO)

Yatin, it's Karl. Thank you for your question. In terms of finance guidance, I mean, we're not ready yet. I think there are still too many variables. The German price will be really important. The China launch, we're only just launching the SubQ, so I think we need to see a few quarters of that, and then we'll get back to you on finance guidance. Thank you.

Yatin Suneja (Senior Managing Director and Biotechnology Analyst)

Thank you, Karen.

Operator (participant)

Your next question comes from the line of Vikram Purohit with Morgan Stanley. Please go ahead.

Vikram Purohit (Executive Director of Biopharma Equity Research)

Hi, good morning. Thanks for taking our question. We just had one on the recent launch of subQ Vyvgart into myasthenia gravis. Understanding it's early, but is there any color you could provide on the demand trends you're seeing from prescribers and patients towards subcu versus IV? If you've been able to glean any trends at this phase of the launch on the types of patients that are leaning more towards subcu. On that same topic, are you able to provide any commentary at this point on how you're finding early receptivity towards the subcu option from payers? Thanks.

Tim Van Hauwermeiren (CEO)

Yeah, thank you, Vikram. I'm going to try and limit the question to one. Maybe, Karen, can you comment on subcu launch dynamics and any trends which we would see? Thank you.

Karen Massey (COO)

Absolutely. I mean, it's really too early to tell, or that any of the details that you asked about. What we are seeing, we believe we have a strong value proposition, and the outlook is strong. We are getting early positive signals. Those are verbal from when we're out speaking with neurologists and the feedback we're getting from our field force. Obviously, it takes a while, as Karl said, to get the payer policies in place. We have had one policy that's been put in place, but we need to continue to work on those. That it impacts the uptake right at this moment.

We are seeing enrollments come in, we are seeing positive feedback, and we strongly believe, and still have the conviction that the 30 to 90 second, is a real advantage for patients, and it will really start to open the market up for community neurologists. We'll keep you updated as we learn more.

Tim Van Hauwermeiren (CEO)

Thank you, Karen, and thank you, Vikram, for the question. Thank you.

Vikram Purohit (Executive Director of Biopharma Equity Research)

Thank you.

Operator (participant)

Your next question comes from the line of Allison Bratzel with Piper Sandler. Please go ahead.

Allison Bratzel (VP and Senior Research Analyst)

Hey, good morning, and thanks for taking my question. Maybe just a follow-up on an earlier question on the prefilled syringe. Could you just remind us of the expected cadence of updates on the subcu prefilled syringe? It does look like you've been enrolling the phase I bioequivalence trial in healthy volunteers for the PFS for a few months based on ClinicalTrials.gov. Just curious, though, what other clinical work would need to be carried out for that to be filable? If you could just outline the expected data flow and development path there, that would be helpful. Thank you.

Tim Van Hauwermeiren (CEO)

Hey, Allison, thank you for being with us today. I'm going to comment on your question. There are a couple of data streams, you know, which need to be generated in parallel in order to file for the PFS. We have the bioequivalence study, which you correctly call out to be ongoing. We have the human factor studies you need to complete, of course, there's a whole invisible train of CMC work which needs to happen with our CDMOs. It's when these 3 come together and generate all the data, including stability data, that you're actually ready to submit.

We will be getting more granular on timeline over the course of next year, but the prefilled syringe really is a priority for us, because we think it's gonna be an enabler of the long-term rollout of Vyvgart and, of course, a key enabler for cell administration. Stay tuned whilst we work through these 3 data team generations.

Operator (participant)

Your next question comes from the line of Alex Thompson with Stifel. Please go ahead.

Alex Thompson (Managing Director and Senior Equity Research Analyst)

Hey, good morning. Thanks for taking my question. I guess had a quick follow-up on Pemphigus. As we think about steroid tapering in the drug arm, you know, what does good look like there in your view? Is it no steroid, or what is a good dose of steroids in these patients look like to be clinically meaningful? Thanks.

Tim Van Hauwermeiren (CEO)

Hey, Alex, thanks for that question. Just to get it clear, it's not just on the drug arm that we do steroid tapering. We actually test active versus placebo, and in both arms, the background is a steroid tapering protocol. All patients start on the same amount of steroids, and then, you know, with a predefined protocol, you need to step down in your steroid use. The endpoint actually is a complete remission. That means that you're free of skin lesions on the minimum dose of steroids, and that's the minimum dose the way it is used in pemphigus. It's a very stringent endpoint to reach, and actually, you need to be at eight weeks in CR on minimum dose of steroids in order to effectively hit the endpoint. The bar is very high.

We cannot expect, you know, a very high response rate in active, but it's really designed to push placebo as close to zero as possible. Let's look for the delta, the statistically significant delta between active and placebo, and that will mean victory on the primary endpoint. In the secondary endpoints, as I said, we will unpack all the information which actually is very relevant for patients in terms of, you know, total curative use of steroids and the ability to effectively taper meaningfully, and then, of course, speed to disease control, and, you know, absence of formation of new lesions. That is the full extent which we will be able to unpack in the top-line data.

Alex Thompson (Managing Director and Senior Equity Research Analyst)

Great. Thanks.

Tim Van Hauwermeiren (CEO)

Thank you for the question.

Operator (participant)

Your next question comes from the line of Akash Tewari with Jefferies. Please go ahead.

Speaker 22

Hi, this is Amy on for Akash. Thanks so much for taking our question. Just two from us. First, on Long COVID POTS, do you envision efgartigimod to be given chronically as long-term maintenance, or would it be more of a one-time treatment? Finally, on your expectations, could you revisit your expectations for when you'll reach profitability? Thanks so much.

Tim Van Hauwermeiren (CEO)

Thank you, Amy, and again, this is two questions for the price of one, right? but I'll give the second question very quickly to Karl, but let me comment on POTS first. This is a key question in Long COVID POTS. If my colleague and Chief Medical Officer, Luc, would be here in the call, he would say, "Look, we need to learn whether, you know, it's sufficient to cleanse the body in a one-off treatment cycle with Vyvgart to then be symptom-free, or indeed, would you need to go into more chronic dosing in Long COVID POTS to basically effectively take care of the patients. This is one of the key questions we need to address next to the biology question in this phase II proof of concept trial. Stay tuned.

We're all curious to learn about that, and, Karl, would you mind briefly commenting on the question 1B?

Karl Gubitz (CFO)

Thank you, Amy. Yes, path to profitability, I mean, we're not going to comment on that in terms of timing. What I will say is that we are a sustainable company, we stand on our own legs, and I think that's all we will say for now. Thank you.

Operator (participant)

Your next question comes from the line of Joon Lee with Truist Securities. Please go ahead. My apologies. Your next question comes from the line of Rajan Sharma with Goldman Sachs. Please go ahead.

Rajan Sharma (Executive Director of Pharma and Biotech Equity Research)

Hi, it's Rajan. Thanks for taking the question. Just on CIDP and post the ADHERE data, is it safe to assume that you're going to be positioning Vyvgart as a first-line option there to compete directly with IVIG? What kind of additional work do you think you need to do to convince the treating community that there is more pathogenic IVIG activity in the disease than they may have previously assumed?

Tim Van Hauwermeiren (CEO)

Yeah, thanks for this question. I think there will be, just like for MG, a lot of education going on, you know, educating our audience on the fact this is an IgG-mediated disease based on now data in hand. I think you correctly call out that the way the trial was designed and the way the data panned out, is that there's no need to niche this product into a refractory line or, you know, a line of IVIG failures. I think the drug was equally effective in patients, you know, which were on steroids and background therapy, which had been on IVIG or SCIG background therapy, or which were either newly diagnosed or treatment-naïve in the last 6 months. Equal efficacy, equal right to respond to the drug across the board.

We do not see any reason to actually go and actively niche ourselves in what we think is a sizable opportunity. Thanks for the question.

Operator (participant)

Your next question comes from the line of Joon Lee, of Truist Securities. Please go ahead.

Joon Lee (Managing Director and Senior Biotech Analyst)

Hey, yeah, congrats on the progress. Thanks for taking our questions. You know, with CIDP data on hand, how are you thinking about commercial competitiveness of as part of Vyvgart versus IVIG and CIDP? At steady state, how do you see the breakdown of IVIG versus FcRn, FcRn-targeted products in CIDP? Thank you.

Karen Massey (COO)

Yeah, thanks, thanks for the question, I can take that. It's a little bit too early for us to comment on sort of IVIG versus FcRn market share, if you will. We still need to continue to do the workup on the commercialization plan. What I can say to your first question, we see a really strong value proposition when we look at the holistic picture of Vyvgart in CIDP. When you think about the efficacy, and Tim just talked to that, the strength of the data there. The safety and tolerability, I think, was incredibly impressive. Weekly, it was weekly dosing, and we saw that the safety profile continues to hold up. The tolerability is really clear. And then obviously, the 30 to 90-second injection.

We believe that we have a full package that will be able to compete really well in the market, and we have conviction in the product. We'll do the workup and share some of our thoughts around what that might look like versus IVIG in the coming months.

Joon Lee (Managing Director and Senior Biotech Analyst)

Thank you.

Operator (participant)

Your next question comes from the line of Samantha Semenkow with Citigroup. Please go ahead.

Samantha Semenkow (VP and SMid Biotech Equity Research Analyst)

Hi, good morning, and thanks for taking the question. Just to follow up on pemphigus, you know, assuming the data is positive on the primary and some of the secondary endpoints and the read on the fourth quarter, how do you envision Vyvgart fitting into the treatment paradigm? Just curious, with your conversations with physicians and how you design the trial, and if there are any barriers you would have to overcome with current treatment patterns. Thank you.

Tim Van Hauwermeiren (CEO)

Thank you, Samantha, for this question. I'm excited about our opportunity in the autoimmune blistering disease space. The interesting thing about Pemphigus is that actually it's an area which is wide open. The only treatment options these patients have today is actually steroids, which they hate with a passion, and then rituximab, which, you know, has a slow onset of action, significant side effects, and actually a real-world efficacy, which is significantly lower than what they have shown in the clinical trials. If you now look at the phase II clinical data for efgartigimod, you know, with a very fast onset of action, a very high response rate, and an unexpected durability, it's not difficult to see that you can start to drive a wedge between steroids and rituximab.

I think there's a unique opportunity here to go and rethink the treatment paradigm, but let's not get ahead of ourselves. Let's wait for the phase III data, because they will inform us about, you know, the best way to position the drug going forward. Excited about the opportunity, and thank you for the question.

Operator (participant)

Your next question comes from the line of Joel Beatty of Baird. Please go ahead.

Joel Beatty (Biotechnology Equity Research Analyst)

Hi, thanks for taking the question. Patients starting on Hytrulo, what's the mix of patients you're seeing switching from IV Vyvgart versus patients for which Hytrulo is their first experience with the class?

Karen Massey (COO)

I, I think I heard your question, that it was around switches from Hytrulo, or from Vyvgart to Hytrulo, and it's just too early to tell. We haven't seen the data on that yet. As I said, we're getting strong feedback on the value proposition of Hytrulo.

Tim Van Hauwermeiren (CEO)

Joel, it would be disappointing, right, if this would just be a switch dynamic.

Karen Massey (COO)

Yes.

Joel Beatty (Biotechnology Equity Research Analyst)

like pattern?

Karen Massey (COO)

Yeah, absolutely. I can comment on that. I think we've commented on that before. The strategy here is not that we're switching from Vyvgart to Vyvgart Hytrulo, but rather we're trying to open up access for patients in the community and elsewhere, where the 30, this 90-second injection is a better option for fitting into their lives. Yeah.

Tim Van Hauwermeiren (CEO)

Thank you, Joel. Thanks for the question.

Xian Deng (Executive Director of Equity Research)

Thanks.

Operator (participant)

Your next question comes from the line of Douglas Tsao with H.C. Wainwright. Please go ahead.

Douglas Tsao (Managing Director of Equity Research)

Hi, good morning. Thanks for taking the question. Just following up on Hytrulo. You've obviously spoken about the opportunity now to get into the community more. I'm just curious, as you've been in the field more, what percentage of the market does this now open up? Meaning, how many, you know, patients were sort of community-based and didn't really have great access to Vyvgart for whatever reason?

Karen Massey (COO)

Yeah, look, it's a great question. I mean, I think the We still see the addressable market for Vyvgart and Vyvgart Hytrulo as that 17,000 that we shared before. We think Hytrulo allows us to really penetrate more into the community, get closer to being used after the oral, and so really opens up that segment of the market. The way that I would think about it is that the addressable market is still 17,000, and we're on the front end of that as we at this point in March.

Douglas Tsao (Managing Director of Equity Research)

Okay, great. Thank you.

Tim Van Hauwermeiren (CEO)

Thank you, Douglas.

Karen Massey (COO)

Thanks.

Operator (participant)

Your next question comes from the line of Leland Gershell with Oppenheimer. Please go ahead.

Leland Gershell (Managing Director and Senior Analyst)

Hey, good morning. Thanks for taking my questions. With respect to empasiprubart, as you look forward to the phase II, second cohort get in MMN next year, is there a particular bar you're looking to meet, or is that the data merely to inform next steps? Also want to ask with respect to that, as are you expecting to start either or both of the POC studies in DM or kidney this year? Thank you.

Tim Van Hauwermeiren (CEO)

Yeah, thank you. I'm impressed by how you pronounce the name of Empa. I mean, I would like to record it. Empa is an exciting molecule. The phase II trial is really designed to generate PK/PD data and efficacy and safety data to inform our model. Ideally, the two dose cohorts give us sufficient information to triangulate what the Stage C dose should be. What we have said publicly is that on dose cohort number one, we not only passed an independent and a data review committee's blessing from a safety and tolerability point of view, but I think we also saw convincing efficacy allowing us to venture into dose cohort two.

The idea is that, you know, we see a separation between the two dose cohorts, so the PK/PD model is fully informed. I believe that based on the efficacy we have seen already, we think we have a drug in MMN. The remaining question is, you know, what is the dose going to be for phase III, and continue to document, of course, safety. Yet this is a pipeline and a product opportunity. MMN is very exciting as an indication, but for the other two indications, you know, which we're lining up are equally exciting. We are on track to start both trials as we line out in the press release. Soon, this molecule will be playing already in three indications, and we think there is more to unpack in terms of opportunities. Please stay tuned. Thank you for the question.

Operator (participant)

Once again, ladies and gentlemen, if you have a question, please press star one. Your next question comes from the line of Xian Deng of UBS. Please go ahead.

Xian Deng (Executive Director of Equity Research)

Hi, thank you for taking my question. You have quite a few catalysts coming up, you know, BP, pemphigus, TD, etc., and there are many more indications in the pipeline. Just wondering, with so many indications, is there any one that you would like to highlight as you know, if there's anyone that's higher risk than others, or if there's anyone that, if you make it, that will be much bigger than others in terms of commercial opportunities? Yeah, anyone, anyone that you would like to highlight in particular? Thank you.

Tim Van Hauwermeiren (CEO)

Thank you. Yeah, that's a really challenging question to me, because I'm equally excited about all the indications. It's very difficult to tell you which one is gonna be ultimately the biggest one. I know that, you know, when I sum them up, this is going to be, in its totality, a very sizable pipeline and a product. Let me quickly call out, you know, ITP, where we're on track to get our marketing authorization in Japan. Soon we will have two indications on the market. I'm very excited about our myositis trial, which is very innovative. It's a basket trial, the first one, where we go after three distinct subpopulation in myositis, where these people are in very high unmet medical needs, with not really effective treatment options at all.

We're really looking forward to the myositis trial, and I'm paying close attention to it. I'm very excited about the universe of opportunity in the autoimmune blistering diseases, with both Pemphigus and bullous pemphigoid, progressing very well. Then, of course, we have a whole third wave of indications where, frankly speaking, we're not taking on more biology risks. We still, you know, in the sweet spot of the drug, where there is strong conviction on biology, clear feasibility from a clinical, a trial execution point of view, and a real commercial opportunity to transform the lives of these patients. This is the universe, the universe of opportunity which we're approaching. Thank you for the question.

Operator (participant)

There are no further questions at this time, this will conclude today's conference call. Thank you for joining us. You may now disconnect your lines.