argenx SE (ARGX) Q1 2021 Earnings Report, Transcript and Summary

Good morning, and welcome to the argenx First Quarter 2021 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I'd now like to turn the conference over to Beth DelGiacco. Please go ahead.

Thank you. A press release was issued earlier today with our first quarter 2021 financial results and the 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 on Slide 2 that forward-looking statements may be presented during this call. These may include statements about our future expectations, clinical development, regulatory timeline, the potential success of our product candidates, financial projections and upcoming milestones. Actual results may differ materially 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; Eric Castaldi, Chief Financial Officer; and Keith Woods, Chief Operating Officer. I will now turn the call over to Tim.

Thank you, Beth, and good morning, everyone. We appreciate you joining us today. Starting with Slide number 3. During our R&D Day in 2019, we shared our plan for how argenx could become a fully integrated immunology company that reaches patients globally, who are suffering from autoimmune diseases. We call it our 2021 Vision and it outlines the key drivers that will continue to build the value year-over-year even beyond 2021. Based on where we are today, we have executed well against our 2021 ambitions. First, the reaching patients. This year, we are on track with our transformation into a commercial organization with the potential US approval of efgartigimod in generalized myasthenia gravis, followed shortly by a potential launch in Japan. We are also moving forward in Europe and in China with Cilag. At the same time, we want to be a company known for clinical execution and good business decisions when it comes to pipeline privatization. We are focused on assets with a lot of breadth like efgartigimod and ARGX-117, and have demonstrated strong capabilities in advancing these programs. Notably, we have shown proof-of-concept in all four of our initial efgartigimod indications. We are hoping for a similar track record with ARGX-117. And finally, we want to be a company that continues to capitalize on early innovation, so that we operate at all stages of the value chain. This is the core purpose of our Immunology Innovation Program. We will continue to grow our pipeline with differentiated candidates that emerge from an immunology breakthrough. Today, we will update you on our recent achievements related to each of these key drivers, our path to reaching patients, our clinical execution and our early-stage programs. These are all critical elements of our strategy to become a global sustainable immunology company. First, our path to reaching patients. We announced this morning that we have filed the Marketing Authorization Application to the PMDA in Japan. This positions us well for an early cadence of expected launches in MG, first in the US around our PDUFA date of December 17, second in Japan. We are on-track to file our marketing application in Europe in the second half of 2021, and Zai anticipate discussions with the regulators in China this year about a potential accelerated pathway. With close to 200,000 MG patients, the market opportunity in China is one of the largest in the world. We are incredibly excited that we've made important progress towards our global launch in just one year since we presented data from the Phase 3 ADAPT trial. That is one core motivated [ph] across all of our hard-working employees and that is the patients. We've been able to spend considerable time with the MG community and have heard first-hand about the challenges they face. We see that the people living with MG have had to accept in reality either due to disease symptoms or side effects from current treatments. This is a truly debilitating disease characterized by fatigue, depression and an inability to perform simple daily activities. In some cases, it may result in a life-threatening crisis. Not only does this hinder patients' ability to live their own personal and professional lives to the fullest, but it takes a considerable call on the friends and families as well. It is clear that their fight with fighting MG is far from over. Based on the positive Phase 3 data we showed from the ADAPT trial shown on Slide 4, we believe we can offer a new treatment option to patients with a promising value proposition. We showed an unparalleled response rate of 78% across the first two treatment cycles and the fast onset of action in 84% of responders. With the depth of response, where 60% of responders achieved an MG-ADL of 0 or 1, patients could think about the minimal manifestations of their disease. Furthermore, the trial demonstrated the potential for individualized dosing based on the durability of responses we observed which may provide enhanced optionality to patients. And importantly, the safety profile in ADAPT was comparable to placebo, which is a crucial element to our key stakeholders. As of today, there is a significant majority of patients who completed ADAPT and rolled over to ADAPT+ still remain in the study. In addition to advancing IV efgartigimod, we have also made progress in advancing our subcu products, forward with the goal of reaching MG patients. Slide 5, the ADAPT subcu trial is underway with a target enrollment of 50 patients. And this is non-inferiority trial, we will compare IgG reductions between the IV and subcu products and day 29 as the primary endpoint. In addition, we have a safety database requirement for filling and we'll work to achieve this by switching eligible and interested patients from ADAPT+ to ADAPT subcu. The formulation we are evaluating in this trial, which is being used in all ongoing trials of subcu efgartigimod is equipped with Halozyme ENHANZE technology. With this product candidate, we hope to offer patients a self-administered single subcutaneous injection that only takes a few minutes to deliver. We believe that by advancing both an IV and a self-administered subcu efgartigimod since we are capturing patient preferences and can reach a larger population of people suffering from autoimmune diseases. Before moving to the rest of our pipeline, I'd like to close on MG by sharing my pride and gratitude to our team who strongly executed despite the global pandemic. Between our experienced global launch team, our strong ADAPT data and our dual development of both IV and subcu formulations, we hope to support a new treatment option for people living with generalized myasthenia gravis. This positive readout from ADAPT was not only a significant milestone for the Company, but it's further validated the role of efgartigimod may have in addressing a range of IgG-mediated autoimmune diseases. This brings me to the second key driver, clinical development within our differentiated antibody pipeline, Slide 6. As I mentioned earlier, we have demonstrated proof of concepts with efgartigimod in all four of our initial indications and currently have registrational trials ongoing across each. To-date, we have dosed over 400 subjects with efgartigimod, some of whom have been treated with efgart for well over two years. With each trial and through our ongoing translational work, we continue to learn more about our SC fragments and how the unique engineering of efgart may contribute to the unique efficacy and safety profile we have seen to date. Our most recent achievement within the efgartigimod program occurred during the first quarter with the announcement that we surpassed a pre-defined GO threshold in the ADHERE trial in chronic inflammatory demyelinating polyneuropathy. We had built a planned efficacy assessment into the trial because the role of the autoantibody in CIDP disease progression is less defined than it is for MG. Following this GO decision, we can confidently expand enrollment up to approximately 130 CIDP patients into the randomized portion of the trial, which is depicted on Slide number 7. This decision also validated our indication selection strategy as we move into additional adjacent indications within our therapeutic franchises. We are also actively enrolling patients into the ADVANCE and ADVANCE subcu trials for ITP and to the ADDRESS trial for pemphigus, which are shown on Slides 8 and 9. Given the still unpredictable situation with COVID-19, it is too early to provide guidance on these trials. We will look to provide updates where possible on our upcoming quarterly earnings calls. We also well underway with our fifth and sixth indications and we will be initiating trials this year. We look forward to sharing more about these during our R&D Day in July, but have already confirmed that the fit is within our muscular franchise. Slide 10; as a first-in-class and potentially best-in-class FcRn antagonist, we recognize the vast potential that efgartigimod could have in autoimmunity. We want to roll out new indications as quickly as we can. This is why we were particularly excited to select Zai as our partner in China because their strong development capabilities will be an asset to enhance the long-term value of efgartigimod. Slide 11; by contributing patients to ongoing global trials, we hope Zai will help accelerate the path to approval from each respective indication. And with Zai running Phase 2 proof-of-concept trials in future efgartigimod indications, we hope to expand the scope of our overall pipeline. We aspire to take efgartigimod into 10 indications over time. Slide 12; we also recognize that we may have another pipeline in the product opportunity with ARGX-117. We look forward to showing the first clinical data sets mid-year from both of IV formulation and the subcu formulation equipped with Halozyme's ENHANZE technology. With our Phase 1 data, we will be showing safety and tolerability, PK-PD properties, and we look to identify dosing regimens based on complement biomarkers to take forward into future Phase 2 trials. Similar to the engineering enhancements we made to efgartigimod, we also optimize ARGX-117 to have sweeping capabilities. We expect these qualifications will lead to differentiation in terms of the dosing levels and schedule we can achieve that our C2 antibody. Slide 13; we have identified our first indication for ARGX-117 to be multifocal motor neuropathy, or MMN, which will sit within our neuromuscular franchise. We used our proven indication selection strategy for MMN and we'll do the same for additional Phase 2 trials that we will start. First, we rely on biology. MMN is an Ig immune-mediated disease, where IgM autoantibodies activated complement via the classical pathway. C2 sits at the intersection of the classical and lectin pathway, making it an ideal target for an indication like MMN. We continue to invest in translational work in the disease pathways of MMN and we'll share more of this data in the future. Beyond these such biology rationale [ph], there are also known clinical and regulatory endpoints in MMN from precedent trials and the strong commercial case. This is a patient population where a significant unmet need still exists. As you can see, we are very excited to advance ARGX-117 forward, as we hope to reach even more patients suffering from autoimmune disease. Before we move to the last key driver, our early innovation, I'd like to reiterate that our development program of cusatuzumab in collaboration with Janssen remains ongoing as seen on Slide 14. We announced earlier this year that we are prioritizing the triple combination of cusa, azacitidine and venetoclax in the ELEVATE trial. We will make decisions on next steps for the collaboration once we review data from ELEVATE, specifically around response rate, durability, safety and tolerability, and whether there may be trends to identify from AML subsets in the trial. Slide 15; now onto our Immunology Innovation Program or IIP, a centerpiece to our long-term value creation strategy. Through our IIP, we have been able to add value year-over-year by turning an immunology breakthrough of our academic collaborators into an argenx pipeline candidate. We have done this with each candidate to date, whether it's our wholly-owned assets like efgart or ARGX-117, or our partnered programs with AbbVie, LEO, or Janssen, asset-centric companies like AgomAb or Staten who are working with argenx created molecules. With our wholly-owned candidates, we prioritize those that makes sense within our therapeutic franchises in order to leverage core capabilities across the value chain. Slide 16; important to boost our IRP toolkit. We are continually looking to enhance our technology capabilities. We have our proprietary V-region and Fc engineering technologies SIMPLE, NHANCE, POTELLIGENT and ABDEG. We also have our license agreements with Chugai and Clayton to amplify our Fc engineering capabilities. With long-term lifecycle management of efgartigimod in mind, we are planning for a broad product delivery platform. We have our collaboration with Halozyme, for which we still have four target nominations available. And today, we also announced our recent collaboration with Elektrofi, a Boston-based company with capabilities to highly concentrated biologics into smaller volumes. While still very early in development, we believe the technology could provide us the opportunity to dose efgartigimod and other future products with next-generation delivery systems. Similar to our collaboration with Halozyme, we have targeted exclusivity for FcRn and one additional target. These types of technology agreements will continue to be part of our early discovery strategy. We don't intend to communicate on each one, but we want to share our commitment to evolving our overall capabilities as we grow and as the next-generation technologies emerge. We hope that this continued investment will help us build the most differentiated pipeline possible. Slide 17; with the acceptance of both our applications for IV efgartigimod in the US and Japan, we are solidly positioned for a steady cadence of launches. We are hopeful that the stellar results from the ADAPT trial will position us for success in MG. This is a space in which there has been little innovation and patients are still in need of more options. We are laser-focused on execution as we one, grow our team; two expand into new indications for efgart; three, develop our second pipeline in a product opportunity ARGX-117; and fourth, identify new high potential assets through our IIP. Finally, as we mentioned in the press release this morning, we look forward to providing updates on our deep and differentiated pipeline of assets at our upcoming R&D Day in July. With that, I will turn the call over to Eric for a financial update.

Thanks, Tim. Slide 18 covers our first quarter of 2021 operating results which are detailed in today's press release and regulatory filings. As we stated in this morning's press release, as of January 1, 2021, we changed our functional and presentation currency from euro to US dollars. You will see our financial highlight recorded in US dollars going forward. So, total operating income increased by $141.6 million for the first quarter of 2021 to $167.4 million compared to $25.8 million for the same period in 2020. The increase was primarily due to the closing of strategic collaboration for efgartigimod with Zai Lab, resulting in the recognition of $151.9 million in collaboration revenue. R&D expenses increased by $17.7 million for the quarter to $122.3 million compared to $104.7 million for the same period last year. This increase resulted primarily from higher external R&D expenses, mainly related to our evaluation of efgartigimod in multiple indications and also clinical and preclinical programs. The higher expenses were also due to a planned increase in headcount and the increased cost of the share-based payment compensation plans related to the grant of stock options. SG&A expenses totaled $56.3 million for the first quarter compared to $27.6 million for the same period in 2020. The increase resulted primarily from higher personnel expenses, including the costs of the share-based payment compensation plans related to the grant of stock options and also, consulting fees linked to the preparation of a possible future commercialization of efgartigimod. We saw an increase in fair value on non-current financial assets of $11.2 million for the first quarter. This is the result of AgomAb Therapeutics closing of Series B financing round. As you are aware, we maintain a profit share in AgomAb for granting the license of ARGX-114. Exchange losses totaled $28.8 million for the three months ended March 31, 2021, compared to an exchange gain of $23 million for the same period in the prior year. Because of the change in our currency, the exchange losses for the first quarter reflect the unfavorable change in the euro-US dollar exchange rates. Finally, we ended the quarter with cash, cash equivalents and current financial asset totaling $2.9 billion compared to $2 billion on December 31, 2020. This increase resulted primarily from the closing of a global offering in February 2021, resulting in $1.1 billion in net proceeds and the net receipts of our development cost-sharing payment received from Zai Lab. These were partially offset by our payments to Bayer for a priority review voucher and the other net cash flows used in operating activities. I will now turn the call over to Keith for on an update on our commercial activities. Keith?

Thank you, Eric. To echo Tim's sentiments, it's amazing to consider that the pivotal ADAPT readout of efgartigimod in MG was just one year ago. This was a significant gating event, which led us to meaningfully expand and accelerate the development of our commercial organization. The driving force which continues to push us forward as we approach a potential launch is the magnitude of what this treatment could mean for patients. There is a significant unmet need for innovative fast-acting safe treatments for people living with MG. We hear this every day from key stakeholders, including the patients themselves, their caregivers, advocacy partners and the physicians who treat them. As part of our ongoing commitment to the MG community, we recently launched our Pre-approval Access program. We are preparing for an end-of-year approval in the US, but in the meantime, we want to ensure that we can offer efgartigimod to MG patients who meet the pre-approval access criteria. Our PAA is currently open in the US, Canada and seven countries in Europe. We also continue to provide IV efgartigimod to patients who remain on the ADAPT+ study, and subcu efgartigimod to patients enrolling in our ADAPT subcu trial, whether it's from rollover from IV or as new participants. As Tim already mentioned, we are still the only company actively evaluating both IV and subcu formulations of an FcRn antagonist. This is important for us to reach as many patients as possible. We believe this optionality will be sawed a significant competitive advantage from both a reimbursement standpoint and from a patient and physician preference perspective. On Slide 19; we remain sharply focused on our engagement efforts with all key stakeholders, including patients, health care providers and payers. For patients, we have awareness and advocacy initiatives well underway, as depicted on Slide 20. Our MG United platform has ongoing engagement from over 25,000 unique visitors. Our real-world evidence study continues to enroll and now has close to 2,000 participants. Data from this study in addition to our health economics outcomes work will be instrumental and helping us better understand the disease burden associated with MG. All of these initiatives are guiding our engagement efforts with the broader MG community as we prepare for our potential launch. We have also engaged most of the leading GMG treating neurologists through our disease state awareness campaign. Our medical affairs team has been actively engaging with neurologists as well, most recently at the AAN meeting a few weeks ago. Our MRLs and TRLLs [ph] are hard at work in their education efforts as we know how crucial this will be at launch given the new mechanism of action. From a payer perspective, we continue to engage with national and regional payers on the potential value that efgartigimod could provide to MG patients. Our team is also engaging with specialty pharmacies, specialty distributors and infusion networks to ensure broad access for patients at launch. Another key part of this will be our patient support program, which will be managed closely by our team of nurse case managers who will work towards building a critical infrastructure to help support access for gMG patients prescribed efgartigimod following its approval. Slide 21; from a regulatory perspective, as you saw in the press release this morning, we are thrilled to have the J-MAA accepted for review by PMDA in Japan, with a targeted launch in 2022. We continue to make strategic hires and expand our global organization and support a series of launches in the coming years. We now have over 500 employees globally, including growing commercial organizations within the US, Europe and Japan. While our key functional heads have been in place for more than a year, we are now in the process of hiring our field sales forces. We recently brought on our regional business directors and are starting the interview process for our territory business managers. I've been very impressed with the high caliber of candidates we are engaging with as we expand. The breadth of experience and core cultural alignment they bring to our organization will help us to get the differentiated medicines to patients in need. Slide 22; additionally, we know that the strategic investments we are making now in top-tier candidates will benefit us as we expand our neuromuscular franchise into CIDP and future indications with efgartigimod and ARGX-117. We plan to execute a similar smart growth strategy for our other evolving franchises as we base our future hires around key data events. Finally, we have strong manufacturing and logistic partnerships in place with world-class companies like Lonza for drug substance, Vetter for fill and finish, and Cardinal Health for third-party logistics. We are actively collaborating with global regulators to ensure the in-person or virtual inspections can occur as needed. To conclude, we see signs and hope that the effects of the global pandemic will be somewhat attenuated by our December 17, PDUFA date. Even so, we are preparing for the likelihood that we will launch in a partially virtual environment, and the growth will be gradual and steady as we are engaging with customers regarding this new mechanism of action. I will now turn the call back to Tim for some concluding remarks. Tim?

Thanks, Keith. Before we begin the Q&A, I would like to conclude with Slide 23. We are working hard every day to build the next great integrated global immunology organization that is strongly positioned for long-term sustainable growth. We are well-capitalized and our strong balance sheet will provide the foundation to expand our team and reach new indications and geographies. We have made meaningful progress with our lead asset efgartigimod and our focus on execution as we advance forward six indications. We look forward to expanding the breadth of this pipeline with the help of our strategic partner Zai Lab. We are also approaching the first clinical data readout from ARGX-117 which we hope will launch our next broad pipeline opportunity into meaningful autoimmune indications. And finally, we remain firmly rooted in groundbreaking immunology research as we grow through our IIP and collaborative efforts in order to help improve the lives of patients around the world. With that, I will turn the call back to the operator to open the call to your questions.

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Derek Archila from Stifel. Please go ahead.

Hey, good morning, and congrats on the progress, guys. One question - all right. So - and maybe this is for Keith. You talked about the pre-approval access program for efgartigimod in MG patients. So I just want to kind of get a sense of what the patient criteria are for getting access? And I guess, how are you communicating that program, if you can at all? And is there a cap on the number of patients you can actually enroll into that program? Thanks.

Hi. Good morning, Derrick, and thanks for the question. So we were really pleased to offer the pre-approval access program because this program demonstrates our commitment to the patients who are living with MG. At the time - at this time right now, the commitment is to only for patients that are with MG that cannot participate in a clinical trial because remember, if a patient can participate in a clinical trial, we are actively enrolling our subcu efgartigimod MG trial. If they cannot participate in the clinical trial that can go into the pre-approval access program, but basically, it has the same strict inclusion-exclusion criteria that we used in our Phase 3 clinical trial. Again, this is just another way to honor our commitment to patients. You know that all of our patients that participated in ADAPT were eligible to roll over into our OLE, and more than 75% of the patients that rolled over are still on. After they complete a year in that OLE, they will have the option to remain on therapy. We're committed to them, or as Jim stated in the prepared remarks, they can rollover into our subcu bridging study.

Got it, okay. And then, there is no cap on the number of patients you can get into that access program?

So we have an internal cap right now just because of the amount of supply that we've shipped to our partner Clinigen, but we can always change that as needed.

All right. Thanks, guys, and congrats again on the progress.

Thank you.

The next question comes from Akash Tewari from Wolfe Research. Please go ahead.

Hi. This is Amy on for Akash. Thanks so much for taking our question. On your Elektrofi partnership, is it more of a backup option? Or are you seeing any sort of benefit with their microparticle suspension technology versus Halo's in areas including AE, mediated or PK? And then, if we could just sneak in one more on MG. And given you and Alexion both ran 26-week MG trials and you have an earlier eight-week primary endpoint. Has the FDA specifically said anything on what they expect for efficacy between the weeks eight and 26? And that's it. Thank you so much.

Thank you for the question. Let me take the Elektrofi question first and then I will hand over to Keith for the FDA-related question. So the way you have to think about our collaboration with Elektrofi is that we're always thinking five steps ahead. This is a relatively early-stage technology and it's a promising technology if you want to break through the barrier of the typical physical limits of the concentration you can achieve for the biological like an antibody or an antibody fragments. You may remember that for efgartigimod, we already reached 200 milligram per milliliter concentration which is phenomenal. But if you want to break through that, you need a different type of technology. And that's what we're seeking to access through the Elektrofi collaboration. The backbone of our subcutaneous product presentation approach continues, of course, to be the Halozyme technology. That subcu execution is now in play across all our indications. Maybe, Keith, you want to address the FDA question?

Happy to do so. Tim. So, Amy, thanks. Yes. Our primary endpoint was in fact at week eight, but we continued to retreat these patients throughout the entire study. In fact, we shared that, at that primary endpoint at week eight, we had a 67.7% response rate. But after a second cycle, almost 80% of patients that were exposed to efgartigimod had a response. So we are sharing the continued positive clinical efficacy data with the FDA as we go through review.

Okay, great. Thank you so much.

The next question comes from Tazeen Ahmad from Bank of America. Please go ahead.

Hi. Good morning. Thanks so much for taking my question. Just wanted to get a little bit of color regarding the specifics of your collaboration with Zai Lab. Can you just remind us what are the total milestones potentially expected, and when could the next milestone be in the collaboration? Thanks.

Thank you. Tazeen. Thank you for being with us today, and thank you for your question on Zai Lab. It's a partnership we're very excited about. Remember, we spoke about a total of $175 million upfront partially in cash upon signing partially, in equity and a smaller fraction associated with the milestone - regulatory milestone, which will happen downstream, and then all remaining parts of the economics actually situate themselves in royalty Zai Lab will pay to us on net sales in their territory. Thank you.

The next question comes from Joon Lee from Truist Securities. Please go ahead.

Hi. Thanks for taking our questions and for the updates. Can you tell us a little bit about your ongoing dialog with payers ahead of the approval? And how you're thinking about pricing profile given your individualized dosing regimen? How much of an inter-patient or even intra-patient variation are there in frequency? And how quickly can you also get a J-code established post-approval? Thank you.

Yes. So Joon, a few things. First of all, we have a fully staffed US market access team so we not only have our teams that cover the national payers, but we also throughout the US, have a team placed that's covering all of the regional payers. So we continue to have a regular dialog with the payers. I want to remind you that they are pleased with the - on approach such as individualized dosing because they don't want to have to pay for a therapy or medication when it's not needed. What does lead the question for them, okay, what can I expect? And so what we are sharing over time is what occurred in the ADAPT trial, and in the ADAPT+ trial, so that we can have an idea of what is the average number of cycles that are going to be required in a year. And you're going to have some - we have some patients that get a really long benefit from one cycle of efgartigimod, and those patients are going to be the less expensive patients. We have others that are going to require more chronic treatment. But what we will do is look at the average and see how that distribution curved, shapes out and then we are pricing for the annual value to manage a patient to put a patient and a minimum symptom expression and then be able to maintain them there. And we will price for the average on that and that backs us right into our bio price.

Great, thank you.

The next question comes from Danielle Brill from Raymond James. Please go ahead.

Hi, guys, good morning. Thanks so much for the question. I was just wondering if you can maybe comment a little bit more on the PAA program enrollment. I'm curious how it's tracking compared to your internal expectations? And I mean, if you could share how many patients you've enrolled that would be great. Thank you.

Yes. Danielle, we have not made that information public yet. I can tell you that the PAA, there has been demand coming from the US, from Canada and from Europe already. It's a process that we go through to actually enroll the patients and get them started. So the demand it meets our expectations, and at this point, we just haven't disclosed the total number of patients that are in the PAA. Thanks.

The next question comes from Yaron Werber from Cowen. Please go ahead.

Great. Thanks for taking my question. Actually, I had a question about ARGX-117 for MMN. Maybe can you - I don't know if you can share with us how are you thinking about the time to evaluate in the primary endpoint? And are all patients going to have to be anti-GM1 IgM antibody positive to be enrolled? And I assume they need to be second line onwards. Thank you.

Hi, Yaron, thank you for being with us today. And what concerns MMN, of course, so far, we have been talking mainly about our conviction around the biology of this disease, clearly driven by pathogenic IgM antibodies, which do recruit the classical pathway. We haven't disclosed details yet on the clinical trial design, but we will do so when we're progressing through the R&D Day. The trial design is something you can get inspiration for when you look at the IV trials, [ph] which we can all study in the MMN space. And these are the trials, which have basically established the clinical and regulatory endpoints. And to answer your second question, no, and we will probably not use an anti-GM1 antibodies presence as an inclusion criterion. And we will disclose, of course, in more detail inclusion-exclusion criteria. But we believe that is recent evidence amongst others from our key collaborators at Utrecht University and suggesting that all MMN patients actually have these autoantibodies, and actually, the title of these autoantibodies directly correlates with disease severity. Thanks for the question.

The next question comes from Jason Butler from JMP. Please go ahead.

Hi, thanks. I had another one on ARGX-117. Actually, thanks for taking the question. Just if you're thinking about the potential for a longer duration or durability of PLEX [ph] versus IVIg, and the fact that this is a slower progressing disease, just how are you thinking about the control arm, and how to optimize around that? Thanks

Hey, Jason, thank you for being with us today. Thank you for this question. We haven't disclosed a trial design yet and we will do so. You know that we do that. I would suggest that you take a look at, for example, the CIDP trial which we unveiled the trial design to give you a feeling of how you could work in this type of diseases. And we consider MMN to be very similar to CIDP when it comes to thinking through the pitfalls of clinical trial and execution - design and execution Thank you.

Great, thanks.

The next question comes from James Gordon from J.P. Morgan. Please go ahead.

Hello. James Gordon, J.P. Morgan. Thanks for taking the question. I had a question on the new mechanism. So I saw that Alexion has taken their oral Factor D inhibitor into Phase 2 for MG. So the question is, how promising do you see that sort of approach for treatment of a disease like MG? And could an oral Factor D work even more broadly than MG and the other indications that you're planning on targeting with an FcRn inhibitor? Or there is [indiscernible] optimistic there? And also just a clarification just on the Elektrofi formulation. When is the earliest of that might potentially be able to come to market, please?

Thank you, James. Concerning your question on the involvement of complement in MG, whether you have an C5 blocker or affected D-Blocker. [ph] What we know about the disease biology is that actually, the autoantibody is at the heart of the disease biology. It's exerting multiple pathogenic modes of action at the neuromuscular junction. Complement recruitment is just one of them. It's also acetylcholine [ph] receptor blockades and cross-linking and internalization, which are in play, and therefore we think that and moving agent like efgartigimod should be upstream of any complement inhibitors regardless whether that would be a C5 blocker or affected D blocker. Concerning your question on Elektrofi, it's too early to give you a timeline for if and when a product could hit the market. This is a novel technology which we to a certain extent going to pioneer in close collaboration with our partner Elektrofi. Thank you.

The next question comes from Douglas Tsao from H. C. Wainwright. Please go ahead.

Hi. Good morning, and thanks for taking the questions. Just wanted to revisit the question on pricing. You sort of indicated price to be average duration. And I'm just curious, have you engaged with payers in sort of more of a value-based model, meaning just sort of setting an annual price regardless of how many treatments they need, but just sort of controlling somebody's disease? The MG or any other diseases in development? Thanks.

Yes. So, Doug, we have engaged with payers, done exactly that. We've also done a great deal of market research after showing them the data and asking them what they believe the annual value is. I've stated this before. You have a product that's being used in MG right now that's approved with Solaris that has retail at up to 700,000 [ph] per year. And it's been pretty well covered by payers for relapsed refractory MG. I think that we are going to be able to offer a great value to the payers and the patients because of the impact - the clinical impact that we can have on these patients. And again, we are looking at efgartigimod in the big picture. It's bigger than just the launch of MG. We already in four indications. We'll be in six before the end of the year with aspirations to go up to 10 indications. So we need to think about that as we go to price as well. Thanks.

Okay.

The next question comes from Graig Suvannavejh from Goldman Sachs. Please go ahead.

Okay. Good morning, good afternoon, and thank you for taking my question. I had a question, just on your expected announcement of the fifth indication and on a six indication for efgartigimod. Could you just remind us if those indications will evaluate both an IV and a subcu? Or if you're leading with the subcu formulation? And then in terms of the indications in themselves, if one or both of them will be overlapping with your existing disease areas of interest, or if they will establish a new beachhead? And then, secondly, maybe just a quick one on your upcoming R&D Day. How much of that R&D Day will you spend talking about perhaps your non-efgartigimod, non-ARGX-117, and non-cusatuzumab pipeline, whether any proprietary or partnered? Thank you.

Thank you, Greg. Thank you for being with us today. Concerning your first question and it is our vision to have both IV and subcu products available in each and all of our indications. You will see from the pipeline updates that we have been prioritizing for the more recent indications, the subcu product execution simply because it gives us more degrees of freedom during this COVID pandemic. And we already disclosed publicly that the fifth indication will fit squarely in neuromuscular franchise and we will be talking more about the sixth indication of course soon. The R&D team will mainly focus I think on efgartigimod and cusatuzumab, but the agenda will be made public soon and then maybe we can interact for further questions on the agenda then. Thank you.

The next question comes from Rosie Turner from Barclays. Please go ahead.

Good morning or good afternoon. Thank you very much for taking my question. Just one on manufacturing, if I may. So I know Lonza is your key partner there and they've been having some issues manufacturing the Moderna vaccine in terms of delays. Just wondering how your discussions with them are progressing? And if there is any indication, it could be in delays in the beginning of 2022 when you're ready to start launching? Thank you.

Thank you, Rosie. Maybe Keith would like to take this question.

Sure happy to. So Rosie, first of all, I want you to rest assure that we already have commercial supply that is manufactured and ready to go for launch. Additionally, we know that the global pandemic has put additional pressure on the supply chain. Fortunately, we had already ramped up production prior to the pandemic because of the - you can see how much we are putting into our pipeline and then going into China where there is a huge population, so we wanted to make sure that we had ramped up our supply well in advance and we did that. And finally, regarding communication with Lonza, we have a very good relationship with Lonza and I can tell you that we speak to them pretty much on a weekly basis going through all of the logistics. So, I feel quite confident in where we are now and we've taken all the precautions that we can. So unless something unforeseen, we should be in good shape.

So just one follow-up, is that both subcu and IV supply?

Yes. I mean, right now we're focused on the IV supply from a commercial point of view and the subcu supply we're focused on for clinical trials roughly so to do separate.

Okay, perfect. Thank you very much.

Thank you.

The next question comes from Yatin Suneja from Guggenheim. Please go ahead.

Hey guys, this is Eddie [ph] on for Yatin. Thanks for taking the question. So I just wanted to ask how you're thinking about the filing for ITP? Are the two advanced trial each sufficient on their own or will you need two separate BLAs, or you need to see success in both and filed together? And then are there any safety requirements or gating factors differ between those two formulations? Thanks.

Thank you, Eddie [ph]. So the - I mean that both the IV and the subcu trial in ITP would jointly satisfy the requirements of the FDA for the BLA filings. The data packages of both trials would feed into one in the same BLA. And that then indeed would meet their requirements in terms of two independent studies, but also the requirement in terms of size of the safety database.

Thank you.

The next question comes from Lenny Van Steenhuyse from KBC. Please go ahead.

Good afternoon. Lenny here. Thanks for taking the question. Quick one on ARGX-117, we see that the plan is to involve Zai Lab's Elektrofi and efgartigimod clinical development to expand the breadth of the program. I was wondering if this is a strategy that you would consider as well earlier on and ARGX-117 development as we enter that Phase 2 development at the end of the year? Or would you prefer to take a more stepwise approach from seeing first initial proof of concept before then and expanding to additional geographies for development? Thank you.

Thank you, Lenny. Thanks for being with us. So you're right that the Zai Lab partnership - the scope of the partnership is limited to efgartigimod. It does not reach into any other pipeline asset of the company. And look, there's a lot of work on the place of Zai Lab if they want to help us on up to 10 indications and we will see how the partnership evolves. This is to certain extent new territory for us. It's an important strategic component to the lines. And let's see how that goes before we make any further pipeline decisions. Thank you.

All right. Thanks.

The next question comes from Yanan Zhu from Wells Fargo. Please go ahead.

Hi, thanks for taking my question. Just wondering about the upcoming data readout for the healthy volunteer study of argenx-117, could you comment on the - what level of PD biomarkers could translate into clinical meaningfulness in patients in terms of C2 level reduction, free C2, total C2 as well as the CH50 titers? Just what kind of expectation do you have for the data from the healthy volunteer study? Thanks.

Thank you for the question about the healthy volunteer study. So this is a pretty robust study. We do single ascending dose and multiple ascending dose work for both the IV and the subcu products. The subcu product is equipped with Halozyme's ENHANZE technology. And you spot on above and beyond your classical Phase I readouts, which would be safety, tolerability and safe dose for Phase 2. There would be meaningful information deducted from biomarkers and complement is a very interesting system to study from a biomarker point of view. And you're right, we are studying total C2 levels, free C2 levels and complement activity and we will be showing you some of these data when we release a Phase I data around the middle of the year and having these data will have informed us about how to dose in Phase 2 for indication being MMN. So stay tuned. But you can expect data similar to the data, which we unveiled during the R&D Day in New York in 2019. Thank you.

Got it. Thank you.

The next question comes from Colleen Kusy from Baird. Please go ahead.

Hi, good morning. Thanks for taking our questions. So for MG, in your market research, do you have a sense for how many patients may prefer subcu versus IV formulation?

Sure. I can - Colleen, I can only give you - this is not going to be true market research, it's only going to be in speaking with roughly a cohort of about 50 physicians throughout the US. I think that you will see that there will be a larger demand to be on subcu, but I'm hearing up and there is up to 30% of patients that do not want to stick themselves with the subcu injection and would want to stay on IV. I've actually also seen a very similar figure to that when some of the analysts have done calls with physicians. So haven't done any broad-based official market research, but that's roughly the numbers that we're thinking.

There are no more questions in the queue. This concludes our question-and-answer session. I would like to turn the conference back over to Tim Van Hauwermeiren for any closing remarks.

Thank you, operator. This company is executing strongly on the business plan. I think we're moving forward on all fronts as you could see in the Q1 earnings updates. We would like to conclude here. And thank you for your participation to the call and the questionnaire today. Thank you.

The conference has now concluded.

Good bye.

Thank you for attending today's presentation. You may now disconnect.